[NTU Risk Society and Policy Research Center Press Release]

Fourth Annual Corporate Sustainability Disclosure Readiness Survey (2025) ——Capitalizing on International Slowdown in Sustainability to Accelerate Net-Zero Transition

NTU Corporate Sustainability Disclosure Readiness Survey——Capitalizing on International Slowdown Accelerate Net-Zero Transition

The Risk Society and Policy Research Center (RSPRC) of National Taiwan University (NTU) has been conducting corporate climate-related financial disclosure surveys since 2022, with each successive survey enhancing our understanding of related topics. The fourth round of survey was conducted this year (2025). Under the original framework of the Climate-Related Financial Disclosure Report, the most recent survey not only highlights sustainable finance for the first time, but also introduces several new aspects, such as labor rights and human rights due diligence (HRDD). In addition, the survey was renamed as the "Corporate Sustainability Disclosure Readiness Survey," and the survey report was released on June 11. The report analyzes Taiwan's readiness and trends related to sustainability disclosure in areas such as climate disclosure, sustainable finance and labor rights amid global headwinds against ESG.

First, the key findings of this survey underscore the inadequacies of carbon pricing policies in promoting the corporate implementation of internal carbon pricing. They also suggest these policies might contribute to a regression in supply chain greenhouse gas emission (GHG) disclosure and reduction targets. Second, the failure to integrate overall climate regulations with policy objectives has led to low demand for climate-related engagement and green loans from financial institutions. Hence, there is a need to strengthen incentives for sustainable financial policies. Third, gender and age discrimination persist within companies, highlighting the need to reinforce labor rights and perform HRDD on companies and suppliers. Fourth, significant changes in international political and economic markets have led to headwinds against corporate implementation of ESG. Hence, Taiwanese companies should capitalize on the global slowdown in the path to sustainability, to rapidly achieve momentum as leaders of sustainable transformation in Asia.

This survey was conducted from March to April 2025, targeting Taiwanese companies with annual revenues exceeding NT$ 100 million. A total of 906 companies were selected through proportionate stratified random sampling from key industries (including traditional high-carbon manufacturing, electronic high-carbon manufacturing, construction engineering, transportation and warehousing, real estate, and financial services) and other manufacturing industries. The topics covered by the survey included core aspects of corporate climate-related disclosure, the impact of sustainable finance, workplace diversity, equity and inclusion, and HRDD. Based on these findings, recommended directions for corporate climate and social sustainability strategies were proposed.

According to the survey findings, regarding climate disclosure, 20.2% of all surveyed companies have implemented Task Force on Climate-Related Financial Disclosures (TCFD) guidelines, with the figure rising to 60.6% among listed companies, thus, exhibiting a trend of annual growth. Regarding metrics and targets, the survey indicated that companies have stagnated in disclosing greenhouse gas emissions and setting net zero targets, They have also regressed in supply chain GHG disclosure and setting carbon reduction targets. Regarding governance, companies have not significantly progressed in ensuring that board members attend climate-related courses or in connecting executive compensation to climate performance. Regarding strategy, the proportion of companies undertaking medium- to long-term risk assessment has decreased, with no significant growth in the proportion of those undertaking the quantification of financial impact. Regarding risk management, while companies have demonstrated some improvement in their understanding of domestic carbon pricing policies, only a few have implemented internal carbon pricing, representing only 2.3% of all surveyed companies. Even among companies implementing TCFD guidelines, fewer than one in ten (9.3%) have undertaken internal carbon pricing.

Regarding sustainable finance, only 13.3% of companies have previously undertaken climate-related engagement with financial institutions, 67.8% of which stated that the primary issue of concern for financial institutions was CFV. Additionally, the survey revealed a lack of growth in the number of companies requested by financial institutions to provide climate-related information or received preferential financing terms based on relevant performance. Furthermore, corporate demand for green loans in response to climate risks and opportunities was only 24.9%. Six out of ten companies (60.1%) were unaware of or did not require climate-related financial products.

Regarding labor rights and workplace inclusivity, the survey discovered that a few companies continued to consider gender (4.0%) and age (13.0%) when hiring employees. Only 64.1% of companies reported the absence of a significant gender pay gap. Nearly six out of ten companies (59.2%) reported that a higher number of managers were men. Regarding labor force participation, specifically the impact of carbon reduction on employees, majority of the companies (53.4%) stated that channels for communication and dialogue have been established for employees significantly affected by carbon reduction plans. However, less than 20% of ten companies (16.2%) have assessed the impact of carbon reduction plans on employees. Regarding supply chain HRDD, 81.8% of all surveyed companies expressed that they would terminate cooperation with suppliers having a significant negative human rights impact, however, only half (51.0%) included social indicators (e.g., human rights) in their supplier selection mechanism, and only 21.3% conducted on-site auditing of supplier HRDD.

Professor Kuei-Tien Chou, Director of the RSPRC, stated that this survey focused on governance and market trends in the international advocacy of net zero carbon emissions and ESG expansion. The survey on climate-related disclosure, sustainable finance, and labor rights demonstrated that Taiwan continues to have much room for improvement. The findings on climate disclosure indicate that the carbon fee system established in October last year did not succeed in driving companies to proactively set carbon reduction targets, perform internal carbon pricing, or reinforce supply chain GHG disclosure. In addition, clear targets were lacking in relevant climate policies and regulations, including those involving carbon pricing, green financing, and provisions for major electricity consumers. Regarding sustainable finance, no growth has been observed in climate-related engagement, climate-related information, and green loans between banks and companies, indicating the presence of a sizeable gap in the top-down promotion of green financial policies. Regarding labor rights, Taiwanese companies should further strengthen gender equality and labor force participation in net-zero, fair transition, while simultaneously conducting increased institutionalized regulation and enforcement of human rights among suppliers.

Dr. Ya-Ting Kuo, Assistant Professor at the Asia Eastern University of Science and Technology, expressed that financial institutions play a pivotal role in guiding capital flows. Financial systems are only able to shape corporate climate behavior and dictate the direction of industrial transformation when they have incorporated climate risk as assessment criteria, thus providing companies with incentives to strengthen internal carbon management. Nevertheless, the majority of Taiwanese companies have a relatively conservative capital structure and tend to continue using old energy-intensive equipment, rather than employing green loans as a long-term financing tool to support the replacement of outdated equipment to achieve low-carbon transition. Therefore, a three-pronged approach is recommended, with simultaneous interventions involving the demand side (companies), supply side (equipment manufacturers and financial institutions) and institutional side (policies and regulations), to create a complete low-carbon transition ecosystem.

Yi-Meng Chao, a Senior Research Fellow of the RSPRC, explained that when dealing with human rights issues, in addition to domestic policies and regulations, companies in electronic high-carbon industries and the international market face greater pressure from the customer supply chain. The survey findings indicated that companies in electronic high-carbon industries and those that engage in climate-related disclosure are more probable to conduct HRDD on factories or operating locations and suppliers. However, there is room for overall improvement. This suggests that although companies have mechanisms in place to terminate suppliers with significant negative human rights impact, they may fail to promptly identify, prevent, and mitigate potential negative human rights impact. Hence, companies are recommended to undertake the gradual implementation of HRDD.

According to the overall analysis by Professor Kuei-Tien Chou, Taiwan has successfully transformed itself into a key player in the global technology and manufacturing supply chain. Hence, as a global hub, Taiwan's government, companies, and society must strive harder and move actively toward a new path of net zero carbon emission and ESG. This is particularly critical at a time when the international community is lagging in the path to sustainability owing to various political and economic factors, including the announcement by the US government and numerous companies to abolish Diversity, Equity and Inclusion (DEI) initiatives, the European Union's approval to delay the implementation of the Corporate Sustainability Reporting Directive (CSRD) and Corporate Sustainability Due Diligence Directive (CSDDD), and so on. Taiwan should capitalize on this opportunity to rapidly compensate for past delays in green transformation, and seize the opportunity to become a leader of sustainable economic and social transformation in Asia.

This survey report was released during the "2025 Fubon Sustainable Future Forum – Risk and Opportunities of Taiwan's Sustainable Transformation under Emerging Political and Economic Trends." For further information, kindly visit the RSPRC website.

Date published: June 11, 2025.