Taiwan's rising corporate sustainable development
The ECCT's Corporate Social Responsibility committee hosted a lunch on the topic "Taiwan's rising corporate sustainable development" with guest speaker Dr Eugene Chien, Chairman of the Taiwan Institute for Sustainable Energy (TAISE) & President of the Center for Corporate Sustainability.
The speaker gave an update of the status of corporate sustainable development in Taiwan. He highlighted how more and more companies are embracing the major aspects of responsibility in terms of corporate governance, society and the environment. This includes a growing recognition on the part of companies of the need to work with other stakeholders and the importance of sustainability reporting.
On a global comparative basis, large Taiwanese companies are doing well in terms of sustainability reporting and performance.
According to the Environmental, Social And Governance (ESG) disclosure score and coverage statistics of 24 major global economies compiled by Bloomberg, Taiwan ranks second globally (after France and ahead of Spain) in terms of market capitalisation weighted average ESG disclosure.
A total of 455 Taiwanese companies are providing ESG disclosure and they are major corporations (accounting for 81% of the weighted market capitalisation in Taiwan). Of these companies, 348 use the most advanced (G4) sustainability reporting guidelines, a higher percentage than any other country. Moreover, 44% of sustainability reports submitted by Taiwanese companies were verified by third parties, a figure which is higher than the global average of 28%. In another measure, 18 companies were included in the Dow Jones Sustainability Index (DJSI), accounting for 20% of companies in the DJSI emerging market index.
Taiwan's progress has been rapid. In 2008 only 13 companies published CSR reports. This number has risen to 458 in 2017. This is a remarkable achievement given that it is not easy to prepare reports.
Chien believes that the carrot, rather than the stick is the best approach. In other words, persuading companies to participate is better than forcing them. Judging by the results, it is clear that this approach is working in Taiwan.
The Taiwan Corporate Sustainability Awards (TCSA, run by TAISE) have played the role of a major carrot in this regard. Started in 2008 and held annually, the awards have served as a catalyst and inspiration to companies to improve and report on their sustainability initiatives. The awards have been so successful that they have gained the participation of firms with a total operating income that constituted 88.12% of Taiwan's GDP (in 2015).
The awards also show a remarkable improvement not only in the number of companies reporting but also the quality of reporting. In the first year of the awards, 60% of companies failed to meet reporting requirements. By 2016, the failure percentage had fallen to 2.6% while the number of companies receiving gold awards (the highest standard of reporting) had expanded from fewer than 10 in the first year to about half of all companies participating.
The performance of Taiwan's companies has also improved. According to the Asian Corporate Governance Association, Taiwan ranked fourth in corporate governance performance in Asia (excluding Australia) in 2016, after Singapore, Hong Kong and Japan.
TCSA has a number of awards including: Growth through innovation, creativity in communication, social inclusion, supply chain leadership, transparency and integrity, people development, sustainable water management, climate leadership and circular economy leadership.
Chien went on to list the top 10 domestic companies that were recognised with awards in 2016 as well as the top 3 foreign firms operating in Taiwan. He also described some of the activities of the winners, which included initiatives to support communities such as libraries and other community development projects, water saving and recycling plastic into high-end sports clothing.
Besides awards, TAISE has set up the Center for Corporate Sustainability (CCS), which has arranged over 200 events such as CEO forums, lectures, clinics and seminars. This year TAISE established the "Taiwan Sustainability Guildhall" aimed at creating a cooperation and exchange platform for experts and corporate leaders.
Another of TAISE's initiatives in 2017 was the "Taipei Golden Eagle Micro-Movie Festival", held to support the production of short films aimed at strengthening environmental awareness and promoting sustainability.
The institute is also supporting academic work on sustainability through its CSR Academic Paper awards which cooperates with 25 universities. The institute is also working with over 3,000 schools whereby students submit paintings for the climate change painting competition.
In an effort to broaden the scope of public acceptance of the awards, in 2015 a class was held to train judges from various backgrounds, not affiliated to TAISE. 228 of the participants then acted as judges in 2016. The aim is to increase the number of these types of judges every year and to reach 1,000 by 2020.
This year a youth sustainability leadership camp was held to strengthen the participation of Taiwanese youth in global sustainability issues and to develop sustainability leaders.
While foreign companies operating in Taiwan may have CSR programmes and initiatives, according to Chien, there is a lack of transparency about them. In addition, many companies lack holistic programmes and do not have enough interaction with local NGOs. He therefore recommended that companies remedy this by increasing transparency, implementing more comprehensive plans and working more actively with local NGOs. In addition, by employing some of their best global initiatives in Taiwan, foreign companies could burnish their credentials as sustainability leaders in Taiwan.