The FSC states that corporations that produce consumer staples, sell to end consumers directly, or of a certain size or above have greater impact on the environment or the general public from their operating activities. Such corporations should fulfill their corporate social responsibilities to the best of their abilities. Additionally, food safety issues have been posing threats to the health of all residents of Taiwan in the past few months and severely damaging the trust of the public and the international image of Taiwan. As a result, the FSC will not only increase the responsibility of internal control at listed companies but also require listed food processing companies, financial services companies, chemical industry companies, and companies with more than NT$10 billion (the same currency applies hereafter) of paid-in capital to compile Corporate Social Responsibility Reports (referred to as CSR Reports hereafter) to increase the social responsibilities among companies that have a direct business-to-consumer (B2C) relationship and revive the trust for listed companies in those categories among consumers and firms in the supply chains.
Those companies should adopt internationally accepted guidelines in the compilation of CSR Reports. Such guidelines provide indicators in various dimensions, such as the environment, the society, and corporate governance, and substantively disclose critical issues of the industries in which those companies operate. The objectives of such guidelines are inducing corporations to review their operations as well as the risks and challenges of their operations comprehensively so that those companies can draft their operation policies and responses. Additionally, in the course of compiling such reports, the corporations can understand the issues that attract attention internationally and from other firms in the same industry, the strengths and weaknesses of their companies, and the matters that urgently require improvement. After a corporation performs said review, it can then compile the CSR Report that can serve as a tool of communications internally and externally, completely present the environment in which that corporation operates, and the direction toward which the company should follow. The CSR Report can then help stakeholders of the company (such as shareholders, employees, the community, vendors, or customers and end consumers) understand the company.
The details on the scope of companies that are required to compile CSR Reports under this pronouncement are as follows:
I. The subjects of this regulation: Listed companies in Taiwan in the food industry, in a group of specific companies with dining service revenue at over 50% of total revenue in the most recent year, in the financial service industries, in the chemical industry, and companies with paid-in capital above NT$10 billion.
II. The method of regulation: The TWSE and GTSM will clearly identify such companies in their operation rules and information disclosure regulations. Said companies should adopt “Internationally Accepted Guidelines” each year in the compilation of their CSR Report and release such reports before the end of each June. Additionally, considering that those companies need more time for preparation and communication for their initial report, those companies that compile reports for the first time may release their reports before the end of December.
The FSC has sent official letters to the TWSE and the GTSM to provide applicable regulations and subsequent measures. Applicable regulations and details are expected to be released and become effective in the first ten days of October.
Corporate Finance Division, Securities and Futures Bureau
Please direct your inquiries to:
http://fscmail.fsc.gov.tw/FSC-SPS/SPSB/SPSB01002.aspx