In order to improve the comparability of sustainability-related financial information (hereinafter referred to as “sustainability information”), build  investor trust, promote sustainable capital investment, and accelerate the sustainability transition and net-zero commitment of domestic enterprises, the Financial Supervisory Commission (hereinafter referred to as “the FSC”) released the “Roadmap for Taiwan listed companies to align with IFRS Sustainability Disclosure Standards” (hereinafter referred to as “the Roadmap”) on August 17, 2023. The Roadmap announced that TWSE/TPEx listed companies (hereinafter referred to as “the listed companies”) will apply the IFRS Sustainability Disclosure Standards endorsed by the FSC (hereinafter referred to as “the ISSB Standards”). Starting from 2026 fiscal year, the listed companies will apply the ISSB Standards in three stages based on the paid-in capital, and the sustainability-related financial information shall be disclosed in a dedicated chapter of their annual reports.
To comply with the Roadmap, the FSC has proposed amendments to the “Regulations Governing Information to be Published in Annual Reports of Public Companies” (hereinafter referred to as “the Annual Report Regulations”). A public comment period will begin in accordance with the Administrative Procedure Act to gather feedback from all sectors. The key points of the amendments are as follows:
I.    Disclosure of sustainability information in a dedicated chapter of the annual report with the board’s approval: According to the Roadmap, it is stipulated that companies that meet certain criteria shall include a dedicated chapter in their annual reports containing the “sustainability-related financial information” approved by the board of directors, to improve the quality of sustainability information.
II.    The important principles and transitional provisions for preparing sustainability information: Companies shall prepare and disclose sustainability information in accordance with the ISSB Standards. To assist companies in understanding these principles, the Annual Report Regulations incorporated key preparation principles referencing to the ISSB Standards. For example, the reporting entity and the reporting period (including the comparative period) for sustainability information shall be consistent with the financial statements. In addition, transitional provisions and proportionality mechanisms may be applied (e.g., in the first reporting year, the listed companies may choose to disclose only climate-related information or omit comparative information). Companies may also apply proportionality mechanisms by adopting disclosure methods suited to their skills and capabilities to decide quantitative or qualitative disclosure.
III.    Annual report filing alongside financial statements filing: To facilitate investors decision-making by referring to both the financial statements and sustainability information, it is stipulated that the listed company shall file its annual report at the same time as its financial statements upon adopting the ISSB Standards. However, if unable to finalize the full annual report by the deadline, the listed companies may initially file only the sustainability information chapter and then submit the full annual report before the shareholders’ meeting.
IV.    Other matters under determination (e.g., greenhouse gas measurement method and disclosure timeline for Scope 3 emissions): Recognizing that the sustainability disclosures cover a wide range of topics and interact with the national sustainability policy, the FSC established the “Advisory Group for Endorsement of the IFRS Sustainability Disclosure Standards” (hereinafter referred to as “the Advisory Group”) by referring to recommendations from scholars and international practices. The Advisory Group aims to introduce a rigorous advisory mechanism to gather opinions from wider stakeholders as input for policy making. Regarding the greenhouse gas measurement method and disclosure timeline for Scope 3 emissions -which relate to the Climate Change Response Act and the national sustainability policy, public consultations will be held by the Advisory Group, with participation from relevant government agencies (such as  the Ministry of Environment and the Ministry of Economic Affairs). The evaluation results will be published by year-end, with formal regulations will be issued via official letter.
           The listed companies with paid-in capital over NT$10 billion (Stage 1 companies) shall begin preparing sustainability information starting from the 2026 fiscal year, and file it alongside their annual financial statements by March 16, 2027. The FSC also reminds Stage 1 companies to formulate and execute their plans for implementing the ISSB Standards, and to continuously adjust internal controls related to sustainability information management to align with the ISSB Standards. As for companies in other stages, the FSC will continue to provide support, such as the template of plans for implementing the ISSB Standards and disclosure examples through its task force to assist in compliance.
 The FSC notes that adopting the ISSB Standards will improve the comparability of sustainability information and build investor trust, reduce greenwashing, enhance international visibility, promote sustainable finance, accelerate corporate sustainability transition, and drive supply chain decarbonization. While initial compliance may incur systems and preparation costs, these are expected to decrease overtime as the capacity building. Besides this, the proportionality mechanisms are available- e.g., qualitative disclosures of anticipated financial impact based on the companies’ skill and resources, supported by reasonable and verifiable information available on the reporting date. The FSC has established a task force since August 2023 to provide sufficient resources to reduce the cost of compliance. The task force has completed the translation of the ISSB Standards and posted it on the website of the Securities and Futures Bureau of the FSC, which will be endorsed in conjunction with the revision of the Annual Report Regulations. In addition, the task force has collected practical issues from external parties and compiled a set of Frequently Asked Questions, along with the template of plans for implementing the ISSB Standards. Relevant resources have been posted on the IFRS Sustainability Disclosure Standards Alignment Website  In addition, the task force has provided IFRS S2 disclosure guidance and has held four IFRS S2 Disclosure Workshops starting from April 28. Companies are encouraged to utilize such resources to support compliance.
      In addition to being published in the official gazette of the Executive Yuan, a summary and comparison table of the draft amendments will be published on the FSC website. Public comments may be submitted via the “Advance Notice on Draft Amendment” page of the FSC’s website “Laws and Regulations Retrieving System” within 60 days of the announcement. Inquiries may be directed to the Securities and Futures Bureau of the FSC. The FSC will extensively consider opinions from external parties and carefully evaluate them when proceeding with regulatory amendments.

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