Climate Risk Management
Management Framework and Policies
Uni-President Asset Management has incorporated climate change risks into the Company’s overall risk management framework and systematically integrated them into investment decision-making and risk management processes to ensure that climate risk management operates in alignment with existing governance and operational mechanisms. While balancing safety, liquidity, and profitability in the use of assets, the Company continues to strengthen its accountability for climate risk management to enhance operational resilience and climate adaptive capacity.
Uni-President Asset Management has established a risk management framework involving the Board of Directors, management, and all employees. Through clear reporting and communication processes and cross-departmental collaboration, the Company ensures that climate risks are properly considered in its risk governance and decision-making. Building on this foundation, the Company has established a “three lines of defense” internal control framework. Based on the principles of tiered controls and mutual checks and balances, this framework clearly delineates the responsibilities, processes, and systems at each level to ensure that climate-related risks are clearly identified, assessed, monitored, and reviewed within each line of defense, thereby reducing potential risk blind spots that may arise from a single unit or process.
Three Lines of Defense for Internal Control
| Three Lines of Defense Internal Control Framework | Responsibilities | Responsible Units |
|---|---|---|
 First Line of Defense |
| Business and operational units |
 Second Line of Defense |
| Risk management unit and compliance unit |
 Third Line of Defense |
| Audit unit |
Climate Risk Management Process
To effectively implement the aforementioned integrated risk management framework, Uni-President Asset Management integrates internal and external resources through the four key processes of “identification, measurement, monitoring, and reporting” to establish a comprehensive climate risk management and assessment framework. The Company systematically assesses the potential short-, medium-, and long-term impacts of climate-related physical and transition risks on its operations and business activities and conducts a materiality analysis and ranking of the identified climate risks to enhance the overall effectiveness of risk management.
Green Investment Risk Management and Transition Strategies
Uni-President Asset Management conducts integrated assessments of climate risks associated with investment targets. Rather than using industry classification as the sole basis for exclusion, it comprehensively evaluates individual stocks based on their operational characteristics, risk management practices, and low-carbon transition initiatives. By integrating diverse third-party databases and publicly available corporate information, the Company comprehensively assesses the climate performance of investment targets and incorporates the impacts of climate and sustainability issues on financial performance, operations, and reputation into investment decision-making. In addition to adjusting positions based on analysis results and investment intentions, the Company conducts engagement activities to communicate with its investment targets and monitor their climate-related sustainability performance. By continuously monitoring the portfolio’s exposure to medium and high climate risks and its overall emissions, and by tracking the effectiveness of climate risk responses and the fulfillment of commitments by engagement targets, the Company is able to direct capital toward companies that are environmentally beneficial and actively pursuing a sustainable transition.
Four-Stage Evaluation Metrics for the Investment Process
Engagement Activities
Uni-President Asset Management fulfills its duties as an “asset manager” by comprehensively assessing the climate risks and low-carbon transition opportunities of investee companies. After reviewing information such as financial information, industry overviews, and business strategies, the Company selects potential or existing investment targets with significant climate risks or lagging transition efforts as priority targets for climate-related engagement. The Company engages in dialogue with engagement targets either independently or in collaboration with other institutions and tracks their transition progress through publicly available information and telephone interviews. In 2025, the Company conducted ESG-themed engagement with a total of eight companies, with environmental topics accounting for 46% of all engagement topics. The Company also plans to increase the frequency and depth of its engagement efforts to urge investment targets to support the climate transition and further strengthen the climate resilience of the investment portfolio.
Engagement Assessment Process
2025 Climate-Themed Engagement Case Study
Engagement Target
Company AEngagement Model
Joint engagementPerformance Review
Company A received only a BBB rating in the TIP Taiwan Sustainability Ratings. Although its performance in social and environmental aspects is relatively strong, there is still room for improvement.Details of Engagement
The Company requested that Company A set specific targets, such as targets for renewable energy use, waste recycling rates, and reductions in water consumption per unit of product, or provide a verifiable timeline.Follow-Up
- Climate governance: In 2024, Company A established a Sustainable Development Committee, with the President serving as chairperson.
- Climate targets: A 12% renewable energy usage rate by 2030.
- Climate risks: Water resource management has been included within the scope of material issues.
Engagement Results
Through joint engagement, Uni-President Asset Management effectively prompted Company A to shift from passive disclosure to proactive strategic planning. This demonstrated Company A’s willingness to take climate action while putting Uni-President Asset Management’s ESG philosophy into practice.