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Taiwan’s Financial Supervisory Commission (FSC) has been strengthening Environmental, Social and Governance (ESG) disclosure requirements for listed companies since 2023, with mandatory sustainability reporting now extended to all companies on the Taiwan Stock Exchange (TWSE) and Taipei Exchange (TPEx), regardless of size.
This guide explains how Taiwan’s ESG framework is structured, what listed companies are required to disclose, how the requirements phase in through 2028 and where Taiwan’s approach differs from the EU’s Corporate Sustainability Reporting Directive (CSRD).
- All companies listed on the TWSE and TPEx need to publish sustainability reports covering the 2024 fiscal year, regardless of paid-in capital.
- Taiwan’s ESG evaluation system uses 75 indicators across three dimensions: Environment (21%), Social (31%) and Governance (48%).
- Reporting requirements will progressively align with IFRS S1 and IFRS S2 between 2026 and 2028, with financial institutions required to disclose and obtain assurance for Scope 1, 2 and 3 greenhouse gas emissions.
- Taiwan’s framework differs from the EU’s CSRD in coverage and materiality assessment, which can create compliance gaps for foreign companies sourcing from Taiwanese suppliers.
- Foreign investors that align with international ESG standards early will improve access to green finance, reduce supply chain risk and strengthen their long-term position in the market.
The ESG regulatory framework in Taiwan
Taiwan’s FSC and the TWSE are the key drivers of the ESG agenda. The sustainable development action plans by the FSC and amendments to TWSE rules reflect a deliberate effort to align Taiwan with global sustainability trends.
These regulatory changes apply to all companies listed on the TWSE and the TPEx. They establish mandatory disclosures, define the scope of reportable information and set phased timelines for adopting international reporting standards.
TWSE ESG evaluation system
The TWSE officially launched its enhanced ESG Evaluation System, covering three core dimensions: Environment (E), Social (S) and Governance (G). This system uses 75 indicators to assess listed companies’ sustainability performance. The framework aligns more closely with mainstream international ESG frameworks, with specific weightings:
| Dimension | Weighting |
|---|---|
| Environment (E) | 21% |
| Social (S) | 31% |
| Governance (G) | 48% |
Key updates in the evaluation system
The evaluation framework has been updated to align more closely with mainstream international ESG frameworks. The revisions across each dimension reflect both heightened regulatory expectations and emerging global disclosure standards.
- Environment (E): Increased focus on resource efficiency, biodiversity and natural carbon sinks. New indicators cover waste management, circular economy, energy use disclosure and supplier environmental management. This aligns with the Global Reporting Initiative (GRI) framework and the Taskforce on Nature-related Financial Disclosures (TNFD).
- Social (S): Deepened requirements around human rights protection, investor engagement support for innovative startups and family-friendly measures. Emphasis is placed on extending human rights management to supply chain partners.
- Governance (G): Continued focus on sound governance structures, including treasury stock buyback disclosures and the appointment of a Chief Sustainability Officer. Board diversity has been added as a bonus item.
Mandatory ESG reporting and disclosure timelines
Taiwan has adopted a phased approach to mandatory ESG reporting. All TWSE and TPEx listed companies are required to publish sustainability reports covering the 2024 fiscal year, regardless of paid-in capital. These reports should follow established international frameworks such as GRI or SASB.
From 2026 to 2028, reporting requirements will progressively align with IFRS S1 (general sustainability disclosure requirements) and IFRS S2 (climate-related disclosures). Financial institutions will be required to disclose and obtain assurance for greenhouse gas emissions across Scope 1, Scope 2 and Scope 3 during this period.
Core disclosure requirements
Companies are expected to disclose across the following areas:
- Environmental disclosures: Carbon emissions by scope, energy use and efficiency, waste management and water resource management
- Social disclosures: Human rights protections, labor practices, employee welfare and community engagement
- Governance disclosures: Board composition and diversity, anti-corruption policies and mechanisms that protect shareholder rights
In addition, carbon reporting should include third-party audits (for example, under ISO 14064), documented emission-reduction measures and a clear roadmap toward carbon neutrality.
How Taiwan’s ESG requirements compare to EU standards
While Taiwan is actively converging with global ESG reporting standards, differences remain when compared to the EU’s CSRD. These gaps are most relevant for foreign companies that should satisfy both frameworks.
| Feature | Taiwan’s ESG framework | EU’s CSRD |
|---|---|---|
| Coverage | Primarily listed companies; SMEs are not subject to mandatory disclosures. | Broadly applies across company sizes and sectors. |
| Materiality Assessment | TWSE assigns disclosure obligations by industry categories; materiality assessments are encouraged but less rigorous. | Mandates double materiality assessment, evaluating both impact on the company and the company’s impact on environment. |
These differences can create challenges for foreign companies with EU ESG obligations sourcing from Taiwanese suppliers. Such companies may need to provide technical and operational support to help Taiwanese partners meet expanded disclosure obligations.
Opportunities and challenges of ESG framework for foreign investors
Taiwan’s evolving ESG framework presents clear opportunities for foreign investors. Companies that meet these standards can strengthen their appeal to international capital and gain improved access to green finance, including sustainable bonds and transition financing. Strong ESG performance also supports supply chain transparency, which is increasingly valued by global customers and institutional investors.
At the same time, implementation poses practical challenges. Collecting reliable ESG data, particularly Scope 3 emissions, can be complex and resource-intensive. Foreign firms should work through differences between Taiwan’s local requirements and international standards such as the CSRD and IFRS S1/S2 to avoid compliance gaps. Smaller Taiwanese suppliers may lack the capacity to produce the required data, so foreign partners should be prepared to provide technical assistance and training to ensure consistent and auditable reporting.
Conclusion
Taiwan’s strengthened ESG reporting regime makes sustainability a central element of corporate strategy for listed companies and their supply chain partners. Foreign investors who engage early and align reporting with international standards will reduce regulatory and supply chain risk, improve access to green capital and strengthen long-term competitiveness in the market. Proactive planning, covering data systems, governance and supplier readiness are essential to turn regulatory obligations into strategic advantage. For a broader compliance perspective for Taiwan businesses, see our corporate compliance requirements guide.
How Acclime can help with ESG reporting in Taiwan
Acclime Taiwan supports foreign investors in meeting ESG reporting obligations, from initial framework assessment through disclosure preparation and third-party coordination. Our team can help you navigate the phased IFRS S1/S2 adoption timeline, identify gaps between Taiwan’s local requirements and international standards and build a reporting approach that satisfies both.
By working with Acclime, you can reduce compliance risk, meet disclosure deadlines and strengthen the ESG positioning with international investors. Contact us to discuss your reporting requirements and get clear recommended steps.
