Taiwan Stock Exchange

Respond to Sustainability Initiatives

Respond to international sustainability initiatives

The UN set 17 Sustainable Development Goals (the "SDGs") in 2015 to resolve major social problems in collaboration with global enterprises. By proactively connecting our sustainable development strategies with the world, the TWSE responds to the SDGs with its own advantages and contributions. On top of supporting and responding to the 17 SDGs, the TWSE integrates the Sustainable Stock Exchanges (the "SSE") initiative with its core competence to demonstrate its influences through the following 11 SDGs.

Our visions and objectives

In 2020, the FSC announced the three-year "Capital Market Roadmap," "Corporate Governance 3.0 – Sustainable Development Roadmap," and "Green Finance Action Plan 2.0" to create a fair, efficient, diverse, and internationalized capital market with a focus on innovation, transparency and sustainability with the combined efforts of peripheral agencies, non-profit organizations and the financial industry.

As a capital platform, the TWSE's goal is to build an ESG eco-system incorporating all the stakeholders, including securities peripheral units, criteria creators, listed companies, investors, intermediary institutions, other market participants, and academic institutions/NGOs. With the three objectives of "creating a sound ecosystem for corporate sustainable development," "strengthening sustainability disclosure," and "enhancing the culture of corporate governance," the TWSE will lead the securities and futures industry to transition to sustainable development.

Create a sound ecosystem for corporate sustainable development

To carry out the FSC's "Capital Market Roadmap" and "Sustainable Development Roadmap," the TWSE will continue to pursue market reforms and develop more competitive products and services. The TWSE aims to create a sound ecosystem for corporate sustainable development through the continued development and launch of sustainability-related indices and products, Corporate Governance Evaluations and promotion of stewardship principles.

Actions taken in 2022 and future agenda are as follows:

Strengthen sustainability disclosure

Enhance the culture of corporate governance

Results and achievements

Since 2010, the TWSE has keenly observed and augmented regulations relating to corporate governance and corporate social responsibility. Today, Taiwan's corporate sustainability has risen to and gone beyond international standards, receiving numerous global distinctions. Taiwan received 4th place, which was its record-high ranking in the ACGA's "CG Watch 2020." With improvements in all categories over the previous report, it clearly indicates that the TWSE has made a concerted effort to strengthen the corporate governance ecosystem. Concurrently, Taiwan's weight is ranked among the highest in the world's top three ESG indices.

The TWSE has always closely observed global developments and practices. Referring to the TCFD, SASB, and other international guidelines, the TWSE has amended the "Rules Governing the Preparation and Filing of Sustainability Reports by TWSE Listed Companies." The aim is to deepen corporate governance and encourage companies to promote sustainability practices. The three main themes are "corporate governance," "disclosure of corporate sustainability information," and "stewardship principles."

• Corporate governance

  In 2010, the TWSE published the "Corporate Social Responsibility Best Practice Principles for TWSE/ GTSM Listed Companies" (renamed as "Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies") and "Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies." In 2013, the TWSE established the Corporate Governance Center to conduct evaluation of corporate governance, which has now completed its ninth annual evaluation. The indicators include four categories, which are "protection of shareholder rights and interests, equitable treatment of shareholders," "enhancing board composition and operation," "increasing information transparency" and "promoting sustainable development."

  
  

  In promoting corporate governance, the TWSE first incorporated it into the corporate governance evaluation indicators, then amended regulations regarding best practices, encouraging companies to voluntarily adopt corporate governance. As it has been embraced by more and more companies, forming a solid enough foundation for mandatory adoption, the TWSE further amended relevant regulations to phase in mandatory compliance by TWSE and TPEx-listed companies. Much of the data indicates that the quality of corporate governance among listed companies is on the rise, a clear sign that the TWSE's efforts have had a marked effect.

  
  
  
  
  
  
  
  

  The TWSE will continue to optimize the indicators for the Corporate Governance Evaluation to effectively discern a company's performance. Listed below were three major changes made in 2022:

  
  
  

  The Corporate Governance Evaluation procedures and indicators are announced at the end of the preceding year. In the first quarter, the TWSE and TPEx jointly hosted briefings to explain amendments to the indicators, evaluation procedures, and other major corporate governance matters to listed companies. In 2022, the briefings continued to be held virtually due to the pandemic, and the videos were made available on WebPro 3.0 for reference.




• Disclosure of corporate sustainability information

  Following the "Corporate Social Responsibility Best Practice Principles for TWSE/TPEx Listed Companies" in 2010 and the "Taiwan Stock Exchange Corporation Rules Governing the Preparation and Filing of Corporate Social Responsibility Reports by TWSE Listed Companies" in 2014, the TWSE continued to review and amend regulations, driving Taiwan's listed companies to adopt ethical management practices and strengthen their sustainable development. The GRI Standards for sustainability reporting have been adopted by listed companies comprising 80% of all market cap, with many companies voluntarily reporting on sustainability. In 2019, the TWSE added the stipulation that companies had to disclose the average and median salary data of non-managerial full-time employees in their CSR report. By encouraging companies to value employees' rights and raise the minimum wage while pursuing operational performance, both employees and employers can benefit from the implementation of corporate social responsibility.

  
  
  
  
  

  In the future, the TWSE is prepared to expand the scope of quantitative non-financial disclosure in keeping with financial reporting, also to enhance the relevance and comparability of our sustainable reporting in correlation with global practices.




• Stewardship principles

  In 2016, the TWSE launched the "Stewardship Principles for Institutional Investors," with the goal that institutional investors would participate in and improve the corporate governance of the investee companies by monitoring their business operation, attending shareholders' meetings, exercising voting rights and communicating with managerial level officers. As of December 31, 2022, a total of 153 institutional investors have signed the "Stewardship Principles for Institutional Investors." In 2019, the TWSE raised the bar for evaluations and announced the signatories with better practices and compliances annually. This was done to promote institutional investors so others may learn from them, and to advance the entire level of stewardship in Taiwan. Furthermore, the government published the evaluation results of adherence to Stewardship Principles for the reference of investment fund managers, motivating institutional investors to do better.

  
  
  




• Promotion of corporate sustainability

  Through ESG-related training, promotion and forums, the quality and quantity of the non-financial information disclosed by TWSE-listed companies have significantly improved. In 2022, the TWSE held two sessions of the TCFD training. One was for the financial sector regarding the TCFD reporting guidance which was co-hosted by Cozeta Energy Service Corp. The other was a promotional event, co-hosted by the Accounting Research and Development Foundation, to strengthen the disclosure of sustainability reporting under TCFD guidelines.

  
  

  The TWSE also conducted a number of industry-themed events to promote the "Sustainable Development Guidemap," highlighting the importance of carbon reduction to the steel, cement, rubber, plastics, semiconductor, and electronics industries, and inviting experts to share their carbon reduction and sustainability practices. Together with Quantum International Corp. (QIC) and Georgeson, the TWSE held the webinar on "Independent Directors and the 2022 Shareholders' Meeting from an International Perspective," with more than 400 directors and corporate governance officers from listed companies in attendance.

  
  

  In addition to our efforts with companies, the TWSE also reaches out to the general public through media collaborations to promote awareness of corporate governance, inform the public of related policies, and focus attention on Taiwan's achievements in corporate governance. The TWSE President was invited to speak at the "2022 Innovation Forum" hosted by the Economic Daily News, took part in a summit hosted by the Commercial Times about the future of 5G, and delivered a speech on sustainability at the ESG leadership conference co-hosted by National Taipei University and GVM. The TWSE's Chairman was invited to speak at the opening ceremony of the "Cathay Sustainable Finance and Climate Change Summit," and emphasized the company's commitment to strengthening ESG disclosure.

  
  

  In June 2022, the TWSE set up a special webpage on MOPS featuring corporate ESG information disclosure, which comprises 29 quantitative and qualitative indicators as reported by listed companies as of the end of June. By mid-2023, the ESG InfoHub will be fully operational, complete with integrated information on major ESG performances, ESG database content, ESG products, and more.

Financial inclusion

As early as 2005, the UN highlighted the importance of building inclusive financial sectors, through which people have equal the opportunity to access sustainable financial services. The core concept of financial inclusion is to provide effective and comprehensive financial products and services to all individuals and businesses. The rapid developments in technology and the larger environment have shifted FinTech to the forefront of making financial services more accessible to an increasing number of people.

The demographic makeup of Taiwan's securities market is primarily middle-aged to elderly investors, as younger investors often encounter barriers in participating in the market due to a lack of funds. To effect positive demographic change among Taiwan's investors, the TWSE implemented continuous trading in March 2020, intraday odd lot trading in October 2020, significant achievements in financial inclusion, allowing investors to buy stocks in odd lots and accrue profits. To improve the accessibility and availability of financial services and products, the TWSE has rolled out the following measures in recent years:

In addition, to expand financial inclusion and offer friendly services to people with disabilities, in 2021, the TWSE designed its official website to conform to the four principles and 13 guidelines of the "National Communication Commission's Web Content Accessibility Guidelines" for web developers. The new website, with a streamlined interface and framework, was completed and officially launched in November 2021, and it got 100,000 views throughout the year 2022. Those with disabilities can access all available financial information through the simplified web design and suitable assistance, such as audio description and Braille display.

Please refer to 2.5.1 "Innovative trading mechanisms" for more information about trading mechanisms.

Promotion of financial knowledge

The TWSE has implemented the "Financial Knowledge Popularization Project" in response to government policy. In coordination with the "Deepening the Foundation on Campus" strategy of the FSC, the TWSE is dedicated to the long-term promotion of knowledge in financial management, securities investment and risks. Through educational activities, the TWSE provides the public with more opportunities to understand the operations and concepts of the financial market and even apply related knowledge in daily life. Financial knowledge is promoted through three main channels: campus education, promotional events and online promotion. In 2022, the TWSE devoted TWD20.98 million to help educate the public in accurate investment and wealth management awareness, with the aim of ensuring the steady growth of the securities market and social order.

• Diverse and innovative promotional campaigns and platforms

  Facebook Fan Page

  
  

  The TWSE continued to conduct online marketing through its Facebook Fan Page in 2022, promoting key market issues focusing on different monthly themes through posts, videos and quizzes with prizes. Posts were made regarding prevention against investment fraud, introduction of day trading mechanisms and settlement default, reminding investors to be aware of false investment and financial advertisements on social media or instant messages in addition to the criminal penalties of stirring up speculative frenzy on social media and investment risks.

  
  

  This year, the TWSE also released a brand-new video series, "All Things about the Stock Market," with four videos in total: "Account Opening and Trading," "Fixedterm Fixed-amount Investments of stocks and ETFs," "Information Search," and "ezSearch," The videos were also uploaded on to the TWSE Facebook Fan Page and the "Learning at Home Network." The easy-to-follow videos guide new investors through the basics to find the investment style best suited to them.

  
  
  

  




• Online prizes and quizzes

  The TWSE website held the "Soaring Dragon and Leaping Tiger" prize-awarding event from September 27 to November 19, 2022 to help investors establish accurate portfolio-management concepts. Participants learn securities knowledge and develop trading risk awareness through educational games.

  
  

  With financial scams becoming so widespread in recent years, the TWSE takes pains to remind investors of common fraudulent messages and ways to avoid them. The online activity gave away 1,120 prizes totaling TWD440,000, and was viewed 356,000 times.




• Financial education comics

  Since 2007, the TWSE has commissioned the Securities & Futures Institute to create and publish comic books as educational materials on the securities market. The TWSE comics are released annually, with different themes such as an introduction to the stock exchange, fundamentals to stock trading, and other basic investment concepts. In recent years, they have evolved to mimic the styles of popular manga series, and adapted to incorporate information about new market mechanisms and products, such as ETFs, ETNs, and intraday odd lot trading.

  
  

  In late 2022, the 19th volume of the comics, dubbed "ESG – the key for human survival," was published. The latest issue depicts climate change-induced disasters and the key role of ESG policy in warding off the problem, highlighting the importance of corporate governance, corporate social responsibility, ESG, and sustainable development. The publication shares links to the "Learning at Home Network," "Investor Knowledge Network," and "ezSearch," and introduces common fraudulent practices, urging investors to be on their guard and avoid being ripped off by swindlers.

  
  

  

  The TWSE integrates corporate governance and sustainable development into the comics storyline so as to spread awareness. This will inform readers on the selection of long-term investment targets and help fulfill our obligation to better society and the environment.

  
  

  The TWSE distributes the printed copies to the competent authority, peripheral agencies of the securities and futures sector, the headquarters and branches of securities firms, schools and higher institutes of learning, and public libraries. In addition, the ebook versions are available on the "Investor Knowledge Network" and "Learning at Home Network." To increase readership, the TWSE has partnered with county and city libraries so that the public can read the ebook comics for free. Many schools and securities firms have requested more copies to supplement their financial literacy classes for students and employees, or to promote financial knowledge to investors.




• School field trips and institution group visits to the TWSE

  Each year, the TWSE plays host to student field trips. However, due to the pandemic, the TWSE has suspended all visits since March 2020. To ensure that investment education and financial literacy remain uninterrupted, the TWSE uploaded two videos introducing ETFs and the Taiwan Innovation Board for teachers to use in classrooms free of charge. The ETF video has been licensed without cost to National Open University for their online class "Fund management."

  
  

  In 2022, the TWSE resumed group visits for schools and organizations to promote accurate knowledge of the securities market and portfolio management, and to assist schools in combining finance theory with practice. A visitor system was set up on the "Investor Knowledge Network" to respond to requests for group visits. Due to the pandemic, on-site visits were suspended during January to March; in April, on-site visits were resumed. In 2022, a total of 489 visitors participated in 15 on-site visits, including 29 guests from the Private School Retirement and Compensation Fund.