Responsible Investment Policy
China Life referenced the United Nations Principles for Responsible Investment (PRI) and incorporated factors of ESG into its investment policy, in order to implement sustainable development strategies and realize sustainable finance. We select investment targets with sustainability value by comprehensively evaluating their products, operations, and actions from the perspective of ESG, while pursuing investment profits and growth.
We established exclusion standards to exclude companies that are involved in environmental pollution, social disputes, or poor corporate governance when evaluating potential investment targets, excluding them from making direct investments.
We continue to monitor, analyze, and evaluate information on investment targets after making investments. If any investment target is involved in a matter listed in the exclusion standard, we immediately examine and evaluate if the investment target has made any improvements or plans, and explain the response measures taken by China Life in the evaluation report, such as changing investment strategy or lowering the limit.
Going forward, China Life will continue to adjust its investment portfolio with an emphasis on the implementation of initiatives, in hopes of driving carbon reduction in the industry value chain through climate action.
Responsible Investment Flowchart
Responsible Investment Performance
✓ Evaluate Climate Action Results Based on ISO 14097
We understand that climate change has become a global risk. As an asset owner, China Life hopes to work together with investees and jointly gain influence in climate actions through the guidance of funds. After discussions in cross-departmental meetings, investment departments propose potential climate actions based on analysis of carbon emissions from our asset portfolio, including: adjusting positions and investment targets, and attending shareholders' meetings, forums, and workshops. After considering feasibility, we selected three climate actions, "Investment in renewable energy power plants," "Investment in green bonds," and "Engage high carbon emission industries" as our goals in the current stage.
✓ Investment in Renewable Energy Power Plant
To realize the value of corporate sustainability and support the development of Taiwan's renewable energy industry, the investment and sustainability teams of China Life carefully evaluate qualifications, risks, and related opportunities of investment targets. As of 2022, China Life invested in renewable energy power plants expected to have a total installed capacity of 632.63 MW (up 277% compared to the previous year), and electricity generation expected to reach 863 million kWh (up 277% compared to the previous year), achieving the environmental benefit of reducing GHG emissions by a total of 452,600 metric tons (up 310% compared to the previous year). Based on the percentage of funding invested by China Life, this will reduce GHG emissions by 79,600 metric tons (up 1,067% compared to the previous year). China Life is actively investing in the renewable energy industry. Besides increasing the investment percentage, China Life will continue to search for investment opportunities with development potential and substantive environmental benefits.
✓ Investment in Green Bonds
China Life is actively investing representative green bonds in Taiwan and overseas, and expects the funds to be invested in renewable energy, the improvement of energy efficiency, green transportation, sustainable water resource management, and green buildings. As of 2022, China Life's investments in green bonds and sustainability bonds increased approximately 86% compared to 2021, which is expected to reduce GHG emissions by 317,000 metric tons/year. China Life supports the government's Green Finance Action Plan 3.0, which is a policy that promotes the development of green financial products, and invested in the green bonds issued by TSMC and Orsted to support the development of clean energy in Taiwan. The investment amount reached NT$2.3 billion and shows that we take action to make ESG investments.
✓ Engaging High Carbon Emission Industries
After identifying investment positions with high carbon emissions, China Life distributed 121 questionnaires to investees with high carbon emissions in 2022. China Life aims to jointly engage in climate action with investees, and encourages investees through the questionnaires to actively inventorize and manage GHG emissions, set reduction goals, carry out reduction actions, and track reduction results. We understand the carbon emissions, current carbon reduction measures, climate actions, and future carbon reduction goals of investees of different scales and in different industries based on analysis results. We continue to track their carbon emissions and other climate actions to verify if investees are able to achieve the goals they set for each year.
✓ Actively Investing in Six Strategic Industries
After the 5+2 Industrial Innovation Plan, China Life continued to actively invest in and support natural gas power plants, green energy, and pharmaceutical companies, in compliance with under the government’s policy to invest in six strategic industries. The balance of direct and indirect investments in six strategic industries reached NT$120.405 billion in 2022.
