Key Indicators
Organize Climate Training with Directors and Senior Managers.
To Commit towards Net-Zero Carbon Emissions by 2049.
Climate Change Governance
Climate Change Strategy
Climate Risk Management
Key Climate Metrics and Targets
The Board of Directors, as the highest-level climate risk oversight body, receives regular risk management reports from the Risk Management Committee. In addition, the Company has established a Sustainable Development Team under which there are six functional groups; the Team is overseen by the Company's President. The team holds regular meetings to discuss carbon reduction measures and the risks and opportunities brought by climate change.
Organizational Structure for Climate Change Governance
Board of Directors of Fglife
Risk Management Committee
The committee formulates the Risk Management Policy and oversees the execution of risk management across all units. It regularly reports to the Board of Directors on the status of risk management implementation and provides necessary improvement recommendations.
Risk Management Office
In order to monitor climate change risks, key risk indicators (KRIs) and general risk indicators are established. The Company's performance in environmental protection (E), social responsibility (S), and corporate governance (G) is regularly reviewed through monitoring indicators. If any of the above indicators exceed the control threshold (green light), appropriate measures are proposed to mitigate the impacts of climate change.
President
Sustainable Development Team
Sustainable Development Team- The team currently consists of six functional groups: Corporate Governance, Customer Value, Employee Care, Social Co-prosperity, Green Sustainability, and Climate Governance. These functional groups hold meetings quarterly to discuss the risks and opportunities of climate change. The discussions and outcomes are disclosed in the sustainability report.The Green Sustainability and Climate Governance groups are responsible for conducting full-workplace carbon footprint inventory and setting medium- and long-term carbon reduction targets.
Green Sustainability Group
Responsible for planning and executing net-zero emissions , environmental strategies, and action plans.
Climate Governance Group
Responsible for climate risk assessment, as well as the planning and execution of climate-related financial disclosures (TCFD).
Climate Change Education and Training
To enhance the climate change-related knowledge of board members, senior management, and members of the Sustainable Development Team, training sessions are held annually.
Climate change encompasses physical and transition risks, as well as opportunities for mitigation and adaptation. The Sustainability Development Team at Fglife analyzes the actual and potential climate risks and opportunities that the Company may encounter. We follow a climate risk identification process to identify climate risks and opportunities for different business areas and assess their financial impact on the Company. A climate risk matrix is then developed to prioritize the identified climate risks and opportunities.
Climate risk and opportunity identification
Farglory Life uses the matrix to determine the severity in which a risk would affect three various factors: Reputation risks, Market risks, and Physical Acute risks. In addition, we also consider a timeframe: short-term, medium-term, and long-term.
Climate Change Risk Scenario Analysis
Based on the benchmark of the end of December 2023, Farglory Life's loss ratios under different scenarios are as follows: 1.39% for orderly transformation scenario, 2.74% for disordered transformation scenario, and 6.91% for too little too late scenario. Compared to the previous year's results, the loss ratios for 2022 were 1.38% for orderly transformation scenario, 2.71% for disordered transformation scenario, and 6.93% for too little too late scenario. Observing from the scenario analysis results, the loss ratios for each scenario from 2022 to 2023 did not show significant changes and remained within manageable ranges.
In addition to following the Risk Management Practice Guidelines for Insurance Enterprises, the Company incorporated climate change risk into our Risk Management Policy in 2022. The Company also added the Climate Change Risk and ESG Management Guidelines, which cover both investment and daily operations, and established climate change risk-related KRIs and GRIs to regularly monitor indicator performance
Three Lines of Defense framework
To effectively implement climate risk management, the Company incorporated climate change risk into our Risk Management Policy in 2022. Using a Three-Lines-of-Defense framework for internal control, the responsibilities and functions of each line in managing climate risks were clearly defined.
First Line of Defense
Relevant Business Units
- Investors of Farglory Insurance have formulated the “Operating Standards for Responsible Equity Investment” and the “Operating Standards for Responsible Investment in Fixed Income”, and while using their own funds, have taken ESG and other related issues into account.
- All relevant units have also set up climate change risk KRI and general risk monitoring indicators, all of which regularly submit information to the risk management unit.
- Lenders have reviewed and revised the Operating Standards for Credit Review of Loans to incorporate ESG functions into the review process for business credit.
Second Line of Defense
Risk Management Unit
In charge of developing the “Climate Change Risk and ESG Operating Guidelines” to cover investment and daily operations with consideration for ESC elements.
Third line of Defense
Auditing Unit
Regularly audits the implementation of internal controls regarding ESG work in each department and provides comprehensive reports to senior management teams.
Climate Change Risk Monitoring
Farglory Life sets risk monitoring indicators, including Key Risk Indicators (KRIs) and general risk indicators. These are all regularly monitored by the Risk Management Office, and in the case that the control value (green light) is exceeded, improvement measures are jointly proposed by the responsible departments in accordance with Risk Monitoring and Handling procedures. By doing this, Farglory is able to continuously assess the impact of climate change risks on existing risk management management is continuously assessed.
Farglory Life implementing the ISO 14064-1 Specification for quantification and reporting of greenhouse gas emissions and removals and ISO 50001 Energy management. Through comprehensive inventory and monitoring, the Company effectively manages our operational carbon emissions and energy use efficiency. In terms of response measures, the Company has established operating guidelines, incorporating ESG issues into decision-making processes and conducting carbon inventories for investment and financing portfolios. Based on the inventory results, the Company will formulate policies for high-carbon investments and develop carbon reduction targets to mitigate the impact of climate change risks on our investments and financing.
Key Climate Metrics and Indicators
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Metric
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Short-term Target
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Mid-to-long-term Target
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Greenhouse Gas Emissions (Scope 1–Scope 2)
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Continuously conduct ISO 14064-1 greenhouse gas inventorying; reduce carbon emissions by 4% compared to the previous year.
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Reduce total greenhouse gas emissions by 12% by 2025 and by 28% by 2030, Net Zero Carbon Reduction by2049.
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Policy Carbon Footprint Emissions
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Continuously conduct ISO 14067 carbon footprint inventorying; obtain Ministry of Environment Carbon Label, and apply for the Ministry of Environment's Carbon Label
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Improve policy service carbon footprint reduction, decreasing carbon emissions by 3%.
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Workplace electricity consumption
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Reduce all worksites' electricity consumption by 1% compared to the previous year.
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Reduce all worksites' electricity consumption by 1% annually, achieving a 6% reduction by 2030.
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Workplace water consumption
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Reduce all worksites' water consumption by 0.5% compared to the previous year.
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Reduce all worksites' water consumption by 0.5% annually, achieving a 3% reduction by 2030.
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Promotion of digitization and electronic policies
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Continue to promote green service processes such as digitization and mobilization to reduce environmental impact and greenhouse gas emissions.
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Amount of low-carbon investments
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Increase annual investments in ESG-related businesses such as low-carbon green energy, water resources, and renewable energy, to accelerate development of the domestic renewable energy industry.
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