Energy and GHG Emissions - Yuanta Financial Holdings

Eergy and GHG Emissions

Implementation of Greenhouse Gas Inventory System and Energy Management System

Yuanta is highly aware of the impact climate change has on the economic, financial, and legal environment. As such, in addition to diversifying our operations and developing new businesses based on our existing niches, we also adjust our operating procedures, business strategy, and investment decisions as necessary. On top of this, through education and training, we raise our employees' understanding of climate risk and improve their ability to adapt accordingly, reducing potential operating risks to the Company while also continuing to strive for environmental sustainability.

Since 2015, Yuanta Financial Holding Company (FHC) has started to implement ISO 14001 environmental management system to establish an environmental management framework, formulate environmental policies, plan environmental improvement goals and targets, and propose continuous management improvement plans. Based on the ISO 14001 environmental management system framework, we have been promoting ISO 14064-1 Greenhouse Gas (GHG) inventory, ISO 50001 energy management system, and ISO 14046 water footprint inventory, which have been implemented year by year to effectively carry out carbon reduction, energy saving, water conservation, and business waste control, and to comprehensively improve environmental management efficiency.

About GHG Inventory and Target, Yuanta Financial Holding Company (FHC) has signed the "Science Based Targets (SBT)" in 2019 and verification in July 2022. FHC completed the GHG inventory of categories 1 and 2 and disclosure of investment and financing assets for every year , and is the first comprehensive financial company in Taiwan to initiate. Announced that in the future, it will continue to deepen the inventory of carbon footprints, exert financial influence to promote the low-carbon transformation of the entire industry, and practice the goal of sustainable finance.

internal carbon pricing

Yuanta Financial Holdings has long been attentive to global carbon pricing trends. Since 2020, it has been engaged in carbon pricing mechanism-related discussions. In 2021, it established the “Internal Carbon Pricing Task Force.” In 2022, it conducted a trial run across the entire Yuanta Group. In 2023, it assessed related results and continuously addressed areas of improvement. In 2024, it formally implemented internal carbon pricing mechanisms as its carbon reduction strategies and risk management tools.

To manage and implement internal carbon pricing mechanisms, the Sustainable Development Committee founded the Internal Carbon Pricing Task Force and introduced internal carbon pricing review meetings. The task force team members come from various departments such as the accounting, finance, human resources, and administration departments, and they hold meetings every quarter to assess the reasonableness of Yuanta Financial Holdings’ carbon pricing, the accuracy of its carbon reduction targets, and the effectiveness of its carbon reduction plans. The assessments are performed across departments, and relevant matters are planned. The progress of the Internal Carbon Pricing Task Force is reviewed twice a year at internal carbon pricing review meetings to refine related management matters and establish mechanisms for valuing carbon management.

ISO 14001:2015 Environmental Management System
（Date of first certification: 2022.03.22; Expiry date: 2025.03.21）

Yuanta continues to promote a variety of measures to reduce our environmental impacts and move toward establishing a green corporate culture. In addition to creating a green and friendly workplace, we are also working to encourage customers, employees, and their families to get involved in green initiatives and work together to achieve the goals of environmental sustainability. To promote and manage environmental issues within the Yuanta Group, Yuanta started ISO 14001 environmental management system implementation in November 2015, beginning with Yuanta FHC. The Yuanta Financial Tower and Datong Building passed verification in March 2016. The implementation expanded to include Yuanta Life location on the 16th through 18th floors of Hongtai Building in January 2017. Yuanta FHC and its 9 subsidiaries all have implemented the system and passed the verification, with a 100% coverage rate. Yuanta will continue to maintain the system operational and strive to pass verification.

ISO 14064-1:2018 Greenhouse Gas (GHG) Inventory
（Date of certification: 2024.03.25; Inventory year: 2023）

Yuanta began to implement the ISO 14064-1 GHG Inventory System in 2015, with subsidiaries Yuanta Securities and Yuanta Funds passing certification in May and September of 2016 respectively. In 2020, we undertook ISO 14064-1:2018 inventory of GHG emissions and Yuanta FHC and our subsidiaries passed certification with a 100% coverage rate. In the future, we will continue to conduct GHG inventory every year in order to grasp the actual effectiveness of our company’s energy saving and carbon reduction.

GHG Emissions (metric tons of CO₂e)	2020	2021	2022	2023
Category 1	1,492.17	1,660.71	1,436.98	1,359.64
Category 2 (Location-based)	22,388.12	20,593.33	18,562.91	17,254.23
Category 2 (Market-based)	22,128.53	20,407.59	18,562.91	17,254.23
Category 1+2 (Location-based)	23,880.29	22,254.04	19,999.89	18,613.87
Carbon Intensity (metric tons of CO₂e per NT$ billion of revenue) (Note6)	206.53	186.63	218.57	189.76
Data Coverage Rate (%) (Note7)	100	100	100	100
Category 3~5 (Note8)	6,440.28	4,035.19	125,777.62	97,629.53
Notes： The inventory is conducted for Category 1~4 based on ISO 14064-1. The operational control approach is used to set the organizational boundary, and the base year was the 2017 location-wide inventory. Based on the emission factor methodology, GHG emissions = activity data x emission factor x Global Warming Potential (GWP). The GWP values used in 2020 reference to IPCC AR5 version. From 2021 onwards, the GWP values reference to IPCC AR6 version. Category 1 and 2 GHG emissions include carbon dioxide(CO2), methane(CH4), nitrous oxide(N2O), hydrofluorocarbons(HFCs), perfluorocarbons(PFCs), sulfur hexafluoride (SF6) and nitrogen trifluoride (NF3). Category 1 GHG emissions mainly come from gasoline and refrigerant. The emission factors are calculated using the“Ministry of Environment Greenhouse Gas Emission Factor Management Table 6.0.4.” Category 2 GHG emissions are externally procured electricity. The Category 2 (market-based) GHG emissions are calculated using the quantitative method of the Ministry of Environment “Operating Guidelines for Greenhouse Gas Emissions Inventories. Carbon intensity refers to the emissions of Category 1 and Category 2 greenhouse gases generated per NT$1 billion in revenue. Data coverage rate represents the ratio of locations included in the Category 1 and 2 data compared to total locations in the specified year. Category 3~5 GHG emissions do not include the carbon emissions related to investing and financing activities.

ISO 50001:Energy Management Systems
（Date of certification: 2024.05.28; Expiry date: 2027.05.27）

Since 2016, the Yuanta Group has gradually introduced the ISO 50001 energy management system to continuously evaluate and implement energy-saving plans through a systematic management framework and process in order to achieve effective improvement of energy performance. In 2020, Yuanta Financial Tower, Taipei Datung Building, Taipei Chengde Building, Taipei Baoqing Building, Taichung Building, Tainan Yongkang Building, Tainan Fucheng Building, Kaohsiung Building, Kaohsiung Mingcheng Building, and Taichung Chongde Building, a total of ten Yuanta self-owned buildings have obtained ISO 50001 energy management system certification. The original target of having all of the Yuanta Group’s owned buildings certified by 2021 has been achieved ahead of schedule.

Inventory Boundary of All Owned Buildings in Taiwan	Yuanta Financial Tower	Yuantai Plaza	Taipei Baoqing Building	Taipei Chengde Building	Taichung Building	Taichung Chongde Building	Tainan Fucheng Building	Tainan Yongkang Building	Kaohsiung Building	Kaohsiung Mingcheng Building	Yecaiji Building
Covered Companies	Financial Holdings Securities Bank	Securities Bank Futures AMC	Securities Bank	Securities Bank	Securities Bank Futures	Securities Bank Life (Insurance) Funds Securities Finance	Securities Bank Futures	Securities Bank	Securities Bank Futures	Securities Bank	Funds
Standard Version	ISO 50001:2018
Date of First Certification	2018/05/28										2017/04/23
Expiry Date	2027/05/27										2026/04/23

Energy Saving Actions and Results

Using energy-saving initiatives and reducing energy consumption is an important part of creating low-carbon operations. Through various energy-saving initiatives, including the replacement of high-energy consumption equipment, the installation of LED energy-saving lighting, induction lighting, control of electrical equipment usage, intelligent monitoring of energy consumption, air-conditioning system upgrade, building insulation design, replacing old vehicles and installing electric vehicle charging piles in new buildings, etc., and through education and promotion, the Group has enhanced employees' awareness of energy saving, carbon reduction and environmental protection in order to reduce the potential risks of carbon emissions from the Company's operations and mitigate the impact of climate change.

Energy Saving Actions	Reduction of Power Consumption (kWh)	Reduction of Energy Consumption (MJ)	Carbon Reduction Performance (Metric tonsCO₂e)	Project Input Cost (NT$ thousand)
Installation of LED energy-saving lighting	99,000	356,400	49.01	1,890
Replacement of old air conditioning equipment	142,373	512,542	70.47	9,311
Total	241,373	868,942	119.48	11,201
Notes: The reduction in electricity consumption is calculated by converting the project's electricity savings over 12 months of 2023. The carbon reduction performance is calculated based on the 2022 Electricity Emission Factor = 0.495 (kgCO2e/kWh) announced by the Taiwan’s Bureau of Energy, MOEA. The GHG reductions of the major energy saving actions take place in the scope of Category 2.

Smart Monitoring Implementation

In order to calculate the energy consumption situation with data, real-time and continuous information, Yuanta FHC is the first to introduce “Chunghwa Telecom iEN Smart Energy-Saving Service - Building Energy-Saving System" in 2019. The project is carried out in six steps: current situation evaluation, system introduction evaluation, simulation of results, on-site installation, field acceptance, and official launch.Sensor points and system feeders are deployed in six owned buildings,and real-time metered measurements are used to obtain basic information on electricity consumption of high-energy consumption equipment. Through the system’s real-time online monitoring, we can grasp the continuous energy consumption situation to evaluate the operation efficiency of high energy-consuming equipment, which is the basis for scientific setting of long-term carbon reduction targets.

Renewable Energy Procurement

The Group has actively responded to the changes in Taiwan’s renewable energy regulations and has been subscribing green power through our subsidiaries since 2016. In terms of purchasing renewable energy, in the beginning, the Group focused mostly on solar power plants based on the operating model in our offices. We also requested the power plants to provide actual photos and describe their plans, ensuring that power generation at the sites did not affect land and environmental ecosystems. In addition, the Group completed the signing of the "Renewable Energy Power Purchase Agreement (PPA)" in 2020 and officially switched to renewable energy power supply in the third quarter of 2021. This green power procurement plan covered the Group's 5 subsidiaries: securities, banking, life insurance, funds, and futures. Apart from 5 locations which are already 100% powered by green energy, including Yuanta Securities Ximen Branch, Taichung Branch, Yuanta Bank Main Branch and Taichung Branch, and Yuanta Futures Taichung Branch, the Group will continue to expand the coverage of green energy supply. This year, the total green energy supplied was 2.64 million kWh. In 2023, 7.06% of the energy used by the Group was green energy. This makes the Group not only the largest green power consumer in the financial industry but also the one with the broadest coverage. In summary, the cumulative use of renewable energy from 2016 to 2023 reaches 6,626,582 kWh, reducing greenhouse gas emissions of 3,364.11 metric tons of CO2e, which is equivalent to the amount of carbon absorbed by 340.37 hectares of forest

Yuanta Group Renewable Energy Green Power Usage

Item	2020	2021	2022	2023
Green Power Wheeling (PPAs) (kWh)	-	15.67	94.59	264.34
Total Renewable Energy Consumption(kWh) Note	51	52.73	94.59	264.34
Electricity Emission Factor (kgCO₂e/kWh)	0.502	0.509	0.509	0.495
Carbon Reduction (Metric tons CO₂e)	256	264.7	481.46	1,308.46
Equivalent annual forest carbon absorption (hectare)	25.31	26.17	49.52	134.81
Note: The total renewable energy usage from 2020 to 2021 included the number of renewable energy certificates purchased. Since 2022, energy supplied has been exclusively green power wheeling. Detailed disclosures are available in the 2022 ESG Report.

Primary Energy Usage

Items		2020	2021	2022	2023
Non-Renewable Energy	Power Consumption (kWh)	43,984,518	41,022,562	36,454,150	34,823,076
	Other Energy Consumption (GJ)	6,160	5,147	4,402	4,531
	Other Energy Consumption (MWh)	1,711.11	1,429.72	1,222.78	1,258.61
	Total Energy Consumption (GJ)	164,533	152,828	135,637	129,894
	Total Energy Consumption (MWh)	1,422.94	1,281.68	1,482.34	1,324.23
	Energy Intensity (GJ/NT$1 billion revenue)	1,422.94	1,281.68	1,482.34	1,324.23
Renewable Energy	Power Consumption of Green Power Wheeling & Renewable Energy Certificates (kWh)	510,000	527,341	945,920	2,643,358
	Total Renewable Energy Consumption (GJ)	1,836	1,896	3,405.32	9,516.08
	Total Renewable Energy Consumption (MWh)	510.00	527.34	945.92	2,643.36
Data Coverage Rate (%)		100	100	100	100
Notes: The primary form of energy use is purchased electricity. The item of other energy includes gasoline and diesel. The conversions of heating value of energy are calculated with reference to the conversion units published by the International Bureau of Weights and Measures and to the “2022 Energy Statistics Handbook – Table for Unit Heating Value of Energy Products” of Taiwan's Bureau of Energy, MOEA. We calculated the data using 860 kcal/kWh for electricity, 7,800 kcal/L for gasoline, and 8,400 kcal/L for diesel, and converted units by 4.1868 kJ/kcal, 0.277778 MWh/GJ. Data coverage rate represents the ratio of locations included in the data compared to total locations in the specified year.