Taiwan Stock Exchange - Rules & Regulations Directory

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Title:

Taiwan Stock Exchange Corporation Rules Governing the Preparation and Filing of Sustainability Reports by TWSE Listed Companies 

Amended Date: 2021.12.07 
Categories: Corporate Governance

Article 1
    These Rules are established according to Paragraph 3, Article 47 of the Operating Rules of the Taiwan Stock Exchange Corporation.

Article 2
    Where a listed company is under one of the following circumstances, it shall prepare and file a sustainability report in Chinese according to these Rules.
  1. At the end of the most recent fiscal year, the company falls into the food industry, chemical industry and financial and insurance industry prescribed in the Taiwan Stock Exchange Corporation Key Points for Classifying and Adjusting Categories of Industries of Listed Companies.
  2. The financial report for the most recent fiscal year submitted pursuant to Article 36 of the Securities and Exchange Act indicates that no less than 50% of the company's operating revenue is derived from food and beverage.
  3. The financial report for the most recent fiscal year submitted pursuant to Article 36 of the Securities and Exchange Act indicates that the company's share capital has achieved no less than NT$2 billion, provided the above may not apply to a company of share capital less than NT$5 billion until 2023. The term "financial report" referred to in paragraphs 2 and 3 means the consolidated financial report prepared in accordance with the "regulations governing the preparation of financial reports by specific industries" made and promulgated by the competent authorities. If a listed company has no subsidiary, the financial report means an individual financial report.

Article 3
    A listed company which meets the requirements under Article 2 of the Rules shall prepare an annual sustainability report for the preceding year by referring to the Global Reporting Initiatives (GRI) Standards published by the GRI, Sector Disclosure and other applicable rules according to its sector features. In the report, the company shall disclose its identified material economic, environmental and social topics, management approach, topic-specific disclosure, and its reporting requirements, which shall, at a minimum, meet the core option of the GRI Standards.
    The sustainability report mentioned in the preceding paragraph shall include relevant environmental, social and corporate governance risk assessments and lay out the performance indicators to manage the material topics identified.
    In the sustainability report, a listed company shall disclose what Content Index of the GRI Standards corresponds to the contents of the report and specify in the report whether the topic-specific disclosures have been assured or verified by a third party.
    The topic-specific disclosure referred to in Paragraph 1 shall be evaluated and disclosed by adopting the standards in compliance with the rules of the competent authorities. If the competent authorities have not promulgated the applicable standards, the company shall adopt the approach of evaluation commonly used in practice.

Article 4
    In addition to the content referred to in the preceding article, the sustainability report prepared by a listed company shall emphasize the following matters.
  1. Listed companies within the food industry and those prescribed under Subparagraph 2, Paragraph 1, Article 2 of the Rules shall disclose their management approaches,, topic-specific disclosures and their reporting requirements for major topics including assessment of supplier's impact on the environment or society, customer health and safety, and marketing and labeling. Their reporting requirements shall include at least the following items:
    1. The evaluation and improvement regarding the company's personnel, work environment, hygiene management of facilities and quality control system to improve food sanitation, safety and quality, as well as the significant product and service categories and the percentage affected.
    2. The types and number of incidents of violation against the applicable food safety and sanitation laws and noncompliance with product and service information and labeling laws.
    3. The percentage of the purchased volume in accordance with internationally recognized responsible production standards, categorized by standards.
    4. The percentage of the production volume manufactured in sites certified by an independent third party according to internationally recognized food safety management system standards.
    5. The number and percentage of suppliers audited, and the audit items and results.
    6. The product trace and track management conducted voluntarily or according to the applicable laws, and the percentage of such relevant products to the whole products.
    7. The food safety laboratories established voluntarily or according to the applicable laws, testing items, testing results, relevant expenses and the percentage of such expenses to the net revenue.
  2. Listed companies within the chemical industry shall disclose their management approaches, topic-specific disclosures and their reporting requirements for major topics including energy management, water resources management, waste management, protection of occupational health and safety, assessment of their impact on local community, and their impact and supplier's impact on the environment and society. Their reporting requirements shall include at least the following items:
    1. Total energy consumption.
    2. Total amount of water withdrawn, and volume of effluent required to be disclosed under the law or to be disclosed voluntarily.
    3. Total quantity of hazardous wastes generated during the production process of products required to be disclosed under the law or to be disclosed voluntarily.
    4. Types of injury and rates of injury, occupational diseases, lost days, and absenteeism, and number of work-related fatalities.
    5. Operations with significant actual and potential negative impacts on local communities.
    6. Negative environmental or social impacts in the company itself and its supply chain and actions taken.
  3. Listed companies within the financial and insurance industry shall disclose their management approaches, topic-specific disclosures and their reporting requirements for operation and business in major topic on data security, financial inclusion, and sustainable finance. Their reporting requirements shall include at least the following items:
    1. Number of data breaches, percentage involving personally identifiable information, and number of account holders affected.
    2. Number and amount of loans outstanding qualified to programs designed to promote development of small business and communities.
    3. Number of participants in financial literacy initiatives provided to the disadvantaged without adequate banking services.
    4. Products and services designed by individual operating units to create benefits for the environment or society.
  4. A listed company under Article 2 shall disclose the following:
    1. the number of its full-time employees who are not in a managerial position, the average and medium of the salaries of the full-time employees who are not in a managerial position, and the difference of the three figures from the previous year
    2. the company’s governance around climate-related risks and opportunities, actual and potential climate-related impacts, how to identify, assess and manage climate-related risks, and metrics and targets used to assess and manage relevant climate-related issues.

Article 5
    The sustainability reports prepared by the food industry and the listed companies, chemical industry and finance and insurance industry prescribed under Subparagraph 2, Paragraph 1, Article 2 of the Rules shall obtain a CPA's letter of opinion issued according to the rules published by the Accounting Research and Development Foundation, ROC; the scope thereof shall all include the reporting requirements disclosed pursuant to Items 1 to 7, Subparagraph 1, Items 1 to 4, Subparagraph 2, and Items 1 to 4, Subparagraph 3, Article 4 of the Rules.
    The listed company prescribed under Paragraph 1, Article 2 of the Rules shall disclose the sustainability report and the link to the file of that report posted on the company's website on the internet information reporting system designated by TWSE by June 30. However, if the listed company does not prepare a sustainability in the most recent year or does not prepare the report by referring to the GRI Standards, or the sustainability report has obtained a CPA's letter of opinion according to the rules mentioned in the preceding paragraph, the filing may be completed by September 30.
    A listed company shall establish the operational procedure for preparation and validation of the sustainability report, and include this procedure in its internal control system.

Article 6
    These Rules shall take effect after having been submitted to and approved by the Competent Authority. Subsequent amendments thereto shall be effected in the same manner.

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