DistantNews
Support us
🇹🇼 Taiwan /Elections & Politics

Taiwanese lawmakers slam ESG ratings as 'bragging tools' amid delayed disclosures

From Liberty Times · () Chinese

Translated from Chinese, summarized and contextualized by DistantNews.

At a glance

News Named sources Context piece
  • Taiwanese lawmakers criticized listed companies for delayed disclosure of information regarding food safety violations, arguing it undermines ESG ratings.
  • The Financial Supervisory Commission (FSC) stated that companies failing to promptly report significant events, including food safety issues, will face deductions in their ESG assessments.
  • The FSC clarified that ESG ratings are meant to encourage sustainability, not replace regulatory oversight, and that stock exchanges can still investigate and take action on internal control or disclosure failures.

Taiwanese lawmakers are questioning the effectiveness of Environmental, Social, and Governance (ESG) ratings, accusing listed companies of using them as a "tool to brag" while failing to disclose critical information in a timely manner. The criticism comes after several edible oil companies, including listed firms like Tai Shan, Fu Shou, and Fu Mao Oil, were fined NT$165 million for food safety violations. Legislator Lai Sze-bao pointed out that these companies were aware of the issues as early as April but only announced major information after the penalties were finalized, significantly delaying public disclosure.

If major information is not disclosed in a timely manner, it will affect the ESG rating and lead to deductions.

— Peng Jin-lungFSC Chairman Peng Jin-lung stated that companies failing to promptly report significant events, including food safety issues, will face deductions in their ESG assessments.

Lai argued that this delay in reporting, especially concerning food safety incidents that impact corporate governance (G), renders ESG ratings superficial and ineffective in protecting consumers and the market. He questioned the Financial Supervisory Commission (FSC) and the Taiwan Stock Exchange about their oversight and whether they were actively monitoring such disclosures.

ESG ratings have become a 'tool to brag' and have failed to fulfill their supervisory function.

— Lai Sze-baoLegislator Lai Sze-bao criticized the delayed disclosure of information by listed companies regarding food safety violations.

FSC Chairman Peng Jin-lung acknowledged that companies involved in food safety incidents will see their ESG performance affected and will be penalized in their ESG assessments for delayed reporting. However, he emphasized that ESG ratings are primarily an incentive system for companies to improve sustainable governance, not a regulatory or punitive tool. Peng clarified that the stock exchange can still investigate and take necessary regulatory actions if companies exhibit internal control deficiencies or improper information disclosure, stressing that market supervision involves multiple systems working together.

ESG ratings are inherently a comparative system to encourage companies to continuously improve sustainable governance, not a regulatory or punitive tool.

— Peng Jin-lungFSC Chairman Peng Jin-lung clarified the purpose of ESG ratings.
DistantNews Editorial

Originally published by Liberty Times in Chinese. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

More Stories

From Our Blog