Taiwan grabs ESG bull by the horns

Taiwan is transforming itself into a hub of sustainability and responsible ESG practices.

Taiwan’s economy still heavily relies on the semiconductor and electronics industries. But between 2015 and 2020, emissions from 16 major component makers grew by 7.5% each year, and energy use rose nearly 9% annually, raising the serious risk of getting locked into high carbon emissions, according to an academic research published in 2024 conducted by Gauthier Roussilhe et al. 

While some companies have made progress in improving energy efficiency, the slow rollout of renewable energy hasn’t kept up with the industry’s rapid growth. As a key player in global tech manufacturing, Taiwan now faces a tough challenge: balancing its industrial strength with the need to cut emissions.

The government has shown a strong commitment to tackling the problem. By February 2025, the Ministry of Environment’s “NetZero Green Living Alliance” had attracted over 14,000 participants, promoting low-carbon habits like green purchasing and better energy use in buildings.

More importantly, Taiwan has set a target to cut its electricity emission factor to 0.319 kg CO₂e per kilowatt-hour by 2030—a roughly 35% drop from past levels. 

Exemplars of Governance: Chunghwa Telecom and Delta Electronics

Transparency in ESG (Environmental, Social, and Governance) practices is no longer a nice-to-have—it’s a must. Taiwan’s largest telecom provider, Chunghwa Telecom, set a strong example by earning MSCI’s top-tier AAA ESG rating in June 2025. It became the only telecom company in Taiwan to achieve this, thanks to strong board oversight, employee policies, and data privacy protections.

But Chunghwa isn't alone in stepping up. Delta Electronics, a global electronics giant, began using an internal carbon price as early as 2014, according to Chief Sustainability Officer Jesse Chou (周志宏), as shown on the company's brand news. It started at RMB 20 per metric ton at its main manufacturing site in China.

By 2017, Delta expanded the policy globally and raised the price to US$50 per ton. In 2021, it made an even bolder move—raising the internal carbon price to US$300 per ton, effectively building climate costs into its global operations.

These carbon tolls have redirected billions of New Taiwan dollars each year into green projects. As Chou put it at the public event celebrating the establishment of a new think tank, Taiwan Next, held on May 7, 2025, this system ensures that climate goals are fully embedded in how the company makes investment decisions.

Panorama of Taiwan's ESG and Sustainability Practices

Chunghwa Telecom’s pledge to reach 100% renewable energy by 2040 (RE100) reflects a strong commitment to ESG, with sustainability overseen at the board level. To reach this goal, the company has shut down its 3G networks, phased out outdated energy-intensive equipment, used data analytics to reduce network energy use, applied internal carbon fees, and continued building solar power stations.

Semiconductor leader TSMC pledged to align with the Science Based Targets Initiative (SBTi) by 2035. By 2030, it plans to achieve 85% renewable energy use in Taiwan (RE85) and 100% abroad (RE100), with a long-term Net Zero goal by 2050. 

Taiwan’s green energy sector is making strong progress. SunnyFounder, Taiwan’s first green electric utility, allows everyday citizens to invest in rooftop solar through its "citizen power plant" model—connecting individuals, landlords, and utilities. HD Renewable Energy, a smart energy company based in Taipei, has seen major growth, earning multiple industry awards. In 2024, it posted NT$10.125 billion in revenue—a 73.41% increase—along with a record-high earnings per share.

TECO, a major business group in Taiwan renowned for its manufacturing prowess in industrial electric motors, has made sustainability a top priority by creating an ESG Office that reports directly to the chairman. The company is using a wide range of decarbonization strategies, including an internal carbon price of NT$1,600 per ton across its operations. In its 2024 Sustainability Report, it aims to source 30% of its electricity from renewable energy, with a special focus on solar energy, by 2030, while positioning itself as a global leader in electrification, smart systems, and clean energy services.

Taiwan’s heavy industries are beginning to shift toward sustainability. China Steel Corporation, the country’s largest steelmaker, joined the World Steel Association’s sustainability charter (2025–2027), putting it in the same league as global leaders like Nippon Steel and POSCO.

The company’s plans include pilot projects for hydrogen-based steelmaking and increased use of renewable energy—signaling a serious move to align with international decarbonization efforts. These steps show that even traditionally carbon-intensive sectors are starting to embrace the energy transition.

Taiwan’s financial sector is gaining momentum on ESG. As of Q2 2025, the Financial Supervisory Commission oversees 53 ESG-focused funds, with total assets reaching NT$896.5 billion—an 82% year-over-year increase.

The Taipei Exchange is rolling out tools like carbon footprint calculators and proxy voting analytics (via ISS and Glass Lewis) under its “sustainable performance services.” Banks such as SinoPac are also stepping up, using AI-driven carbon data to guide sustainable lending and bring emissions transparency into credit risk evaluations.

By 2026, Taiwan’s corporate governance rating system will officially include ESG factors. This shift reflects a broader move beyond traditional financial and board metrics to a more sustainability-focused model.

Taiwan’s ESG efforts aren’t limited to the environment—they also address social inclusion and equity. Indigenous-led carbon sink projects in places like Taoyuan’s Fuxing Township are generating carbon credits through reforestation, while also creating economic opportunities for local communities.

Corporations are getting involved, too. Chunghwa Telecom is helping to bridge the digital divide by setting up digital learning centers in Lanyu and supporting rural education through tutoring and job training programs.

ESG reshapes corporate Taiwan

In recent years, Taiwan’s Financial Supervisory Commission (FSC) has introduced several frameworks—such as the Corporate Governance 3.0 roadmap, Sustainable Development Roadmap, and Green Finance Action Plan 3.0—that require climate risk assessments, disclosure of financed emissions, and green finance ratings for institutions. The FSC has also announced a phased rollout of IFRS S1 and S2 disclosure standards: by 2026, companies with capital over NT$10 billion must comply; by 2027, firms with over NT$5 billion; and by 2028, all listed companies, regardless of size.

In 2022, the Taiwan Stock Exchange (TWSE) mandated ESG reporting for listed companies, requiring them to publicly disclose ESG information annually. To assist companies, the Taipei Exchange launched the “Assisted Production of Sustainability Reports Function” on its ESG digital platform in 2025, helping firms prepare their sustainability reports more easily.

Banks such as CTBC, Cathay, and E.Sun have introduced green loan programs and provide technical support to small and medium enterprises (SMEs) and supply-chain manufacturers. These efforts aim to promote sustainability and help businesses meet growing ESG requirements.

Eliza Li (李宜樺), Leader of Sustainability and Climate Change Services at PwC Taiwan, said at an interview with sustainability-focused think tank CSRone: high-emission industries in Taiwan have become increasingly aware of climate risks due to their carbon-intensive operations and mounting regulatory pressures. In contrast, sectors like integrated circuit (IC) design focus more on creating energy-efficient solutions that help their clients lower their environmental impact.

At the same time, Taiwan’s consumer goods sector is embracing the circular economy. For instance, Acer’s Aspire Vero laptop features an OceanGlass touchpad made entirely from ocean-bound plastic and a chassis containing 40% recycled plastic, reducing CO₂ emissions by about 30% compared to traditional designs.

Taiwan is also making strides in social governance, with more companies adopting policies around diversity and inclusion, gender equity, and human rights due diligence throughout their supply chains.

A Constellation of Commitment

Taiwan is at a turning point in its ESG journey, moving from simply meeting disclosure requirements to creating a system driven by strong commitment and meaningful change. Leading the way are smart telecom companies, industrial firms using carbon pricing, and green-focused financial institutions, all building a foundation of accountability, innovation, and community support. However, this work is still unfinished.

Former FSC Chairperson Professor Jennifer L. Wang (王儷玲) wrote in Global Views Monthly that while financial institutions like CTBC and Cathay United are making progress with green loan programs and helping local supply chain manufacturers reduce carbon emissions, achieving a low-carbon future will require stronger cooperation between the government, financial sector, and industry. This coordinated effort is already underway.

With more companies adopting sustainability reporting, regulators taking proactive steps, and social and environmental factors becoming part of corporate governance, Taiwan’s industries are beginning to change how they operate. ESG is no longer a side issue but a key part of business strategy across supply chains, finance, and production.