In response to the international trend toward green finance, Taiwan's government in 2017 began implementing the Green Finance Action Plan, covering such areas as credit, investment, fundraising in capital markets, training and talent development, data transparency, and the robust growth of green financial products and services. The objective is to transform Taiwan into a green, low-carbon economy boasting green investment along with green consumption and lifestyles.
In keeping step with the latest trends, Taiwan in August 2020 announced the Green Finance Action Plan 2.0, which puts further measures in place to enhance the transparency and quality of disclosures by listed companies, and establish taxonomy regulations for sustainable finance in Taiwan. By leveraging the influence of the financial markets, the government hopes to encourage corporations to devote greater priority to environmental, social and governance (ESG) concerns and create a virtuous cycle where investments and industries drive sustainable development.
Major points of plan 2.0
■ Encourage financial institutions to finance and invest in areas of sustainable development: Encourage financial institutions to expand efforts from simply financing and investing in green energy to financing and investing in other green industries, promoting sustainable development projects, and creating innovative sustainability financial products and services.
■ Create a sustainability trading board: Establish a comprehensive sustainability bond market mechanism. Create a trading board for this sustainable development bond market—including green bonds, social responsibility bonds, and sustainability bonds—which can support corporate investment projects that tangibly improve and benefit the environment and society.
■ Improve ESG disclosure content and quality: Require listed companies and financial institutions to disclose climate and ESG-related information on corporate social responsibility (CSR) reports. Also require financial institutions above a certain size to publish CSR reports. An expanded range of businesses will be required to obtain third-party verification for CSR reports.
■ Study the scope of sustainable finance: Establish "Taiwan taxonomy regulations" as reference for financial companies when choosing investment projects and for corporations undergoing carbon reduction transformation.
■ Establish and strengthen integration platforms for ESG information: Set up integration platforms to provide markets with sustainable finance data, create a database for industry to promote sustainable development, and improve green energy information websites to connect businesses and investors.
■ Strengthen financial institutions' management of climate change risks: Incorporate climate change risk management into audit and supervision policies, and promote risk management measures.