In view of the global focus on the environment, society and governance (ESG), in order to create a sound ESG ecosystem to strengthen the sustainable operation of enterprises and the competitiveness of capital markets, the Financial Supervisory Commission (FSC) issued the “Corporate Governance 3.0 -Sustainable Development Roadmap” on August 25, 2020, with reference to the Task Force on Climate-related Financial Disclosure (TCFD), to strengthen the ESG information disclosure of the CSR report.
In view of the importance of ESG information disclosure, this year the FSC will strengthen the disclosure of information in the annual report and the ESG information of investment trust funds, to further encourage enterprises to attach importance to corporate social responsibility. The relevant measures are explained as follows:
(I) Strengthen disclosure of information in annual reports: In order to enable public companies to establish the concept of sustainable operation and attach importance to climate change issues, the FSC amended the “Regulations Governing Information to be Published in Annual Reports of Public Companies” in 2020 to require companies to disclose risk assessment and management strategies of ESG issues related to their operations, assess the potential risks of climate change, and provide information such as countermeasures and greenhouse gas inventory. To further improve the quality of ESG information disclosure and provide more comparable information, the FSC will revise the annual report schedules and add reference examples and disclosure guidelines to guide companies to disclose more important environmental and social issues, such as the quantitative information of carbon emissions, water consumption and waste. In the social aspect, companies will be required to disclose more specific and quantitative contents such as occupational safety (e.g., occupational accident data), workplace diversity and equality (e.g., the proportion of female employees and senior executives) in order to realize the goal of sustainable development of enterprises.
(II) Strengthen the disclosure of ESG information of investment trust funds: In view of the fact that domestic securities investment trust enterprises (SITEs) gradually consider ESG factors in the process of investment decision-making and issue investment trust funds with related topics, Taiwan has recently referred to foreign authorities’ regulations on information disclosure by ESG funds, and formulated the “Principles of Review and Supervision of Information Disclosure by Securities Investment Trust Funds with Environment, Society and Governance (ESG) Related Topics Issued by SITEs” to standardize the common format of information disclosure by ESG funds, and strengthen the integrity of information disclosure of the prospectus on ESG investment policies. The Securities Investment Trust and Consulting Association has been asked to seek opinions of the industry participants on the draft of the aforementioned principles of review and supervision of information disclosure, and the results are expected to be released before the end of July 2021.
With the impact of global climate change and COVID-19, all countries have promoted sustainable development as the top priority. The FSC will also continue to focus on the international development trend and study relevant measures to strengthen the sustainable ecosystem of Taiwan’s capital market and enhance its international competitiveness.
Contact unit: Section Chief Yi-Wen Hsieh, Corporate Finance Division, Securities and Futures Bureau
Tel: (02) 2774-7100