Authors／Kuei-Tien Chou, Director, RSPRC; Ya-Ting Kuo, Postdoctoral Fellow, RSPRC; Yi-Meng Chao, Project Specialist, RSPRC
The tightening of domestic and international climate-related regulations, the increasing frequency of extreme weather events, and even changes in consumer behavior may have potential impacts on corporate revenue, product value, and even business reputation. This is the first major survey in Taiwan focused on the willingness and behavior of domestic companies to make financial disclosures in response to the impact of climate change. The main survey components are divided into seven major sections: Business Drivers, Climate Change Perception, Policy Perception, Governance, Strategy, Risk Management, and Metrics and Targets. It is hoped that the survey will reveal the attitudes and actions of Taiwan companies in the face of uncertainties and risks of climate change.
The survey was conducted by the China Credit Information Service Ltd. (CRIF) and entrusted by the Risk Society and Policy Research Center of National Taiwan University, using companies with an annual revenue of NT$100 million or more in the CRIF database as the population. A sample of 404 successful companies were collected in this survey. The percentage of revenue in the sample and the percentage of revenue in the population were verified to show the consistency between the sample and the population.
The results indicate that less than 10% of the companies have conducted TCFD reports, i.e., only 35 of the 404 companies that they have conducted a TCFD report. Most companies consider TCFD to be a future trend and have begun to implement them as an important strategy. They also believe that TCFD have the benefits of improving corporate image and reducing carbon emissions. Moreover, there are still significant differences in the level of sophistication of TCFD conducted by companies, with just over 20% of companies possessing clear information on governance, strategy, risk management, metrics and targets. However, more than 60% of the companies have already started to plan ahead and seize the opportunity to carry out low-carbon innovation in order to reduce their climate change impact.
In addition, of the 404 companies surveyed, as many as 80% believe that high carbon emission products will be completely or partially phased out in the future, and more than 50% of the companies believe that the business reputation of those who own high carbon emission products will be affected in the future. Additionally, 60% of the companies believe that carbon pricing will affect their revenue, but up to 90% of them are not clear on their carbon pricing, and less than 30% of them correctly pointed out that their industries will be subject to carbon border adjustment mechanism (CBAM) when the EU launches the world's first carbon border adjustment mechanism (also known as a CBAM).
It is believed that the results of this survey may serve as a reference for industry, government, and academia to guide companies to disclose the risks and opportunities they face due to climate change and to develop strategies to cope with them, with the perspective of establishing the capacity of Taiwan companies and their supply chains for low-carbon transition and moving towards much more sustainable and resilient industrial development in the future.
According to the survey's key findings.
- Less than 10% of Taiwan companies have conducted a TCFD report since the release of the TCFD recommendations in 2017
- Listed companies are more willing to conduct TCFD reports in the future than non-listed companies
- Compared with non-high carbon emission manufacturing industries, high carbon emission manufacturing industries consider TCFD reports to be more important or very important.
- Up to 80% of companies believe that high carbon emission products will face complete or partial phase-out in the future
- 60% of the surveyedcompanies believe that future carbon pricing will affect revenue, but as many as 90% of them are unsure of their own carbon pricing.
- 70% of CBAM-regulated companies are unaware that their industry will be regulated
- Of the 35 companies that have conducted TCFD reports, more than 60% have already started low-carbon innovation, but 70% have not yet set renewable energy targets
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