Taiwan's Sole Signatory of
the 'Valuing Water Finance Initiative'
TAIPEI, Oct. 11,
2024 /PRNewswire/ -- During Climate Week NYC,
Sophia Cheng, the CIO of Cathay Financial Holdings, shared her
insights at the iconic World Biodiversity Summit by contributing to
the session "Valuing Natural Capital: Creating Markets for Nature"
on 26 September 2024. Cheng discussed
the role of corporations in driving nature-positive investments,
emerging trends, and actionable strategies. She was also invited by
Ceres (Ceres Valuing Water Finance Initiative) as Taiwan's sole representative to speak on
"Building Corporate Climate Resilience through Water Resource
Management." It's also been the third consecutive year that Cathay
FHC has participated in Climate Week NYC, further demonstrating its
global influence and Taiwan's
financial sector's commitment to promoting nature-positive
growth.
In her speech, Cheng emphasized the urgent need for increasing
capital to support nature-positive initiatives, citing
Bloomberg[1] research, which estimates that USD 166 billion is allocated annually to
biodiversity conservation and restoration. However, this is five
times less than the estimated USD 996
billion per year required by 2030 in the same report. Cheng
urged, "We need more resources invested in sustainable supply
chains, impact investing, and ecosystem building to expand the
biodiversity market." She pointed out that out of the 416
organizations from 51 countries that have adopted the TNFD
(Taskforce on Nature-related Financial Disclosures), 45% are from
Asia. Cheng believes this signals
that Asian companies are eager to engage in more nature-positive
initiatives once global frameworks become clearer.
Recognizing the complexity of biodiversity and nature-related
sectors, Cheng suggested that a global biodiversity project
platform should be established. 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. At the same time, more market participants need to see
successful examples. She highlighted World Bank's "Rhino Bond,"
which links bond yields to the success of rhino conservation
efforts. This initiative has already contributed to an 8% increase
in the black rhino population, delivering dual benefits for both
biodiversity and investors.
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. To encourage the audience,
the panelists adopted a positive and proactive stance, emphasizing
the promising outlook for biodiversity. They highlighted 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. The
notion "with great power comes great responsibility" emerged as a
central theme, with both public and private sectors being urged to
collaborate in building a larger, more impactful market that
integrates biodiversity. As Cheng concluded, she stressed that
"everyone can influence a stakeholder, and the more we engage, the
more successful natural investments will be."
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, in addition
to improving water efficiency in its operations, Cathay FHC and its
subsidiaries analyze companies in their investment and financing
portfolios with high water resource risks. This includes
integrating water governance performance in industries such as
semiconductors, power, and food into Cathay's water resource
investment management and engagement strategies. Cheng also 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.
Cathay FHC continues to lead with innovative financial models
that promote nature-positive outcomes. As the only Taiwanese
financial institution to sign the "Valuing Water Finance
Initiative", Cathay FHC has invested in and provided loans to water
resource sector, including water treatment, water supply, and
wastewater management. Cathay Life Insurance, one of Cathay FHC's
subsidiaries, as the first financial institution in Taiwan to join Nature Action 100,
collaborated with 190 international institutional investors in 2023
to engage 100 companies in industries such as food, chemicals,
forestry, and pharmaceuticals—sectors significantly impacting
natural habitats and biodiversity loss. These engagements urged
companies to take proactive measures to protect and restore natural
ecosystems.
Cathay FHC 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. Cheng concluded by expressing hope for
continued public-private sector collaboration in achieving
nature-positive goals and overcoming financial barriers.
[1] Biodiversity
Finance Factbook: https://assets.bbhub.io/professional/sites/24/Biodiversity-Finance-Factbook_COP28-Edition.pdf
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SOURCE Cathay Financial Holdings