Sustainable Investment
To institutionalize responsible investment, KGI Life formulated its Responsible Investment Policy in accordance with key regulations and frameworks, including the Stewardship Principles for Institutional Investors by the Taiwan Stock Exchange and the United Nations Principles for Responsible Investment (UN PRI). This policy integrates critical Environmental (E), Social (S), and Governance (G) indicators into its investment process, so that the Company fulfills its corporate social responsibility and pursues the goal of stable, long-term sustainable operations.
The scope of the Responsible Investment Policy covers domestic and international listed, unlisted, and OTC stocks, corporate and financial bonds, government bonds, and fund management institutions. KGI Life incorporates ESG and other sustainability factors throughout the investment lifecycle: pre-investment evaluation and analysis, target selection, execution of investment decisions, and post-investment management. It also takes stewardship actions to increase investment value and promote the sound development of its investment business.
To mitigate investment risks, KGI Life has established clear investment exclusion criteria to exclude from direct investment potential targets whose primary business activities appear on the Company's negative list, covering involvement in environmental pollution, social controversies, or poor corporate governance. Furthermore, in line with its Climate-related Risk Management Guidelines, it applies an additional review mechanism to investments with higher climate-related risks to strengthen climate risk identification and control.
KGI Life's Responsible Investment Policy is structured around the UN Principles for Responsible Investment (PRI) and the Taiwan Stock Exchange's Stewardship Principles for Institutional Investors. The Company integrates ESG considerations and climate risks into core decision-making processes for investment and asset management through an institutionalized, quantifiable evaluation and management model, ensuring that its investment portfolio aligns with sustainable trends, mitigating potential financial and non-financial risks and enhancing long-term social and environmental benefits.
STEP 01
Negative List Screening
Before investing, KGI Life verifies sustainability information, reviews for higher climate risks, and screens against its negative list, comprehensively analyzing the potential environmental, social, and governance impacts of investment targets. Targets involved in matters listed in the exclusion criteria are excluded from direct investment.
STEP 02
Investment Target Screening
Using its ESG checklist, the Company systematically assesses a target's performance across environmental, social, and governance dimensions to identify potential sustainability risks and their long-term impacts on development.
STEP 03
High-emission / Climate Risk Check
For investment targets with elevated climate risks, KGI Life initiates an enhanced review process using its checklist for ESG and higher climate risk. Beyond analyzing their carbon emissions and whether they belong to carbon-intensive industries, it also evaluates whether concrete transition plans, carbon reduction targets, or improvement actions are in place. If a target received major environmental penalties in the past year, the Company also reviews its remedial actions.
STEP 04
ESG Evaluation
KGI Life references domestic and international ESG rating agencies such as MSCI, accessed via the ESG IR platform, and gathers financial data, ESG ratings, carbon emissions data, and information on major controversies through external professional databases such as MSCI ESG Manager and Bloomberg. This data forms a key basis for its investment decisions.
STEP 05
Investment Decision
Before making an investment decision, KGI Life goes beyond evaluating macroeconomic conditions, industry outlooks, and financial returns by applying its ESG checklist. For investment cases with elevated climate or sustainability risks, it adjusts its investment strategy or allocation according to the level of impact.
STEP 06
Post-investment Management
The Company periodically calculates and tracks the portfolio's total carbon emissions and carbon intensity as an internal tool for investment evaluation and management, enabling it to adjust investment positions and progressively reduce the portfolio's carbon emissions.
STEP 07
ESG Engagement
KGI Life continuously monitors, analyzes, and evaluates company information, and regularly assesses ESG issues or major negative news related to its investment targets. The responsible unit weighs the materiality of these issues to determine whether proactive engagement and communication are required.
Following the group's decarbonization commitment, KGI Life pledges to fully withdraw from all business activities related to thermal coal and unconventional oil/gas industries by the end of 2040. This includes project financing and investment, credit lines, loans, fixed-income products, underwriting, and all active, passive, and discretionary investments. As a phased commitment, by 2025 the Company will cease direct financing and investment for new thermal coal and unconventional oil/gas projects (including new extraction and the expansion of existing projects) and for companies that are expanding their operations in these sectors. As of 2025, KGI Life has made no new project-based investments in these businesses.
KGI Life is an active investor in the renewable energy industry, fostering the industry's growth by seeking opportunities with development potential and tangible environmental benefits. When evaluating and managing renewable energy investments, the Company requires targets to complete environmental impact assessments covering ecological conservation and environmental risks. Through engagement and questionnaires, it encourages investees to disclose climate and ecological information and to set carbon reduction or sustainability goals, leveraging its financial influence to promote ecological conservation and sustainable development.
In support of the government's Green Finance Action Plan 3.0, KGI Life has invested approximately NT$2.3 billion in green bonds recognized by the Taiwan Stock Exchange and the Taipei Exchange, and approximately NT$9.29 billion in ESG ETFs. This represents a 2.5% increase from the previous year and demonstrates the Company's commitment to supporting Taiwan's ESG development and to practising sustainable investment through financial action.
KGI Life uses data from ESG rating agencies, such as MSCI, to review the ESG ratings of its domestic and foreign listed equities, corporate bonds, and financial bonds. As of 2025, its analysis, conducted using the MSCI ESG Manager database, covered 96% of its total equity and bond assets. Within these, the proportion of investees rated as ESG Leaders increased to 60%, up 1% from the previous year. The Company regularly engages with investees and tracks their ESG progress and performance. It will continue to engage with companies rated as Average and Laggard to help improve the ESG rating of its investment portfolio.
In 2025, KGI Life sent a total of 167 questionnaires to its investees in carbon-intensive industries and to investees and fund managers not yet signatories to the Science Based Targets initiative (SBTi). Its goal was to collaborate with investees on climate action. The questionnaires encouraged them to inventory and manage their greenhouse gas emissions, set reduction targets or transition plans, implement reduction actions, and establish phased milestones to track progress.
The analysis of these responses helped KGI Life understand the carbon profiles, current reduction measures, and the actions taken in response to climate-related risks and opportunities of investees across various sizes and sectors. It also assessed whether they had followed developments related to biodiversity, established relevant policies or commitments, and set transition plans in response to climate risks. KGI Life regularly tracks investees' carbon emissions and other climate-related practices, including water resource management, circular economy, and waste management, to ensure investees remain on track to meet their self-set annual targets. In 2025, it also began assessing whether domestic investees review their principal economic activities against Taiwan's Reference Guidelines for the Recognition of Sustainable Economic Activities, using this as a key input for future investment and engagement.
Engaged Companies by Industry
2025 ESG Engagements with Investees
| (E) Environmental | (S) Social | (G) Governance | Comprehensive ESG | |
|---|---|---|---|---|
| Engagements | 158 | 130 | 129 | 166 |
| Percentage | 27% | 22% | 22% | 29% |
To support Taiwan's 2050 net-zero emissions goal, the Financial Supervisory Commission issued the Reference Guidelines for the Recognition of Sustainable Economic Activities. These guidelines encourage financial institutions to systematically apply sustainable taxonomy principles to investment and financing evaluations, capital allocation, transition engagement with investees, and disclosure of the share of sustainability-related investments. The aim is to channel capital toward economic activities with substantial environmental benefits or companies with credible transition plans, thereby enhancing the transparency and credibility of sustainable finance.
Leveraging its financial influence to help Taiwan's industries transition to net zero in an orderly manner, KGI Life calculates and discloses the key performance indicators (KPIs) for its investment economic activities, as shown in the tables below.
| Description of Investment Economic Activity | Balance (NT$ million) |
|---|---|
| Total investment assets (A)① | 2,216,016 |
| Investments excluded from the guidelines (A1)② | 272,972 |
| Investments covered by the guidelines (A2) | 1,943,044 |
| Non-eligible investments (B1)③ | 1,796,876 |
| Eligible investments (B2) | 146,168 |
| Aligned investments (C1) | 82,761 |
| Investments in transition (C2) | 47,116 |
| Non-aligned investments (C3) | 16,291 |
| KPIs | Percentage (%) |
|---|---|
| Percentage of eligible investments (B2/A2) | 7.52% |
| Percentage of aligned investments (C1/A2) | 4.26% |
| Percentage of investments in transition (C2/A2) | 2.42% |
| Percentage of non-aligned investments (C3/A2) | 0.84% |
| Percentage of aligned to eligible investments (C1/B2) | 56.62% |
① Total investment assets refer to financial assets at FVTOCI, financial assets at amortized cost, investments accounted for using the equity method, financial assets at FVTPL, and investment property—buildings.
② Excluded items include derivatives, real estate mortgage-backed securities, and debt issued by central governments, central banks, and supranational institutions.
③ Non-eligible investments include the financial industry and non-financial industries not covered by these guidelines, unlisted companies, foreign enterprises, and indirect investments.
The guidelines classify eligible economic activities into general and enabling categories. In KGI Life's investment business, investments in general economic activities involved 34 companies, totaling NT$131,341 million, while investments in enabling economic activities involved 10 companies, totaling NT$3,234 million.
| General Economic Activity | DGBAS Code | Investment Amount(NT$ million) |
|---|---|---|
| Semiconductors | C2611, C2613 | 97,753 |
| Computers and peripheral equipment | C2711, C2712, C2719 | 23,319 |
| Cement | C2331 | 5,695 |
| Petrochemicals | C1810, C1841 | 2,249 |
| Textiles | C1111, C1112, C1113, C1119, C1121, C1122, C1123, C1124, C1129, C1130, C1140, C1210, C1850 | 1,226 |
| Passenger and freight rail transport | H4910, H4920, H5231 | 960 |
| Waste treatment | E3821, E3822, E3830 | 20 |
| Freight transport services by road | H4940, H5231 | 18 |
| Road transport and public transport infrastructure | H5241, H5249, H5290 | 96 |
| Waste reuse | E3821, E3822, E3830 | 5 |
| Enabling Economic Activity④ | DGBAS Code | Investment Amount(NT$ million) |
|---|---|---|
| Renewable energy generation, facilities, and components | C2810, D3510 | 1,353 |
| Smart grid system R&D and infrastructure | C2810, C2831, C2832, C2890, D3510, F4220 | 1,324 |
| Infrastructure enabling low-carbon water transport | F4290, H5251, H5259 | 1 |
| Energy storage facilities and components | C2820, C2890 | 556 |
④ The industrial classifications for enabling economic activities in the Reference Guidelines for the Recognition of Sustainable Economic Activities and for the 12 Key Strategies under the 2050 Net-Zero Emission Pathway are not identical. Therefore, the amounts KGI Life discloses under each framework may differ.
Based on the Reference Guidelines for the Recognition of Sustainable Economic Activities, KGI Life has developed differentiated engagement strategies for investees in carbon-intensive and transitioning industries:
- For companies eligible but not yet aligned: engagement focuses on the specific criteria they fail to meet, encouraging them to analyze the gap between their operating activities and the classification criteria and to progressively develop concrete transition plans with phased targets.
- For companies not eligible: KGI Life uses engagement questionnaires to gather information on their current ESG practices and climate change responses, fostering dialogue about their climate-related transition plans and actions.
Through these questionnaire-based engagements, KGI Life also assesses the provision of educational and advisory resources on sustainable economic activities, and has held engagement workshops with selected investees to guide them in understanding the concepts of eligibility and alignment and to raise their awareness of enabling economic activities.
| Engaged Party | A domestic textile company (Eligible but not yet aligned) | A domestic general merchandise retailer (Not eligible) |
|---|---|---|
| Topic | Domestic and international trends in sustainability taxonomies, circular economy-related regulations, and international supply chain transition requirements | Climate change-related plans |
| Content | Through an initial engagement questionnaire, KGI Life gained a preliminary understanding of the company's assessment under the Reference Guidelines for the Recognition of Sustainable Economic Activities. It then co-hosted an engagement workshop with KGI Securities, focusing on the applicability criteria for the textile industry under the climate change mitigation and transition to a circular economy objectives, and exchanged views with the investee on issues such as the use of recycled materials and supply chain management, in order to understand its current implementation challenges, directions for improvement, and future transition needs. | Through an engagement questionnaire, KGI Life gained an understanding of the company's current climate transition plan and its execution, and initiated a dialogue on its climate change response strategy. |
| Outcome | The company gave positive feedback on the engagement and shared that it had already introduced circular economy and resource-efficiency measures in some of its manufacturing processes. The exchange further clarified the gap between its current practices and the applicability criteria for sustainable economic activities. The company will progressively plan concrete transition actions to improve its likelihood of meeting the criteria. | KGI Life has obtained a preliminary understanding of the company's climate transition plan and will continue to track its progress through future engagements. |
| Engaged Party | A domestic textile company (Eligible but not aligned) |
|---|---|
| Topic | Domestic and international trends in sustainability taxonomies, circular economy-related regulations, and international supply chain transition requirements |
| Content | Through an initial engagement questionnaire, KGI Life gained a preliminary understanding of the company's assessment under the Reference Guidelines for the Recognition of Sustainable Economic Activities. Subsequently, in June 2026, it co-hosted an engagement workshop with KGI Securities, focusing on the applicability criteria for the textile industry under the climate change mitigation and transition to a circular economy objectives, and exchanged views with the investee on issues such as the use of recycled materials and supply chain management, in order to understand its current implementation challenges, directions for improvement, and future transition needs. |
| Outcome | The company gave positive feedback on the engagement and shared that it had already introduced circular economy and resource-efficiency measures in some of its manufacturing processes. The exchange has further clarified the gap between its current practices and the applicability criteria for sustainable economic activities. The company will progressively plan concrete transition actions to improve its likelihood of meeting the criteria. |
| Engaged Party | A domestic general merchandise retailer (Not eligible) |
|---|---|
| Topic | Climate change-related plans |
| Content | Through an engagement questionnaire, KGI Life gained an understanding of the company's current climate transition plan and its execution, and initiated a dialogue on its climate change response strategy. |
| Outcome | KGI Life has obtained a preliminary understanding of the company's climate transition plan and will continue to track its progress through future engagements. |
In alignment with the government's initiative for investments in the Six Core Strategic Industries, KGI Life continues to channel capital into sectors with significant growth potential and policy importance, including information and digital technology, green and renewable energy, and industries vital to public livelihood and strategic readiness. As of 2025, the Company's investment balance in these areas reached NT$192.3 billion. The green and renewable energy sector accounted for the largest share, underscoring KGI Life's concrete support for low-carbon transition and national industrial advancement.
| Six Core Strategic Industries | Investment Balance(NT$ hundred million) | Percentage(%) |
|---|---|---|
| Information and Digital Technology Industry | 546 | 28.4% |
| Cybersecurity Industry | 19 | 1.0% |
| Medical Technology and Precision Health Industry | 8 | 0.4% |
| Green and Renewable Energy Industry | 1,294 | 67.3% |
| National Defense and Strategic Industries | 2 | 0.1% |
| Public Livelihood and Strategic Stockpile Industries | 54 | 2.8% |
| Total | 1,923 | 100% |
KGI Life also supports the government's 12 Key Strategies, prioritizing investment in sectors crucial to net-zero transition and energy resilience. In 2025, its investments spanned wind and solar power, power systems and energy storage, and green finance. Through strategic asset allocation, the Company supports renewable energy development, energy infrastructure enhancement, and the growth of the sustainable finance market.
| Industry | Investment Balance(NT$ hundred million) |
|---|---|
| Wind/Solar Photovoltaic Power | 18.4 |
| Power Systems and Storage | 7.1 |
| Green Finance (green bonds and sustainability bonds) | 23 |
| Remaining nine strategies(Hydrogen, Innovative Energy, Energy-saving & Efficiency, Carbon Capture, Utilization and Storage (CCUS), Carbon-Free and Electric Vehicles, Resource Recycling & Zero Waste, Green Lifestyle, Just Transition, and Carbon Sinks) | - |
KGI Life actively exercises its ownership rights, attending 100% of the shareholder meetings of its domestic investees to the extent permitted by law. Its voting rate on proposals at the shareholder meetings of domestic listed and unlisted companies reached 100%, excluding abstentions required by law. KGI Life also participates in the investment research group of the Life Insurance Association of the Republic of China to advance the adoption and implementation of the PRI principles across the investment industry. In addition, 100% of the foreign funds and foreign ETF issuers it holds, and 80% of the foreign private equity fund managers it partners with, are PRI signatories, demonstrating KGI Life's commitment to implementing the UN Principles for Responsible Investment.