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Taiwan regulator to make ESG disclosures mandatory by 2022

Move comes ahead of new anti-greenwash ESG fund disclosure rules in July

Listed companies in Taiwan will be required to report their carbon footprint, water usage, waste management practices, workplace injuries and gender diversity from next year onwards in a bid to improve the availability of domestic ESG data for investors.

Deputy Director-General Tsai Li-ling of Taiwanese financial regulator the Financial Supervisory Commission (FSC) announced the move yesterday, saying that very few listed companies were voluntarily disclosing ESG information despite having been encouraged to do so by the FSC.

According to Tsai Li-ling, the FSC is to revise the disclosure template for annual company reports by the end of this year, and reporting will commence in line with the new template ahead of the 2022 company AGMs. The revised disclosure rules have not been finalised beyond the metrics relating to emissions, water, waste and human capital, Tsai said.

The comments were made during an online event and reported by local daily the Taipei Times.

It is the FSC’s third regulatory initiative on ESG to be announced in recent months. In April, the FSC said that it would tighten disclosure and exposure requirements for new ESG funds by requiring a minimum 60% allocation to ESG assets and enhanced reporting on how ESG is embedded into the fund’s investment process. The FSC has indicated that the new regulations, which are due to be published in July, will be informed by ESG fund disclosure rules set by Hong Kong regulators.

FSC data indicates that 25 ESG funds have been launched in Taiwan so far, valued at $4.39bn.

In addition, the FSC has announced a three-year ‘Capital Market Blueprint’ to improve the competitiveness of Taiwanese firms, including measures to establish an ESG bond market, improve internal ESG risk management and the quality of ESG disclosures, and plans to establish a public stewardship evaluation mechanism by 2023.

In tandem with the FSC initiatives, the Taiwan Depository & Clearing Corporation – which oversees Taiwan’s stock exchanges – has launched an ESG dashboard which provides market participants with free access to proxy research from Glass Lewis, and ESG ratings and commentary from partners Sustainalytics, ISS and FTSE.