Cathay Financial Holdings Leads Taiwan's Sustainable Finance Initiatives

Cathay Financial Holdings, a leading financial institution in Taiwan, has been at the forefront of promoting nature-positive growth and sustainable finance initiatives. The company's Chief Investment Officer, Sophia Cheng, has been actively participating in global events, such as Climate Week NYC, to share insights and drive collaborative efforts towards a more sustainable future.

Driving Nature-Positive Investments and Strategies

Championing Biodiversity and Ecosystem Restoration

Cathay Financial Holdings has been a consistent participant in Climate Week NYC, demonstrating its global influence and Taiwan's financial sector's commitment to promoting nature-positive growth. During the 2024 event, Sophia Cheng, the CIO of Cathay Financial Holdings, contributed to the "Valuing Natural Capital: Creating Markets for Nature" session at the World Biodiversity Summit. Cheng emphasized the urgent need for increased capital to support nature-positive initiatives, citing research that estimates a significant funding gap between the current annual investment in biodiversity conservation and restoration and the estimated annual requirement by 2030.Recognizing the complexity of the biodiversity and nature-related sectors, Cheng suggested the establishment of a global biodiversity project platform. This platform would match diverse funding sources with nature projects across various risk profiles, while setting consistent standards, such as developing market rules for biodiversity credits, to enhance market efficiency and stability. Cheng also highlighted successful examples, such as the World Bank's "Rhino Bond," which links bond yields to the success of rhino conservation efforts, as a model for integrating biodiversity and investment goals.

Integrating Water Resource Management into Investment Strategies

At the Ceres Water Resources Forum, Cheng further emphasized the critical importance of water resources, quality, and stability for both human life and global ecosystems. She shared that Cathay Financial Holdings and its subsidiaries analyze companies in their investment and financing portfolios with high water resource risks, integrating water governance performance into their investment management and engagement strategies. Cheng praised Taiwan's high-tech industries for their proactive responses to water-related risks and encouraged broader efforts in water governance, moving from targeted projects to more comprehensive strategies to avoid greenwashing risks.

Pioneering Sustainable Finance Initiatives

As the only Taiwanese financial institution to sign the "Valuing Water Finance Initiative," Cathay Financial Holdings has invested in and provided loans to the water resource sector, including water treatment, water supply, and wastewater management. Additionally, Cathay Life Insurance, a subsidiary of Cathay Financial Holdings, was the first financial institution in Taiwan to join Nature Action 100. In 2023, Cathay Life Insurance collaborated with 190 international institutional investors to engage 100 companies in industries significantly impacting natural habitats and biodiversity loss, urging them to take proactive measures to protect and restore natural ecosystems.Cathay Financial Holdings has observed the rise of nature-themed asset management and insurance products, along with promising blended finance models that appropriately value ecosystem services, thereby attracting more investments. The company's leadership in these initiatives demonstrates its commitment to driving nature-positive growth and overcoming financial barriers to achieve sustainability goals.

Fostering Public-Private Collaboration

Throughout the discussions at Climate Week NYC, Cheng expressed concerns over the general lack of attention to biodiversity loss, a sentiment echoed by fellow panelists. However, the panelists adopted a positive and proactive stance, emphasizing the promising outlook for biodiversity and highlighting practical measures, such as the construction of the Global Biodiversity Framework, the rise of biodiversity credit schemes, the continuous development of technologies like AI, and numerous transnational collaborations aimed at promoting nature-positive growth.Cheng stressed the importance of collaboration between the public and private sectors in building a larger, more impactful market that integrates biodiversity. She believes that "everyone can influence a stakeholder, and the more we engage, the more successful natural investments will be." Cathay Financial Holdings' leadership in this space demonstrates its commitment to driving sustainable finance and nature-positive growth, not only in Taiwan but also on a global scale.