Cathay FHC’s three arrows for the energy transition: investment and financing in renewable energy, innovative collaboration in renewable energy, and leveraging core competencies to innovate in services.
TAIPEI, June 30, 2024 /PRNewswire/ — Sustainable finance drives competitiveness of net-zero transformation. Yesterday (26th), Lee Chang-Ken, Chairman of Cathay Financial Holdings (Cathay FHC), attended the Climate Investment Summit in person at the London Stock Exchange (LSEG), marking his second consecutive year as as the only Taiwanese speaker. Building on the consensus on “Transforming the energy system and moving away from fossil fuels” reached at the 28th United Nations Climate Change Conference (COP28) In 2023, Mr. Lee used Asia as an example to discuss the challenges and solutions in promoting renewable energy, sharing Cathay FHC’s cross-industry efforts and tangible results in implementing renewable energy initiatives. This demonstrates that Taiwan’s financial sector has successfully achieved net-zero transformation on a global scale.
Cathay FHC leads Taiwan’s Renewable Energy Push at LSEG’s Climate Investment Summit During Climate Week London. Lee Chang-Ken(right), President of Cathay FHC, personally attended the “Climate Investment Summit”.
Cathay FHC leads Taiwan’s Renewable Energy Push at LSEG’s Climate Investment Summit During Climate Week London.
The Climate Investment Summit is a flagship platform for global climate solutions, held in the historic financial center of LSEG. Cathay FHC not only became the only Taiwanese financial institution invited back to the summit, but also served as a bridge for dialogue on the energy transition between theEurope, America and Asia. This is international recognition of the commitment and achievements of Taiwan’s financial sector in the energy transition. Mr. Lee participated in the summit’s discussion on Renewable Returns: The Business Case for Mature Energy Technologies, which explains how Cathay FHC supports the development of low-emission industries carbon through innovative capital and financial services. Cathay FHC has been recognized for the second year in a row as a case of global best practice by the Investor Agenda for its Investor Climate Action Plans (ICAP), making it the only selected asset owner in Asia.
During the panel discussion, Mr. Lee highlighted the challenges and solutions for promoting renewable energy in Southeast Asia, traced the history of the Taiwan government’s efforts to promote renewable energy, and discussed the role of Cathay FHC as a pioneer in this field. Cathay FHC continues to lead the implementation of the trial, helping the market understand its feasibility. “We are also happy to support various innovative models that will benefit the future,” emphasizes Mr. Lee. He Note that Asia is the main source of growth in global electricity demand and is still largely dependent on fossil fuels. Southeast Asian governments should continue to improve policy stability and strengthen infrastructure, while making good use of financial tools such as guarantees or blended finance to improve the cost of capital and capital risks. investment in emerging markets. They should also address just transition issues, such as labor employment, to ensure the success of the energy transition.
Cathay FHC is the sixth financial institution in Asia to set targets validated by the Science Based Targets Initiative (SBTi). It has committed to reducing net carbon emissions from its financial assets to zero by 2050. Cathay FHC is also the first Taiwanese member of the RE100 financial industry and a pioneer in renewable energy financing in Taiwan. In the areas of low-carbon transition and renewable energy innovation, Cathay FHC continues to play a leading role in implementing trials, helping the market understand feasibility, and becoming a key driver of renewable energy in Taiwan. By 2023, Cathay FHC’s renewable energy consumption will reach 17.95 million kWh, and by the end of 2023, the total amount of low-carbon investment and financing will reach NT$330.5 billion (approximately equivalent to US$11.7 billion).
Regarding Cathay FHC’s path to promote the development of renewable energy, Mr. Lee outlined three major strategies. The first strategy is to “enhance investment and financing in the field of renewable energy.” By 2023, Cathay FHC’s total investment and financing in renewable energy will reach NT$63.3 billion (approximately US$2 billion), with a solar installation capacity of 1,504 MW. Cathay United Bank was the first to finance solar power and offshore wind power in Taiwan; Cathay Life Insurance became the first life insurance company in Taiwan to establish the solar project investment company “Cathay Power.” Recently, this company has developed renewable energy on land deemed unsuitable for agriculture by the Ministry of Agriculture, thus promoting a mutually beneficial scenario for land revitalization and renewable energy development, while increasing electricity production to meet market demand.
Second, Cathay FHC promotes “innovative collaboration in renewable energy”. Mr. Lee believes that Cathay FHC’s focus on stakeholder success, active attempts at collaborative innovation, and seeking appropriate directions to identify success stories are the reasons why Cathay FHC can continually overcome challenges and accelerate the development of renewable energies. For example, Cathay Power aims to think systematically about agrivoltaics, creating a standardized, scalable and sustainable agrivoltaics model. Collaborating with the government to launch the agrivoltaic experiment “Agri-Light Project” in Dalin, Chiayi, is an innovative plan that integrates the development of crop grass with photovoltaic technology. This initiative addresses several issues: it is expected to reduce Taiwan’s dependence on fodder imports and mitigate the risks of international supply chain instability while avoiding negative impacts on local agriculture. In addition, livestock manure can be used for energy production from biogas, with the residue serving as organic fertilizer, promoting balanced and circular agriculture in Taiwan.
Third, Mr. Lee stressed that it is important to leverage core competencies to innovate in services. Faced with the many challenges that climate change poses to businesses, Cathay FHC proactively seeks solutions by drawing on its core financial skills to offer diversified and innovative services, transforming challenges into opportunities. For example, Cathay Securities worked closely with Cathay FHC’s Digital Data & Technology Center (DDT) blockchain team to develop a Security Token Offering (STO) product. ), Taiwan’s first STO. The issue consists of a 6-year debt-based STO offering an annual interest rate of 3.5%. Coupled with a preferential purchasing mechanism for electric machines, the overall investment return rate increases significantly, which helps green energy enterprises raise funds from professional investors and enhances investor confidence. Small and medium-sized businesses often find it difficult to purchase green energy independently. As Taiwan’s largest commercial real estate owner, Cathay Life consolidates the purchase and distribution of green energy, enabling our tenants to obtain it more efficiently. This approach plays a vital role in bridging the gap between supply and demand for renewable energy. In 2023, 18 companies received a total of 13.49 million kWh of green energy.
Mr Lee added that Cathay FHC is committed to working with partners and clients across industries to explore more climate solutions together. On 3 July, the Cathay Sustainable Finance and Climate Change Summit will focus on net-zero solutions and sustainable finance. The summit will bring together leading experts and companies in the field of sustainability, including: Sam Kimmins, director for energy at the Climate Group, who will share future perspectives and industrial practices together. The event aims to guide Taiwanese businesses in accelerating climate action and showcase Taiwan’s industrial achievements and commitment to net zero goals on the global stage.
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