Responsible Lending and Investment

The Equator Principles are a set of noncompulsory principles that are adopted on a voluntary basis. They were created in 2003 to provide a tool to be used by financial institutions to assess processes and systems in large financing projects and manage social and environmental risks. While the campaign for its adoption has been going on for more than a decade, the Equator Principles have evolved into an universal social and environmental assessment framework for financing projects. A total of 92 financial institutions around the world have adopted the principles at the end of 2017.

Adopting international standards and the Equator Principles

Following the inclusion of the Equator Principles in the E.SUN Bank Credit Policy in 2014, E.SUN has made specific provisions to support enterprises that pay attention to corporate social responsibility. E.SUN Bank adopted the Equator Principles in December 2015 to ensure loans would not be used to cause material potential risks or adverse impact on the environment or the society. In 2016, E.SUN established an Environmental and Social Risk Task Force and formulated the Equator Principles Project Finance Guidelines. A credit check review and post-loan management system was developed based on the Equator Principles.

E.SUN enforces due diligence rigorously. Regarding industries with a greater impact on the environment or the society, such as those in mining, infrastructures, oil and gas extraction, and energy, E.SUN will handle the loan applications by classifying the risks and help clients implement plans to monitor and improve the environmental impact.E.SUN responds with care to stakeholder attention to credit assets in financing projects. In addition to applying the Equator Principles, E.SUN exercises its strength in risk management and influence in resource allocation and works with clients to pursue sustainability.

Results of 2017: 3 EP compliant financing deals were approved according to credit policy and risk appetite of E.SUN. Risk category of the deals were A and B.
Number of EP compliant loans: 3
Project Risk category Sector Nation Audited by independent
Project L A enegy Vietnam yes
Project S B enegy Australia yes
Project C B enegy Australia yes
Note: according to EP, A type represents greater impact to the environment, B type represents limited impact to the environment.

To ensure future generations will continue to be able to enjoy nature without pollution, Section 3 of the E.SUN Bank Credit Policy states that lending services shall give support to green industries in alternative energy, water resources and pollution control. It is also promulgated in E.SUN Bank Investment Policy that investment shall be made by the principal of social welfare. E.SUN provides financing as needed for enterprises with a positive outlook and involved in reducing energy consumption or pollution or introducing environmentally friendly measures. Such financing programs include the "Rooftop PV Financing" and the "Green Energy and Industrial Equipment Output Loans". In addition, E.SUN supports government policies and offers "Loans for Machine/Equipment Upgrades" by providing preferred rates for customers looking to purchase and install new and clean energy equipment, pollution control equipment, or energy efficient equipment.

Results of 2017:
  •  E.SUN is the first bank in Taiwan to finish pricing and issued the largest amount of green bonds. Thus far, US$60 million worth of green bonds have been issued, which accounts for 4.2% of total E.SUN bond issuance. E.SUN also sets out “Green Investment Plan” and “Capital Usage Plan for Green Bond Issuance” to guide the fund raised to renewable energy development, water resources saving, recycling, greenhouse gas elimination, etc. The issuing of green bonds received the Editor's Award from MTN-i, an internationally acclaimed bonds market information platform: Green Bond Initiative.
  • ● As of December 2017, US$51.37 million of the funds raised from green bond purchase were used to finance four projects on wind power renewable energy development, which is expected to supply 3,490 GWh of power, save 872 kilotons of fuel or 1,291 kilotons of coal, or 576 kilotons of gas, and reduce carbon emissions by 1,846 kilotons, which is equivalent to 186,000 hectares of forest.
Note1:  Data published by the Bureau of Energy in 2016 showed an annual electricity emission factor of 0.529 kg CO2e.
Note2:  According to Taipower, every kWh of wind power saves 0.25 L of fuel, 0.37 kg of coal, or 0.165 kg of gas.
Note3:  According to the Forestry Bureau, the annual carbon fixation for every hectare of forest is 9.9 tonnes.
  • ● E.SUN acting as a underwriter helped Credit Agricole CIB to issue the first foreign financial institution Green bond in Taiwan, which raised US$120 million. In the future, E.SUN will continually assists more corporates to issue green bond and does the best for green finance.
  • ● E.SUN Bank Sustainable Lending Principles and E.SUN Bank Green Energy Loan Services have been developed to enhance client corporations' awareness of environmental protection and corporate social responsibility.
  • ● As of end of 2017, loan was approved to more than 200 clients in solar, LED, environmental engineering, energy saving business. The total amount was 8.6 billion.
  • ● As of end of 2017, a total amount of 1.8 billlion loan was approved to corporates in water sustainability and recycling business.
  • ● As of the end of 2017, there were five participation loans for wind farm development, 290 wind turbines were installed, and the installed capacity was 948.9 MW.
  • ● As of the end of 2017, loans have been approved and paid out for the installation of 456 solar power stations; the annual power generated was 57.44 GWh. It helped reduce 30.04 thousand tons of CO2 emission (equivalent to reduction of 78 Daan Forest Park).
Note:  Data published by the Bureau of Energy in 2016 showed an annual electricity emission factor of 0.529 kg CO2e.
  • ● E.SUN Bank Investment Policy attaches importance to the corporate social responsibility performance of the investee target. Based on the Principles for Responsible Investment (PRI), ESG issues were incorporated in investment analyses and decision-making processes. As of December 2017, the portfolio invested in DSJI composition by E.SUN Bank was 23% of the total equity investment, which is roughly the same as that in 2016. 48% of bonds are invested in DSJI composition. This is lower than that in 2016; however, excluding the adjustment to investment strategies in response to the regulations of the competent authority, the total bonds invested in DSJI composition remain approximately the same as that in 2016.
  • ● NTD bonds invested in DJSI composition increased from 19% to 24%. Furthermore, the number of NTD and foreign currency bonds invested in DJSI targets has increased considerably by 10%. E.SUN Bank not only ensures investment security and risk mitigation but also actively invests in targets associated with corporate social responsibility.

SMEs are the engine behind economic and social development in Taiwan. E.SUN Bank endeavors to be a reliable business partner for SMEs and provide a line of friendly, secured financial services that will respond to the needs of SMEs as they enter different stages such as growth, innovation, and transformation. In 2017, the awards and achievements of SMEs which were counseled and recommended by E.SUN:
  • The 26th National Award of Outstanding Small and Medium Enterprises was awarded to 12 enterprises,4of which were counseled and recommended by E.SUN
  • The 20th Rising Star Award was awarded to 13 enterprises,3of which were counseled and recommended by E.SUN
E.SUN Bank has stipulated in its E.SUN Bank Lending Policy that it shall provide financing and counseling services for SMEs to help them improve their business management. E.SUN continues to integrate government resources for promoting the Small and Medium Enterprise Credit Guarantee Fund, SME Innovative Special Loan, and Financial Industry Supporting Creative Industry Project, which have received multiple awards at home and abroad:
Received SME Partner Award
for the 12th consecutive year

Total loan balance reached
38.8 billion NTD

MOEA, Credit Guarantee Fund
Received the award of Best
in Treasury and working capital -SME
in Taiwan for the 5th consecutive year

《 The Asset 》
Received the award of
Best Bank for SMEs in Taiwan

E.SUN Bank received Best SME award
of the 8th Best Practice Awards

E.SUN Bank received Best SME award
of the 8th Best Practice Awards