TCFD Index

Established by the Financial Stability Board (FSB), the Task Force on Climate-Related Financial Disclosures (TCFD) recommends that companies disclose climate-related information in the categories of corporate governance, strategy, risk management, and goals and indicators. Starting with the disclosure recommended by the TCFD, SFMI intends to improve the business integration of climate change risks and opportunities.

TCFD Recommendatio, Activities at SFMI
TCFD Recommendation	Activities at SFMI
Governance – The organization’s governance dedicated to assessing and managing climate-related risks and opportunities
a) Describe the Board of Directors’ oversight around climate-related risks and opportunities.	The Committee serves as the highest decision-making body that determines mid-to-longterm climate change response directions and oversees the company’s ESG management.
b) Describe management’s role in assessing and managing climate-related risks and opportunities.	The CEO presides over the management of climate-related risks and opportunities, the CFO manages climate-related risks and opportunities from financial perspectives.
Strategy - The actual and potential impacts of climate-related risks and opportunities on the organization’s businesses, strategy, and financial planning
a) Describe the climate-related risks and opportunities the organization has identified over the short, medium, and long term.	Physical risks are being identified in the long-term, general, and auto insurance categories, where more damage is being inflicted by natural disasters, such as floods and typhoons. natural disasters caused by climate change increase the loss ratio as more insurance claims are made. The increased demand for new insurance products and services following the changes caused by climate change is seen as a new opportunity, and the company is focused on developing relevant insurance products and services. Business losses may occur if the government enforces stronger carbon emissions-related regulations and laws to achieve carbon neutrality.
b) Describe the impact of climate-related risks and opportunities on the organization’s businesses, strategy, and financial planning.	We provide a wide variety of environmental insurance products, such as storm and flood insurance, weather insurance, and mileage auto insurance, and a plan has been set up to expand the relevant line of products. To prepare for various transitional risks, we are adjusting our portfolio by downsizing investment assets that contribute to climate change with excessive carbon emissions and expanding eco-friendly investment assets.
c) Describe the resilience of the organization’s strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario.	We determined the internal carbon price and have been carrying out various carbon reduction activities through voluntary management of the GHG inventory. In response to GHG regulations, we have been converting GHG reduction effects into economic value. We acquired the international standard certifications of ISO 14001 (Environmental Management System) and ISO 50001 (Energy Management System) by practicing environmental and energy management.
Risk Management - The methods and processes used by the organization to identify, assess, and manage climate-related risks
a) Describe the organization’s processes for identifying and assessing climate-related risks	The ESG Secretariat—an ESG working group—and working-level employees from relevant teams of each division(teams dedicated to insurance underwriting and investment decision-making, etc.) identify and assess related risks. SFMI’s GLCC (Global Loss Control Center) runs simulations on the cumulative risk of natural disasters to identify clients’ vulnerabilities and assist them in developing alternative solutions. We operate our own disaster prevention and weather information system, which provides clients with real-time information on typhoons and projects changes in precipitation on the Korean Peninsula, considering the impact of climate change.
b) Describe the organization’s processes for managing climate-related risks.	After announcing the coal-phase out principle, we halted all new investments in coal-fired power generation, which includes any direct investments and loans, as well as corporate bonds issued to construct coal-fired power plants. Within the insurance underwriting guidelines, we have restrictions on underwriting the insurance of policyholders and the insured that make significant contributions to climate change (building coal-fired power plants, coal mining facilities, etc.).
c) Describe how processes for identifying, assessing, and managing climate-related risks are integrated into the organization’s overall risk management.	After climate-related working-level employees identify and assess risks, the Board of Directors and the Committee consisting of executives discuss, resolve, and monitor matters related to the company’s response to climate change.
Metrics and Targets - The metrics and targets used to assess and manage climate-related risks and opportunities
a) Disclose the metrics used by the organization to assess climate-related risks and opportunities.	Internal carbon price, GHG emissions, energy consumption, sales of eco-friendly insurance products, eco-friendly investments
Disclose Scope 1, Scope 2, if appropriate, Scope 3 greenhouse gas(GHG) emissions.	Scope 1 is directly discharged, Scope 2 is indirectly discharged, Scope 3 includes emissions from employee’s business trips, the use of water and paper, and waste generation. GHG emission data are disclosed annually through the ESG report.
c) Describe the targets used by the organization to manage climate-related risks and opportunities and performance against targets.	SFMI established a mid-to-long-term target of reducing GHG emissions by 30% from 2011(base year) to 2020, and the target has been achieved.