E.SUN's first inventory of the possible impacts of various climate change risks, including risks and opportunities arising from the company's operating activities due to physical impacts caused by extreme weather events, transformational impacts due to regulations, technologies, or market demand, and other cultural and social impacts. Risk management strategy plans are established based on the analysis results that serve as the basis of actions taken to respond to climate change, and management costs and financial impact are estimated based on such plans. Data collected in the process described above are used in systematic assessments of the association between climate change and finance to reduce risks and exploit opportunities.
■ Climate Change Risks
Apart from affecting the business operations of financial institutions, the greater risk posed by climate change is the impact on lending and investment assets, such as the credit deterioration for loans or price fluctuations in investments. Climate changes and the low carbon transition shall pose varying levels of impact at different times, in turn affecting the existing risks (such as credit risk, market risk, and operational risk). E.SUN has established short, medium, and long-term climate change assessments, which consider our internal management framework and the expected lifetime of the assets. These assessments can be integrated into our existing risk management framework and serve as a way to monitor climate change impacts regularly and formulate new measures.
■ Opportunities
As was resolved at the UN's COP26 Climate Summit, reducing GHG emissions and phasing down unabated coal power, and end inefficient fossil fuel subsidies have become the consensus among nations. The EU planned to adopt the Carbon Border Adjustment Mechanism(CBAM) in 2026. International giants such as Apple, Microsoft, and Google outlined their GHG emissions reduction goals, and demanded that their supply chains implement green production. GHG emission management have become a critical part of an enterprise's operations. On the other hand, the financial industry should leverage its influence to channel funds through environmentally-friendly industries, such as green energy, electric cars, green steel, hydrogen energy, sustainable agriculture, etc. Aside from actively developing responsible finance, green finance, and digital finance, E.SUN also helps customers transition to low carbon while creating business opportunities.
■ Summary of climate-related products and services
Better bringing customers farther than charging alone. We always resort to our products and services when thinking about how we could help customers' problems. As a trend of transition to a green supply chain emerges in the world, nations successfully unveil their net-zeros goals. Instead of simply being a lender, we aim to become an enabler. We have assembled a Solar and Offshore Wind Power Team, offering financial services to renewable energy projects at every stage. We also support the industry that engages in green power generation or pursues energy conservation, and environmentally friendliness, helping customers transition to net-zero emission.E.SUN's primary products and their scale at the end of 2021 are summarized in the table below; for product details, refer to "CH3 Banking for Better".
