The world continued to face sustainability crises such as climate anomalies, food crises, and energy crises in 2023. As governments worldwide strive to achieve sustainability and strengthen national-level commitments, they have evolved from early advocacy and encouragement to the current stage of establishing more regulations for supervision. This has gradually changed the motivation of Taiwanese enterprises in implementing ESG, shifting from past passive compliance with regulatory requirements to actively incorporating ESG into the core of corporate operations and integrating sustainability risks into risk management policies. According to CSRone Sustainability Think Tank's "2024 Taiwan and Asia-Pacific Sustainability Report Status and Trends" research report, among the top ten material issues of concern to Taiwanese enterprises, the top two are Economic Performance (68.5%) and Occupational Health and Safety (66.58%). Innovation and R&D (38.5%), Supply Chain Management (36.6%), and Customer Relationship Management (35.6%) entered the rankings for the first time, demonstrating enterprises' intention to link their sustainability strategies with business strategies to capture business opportunities brought by ESG. Among the top ten risk items of concern to Taiwanese enterprises, Climate Change Risk (73.0%) and Information Security Risk (69.3%) have been the top two risk issues of corporate concern for three consecutive years. With the intensification of natural or man-made disaster-related incidents and accelerated management by institutions such as the Financial Supervisory Commission and the Ministry of Environment, enterprises have increased their attention to risks. Disaster Risk (48.6%) and Environmental Regulatory Risk (44.2%) entered the top 10 risk issues of concern for the first time, indicating that addressing environmental issues such as climate change is an urgent priority.
According to the World Economic Forum's 2024 Global Risk Perception Survey Report, extreme weather events rank second among short-term (2-year) risks and first among long-term (10-year) risks. According to the annual Climate and Catastrophe Insight Report by British insurance group Aon, natural disaster losses were $343 billion in 2021, $355 billion in 2022, and $380 billion in 2023 (primarily due to severe convective storms in Europe and America; 2023 was the hottest year on record, with 13 countries experiencing record-high temperatures), showing an annual increase. To address the threats posed by climate change, the government announced the 2050 Net Zero Emissions Pathway in March 2022, outlining four major strategies: energy transformation, industrial transformation, lifestyle transformation, and social transformation. In February 2023, the "Greenhouse Gas Reduction and Management Act" was amended and renamed the "Climate Change Response Act," adding a dedicated chapter on climate change adaptation and clearly defining net zero emissions by 2050. The Financial Supervisory Commission, through green finance, leverages the influence of financial institutions in managing and utilizing funds to direct capital to sustainable enterprises or projects, encouraging enterprises to prioritize sustainability issues. On March 28, 2023, it released the "Listed Company Sustainable Development Action Plan," using a phased approach through the listed company sustainable development roadmap to first promote listed companies to complete greenhouse gas inventory information disclosure. Through a "large companies leading small companies" approach, the goal is to complete greenhouse gas inventory for all listed companies by 2027 and complete greenhouse gas inventory verification by 2029. Through the carbon inventory process, enterprises can understand their highest carbon-emitting processes or products and whether transformation is needed, subsequently setting carbon reduction targets to achieve the national net zero emissions commitment. Local companies are continuing to promote sustainable development and commit to net-zero- emissions under the guidance of government policy. The quality of sustainability disclosures is also being strengthened so that all stakeholders can monitor and invest in sustainability-related topics together. Mega Securities' parent company, Mega Financial Holding, joined the Sustainable Finance First Movers Coalition in December 2023, adding momentum to the nation's net zero transformation.
SBTi was jointly founded by four major organizations: CDP (Carbon Disclosure Project),
UNGC (United Nations Global Compact), WRI (World Resources Institute), and WWF (World
Wildlife Fund), developing relevant tools and guidance for enterprises to establish
science-based targets. The organization assists enterprises in setting reduction targets
that can effectively avoid the impacts of climate change and control global temperature
rise. Science-based carbon reduction targets provide a clearly defined pathway for
enterprises to reduce greenhouse gas emissions, helping prevent the worst environmental
impacts of climate change, and aligning with decarbonization trends can bring business
growth to enterprises. The so-called "science-based carbon reduction targets," according
to the latest climate science, refers to a company's greenhouse gas reduction targets
reaching the level required to achieve the goals of the "Paris Agreement" (i.e.,
limiting global average temperature rise to within 1.5°C above pre-industrial levels),
which is considered a science-based targets initiative. (Source: CSRone, URL [Science
Based Targets (SBT)] Series Report I - Introduction and FAQs – CSRone Sustainability
Think Tank; compiled from SBTi official website https://sciencebasedtargets.org/how-it-works ).
The benefits include environmental friendliness and commercial benefits for enterprises.
According to the research report "Six business benefits of setting science-based
targets" on the SBTi official website (9th Jul 2018, By Dexter Galvin, Global Director
of Corporates and Supply Chains, CDP), science-based carbon reduction target setting can
bring six major commercial benefits to enterprises:
- Brand Reputation: 79% of surveyed corporate executives believe that enhancing brand reputation is one of the most important commercial benefits of corporate commitment to science-based carbon reduction target initiatives.
- Investor Confidence: 52% of executives indicate that corporate commitment to science-based targets enhances investor confidence in company operations.
- Increased Regulatory Resilience: As governments worldwide continue to work toward achieving "Paris Agreement" goals and strengthen national-level commitment, enterprises expect governments to establish more regulations to control carbon emissions from economic activities. Over one-third (35%) of surveyed executives indicate that setting science-based carbon reduction targets makes them more resilient when facing increasingly strict carbon emission regulatory laws, as more enterprises see the advantages of business models aligned with decarbonization trends and setting goals consistent with the "Paris Agreement" early.
- Enhanced Innovation: Nearly two-thirds (63%) of respondents indicate that setting science-based carbon reduction targets has driven innovation within enterprises, while over 50% of respondents expect that by 2030, at least half of their products and services will be low-carbon.
- Cost Savings: Although the common argument is that green business models are too costly, nearly one-third (29%) of respondents believe effective cost savings are possible, mainly because setting science-based carbon reduction targets not only maintains operational efficiency but also increases enterprise resilience to future environmental changes.
- Competitiveness: As pioneers of low-carbon transformation, over half (55%) of respondents indicate that commitment to science-based carbon reduction target initiatives has enhanced their company's competitive advantage.
Mega Securities firmly believes that leaders have profound influence on company management policies. When the company you lead pursues economic profits, if you can take a long-term perspective, use corporate governance as the foundation, and simultaneously consider the major social and environmental issues and interests that stakeholders such as employees, customers, communities, and shareholders are concerned about, your company will win society's trust and support, receive abundant returns, allow our living environment to gain respite and healing, and bring you and your employees healthy bodies. We look forward to walking hand in hand on the path of sustainability.