Equator Principles

In recent years, environmental protection, human rights and corporate social responsibility (CSR) are getting more attention in global society, and “sustainable management” has become a widely-discussed topic among leading companies in Taiwan. For Cathay United Bank(CUB), “sustainability” means to implement CSR to the very core of our business—financing. This drives us to adopt the Equator Principles (EP) and become the very first signatory in Taiwan to minimize environmental, social and governance (ESG) risks and seize opportunities derived from the action. Our commitment of CSR is to consistently improve the internal loan approval process as well as our products and services, which we firmly believe will bring us and the society to a more sustainable future.

Become the first signatory of EP in Taiwan 

To create positive influences to the society and contribute to low-carbon economy as a financial institution, CUB has been assisting and financing the solar industry in Taiwan and abroad as the demonstration of CSR.


In order to further assist our clients to minimize environmental and social impacts through financing, CUB decided to adopt the Equator Principles in March, 2015, followed by the agreement of the Board. Through the implementation of the internationally recognized voluntary loan approval guideline, CUB aims to further bolster up its core value and faith as the first and leading signatory in Taiwan.


From now on, CUB will follow stricter due diligence procedures in accordance with the Equator Principles and set appropriate risk categorization and post-loan management plans for project finance with potentially large environmental and social impacts. We promise to support and contribute to environmental protection, energy saving and carbon reduction, fair distribution of social resources, cultural heritage conservation, and bio-diversity protection. Our ultimate goal is to become the international benchmark of financial institutions by balancing the values among environment, society, and economic development.


The contribution to corporate sustainability by Cathay Financial Holdings can be seen on the following websites:




About the Equator Principles 

The “Equator Principles” are a set of voluntary guidelines for financial institutions amended by the Equator Principles Association established in 2003. The Equator Principles serve as the guidance for financial institutions to identify, assess, and manage the environmental and social risks of project finance and related loans.


According to the Equator Principles, all signatories must categorize the required types of loans (project finance advisory services, project finance, project-related corporate loans, and bridge loans) into Category A, B, or C according to the potential environmental and social risks of each project. Clients are requested to establish and implement risk management plans to minimize environmental and social impacts. Meanwhile, signatories need to ensure that clients are in compliance with the Equator Principles through covenants and constant monitoring after financial disclosure. More details can be found here: Equator Principles.




1.Establishment of the EP Team

To implement the Equator Principles, CUB has established the EP Team under the International Credit Risk Management Department.

  • Set management guidelines regarding the policies and standard procedures related to the Equator Principles.
  • Review the environmental and social impacts of EP-related projects and provide advice and consultation.
  • Hold internal trainings, communications, process tracking, and information disclosure.
  • On-going monitoring and post-loan management.



2. Comprehensive Policies and Structure for Implementation

To implement environmental and social risk assessment strategy from the Equator Principles, CUB has established comprehensive structure and procedures for project finance in accordance with the Equator Principles. The structure includes: “The EP implementation policy”, management guidelines, standard loan approval and review procedure, risk assessment IT system and so on. The standard procedures regarding environmental and social risk evaluation and categorization, review, covenants, and post-loan management have been systemized and integrated with the existing internal loan approval process in order to further monitor the environmental and social risks of the EP projects.




3. Comprehensive Internal Training Scheme

CUB conducted comprehensive internal trainings for employees in 2016 and 2017.Core concepts of the Equator Principles and standard procedures of loan approval and review are introduced to ensure that our employees in the front line are able to follow our policies and management procedures in accordance with the Equator Principles properly.




Annual Report of the Equator Principles

( Reporting Period: 2016.01.01 ~ 2016.12.31 )
Project Finance Advisory Services
By Sector Number
Mining 0
Infrastructure 0
Oil & Gas 0
Power 0
Others 0
By Region Number
Americans 0
Europe, Middle East & Africa 0
Asia & Oceania 0
Project Finance
  Category A Category B Category C Total
By Sector
Mining 0 0 0 0
Infrastructure 0 0 0 0
Oil & Gas 0 0 0 0
Power 1 1 1 3
Others 0 0 2 2
By Region
Americans 0 0 0 0
Europe, Middle East & Africa 0 0 0 0
Asia & Oceania 1 1 3 5
By Country
Designated 0 0 0 0
Non-designated 1 1 3 5
Independent Review
Yes 1 1 1 3
No 0 0 2 2
Total
Total Number 1 1 3 5
Project Related Corporate Loans
  Category A Category B Category C Total
By Sector
Mining 0 0 0 0
Infrastructure 0 0 0 0
Oil & Gas 0 0 0 0
Power 0 0 0 0
Others 0 0 0 0
By Region
Americans 0 0 0 0
Europe, Middle East & Africa 0 0 0 0
Asia & Oceania 0 0 0 0
By Country
Designated 0 0 0 0
Non-designated 0 0 0 0
Independent Review
Yes 0 0 0 0
No 0 0 0 0
Total
Total Number 0 0 0 0

Note:

  1. Project Finance Advisory Services:The figures above represent the number of projects for which CUB had entered Project Finance Advisory Service contract during the reporting period.
  2. Project Finance:The figures above represent the number of projects which reached Financial Close to which Equator Principles was applied during the reporting period.
  3. Project Related Corporate Loans:The figures above represent the number of projects which reached Financial Close to which Equator Principles was applied during the reporting period.