TWSE Market Insights

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The purpose of sustainability disclosures is to help enterprises identify risks, improve decision-making, and enable investors to evaluate corporate resilience during the transition. However, when regulatory frameworks impose excessive requirements or move too quickly, companies may divert limited human resources and budgets toward data collection, form-filling, and redundant auditing, reducing the resources available for tangible decarbonization initiatives such as equipment retrofits and energy management. On September 23, 2026, the Financial Supervisory Commission (FSC) and the Ministry of Environment (MOENV) jointly announced an adjusted implementation roadmap for TWSE- and TPEx-listed companies adopting the IFRS Sustainability Disclosure Standards, under the premise of keeping national sustainability targets unchanged. Concurrently, revisions were made to both the "Roadmap for Taiwan Listed Companies to Align with IFRS Sustainability Disclosure Standards and Policy Blueprint" and the "Sustainable Development Roadmap for Listed Companies." This recalibration phases adoption according to corporate scale and emissions impact, striking a balance between market information demand and corporate implementation capability.

The revision highlights four primary adjustments. First, the mandate for full adoption has been narrowed from all ~1,970 listed companies to approximately 560 enterprises—specifically those with paid-in capital of NT 2 billion that fall under the MOENV's mandatory GHG inventory registration and verification regime; the remaining ~1,410 companies under NT$2 billion and outside MOENV oversight are still required to disclose basic climate governance, risk management, and Scope 1 and Scope 2 emissions data. Second, for Phase 3 companies slated for adoption in 2028, disclosures during the first two fiscal years will be restricted to climate-related information, with broader sustainability disclosures beyond climate to follow starting in 2030; reporting for Scope 3 greenhouse gas emissions will be shifted to voluntary disclosure. Third, Phase 2 and Phase 3 companies will be exempt from assurance requirements on Scope 1 and Scope 2 emissions at the parent company standalone level, though they must still obtain external assurance for consolidated group-level Scope 1 and Scope 2 emissions according to the designated schedule. Fourth, for the initial two years of adoption, companies may defer filing their dedicated sustainability chapter to the annual report deadline, namely 14 days prior to the annual general meeting; concurrent filing alongside the annual financial report will resume from the third year onward. These adjustments do not apply to the financial, insurance, and securities/futures sectors, which must adhere to their original adoption timelines.

Scope 1 emissions refer to direct emissions from sources owned or controlled by an organization, such as fuel combustion in company boilers; Scope 2 covers indirect energy emissions stemming from purchased electricity, heat, or steam. These two scopes serve as essential baselines for companies to quantify internal operational footprints and establish reduction targets. In contrast, Scope 3 encompasses upstream and downstream value chains, requiring data collection across numerous suppliers and customers. Allowing Phase 3 companies to first build robust Scope 1 and Scope 2 inventory capacity before expanding to supply chain data ensures that future disclosures rest on reliable data.

This adjustment reflects the pragmatic constraints smaller listed companies face in staffing, data infrastructure, and assurance capacity. According to a 2026 survey of Phase 3 enterprises conducted by Deloitte Taiwan (commissioned by the Taiwan Stock Exchange and related bodies), which garnered 1,643 valid responses, only 17.35% reported being able to comply on schedule, while the remainder cited partial or severe difficulties. Key hurdles included identifying material sustainability topics beyond climate and acquiring reliable supply chain data. Companies also face significant operational burdens in consolidating group-level data, implementing specialized sustainability information systems, and reconciling sustainability metrics with financial accounting systems. Forcing full compliance across all metrics at the outset risks inflating compliance costs without necessarily yielding decision-useful, high-quality information.

International jurisdictions are similarly recalibrating sustainability reporting mandates by company size. In February 2025, the European Commission introduced the "Omnibus I" package, and the Council of the European Union gave final approval in February 2026 to directive amendments under the Corporate Sustainability Reporting Directive (CSRD), raising thresholds to enterprises with over 1,000 employees and net turnover exceeding €450 million, drastically reducing the number of covered companies from roughly 50,000 to around 5,000. In July 2026, the European Commission also adopted revised European Sustainability Reporting Standards (ESRS), slashing mandatory datapoints by more than 60%, while enacting a voluntary standard for enterprises with fewer than 1,000 employees to serve as an upper cap on information requests from larger corporates, mitigating the trickle-down burden across supply chains. The EU underscored that this is not a deregulation of climate commitments, but a step to enhance regulatory feasibility and industrial competitiveness while safeguarding net-zero goals. Japan, South Korea, and Singapore have adopted comparable phased or size-based rollouts. Although metrics and thresholds vary by jurisdiction, Taiwan's tiered approach aligns closely with these international trends, and the regulatory rigor of Taiwan's post-adjustment rules remains broadly consistent with mainstream global supervision.

A tiered rollout makes strategic sense from a policy resource perspective. In terms of coverage, the ~560 companies subject to mandatory full adoption represent over 87% of total market capitalization across listed companies and approximately 96% of Scope 1 and Scope 2 emissions; conversely, the remaining ~1,410 smaller firms constitute over 70% of listed entities by count, but represent under 13% of market cap and less than 4% of emissions. Prioritizing comprehensive disclosures from the former group gives financial institutions and investors high-impact visibility into primary emitters, climate risks, and transition strategies, while smaller non-MOENV-regulated entities still provide baseline climate disclosures. It must be noted, however, that Scope 1 and Scope 2 coverage does not equate to equivalent Scope 3 or full value-chain coverage; the government must continue monitoring supply chain data gaps.

Minimizing redundant administrative friction is another central pillar of this policy update. The MOENV plans to introduce a Global Warming Potential (GWP) version conversion module within its inventory platform and expand localized carbon footprint emission factors for critical sectors, such as semiconductors and electronic components; both ministries will coordinate verification and assurance workflows to avoid duplicative audits of identical data; the FSC will also continue to supply disclosure templates, educational training, and technical implementation resources. These supporting measures help businesses channel resources toward data integrity and emissions abatement. Taiwan has pledged to cut net greenhouse gas emissions by 28±2% by 2030 and 38±2% by 2035 (relative to 2005 levels), toward a target of net-zero by 2050. Relieving administrative reporting friction will only translate into real-world transition results if accompanied by practical support that helps smaller enterprises build carbon inventory capacity, subsequently unlocking equipment upgrades, energy management, and supply-chain efficiency.

Adjusting mandatory thresholds is not an off-ramp for smaller listed firms from the sustainability transition. The ~1,410 companies under NT$2 billion in capital and outside MOENV oversight are still required to disclose fundamental climate governance, risk management, and Scope 1 and Scope 2 greenhouse gas emissions in their annual reports. Prevailing ESG evaluation frameworks and market incentives will continue to encourage voluntary, in-depth reporting; furthermore, for suppliers integrated into global supply chains, customer carbon data demands and sustainable financing criteria from financial institutions will sustain pressure to upgrade climate management practices. Therefore, a temporary exemption from full standard compliance does not equate to an exemption from climate risk management. The FSC plans to review implementation arrangements in 2030 based on global developments and corporate readiness, allowing disclosure guidelines, capacity building, and market forces sufficient runway to guide smaller enterprises from basic reporting toward substantive transformation.

In short, disclosure standards cannot deliver decarbonization on their own, but they provide the foundation for corporate strategy, financial backing, and policy appraisal. If this regulatory revision enables large and high-emitting enterprises to maintain high-quality disclosures while affording smaller companies the breathing room to build institutional capabilities, eliminate redundant audits, and close supply-chain data gaps, it will simultaneously serve corporate competitiveness, global alignment, and national transition.