Understanding Taiwan’s ESG Regulations: Regional Comparisons and 2024 Compliance Essentials

Environmental, Social, and Governance (ESG) practices have become a strategic focal point for companies worldwide as investors, regulators, and consumers demand greater transparency and accountability. Taiwan has been at the forefront in Asia, implementing ESG guidelines that shape corporate responsibility and regional competitiveness. In this guide, we dive into Taiwan’s ESG regulatory landscape, highlight key differences with other Asian markets, and explore what companies must do for compliance in 2024 and beyond.

Why ESG Matters for Taiwanese and Regional Companies

Investors and stakeholders increasingly value companies prioritizing sustainable practices. ESG not only helps reduce risk and improve reputation but can also impact business performance and access to capital. Taiwan’s commitment to ESG aligns with global efforts; since 2021, local authorities have enacted far-reaching requirements, keeping pace with top economies in Asia.

ESG Regulations in Taiwan: An Overview

The Taiwan Stock Exchange (TWSE) and the Financial Supervisory Commission (FSC) mandate ESG disclosures for listed companies. Recent milestones include:

• Mandatory ESG Reporting: Listed companies above certain capital size (NT$2 billion) must file annual ESG or sustainability reports.
• TCFD Alignment: Disclosure standards increasingly follow the Task Force on Climate-related Financial Disclosures (TCFD) for climate risk and opportunity reporting.
• Sector-Specific Guidance: Industries such as finance, steel, and electronics have tailored guidelines reflecting higher environmental impact risks.

Comparing Taiwan’s ESG Framework with Other Asian Jurisdictions

Taiwan’s tiered, phased-in approach mirrors developments in Singapore, Hong Kong, and Japan, but with unique features and timelines. Let’s see how Taiwan stacks up against regional counterparts:

Sources: Monetary Authority of Singapore, HKEX, Japan FSA.

What’s New for 2024? Taiwan’s Next Steps

With ESG regulations evolving rapidly, companies in Taiwan face stricter due diligence and expanded reporting for the year ahead. Key 2024 developments include:

• Lower Disclosure Thresholds: Smaller companies included under mandatory reporting — the scope now covers more than 400 companies, with further expansion anticipated.
• Assurance Requirements: Independent third-party assurance for sustainability disclosures is now encouraged, especially for high-impact sectors.
• Climate Risk Stress Testing: Financial institutions must conduct climate scenario analyses aligned to TCFD.
• Anti-Greenwashing Checks: Enhanced regulatory scrutiny and penalties for misleading ESG claims or “greenwashing.”

Practical Compliance Tips for Companies

Compliance isn’t just about ticking boxes—it’s about building stakeholder trust and resilience. Here’s how companies can get ready for Taiwan’s evolving ESG landscape in 2024:

• Assess Current ESG Practices: Benchmark existing disclosures and programs against Taiwan’s latest regulatory requirements and peer companies.
• Engage Top Management: Secure board-level and C-suite buy-in for ESG priorities and transparent reporting.
• Integrate ESG Into Core Strategy: Move beyond siloed initiatives. Embed ESG considerations into risk, opportunity identification, and strategy formulation.
• Establish Internal Data Controls: Prepare for external audits and reporting assurance by improving data collection and management frameworks.
• Stay Ahead of Emerging Standards: Track changes to disclosure rules from FSC, TWSE, and global bodies like the International Sustainability Standards Board (ISSB).

Discover more compliance resources on our ESG Compliance Guide and in our Resource Library.

Benefits of Proactive ESG Compliance

• Investor Appeal: Access to green finance and sustainability-linked loans.
• Enhanced Reputation: Attract and retain talent and customers who value accountability.
• Operational Resilience: Better preparedness for regulatory or physical climate risks.
• Competitive Advantage: Meet procurement standards and market demands, including those from global clients following EU or US ESG frameworks.

Learn about additional ways ESG drives business value in our article Why ESG Matters for Asia-Pacific Companies.

Building an ESG Roadmap for the Future

As ESG becomes deeply integrated into corporate governance, companies must treat sustainability as a central business imperative. Those operating in Taiwan or the greater Asia-Pacific region should:

• Monitor local and global trends to proactively update compliance approaches
• Engage stakeholders across supply chains and subsidiaries for holistic reporting
• Invest in staff training, digital reporting, and external assurance to boost transparency
• Set clear targets and report progress to create long-term business value

Where to Learn More

For a deeper dive, check the original law.asia analysis and consult official updates from the Taiwan Financial Supervisory Commission. You might also find ESG due diligence tips and Asia sustainable finance trends on our site helpful.

Take the Next Step: Strengthen Your ESG Edge

Navigating Taiwan’s ESG landscape requires foresight, adaptability, and sustained commitment. Companies that prioritize compliance and continuous improvement will stand out in a crowded and competitive regional market.

Ready to boost your ESG strategy? Contact our experts for a personalized compliance assessment, subscribe to our newsletter for regular regulatory updates, or join our ESG community to share insights and experiences with fellow professionals.

Stay ahead of regulatory changes and unlock value through responsible business—get started with our ESG Resource Library.

For further reading on Asia-Pacific legal and regulatory topics, visit our blog page.