Sustainable Development

Responsible Lending

Sustainable Banking

TISCO Group is committed to achieving a balance between economic, social, and environmental aspects of its business operations, following the Sustainable Banking Approach to meet the needs of all stakeholders while emphasizes quality growth with strong corporate value and culture. TISCO Group aims to use its expertise in all areas to enhance its performance and create good experience and financial opportunities for its customers and shareholders, which will ultimately deliver value to society and the broader environment.

Responsible Lending

As a financial intermediary providing financing support to the business sector and the public, TISCO places great importance on a thorough and cautious credit approval process to mitigate risks and impacts on the environment, society, and governance (ESG), including climate change. TISCO has established a Responsible Lending Policy to guide executives and employees in related departments, emphasizing the management of risks and impacts related to environmental, social, and governance issues. The essential contents cover 4 topics as follows:

Corporate leadership for responsible lending.
Engagement with stakeholders.
Mechanisms for implementation.
Transparency in handling retail loans, SME loans, and corporate loans

TISCO considers, reviews, and improves the responsible lending policy and practice guidelines by integrating environmental, social, and governance factors as part of lending criteria.

Exclusion list

TISCO has established an exclusion list that identifies individuals and organizations associated with the following activities:

Gambling activities that are not authorized or regulated by the relevant authorities.
Offences relating to embezzlement.
Offences relating to narcotics.
Human trafficking, forced labor, or illegal child labor.
Terrorism activities.
Proliferation of weapons of mass destruction, including nuclear weapons, chemical weapons, biological weapons, anti-personal landmines, cluster munitions, and lethal autonomous weapons systems (LAWS), as well as their key components.
Trading of wildlife and their products that are protected under the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES).

Sector-Specific Credit Approach

TISCO Group applies the principles of Responsible Lending in its financing decisions by considering environmental, social, and governance (ESG) risks and impacts alongside business risks. TISCO expects borrowers to conduct their operations in compliance with applicable laws and standards, effectively manage risks and impacts on stakeholders, and maintain appropriate corporate governance systems.

Certain industries may pose significant environmental and social risks due to the nature of their operations, scale of activities, or areas of operation. Such risks may adversely affect natural resources, biodiversity, and the human rights of surrounding communities, while also exposing businesses to transition risks associated with the shift toward a low-carbon economy.

Financing related to projects in these sectors shall undergo an Environmental and Social Risk Assessment (ESR Assessment) as part of the credit approval process. The assessment covers potential environmental and social impacts, risk management measures, and approaches to preventing, mitigating, and remedying adverse impacts. This process helps ensure that environmental and social risks are managed appropriately. Examples of such sectors include:

Such sectors include, but are not limited to, the following:

Mining Exploration and Development and/or Mineral Processing (Metallic and Non-Metallic Minerals): Activities within these industries may generate significant adverse environmental impacts, including soil erosion, biodiversity loss, and contamination of groundwater and surface water resources. In addition, local communities may be exposed to health risks associated with chemical leakage and noise pollution.
Hazardous Chemicals (e.g., Textile Dyeing Operations): Chemicals used in production processes that are discharged through wastewater may cause water pollution and environmental harm. Projects are expected to recognize the toxicity and hazards associated with chemicals and by-products and implement clear, appropriate, and safe handling procedures. In line with the precautionary principle, projects should establish measures to control employees’ and communities’ exposure to hazardous substances and minimize the risk of environmental contamination.

The Bank will not finance projects that fail to comply with applicable industry standards, environmental and social laws and regulations, or relevant permits intended to prevent and/or mitigate adverse environmental and social impacts.

In addition, projects must provide evidence of an Environmental Impact Assessment (EIA) conducted by qualified professionals, where required by applicable laws, regulations, or industry standards, demonstrating that environmental and social impacts are appropriately managed and controlled.

The Bank will not provide financial support under any circumstances to businesses involved in the manufacture, distribution, transportation, or proliferation of weapons of mass destruction, including nuclear weapons, chemical weapons, biological weapons, anti-personal landmines, cluster munitions, and lethal autonomous weapons systems (LAWS), and critical components specifically designed for such weapons.

For projects related to the defense industry and other categories of weapons not listed above, the Bank will conduct enhanced due diligence and risk assessments to ensure that weapons, military equipment, technologies, dual-use goods, or armed support are not supplied to countries or regions facing elevated risks of corruption, armed conflict, or state fragility (e.g., civil unrest, protests, or political instability), where there is a clear risk that such items may be used to: 1) commit serious violations of international humanitarian law; 2) initiate, escalate, or prolong armed conflict; or 3) support activities that cannot reasonably be considered necessary for legitimate national security purposes.

The Bank will not finance an entity that is involved in the illegal production, trade, or distribution of alcoholic beverages, e.g., unlicensed distilleries, smuggled products, or companies involved in tax evasion.

For entities legally operating alcoholic beverage businesses in compliance with applicable laws and regulations, the Bank may consider providing financial support in accordance with its credit policies and approval processes, while emphasizing responsible business conduct and social responsibility.

The Bank will not finance an entity that is involved in the illegal production, trade, or distribution of tobacco products, e.g., unauthorized manufacturing or sales activities, smuggled products, or companies involved in tax evasion.

For entities legally operating tobacco-related businesses in compliance with applicable laws and regulations, the Bank may consider providing financial support in accordance with its credit policies and approval processes, while emphasizing responsible business conduct and social responsibility.