TAIPEI (Taiwan News) — In a recent episode of ESG Talks, PWC's Executive Director of Sustainability Development Services Christine Chang discussed Environmental, Social, and Governance (ESG) with Taiwan News.
In a survey done by PWC Global, 77% of institutional investors said they would stop buying non-ESG products by 2022.
Chang said PWC has identified four factors that are pushing ESG forward: regulation, performance, investor demand, and COVID-19.
The first factor sees companies fulfilling regulatory requirements, she said, with new rules increasingly pushed forward by governments concerned about the impact of their businesses.
The second factor, performance, has come by better aligning ESG with firms' financial outcomes, she said.
“Financial performance is an end result of proper ESG management,” she said, giving the example of carbon emissions causing extra costs for companies in jurisdictions that levy carbon taxes.
“In the past, shareholders have been focused on financial performance,” she said. Now though, sustainability measures are becoming just as important for long-term investors, she added.
Finally, she said COVID-19 is a social issue, and therefore people and companies have become more aware of the importance of ESG because of it.
There are two main catalysts for bringing ESG to Taiwan: global co-dependence and foreign investment.
These two interrelated factors mean Taiwanese companies have to move fast to keep up with new trends emerging among other international players.
“If top management does not buy into this concept, it becomes difficult for the company to move forward,” she said, adding that some companies in Taiwan are not quite on board with this.
Chang said there are four areas companies need to focus on to move forward: culture, mechanisms, measurement, and communication.
There are some great tools available that help make sense of Taiwan’s ESG ecosystem, she explained.
One is the Taiwan Depository and Clearing Corporation (TDCC), which features an Investor Relations platform that lists the rankings for Taiwan-listed companies based on international ESG ratings.
PWC can help
Chang’s company provides services for companies to improve their ESG across culture, mechanism, measurement, and communication.
PWC provides training for managers on ESG trends, so they are equipped with knowledge about the field, she said.
Her company can also help establish a company’s policies and procedure mechanisms to reach their action goals, assisting the firm to identify key climate risks and how they should address them.
PWC offers new metrics for measuring companies’ progress on environmental key performance indicators (KPIs) and science-based targets (SBTs) as well.
When it comes to communication, there are an array of guidelines PWC recommends, such as the Sustainability Accounting Standards Board (SASB) certification and other disclosure and transparency benchmarks.