Morningstar Sustainalytics has 30 years of experience in the preparation of ESG ratings, and is one of the world's most authoritative ESG ratings organizations. It regularly examines the environmental policies, social impact, and corporate governance systems of over 15,000 companies throughout the world, including Taiwan's 400 largest companies by market capitalization. Sustainalytics ESG ratings take risk management as the principal focus in classifying each of various risks faced by rated companies as "managed risk," "unmanaged risk," or "unmanageable risk." A Sustainalytics ESG Risk Rating is calculated as the difference between a company's overall ESG Exposure score and its overall Managed Risk score. The lower a score, the better is a company's ESG risk management performance. A score of 0–10 indicates negligible risk, 10–20 indicates low risk, 20–30 indicates medium risk, 30–40 indicates high risk, and anything above 40 indicates severe risk.
In the latest ESG Risk Rating published by Morningstar Sustainalytics in January 2023, O-Bank received an excellent ESG Risk Rating of 8.7, which puts the Bank in the "negligible risk" category. Based on the ranking of Taiwan Investor Relations Platform in January 2023, O-Bank is the only financial institution in Taiwan to attain this category, and has received the top ESG Risk Rating in Taiwan's financial industry as well as the No. 3 ESG Risk Rating among all listed companies. Moreover, this score puts O-Bank among the top 1% of all companies rated by Sustainalytics worldwide, so it is clear that international ratings organizations are well aware of the outstanding job that O-Bank has been doing in implementing sustainable business practices. In this latest Sustainalytics ESG Risk Rating Report, O-Bank received strong scores on 22 different indicators. Its risk was classified as negligible in ESG Integration, Business Ethics, Data Privacy and Security, Human Capital, and Product Governance, and the Bank's overall ESG Risk Management score was placed in the highest "Strong" category. The Risk Rating Report also stated: "O-Bank's overall ESG-related disclosure follows leading practice, signalling strong accountability to investors and the public. In addition, a CSR Committee led by the Chairperson is in place at the company, indicating that O-Bank integrates sustainability issues into its core business strategy. O-Bank not only links executive compensation to ESG performance targets, but improves the company's environmental protection and management integrity policies constantly also. Therefore, O-Bank's overall management of ESG risk issues is highly recognized by Morningstar Sustainalytics."
In addition, O-Bank has been working hard on ESG issues, and hopes to make use of financial resources to exert a bigger and more continuous influence. In 2020, it launched the "O-Bank Social Impact Program," the first program of its type in Taiwan; deposits made under the Social Impact Program are used exclusively to back preferential loans to economically disadvantaged persons. Processing fees are not charged under this program, and eligible persons can apply for low-interest microloans, which help the borrowers deal with financial emergencies. On the strength of the Social Impact Program, O-Bank obtained Social Return on Investment (SROI) accreditation in 2022 from Social Value International, which shows that even though the value of a community service program does not show up in a company's financial statements, the fact remains that such a program's beneficial impact upon society can be quantified. A recent audit showed that for every NT$1 that O-Bank invests in its Social Impact Program, the program generates a social return of NT$5.61. The benefits of the "O-Bank Social Impact Program" have thus been affirmed by an international organization. The program enables consumers to make deposits in a way that serves to help others, which sets up a positive feedback loop.
O-Bank Chairperson Tina Y. Lo stated, "O-Bank firmly believes that, in addition to pursuing business growth, we must also use our power as a financial institution and pay due attention to the need for positive ESG developments. We intend to employ a more rigorously constructed mechanism for management of sustainability risk, fulfill our corporate social responsibility, continue promoting financial products and services that can create sustainable value, and further increase our social influence."
*Source Sustainalytics.
Sustainalytics, a Morningstar company and a globally recognized provider of ESG
research, ratings and data has provided on Jan 27,2023 the ESG Risk Ratings
Report for O-Bank.
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