Taiwan Financial Sector Expands Green Procurement and Responsible Investment for Sustainability

Driven by the dual forces of the Financial Supervisory Commission's continuous promotion of the Green Finance Action Plan 3.0 policy and Taiwan's capital markets fully aligning with International Financial Reporting Standards (IFRS) Sustainability Disclosure Standards, Taiwan's financial sector is ushering in a profound operational and investment transformation. In the past, financial institutions mostly engaged in traditional lending and wealth management businesses. Today, under the international wave of net-zero carbon emissions and the guidance of regulatory authorities, financial holding groups are successively incorporating sustainable development into their core strategies. Starting from their own daily operations, expanding procurement of environmentally friendly and socially responsible products, to reviewing their asset allocations and gradually taking divestment actions against high-carbon and high-pollution traditional energy industries, Taiwanese financial institutions are actively building a sustainable ecosystem encompassing supply chains and investment targets through capital guidance and corporate engagement.

In the implementation of green operations, domestic large-scale financial holding groups have demonstrated significant quantitative results. Taking Cathay Financial Holding as an example, through strict supply chain management and green procurement policies, the group has set clear carbon reduction and sustainability targets. The latest statistics show that Cathay Financial Holding's procurement amount for green products in 2025 has reached a scale of NTD 1.533 billion, a substantial growth of 44 percent compared to the previous year. This remarkable growth reflects that financial institutions are fully turning toward environmentally friendly options in the selection of office equipment, information systems, green building materials, and even daily consumables. Through their massive procurement scale, the financial industry has not only reduced its own carbon footprint, but also exerted strong market influence, substantially encouraging suppliers and downstream partners to jointly invest in green transformation and form a virtuous industrial cycle.

Beyond the greening of their own operations, the financial industry has extended its influence to the core of capital supply, driving the decarbonization of the real economy through tighter investment and financing policies. Fubon Life Insurance, a life insurance institution with a massive asset scale in Taiwan, has actively implemented the Principles for Responsible Investment (PRI) in recent years, adopting concrete action plans against climate change risks. According to Fubon Life's sustainability planning, the company has set a clear timetable, expecting to completely withdraw from investments in companies whose thermal coal revenue or power generation capacity accounts for more than 5 percent by the end of 2030. This policy means that financial capital will no longer flow to the main drivers of global warming and carbon emissions. Through concrete measures such as divestment and non-reinvestment, it sends a strong market signal to high-carbon-emitting enterprises, forcing traditional energy industries to accelerate their transformation, otherwise facing the severe test of financing disconnection and difficulties in raising funds.

The financial industry's ability to demonstrate such active transformation momentum stems mainly from changes in the external regulatory environment and the requirements of international supply chains. The Financial Supervisory Commission has actively promoted the Green Finance Action Plan in recent years, gradually establishing a complete regulatory framework ranging from information disclosure, lending policies to investment guidelines. Especially as Taiwan officially aligns with IFRS Sustainability Disclosure Standards, enterprises and financial institutions must disclose more detailed greenhouse gas inventory data and climate-related financial disclosure information. This not only enhances market transparency, but also provides financial institutions with a more standardized and rigorous basis when assessing the carbon emission risks of their investment and financing portfolios. In such an information-transparent environment, if the financial industry fails to properly manage climate risks, it may not only face the crisis of reputational damage, but also pay higher compliance costs under the regulatory pressure of the authorities.

Overall, Taiwan's financial industry's expansion of green procurement and establishment of a phase-out timeline for the coal industry are not only necessary moves to echo global climate governance, but also symbolize that domestic financial institutions are shifting from passive risk bearers to active sustainability promoters. Through green procurement, the financial industry supports the development of the environmental protection industry chain; through the withdrawal of coal investments, it demonstrates the determination to guide capital flows toward a low-carbon economy. This green financial revolution, led by the policies of the Financial Supervisory Commission and practically implemented by financial institutions, not only helps Taiwan achieve its national goal of net-zero carbon emissions by 2050 as scheduled, but also makes Taiwan's financial market more competitive in international sustainability ratings, laying a solid foundation for building a sustainable and mutually beneficial economic ecosystem.