Cathay Financial Holding

In terms of senior leadership accountability, the responsibility for sustainability issues within Cathay Financial Holding lies with the Corporate Sustainability Committee supervised by the Board of Directors. The asset manager identified and prioritised its impacts through a materiality assessment process which included feedback from external stakeholders. Moreover, it has an engagement policy where it describes its approach on sustainability themes and impact topics with clients and investees. This policy includes a clear framework with success criteria and escalation points in the event that engagement is unsuccessful as well as case studies describing where it has engaged successfully with investees on sustainability themes and impact topics. 

Cathay Financial Holding has set a target of net-zero financed emissions by 2050. Regarding engagement on climate change, the asset manager discloses that through Climate Action 100+ it engaged in one-on-one communication with all Taiwanese companies encouraging them to take carbon reduction actions in accordance with the Paris Climate Agreement. It also engages investees on some biodiversity-related topics, such as raw material sourcing, water stress, packaging material and waste. Moreover, Cathay Financial Holding discloses the aggregate amount of finance it devotes to climate solutions while specifying what these solutions are, as well asdiscloses absolute financed emissions of its equity and bond portfolio and publishes the underlying data quality. 

Cathay Financial Holding has a publicly available policy statement committing it to respect human rights and respect the ILO core labour rights. It also publicly discloses the results of its human rights risk assessments, which are aggregated across its operations and locations, and discloses categories of stakeholders whose human rights have been or may be affected by its activities. Furthermore, the asset manager has a grievance mechanism accessible to all workers to raise human rights complaints or concerns. With respect to diversity, Cathay Financial Holding discloses the proportion of its total direct operations workforce for each employee category by gender and age group. It also discloses the amount of finance it directs towards usually excluded groups and small- and medium-sized enterprises (SMEs). 

In terms of its approach to senior leadership accountability, there is no evidence that Cathay Financial Holding links the remuneration of its executive or management teams to sustainability performance criteria. In terms of female representation in leadership positions, women are underrepresented on the board of directors where only 1 out of 13 board members are women. The asset manager also has an opportunity to reach at least 40% female representation in senior leadership positions. Moreover, there is no evidence that it discloses the ratio of basic salary and remuneration of women to men in its total direct operations workforce for each employee category. 

Cathay Financial Holding does not currently disclose interim emissions reduction targets at the group level, such as a 45% reduction in financed emissions by 2030. While it does encourage investees to set a strategy aligned with the Paris Agreement, Cathay Financial Holding has an opportunity to make this a requirement. Furthermore, the asset manager could disclose time-bound targets explicitly for its climate solutions as well as align all of its climate solutions with internationally recognised frameworks. There is no evidence that Cathay Financial Holding is committed to minimising its negative impacts on nature and biodiversity. 

Cathay Financial Holding describes a process for identifying its human rights risks, but there is no evidence the process covers all its financing activities. Moreover, it could disclose that it has a mechanism, or participates in a shared mechanism, accessible to all external individuals and communities who may be adversely impacted by the financial institution to raise human rights complaints or concerns. There is no evidence that Cathay Financial Holding discloses the amount of finance directed towards low-income developing countries.