Since 2016, the Fubon Cultural and Educational Foundation has partnered with the Risk Society and Policy Research Center of the National Taiwan University (hereinafter referred to as NTU RSPRC). Through energy transition projects, they have established a model for collaboration between corporate foundations and academic research centers. Last year, the Fubon Group rebranded the "Fubon Globalization Forum" as the "Fubon Forum on Sustainable Future" and worked with NTU RSPRC to promote Taiwan's social consensus on sustainable development and to connect scientific research and advocacy with respect to international issues. This year, with the theme "Collaboration between Industry and Finance: Bridging the Sustainability Transition Gap," the Fubon Forum on Sustainable Future explored the global issues and social impacts experienced by financial institutions and their related enterprises and industries when addressing environmental, social, and governance (ESG) challenges, reflecting the forum's vision for sustainability.
The forum began with a welcome address by NTU's president, Wen-Chang Chen. He expressed that since his appointment as NTU president last year, he has participated in the Asia-Pacific University Presidents Conferences held in Hong Kong and the conference in New Zealand conducted on June 23–27, 2024. The themes of these conferences highlight the international focus on sustainability, particularly in the context of technological progress for achieving increased energy and resource consumption. NTU emphasizes sustainability in both teaching and research; it has established three research centers on sustainability, along with a sustainability office. The Ministry of Education has approved the sustainability curriculum to actively promote sustainable development. In addition, NTU has formed the Taiwan University Alliance for Sustainable Governance, consisting of nine universities, and holds the first rank in sustainability evaluation among all the public universities in the country. In the QS World University Rankings, NTU ranked 68th in 2024. President Chen believes that sustainability should not be restricted to policy and education. He expressed his gratitude to the Fubon Group and the Fubon Cultural and Educational Foundation for their long-term support of the NTU RSPRC's efforts on sustainability and climate change. The Fubon Group embodies the spirit of "taking from and giving back to society" to ensure sustainability and the well-being of people.
Following President Chen's speech, Daniel Tsai, Chairman of Fubon Group, stated that the theme of this year's conference is how to bridge the sustainability transition gap. He agreed with President Chen's statement that sustainable development is critical to ensuring global well-being. Since the establishment of the RSPRC in 2016, NTU has worked extensively with the Fubon Group to analyze and address the major risks to Taiwan, especially those related to climate change. Chairman Tsai stated that through the forum, the Fubon Group aims to raise awareness about sustainability issues within different industries and society. He mentioned that the long-term collaboration between the Fubon Group and NTU RSPRC has inspired other financial institutions to host similar forums that promote discussions on sustainable development. He shared an anecdote from the Fubon Group's first forum, wherein Dr. Yuan-Tseh Lee urged people to keep up with the changing times. He mentioned that the Fubon Group launched the "Run for Green" initiative to advance sustainable development.
Subsequently, Vice President Bi-khim Hsiao delivered a speech upon entering the venue. First, she began by expressing gratitude toward the Fubon Group and NTU RSPRC for their long-term attention to public policy. She stated that organizing such forums every year could stimulate our imagination about the future and build a societal consensus on sustainable development in Taiwan, thereby creating greater flexibility and adaptability in Taiwan with respect to international development. The theme of this year's forum, green finance and transition toward sustainability, is a significant global issue and an important policy of the government, with large investments in substantial resources. Vice President Hsiao stated that due to its critical role in the global supply chain, Taiwan needs strong support from the financial industry to support a net-zero transition and technological development. She stated that the forum could facilitate the integration of resources from industry, government, and academia, thereby creating a green and sustainable future.
Green Finance Policy and Legal Framework
The first session of the forum, centered on green policy and legal framework, was moderated by Ying-Jaw Lai, former Judicial Yuan President. The Deputy Chairman of the Financial Supervisory Commission (FSC), Yen-Liang Chen, welcomed all participants and gave a brief introduction on policy frameworks. This was followed by a panel discussion with Professor Ching-Pin Tung from the Department of Bioenvironmental Systems Engineering at NTU, Wei-Chieh Hsu (Deputy General Manager, Fubon Financial Holdings' Risk Management Department), and Kai-Lun Chien (Chairman, Environmental Jurists Association).
First, in his introduction, Deputy Chairman Chen mentioned that the FSC promotes sustainable finance policies in Taiwan and supports the integration of sustainability information chapters with the Securities and Exchange Act, Green Finance Action Plan, and Sustainability Development Roadmap and Action Plans for listed companies. He pointed out that the FSC's goal was to create a sustainable financial ecosystem encompassing financial institutions, institutional investors, listed companies, and upstream and downstream supply chains. He stated that the Green Finance Action Plan will be updated from corporate governance 1.0 to 3.0 to build a robust ecosystem through the Sustainability Development Roadmap for listed companies. Second, he explained the proposed framework for integrating the International Financial Reporting Standards (IFRS) for sustainability, noting that the benefits of the IFRS sustainability disclosure standards include enhancing international visibility, guiding sustainable investment, accelerating sustainability transitions and commitments, and preventing greenwashing. He suggested that Taiwan should directly adopt the IFRS protocol to align with the international standards, which require the simultaneous disclosure of annual reports and financial statements in shareholders' meetings, applicable to all three stages. In general, the FSC has established a project team to facilitate the adoption, integration, regulatory adjustment, promotion, and training related to the standards. Deputy Chairman Chen concluded his speech by stating, "The highest good is like water," while urging everyone to recognize the challenges and potential competition within industries and finance to promote the transition.
Professor Ching-Pin Tung from the Department of Bioenvironmental Systems Engineering at NTU spoke about "Greenwashing, Competitiveness, and Influence." He highlighted the fact that unidentified risks may lead to higher risks while emphasizing the importance of scientific regulations and Taiwan's compliance with international standards. First, he summarized the trends in ESG sustainable development governance and explained a few failure cases of corporate ESG in the context of Taiwan. In addition, he discussed the FSC's Green Finance 3.0 and sustainable financing initiatives, while using green loans and sustainability-linked loans as examples to emphasize the challenges and risks posed by ESG. Furthermore, he used IFRS S1 and S2 as examples to explain the major pathways toward sustainable development. He noted the impacts, opportunities, and ecosystem of physical and transition risks related to climate change, explained the core elements, and disclosed the information on the Task Force on Climate-related Financial Disclosures (TCFD). Moreover, he introduced a template for the physical risks related to governance organizations for climate change. Regarding sustainability governance tools, he discussed various instruments, including the Environmental Product Declaration (EPD) Type III, the EU Anti-Greenwashing Directive, the Green Claim Directive, the United Kingdom's (UK's) Digital Markets, Competition, and Consumers Bill, and the World Bank's Environmental and Social Management System (ESMS). Moreover, he explained the Green Citizens' Action Alliance's evaluation of sustainability awards and reviewed the five principles of Taiwan's financial institution guidelines for preventing greenwashing, to initiate a discussion with the participants while urging them to reflect on and discuss these initiatives.
The third speaker, Wei-Chieh Hsu, the Deputy General Manager of Fubon Financial Holding's Risk Management Department, discussed the theme "Development Trends in Sustainability Reports in the Financial Industry." He gave a brief introduction to the progression of sustainability reports in Taiwan and the timeline and aspects involved in enhancing the disclosure of sustainability information for listed companies, along with a discussion on the timeline and applicable targets of carbon footprint verification for listed companies. Then, he discussed the regulations of the international sustainability report, using the Taiwan Semiconductor Manufacturing Company's (TSMC's) sustainability report framework as an example of corporate compliance with respect to international standards. He noted that Fubon Financial Holdings has voluntarily disclosed its corporate social responsibility (CSR) report since 2006, before the government introduced the mandatory CSR disclosure policy in 2014. Furthermore, he shared how the IFRS promotes unified international standards, e.g., the IFRS S1 (general requirements), S2 (climate-related disclosures), and the other developing standards. He pointed out that among the current sustainability-related regulations in Taiwan's financial industry, the majority of TCFD, annual shareholders' meetings, and financial reports primarily communicate with investors, while sustainability reports address a broad range of stakeholders. Finally, he summarized the challenges and response strategies in Taiwan, while highlighting the importance of the timing and location of disclosures, consistency in reporting boundaries, materiality judgments, completeness of Scope 3 carbon footprint verification, and enhanced data collection processes.
Finally, Kai-Lun Chien, the Chairperson of the Environmental Jurists Association, discussed the topic "Sustainability Information Disclosure and Management in Transition: Regulatory and Supervisory Issues." Chairperson Chien began with several questions: For example, 1) How do we interpret the new legal situation where sustainability reports and sustainability information chapters coexist? 2) Will sustainability reports be replaced?; and 3) What is their legal status? Then, he explained the legal risks and regulations of sustainability reports and discussed the directors' duty of care, the fiduciary duty under company law, and the obligations of corporations in civil liability and torts. He mentioned that sustainability reports are stakeholder-oriented, whereas the sustainability information chapters in annual reports are investor-oriented, indicating a fundamental difference in their disclosure targets. Moreover, he emphasized that Taiwan should be wary of the greenwashing trend among corporations while referring to the United Nations (UN) Integrity Matters Report, the European Union (EU) Empowering Consumers for the Green Transition Directive, and the United States (US) Green Guides. He explained that since 2021, there has been an increase in global climate-change litigation, including lawsuits for exaggeration, misleading information, and concealment, and that in 2024, the Green Citizens' Action Alliance held a press conference on ending anti-greenwashing regulations. The discussion ended on the note that the Ministry of Environment and the FSC are likely to introduce relevant guidelines. Furthermore, Chairperson Chien emphasized that Taiwan has entered an era of sustainability information disclosure and may enter an era of sustainability management in the future. He stated that the process of introducing special laws or new chapters to existing company laws is ongoing.
During the panel discussion, Ying-Jaw Lai (the moderator), a former Judicial Yuan President, noted that financial institutions should commit to the Equator Principles and refrain from lending to high-pollution enterprises. He highlighted the fact that, despite the legal basis of annual reports, there are issues with the standards of materiality judgment.
Climate-related Financial Disclosure Survey: Key Actions and Challenges for Industry's Net-Zero Transition
The theme of the second session was "Climate-related Financial Disclosure Survey: Key Actions and Challenges for Industry's Net-Zero Transition." This survey was the result of collaboration between NTU RSPRC and Fubon Financial Holdings for three consecutive years; the entities focused on carbon-intensive industries such as cement, glass, construction, transportation, petrochemicals, steel, electronics, and finance. This session was moderated by Kuei-Tien Chou (Director, NTU RSPRC). The presenters included the Industry Climate Risk Research Team from NTU RSPRC, researchers Ya-Ting Kuo and Chung-Pei Pien from NTU RSPRC, and Professor Yin-Hua Yeh (Department of Information Management and Finance at National Yang-Ming Chiao Tung University).
Director Chou opened the session; he highlighted the fact that despite Taiwan's crucial position in the global supply chain, the challenges that the country experiences amidst the global pressure for net-zero carbon emissions and the emergence of AI technologies are difficult. He stated that with support from Fubon Financial Holdings, the NTU RSPRC presented the third corporate-related financial disclosure. He explained that NTU RSPRC illustrated the challenges experienced by the government and businesses in transitioning towards net-zero carbon emissions and provided relevant recommendations. He believed that Taiwan should advance swiftly and establish economic, social, and technological industry goals.
Then, Ya-Ting Kuo, a researcher and Assistant Professor at the Asia Eastern University of Science and Technology, introduced the methodology and results of the TCFD survey. The survey was conducted by the China Credit Information Service from April 2024 to May 2024, using stratified proportional sampling, with a total of 901 companies. Approximately 80% of these companies were in the manufacturing industry, including traditional carbon-intensive, electronic carbon-intensive, and non-high-carbon emission manufacturing, and the remaining 20% consisted of financial services, transportation and warehousing, construction, and real-estate industries. The majority of surveyed companies were non-listed and non-corporations, with two-thirds of the companies being small and medium-sized. The interviewees were mainly company executives or personnel responsible for ESG, environmental safety, and finance. The results indicated a significant increase in the number of companies that participated in the TCFD survey, from 35 (in 2022) to 130 (in 2024). Listed companies portrayed faster progress. Nearly 50% of the businesses that presented climate financial disclosures were driven by policy initiatives, and 34.6% of the businesses believed that such policies could improve their image. Regarding indicators and targets, only 55.8% of the surveyed companies disclosed their greenhouse gas (GHG) emissions, and 19.1% conducted carbon footprint verification. Furthermore, only 19.1% of the companies set clear timelines for achieving sustainability goals. Overall, companies participating in TCFD have made a significant increase in these aspects, indicating that policy promotion has a significant impact on the companies that incorporate climate risk into their business operations.
With respect to the Scope-3 voluntary disclosures, governance, and strategies, the policy was weak. Only 12.5% of the companies conducted supply chain GHG verifications, and merely 5.7% set clear emissions-reduction targets. Regarding governance, nearly 90% of the TCFD-participating companies ensured that their boards incorporated climate risks into their operations, and 71.5% of the board members received appropriate training. Only 12.3% of the companies linked climate performance to salaries. Regarding strategies, 50% of the companies did not conduct long-term (10-year or more) risk assessments, while only 43.8% performed quantitative financial impact analyses. The percentage of companies that conducted scenario analysis increased to 52.3% in 2024. Carbon-intensive industries have yet to establish climate resilience strategies due to a lack of guidance and resources and the low financial impact of carbon emissions.
With respect to risk management, a higher proportion of traditional carbon-intensive industries conducted physical risk assessments, with room for improvement for carbon-intensive electronic industries. In response to climate change, professional scientific tools are necessary for assessment; the proportion of companies that used geospatial data increased from 22.9% in 2022 to 40% in 2024. Regarding transition risks, the NTU RSPRC analyzed the 2022 sustainability reports of Taiwan's top 30 GHG-emitting companies and revealed that carbon pricing mechanisms had the most significant impact. Approximately 60% of the participating companies considered that carbon pricing had a significant impact on their finances. However, 80% of the companies were unaware of the carbon pricing proposed by the government. Due to the EU's carbon border adjustment mechanism (CBAM), 85% of Taiwanese companies do not export to the EU, and only 6.7% have assessed their product carbon footprints. Furthermore, only 2% of the companies internalized environmental costs through internal carbon pricing. Even among the TCFD-participating companies, only 8.5% implemented internal carbon pricing.
Regarding opportunities, the survey indicated that the development and increase in low-carbon products and services and the usage of low-carbon energy are two prospective future opportunities. However, only 32.7% of the companies built renewable energy infrastructure, 5.4% purchased green energy certificates, and 11.1% set renewable energy targets. In the carbon-intensive electronic industries, 28.1% of the companies used renewable energy due to customer demand, a higher percentage than that noted in other industries. Regarding financial needs, the proportions of companies that construct renewable energy infrastructure or purchase renewable energy were relatively low, at 21.8 and 30.9%, respectively. With respect to low-carbon innovation, only 20.4% of the companies were engaged in low-carbon innovation, which indicated that the majority of companies ignored the opportunities related to climate change. In terms of funding allocation, 54.9% of the companies prioritized process innovation, with the second-highest priority being product innovation.
Finally, the survey revealed that the financial industry plays a crucial role in advancing the net-zero transition. The proportion of companies required to provide climate-related information increased from 18.2% in 2023 to 40.3% in 2024. Moreover, 41.5% of the companies aimed to obtain loans from financial institutions, although the demand for green insurance was only 6.4%. The NTU RSPRC conducted a capital survey on Taiwan's top 3,000 companies, generating responses from 46 finance companies. The responses revealed that 56.5% of large financial firms requested climate-related information, and approximately 80% were willing to offer climate-related financial products and favorable financing conditions.
Director Chou concluded that although the majority of the top 30 manufacturing companies in Taiwan disclosed their climate-related information, there were significant issues in the overall enterprise supply-chain investigation. The recommendations based on this survey could be divided into two parts: driving government and corporate governance transformations. In terms of driving government governance transformation, Director Chou suggested that the current policies and regulations are stagnant and the momentum for promoting renewable energy is weak. He stated that FSC has been promoting Green Finance 2.0 since 2021 and has now upgraded to Green Finance 3.0, which was one of the most effective actions implemented by Executive Yuan.
However, the repeated delays in implementing carbon fees could result in unclear information from the perspective of the companies, which could affect their competitive strategies. Taiwan attempted to promote energy and carbon taxes in 2006, 2009, and 2015 but failed; to date, the country's carbon pricing remains undetermined. The review of terms for heavy electricity users has been repeatedly postponed, and companies generally prefer being on the sidelines. The government needs to establish a strong cross-departmental organization for climate reporting, led by Executive Yuan and supervised by commissaries, to address Taiwan's net-zero climate issues.
Regarding corporate governance transformation, Director Chou suggested that companies should seize climate opportunities, link compensation with ESG performance, and cultivate relevant talent. The financial industry should offer climate financial products to promote corporate climate information disclosure and low-carbon innovation while encouraging carbon reduction and climate change adaptation. Currently, the finance industry is providing favorable financing conditions to encourage companies to engage in climate disclosure and low-carbon innovation. Green finance promotes carbon reduction and climate change adaptation and facilitates just transition finance. Therefore, it is crucial to pay attention to the just transition documents published by the United Nations Development Programme and the International Labour Organization while focusing on the financial, industrial, and social issues in Taiwan and ensuring the dissemination of labor rights and gender equality in the supply-chain legislation of the country.
After the team's presentation, Professor Yeh Yin-Hua from the National Yang-Ming Chiao Tung University conducted discussions with the survey participants and explained the reasons behind the results. Professor Yeh emphasized that in the sustainability development reports of the listed companies in Taiwan, the most lacking TCFD aspect was financial disclosure. Furthermore, he explained that the existing reports are limited to textual descriptions and do not reflect the impact of climate risks on corporate income statements and balance sheets. Although S1 and S2 can be expected in the future, there is still room for improvement. He noted that despite the discussion on net-zero emissions in the past few years, global carbon emissions have not witnessed a significant decrease. In Taiwan, CO2 emissions account for 95.32% of the total pollutant emissions, much higher than the global average of 71.6%, mainly because 83% of the country's electricity is derived from fossil fuel-based power generation. Corporate emission reduction outcomes depend on the national power structure, which is a Scope-2 climate issue. Without improvement in this area, companies find it difficult to achieve their emission reduction targets.
During the discussion session, professor Yeh indicated that Taiwan's carbon pricing system, which is not well developed, is a crucial driving force for corporate carbon reduction. He identified three main driving forces for corporate carbon reduction: institutional investors, supply chain demands, and the financial industry. In the TCFD reports of TSMC, Taiwan Cement, and China Steel, the indicators and targets are not presented clearly. TSMC's carbon emissions are expected to increase by 2030, Taiwan Cement only considers relative indicators, and China Steel is a carbon-intensive enterprise. Therefore, Professor Yeh suggested an accelerated transition in the energy structure and the timely implementation of an effective carbon pricing system. Low carbon pricing would force companies to treat it as a cost rather than focusing on the incentive to reduce emissions. Singapore is a good example of carbon pricing; the carbon tax of the country is increasing annually, reaching USD 600 per ton in 2023, with plans to increase it further to USD 1,200–2,000 per ton by 2030. Professor Yeh concluded that sustainable development governance should incorporate an assessment of climate-related risks and opportunities. Furthermore, he suggested that corporate carbon reduction should include carbon footprint verification, emission reduction, offsets, and disclosure while ensuring clarity, comparability, and implementation and avoiding greenwashing.
Professor Chung-Pei Pien pointed out, that apart from the need for a broader perspective on political considerations, Taiwan's enterprises should mandate policy-driven TCFD disclosures. Currently, the disclosures are provided by consulting firms, and the companies themselves are not clear about the details. In addition, companies need to take action toward sustainable development, e.g., reducing carbon emissions and purchasing renewable energy. Dr. Nai-Wen Wang from the Department of Anthropology at NTU mentioned that the key to the diversity of agricultural carbon credits and the organic industry is policy promotion. Chia-Wei Chao (Director, Taiwan Climate Action Network) raised a question about how in-depth interviews reveal a gap between the responses of carbon-intensive companies to net-zero scenarios and their carbon reduction plans. Director Chou responded that carbon farming by small-scale farmers requires inter-departmental coordination and that carbon fees should be coordinated by the Ministry of Finance. Drawing from her research experience, Professor Ya-Ting Kuo highlighted the current shortage of talent in carbon-intensive industries and disclosure reports of small- and medium-sized enterprises.
Error
Joomla Gallery makes it better. Balbooa.com