FENC sets example with Taiwan’s first four types of sustainable development bonds
Published: Feb 2025
Best Sustainable Treasury Solution
Overall Winner
Far Eastern New Century
Jenny Ho
Senior Vice President
Far Eastern New Century Corp. (FENC) is a Taiwan-listed company principally engaged in polyester and textile products, as well as conglomerate businesses, operating in Taiwan, USA, Japan, Mainland China, Vietnam, Malaysia, The Philippines and other regions.
The challenge
This solution is not so much a response to a particular challenge or set of challenges but more a case of an ongoing journey at Far Eastern New Century Corp. (FENC) to address sustainability. As FENC Chairman, Douglas Hsu said, “To cope with an era of carbon pricing, corporate entities must address the impacts of climate change and provide responsive solutions toward decarbonisation, transforming the challenge into a strength in order to take the lead in the race to net zero.”
The solution
FENC responded to the Taiwan government’s sustainable development policies and integrated financial planning seamlessly into its corporate sustainability strategies. It took the initiative and successfully issued the first corporate sustainable exchangeable bond, to set an example and encourage more corporate entities to participate in sustainable development. FENC has become an innovative benchmark enterprise for sustainability financing in Taiwan, continuing to create a win-win for the government, corporations and stakeholders.
Over the years, FENC has issued four distinct types of Sustainable Development Bonds. Each issuance has been a journey, fraught with challenges, but the company always emerged victorious, achieving its objectives each time. This latest issuance was no different, even though the challenges faced were the most formidable yet. The journey began with the complex task of seeking approval from two separate regulatory bodies, Securities and Futures Bureau (SFB) and Taipei Exchange (TPEx).
FENC’s Board approved six green investment initiatives. The next step was to obtain the Sustainable Development Qualification Certification from the authority. This solution represents a unique financing instrument that combines the best of both worlds – debt and equity.
The project culminated on August 8th, when FENC successfully issued and listed Taiwan’s first such instrument. The funds, New Taiwan Dollar (NTD) 2.5bn, are used to support investment projects with green benefits for FENC and its subsidiary. With measures to improve manufacturing processes, equipment and energy management, FENC aims to actively achieve sustainability transformation goals — reduce greenhouse gas emissions by 50%, grow green products to 50% and utilise 50% green feedstock by 2030.
This milestone is not just a testament to FENC’s relentless efforts, but also a beacon of hope for sustainable development in the financial world. It is a clear indication that sustainable finance is not just a trend, but a necessity in today’s world. It is a journey that FENC is proud to be a part of, and one they are committed to continuing in the years to come. (Ernst & Young acted as Verifier/External Reviewers and KGI Securities were Underwriter/Bookrunner.)
“Passion led us here. We are truly honoured to make significant strides in sustainable finance. This recognition serves as a profound encouragement for everyone involved.”
Jenny Ho, Senior Vice President
Best practice and innovation
Taipei Exchange released the guidelines for sustainable development bonds in December last year, allowing convertible and exchangeable bonds to be issued within the scope of sustainable development bonds, with an aim to expand the capital market for such bonds.
FENC took the initiative and successfully issued the first corporate sustainable exchangeable bond, to set an example and encourage more corporate entities to participate in sustainable development.
This contributes to the overall long-term operational development of the company, as it strives to practice environmentally friendly and socially prosperous sustainable business principles.
Key benefits
Cost savings.
Carbon reduction.
Return on investment (ROI).
Risk mitigated.
Improved visibility.
Exceptional implementation (budget/time).
“Far Eastern New Century, has been focusing on ‘Innovation’ and ‘Sustainability’ for years, and aligning with our core values into financial strategy. Since the 1990’s, we issued over 100 bonds, accumulated amount exceeded US$8.6bn and over ten innovations, first-of-its-kind products in Taiwan among our peers. Despite our existing achievements, we persistently strive for a transformation towards carbon reduction and our teams are always at the forefront of advocacy in this area,” explains Jenny Ho, Senior Vice President.
The Adam Smith Awards Asia are the industry benchmark for best practice and innovation in corporate treasury. The 2024 awards attracted 406 nominations. To find out more please visit treasurytoday.com/adam-smith-awards-asia
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