Press Release: Insufficient Taiwan’s Corporate Climate Commitments Make a Major Stumbling Block to Achieve National Net-Zero Target

This press release first appeared in the Green Citizens’ Action Alliance on 12/20/2022, and is translated into English and republished here.

· 80% (1300+) of Taiwanese publicly-listed companies do not set GHG reduction targets. Even companies with climate goals do not show enough climate ambitions (e.g. Only planning to reduce 20% of carbon emissions by 2030.)

· Only 2.7% (47) of publicly-listed companies have committed to 2050 net-zero targets.

· Most companies do not have credible climate strategies nor disclose scope 3 emissions, which is not aligned with the criteria of the ‘Integrity Matters’ report published by the United Nations’ High-Level Expert Group at COP27.

· To increase the quantity and quality of disclosed climate targets and plans, the Taiwanese authority should develop more ambitious policy instruments, such as corporate sustainability reporting standards, carbon footprint labels for specific products, and low-carbon procurement for public construction.

In December 2022, five environmental non-governmental organizations jointly held a press conference to call on Taiwanese publicly-listed companies to commit to more ambitious climate action. According to the analysis of 1700+ Taiwanese publicly-listed companies conducted by the Green Citizens’ Action Alliance, [1] less than 3% of companies have a net-zero target (In contrast, more than one-third of the world’s largest publicly traded companies have it). [2] Even worse, around 80% of Taiwanese companies do not set any GHG reduction targets, and the others have unambitious targets or unclear strategies. In 2021, the Taiwanese government has already committed to the 2050 net-zero target and now is developing relevant laws and policies, however, it seems that those unprepared companies may slow down the overall net-zero timeline.

“Many companies have electricity intensity reduction targets, but it does not mean actual carbon reduction. In addition, some companies claim they will develop carbon reduction targets and plans after the completion of the GHG inventory. Nonetheless, the net-zero progress might be delayed as these companies may not finish the inventory until 2027 or 2028,” [3] said Ke, a Green Citizens’ Action Alliance researcher.

The researcher of the Environmental Rights Foundation, Hsu, pointed out that industrial structure should be changed as well. The petrochemical industry is the major GHG emitter that contributes about 50% of national GHG emissions. Therefore, the reduction measures of such carbon-intensive industry are critical to the fulfillment of the 2050 net-zero target. Currently, most attention is drawn to incremental measures, e.g. Renewable energy use and energy efficiency, but revolutionary strategies have not been discussed, such as cutting down the feedstocks from fossil fuels, or even reducing the scale of the petrochemical industry. If the government does not consider the policies aiming to transform industrial structures or reduce the overcapacity of the petrochemical industry, Taiwan may fail to achieve its climate pledges.

China Steel and its subsidiary, Dragon Steel, are the second largest contributors to GHG emissions in Taiwan since they adopt a carbon-intensive process: blast furnace-basic oxygen furnace (BF-BOF). Although China Steel has a relatively complete climate target and reduction plans, but its 2030 interim target is not strong enough- merely decreasing emissions by 22% compared to 2018. Worst of all, Dragon Steel has not provided any details regarding climate actions in its sustainability report, which lags behind the international trend of decarbonization in the steel industry. “The parent company, China Steel, should be responsible for formulating comprehensive climate strategies, including that of Dragon Steel,” the director of the Citizen of the Earth, Deng, emphasized.

“When looking into the content of sustainability reports from large publicly-listed companies, we found climate-related information is usually insufficient. For instance, Formosa Plastics Group does not have a robust climate transition plan. Besides, many companies do not mention scope 3 emissions or their efforts to reduce emissions across the value chain. All of these do not align with the standards from ‘Integrity Matters,’ the report published by the United Nations’ High-Level Expert Group regarding credible net-zero pledges and climate-related disclosures.” The researcher of the Taiwan Climate Action Network, Lin said. “The Netherlands and Sweden have required the disclosure of carbon emissions for construction projects or specific products, such as cement or steel. The United States also requires federal contractors to set science-based targets (SBT) and disclose climate data through Carbon Disclosure Projects (CDP). In contrast, the Taiwanese government has not developed such policy tools to request companies,” Lin said.

The researcher of the Green Citizens’ Action Alliance, Chen, thought that the government should propose more ambitious interim climate targets, strategies, and policies to pressure the companies to take climate action in line with science-based research. Recently, the government is revising 12 key strategies for its net-zero pledge. “Climate-related information disclosure” should be the principle of the 12 key strategies, especially for the two strategies of “Green Finance” and “Energy Saving & Efficiency.” Transparent climate information not only steers the private sector toward climate-positive investment but also encourages civil society in monitoring net-zero transition.

The five environmental NGOs of the Taiwan Climate Action Network concluded the press conference with five requests as follows:

For the government and congress:

1. The current national 2030 climate target (-20% emissions compared to 2005) should be raised, and finish the amendment of the “Climate Change Response Act ” as soon as possible.*

2. The Financial Supervisory Commission should revise the requirements regarding corporate climate-related information disclosure based on the recommendations from the ‘‘Integrity Matters” report.

3. ‘Information disclosure’ should be the principle of the governmental 12 key strategies for net zero, and also be implemented in the following plans.

For the publicly-listed companies:

4. Companies should implement GHG scope 1 &2 accounting and verification, and commit to long-term net-zero pledges as well as short-term science-based targets.

5. To engage the global net-zero initiatives, companies should conduct scope 3 accounting and develop relevant reduction plans.

For more information, please contact the Green Citizens’ Action Alliance or access their ESG Monitor website: https://thaubing-esg.gcaa.org.tw/

Note: This press conference was held on December 20th, 2022. The government updated the 2030 climate target to -24% emissions compared to 2005 on December 28th. The congress passed Climate Change Response Act on January 10th, 2023, and it was signed into law on February 15th, 2023.

[1] Data source: Market Observation Post System (MOPS) and government open data platform (Data.gov.tw). Taiwanese publicly listed companies have to annually report their ESG information on the MOPS website since 2022, including climate-related information. People can also download “ the collection of listed companies’ ESG Information” from Data.gov.tw. Assessment date: 11/01/2022

[2] Source: ‘NET ZERO STOCKTAKE 2022.’ published by New Climate Institute, Oxford Net Zero, Energy & Climate Intelligence Unit and Data-Driven EnviroLab.

[3] Taiwan Stock Exchange has required specific publicly-listed companies to publish a sustainability report annually by referring to the Global Reporting Initiatives (GRI) Standards. According to current requirements, listed companies with capital between 5 billion and 10 billion NT dollars should disclose GHG scope 1 & 2 emissions and relevant climate information by 2027; listed companies with a capital of less than 5 billion NT dollars should finish climate disclosure by 2028.