Sustainable Lending

■ Sustainable lending services

With continued global warming and increase in extreme climate events, the Taiwan government has actively promoted renewable energy and developed the Green Finance Action Plan 2.0 to encourage investments from financial institutions. As a long-term advocate of environmental sustainability, E.SUN responds to international trends and major domestic policies, continues to develop special products such as renewable energy project financing, sustainability-linked loans, and green loans to support the use of renewable electricity and promote energy conservation and carbon reduction.

1. Loans to ESG industries

In 2021, E.SUN continued to invest resources in industries that are friendly to the environment and society, such as industries involved in green power generation, energy conservation and environmental protection, circular economy, medical care and education, and supported key industrial development policies promulgated by the government. As of December 2021, we have extended NT$251.86 billion in loans to these industries (compared to the NT$249.685 billion in 2020).

2. Green loans

In 2021, E.SUN established relevant bylaws and regulations with reference to the Loan Market Association's Green Loan Principles. The purpose of this is to support business sustainability and extend green loans for green projects to assist enterprises in investing in clean energy, energy storage systems, water resources and environmental pollution control, environmental protection products or equipment, and green buildings, etc.

■ Green energy project financing

E.SUN harnesses its financial expertise to assist enterprises and industries with the promotion of green energy development. Starting with small and medium-sized solar rooftops to recent developments in large-scale power plants such as offshore wind power and ground-based solar power, we truly understand that investing in green energy industry financing is not only in line with global trends and in support of industrial development requirements, but also increases E.SUN's professional capabilities and creates more business opportunities. In recent years, E.SUN's green energy project financing business has exhibited favorable development, in both quality and quantity. It has successively established head office offshore wind power and green energy expert teams to participate in important domestic wind power and solar projects. As of December 2021, E.SUN reported an outstanding loan balance of NT$18.726 billion (compared to the NT$11.106 billion in 2020).

■ Supporting Diverse Sources of Renewable Energy

In 2021, E.SUN supported the world's largest geothermal field in San Francisco, California, which operates 13 geothermal power plants, generating 725 MW of geothermal electricity from an 87-miles long steam pipeline. Geothermal energy is a source of renewable energy that can steadily supply power all year round, unlike wind power and solar power which generate different amount of electricity during peak and off-peak periods. This geothermal field is considered a base load power plant that can steadily supply the market's power demand. In this geothermal field, its water consumption is also in line with the spirit of sustainability, with 60% of water sourced from urban wastewater and 40% from recycled water. E.SUN will continue to develop more green energy project financing, and actively assess and invest more in green energy power plants that conform to global sustainability trends.

3. Sustainability-linked Loans

To encourage companies to set up their own ESG development goals and continue to invest in sustainability-related activities, referencing the LMA Sustainability Linked Loan Principles, E.SUN assesses a company's actual ESG investments, engages with companies on setting a sustainability goal, and offers financial service discounts if this goal is achieved. As of 2021, E.SUN has approved 55 loan applications or NT$56.435 billion in total, and the outstanding loan balance was NT$10.681 billion. In the future, E.SUN will plan to incorporate the performance of related products into the assessment of business units, guide business units to grasp the sustainable development process of customers through incentive mechanisms, and actively promote sustainability-linked financial products to enhance the bank's influence in the environmental and social aspects.

■ Promotion of sustainable development topics: Reconstruction of Urban Unsafe and Old Buildings Loan

Taiwan is facing a crisis caused by elderly people living in old houses. According to government statistics, more than 31% of its population are people over the age of 55, and nearly 50% of houses in Taiwan are more than 30 years old. Old houses are not strong enough to withstand earthquake and also lack firefighting equipment and barrier-free spaces, both of which affect the safety and quality of life of Taiwanese citizens. E.SUN accompanies homeowners throughout the process as they build a safer and warmer home. In response to the government's policy for reconstruction of urban unsafe and old buildings, E.SUN established a promotion working team dedicated to urban renewal of dangerous and old buildings. cultivated approximately 50 financial consultants with building renewing promoter qualifications, and launched the "Reconstruction of Urban Unsafe and Old Buildings Loan" in 2020 to actively help homeowners create a safer living environment.

E.SUN participated in the 3rd Urban Renewal Expo organized by the Ministry of the Interior in 2021. During the expo, digital methods were used to interact with visitors, promote safe housing concepts, and provide a detailed explanation of all the financial services that E.SUN offers in relation to the reconstruction of dangerous and old buildings. Additionally, E.SUN linked its internal trust and tax planning resources to offer a one-stop financial service, and partnered up with external construction management companies to ensure the smooth progress of reconstruction projects. Through these efforts, E.SUN is committed to helping customers live safely and building a more age-friendly environment, where happy memories are constantly created, thereby creating a better and more resilient city.

■ Sustainable mortgage

In our path to promoting sustainable development, E.SUN pays constant attention to environmental and social issues and launches a diverse range of ESG and sustainability-linked mortgages to help customers build their dream home. These products include "green buildings," "care-free mortgage" As of the end of 2021, E.SUN assisted more than 10,000 customers in achieving their dreams of building a home. The balance of sustainable mortgages reached NT$96.2 billion, accounting for 20% of the total purchase and repair balance.