What is ESG?

ESG is an important concept for measuring a company's ability to operate sustainably, covering three core areas: Environmental protection (Environmental), Social responsibility (Social), and Corporate governance (Governance). These areas together form the foundation of ESG and have become key indicators for evaluating a company’s social responsibility and sustainable development capabilities.

Environmental Protection (E): Focuses on the impact a company has on the environment, including greenhouse gas emissions, energy usage, waste management, and the use of natural resources. Companies need to actively take measures to reduce their carbon footprint, promote the use of renewable energy, and ensure that their production processes minimize negative environmental impacts. This not only helps protect the planet but also enhances the company’s image in society, increasing its competitiveness in the market.

Social Responsibility (S): Emphasizes the impact a company has on society, including employee welfare, working conditions, community engagement, and human rights issues. Companies must ensure that every aspect of their operations considers the impact on employees, suppliers, customers, and local communities, and take active steps to promote social equity and inclusion. Such responsibility can increase employee satisfaction and productivity, as well as enhance consumer trust in the brand.

Corporate Governance (G): Refers to the internal management structure and decision-making processes of a company, including board composition, diversity, transparency, protection of shareholder rights, and compliance. Good corporate governance helps ensure fairness and transparency in decision-making, prevents misconduct, and protects investors' interests, thereby enhancing market confidence in the company.

ESG is not only a concrete measure of a company's social responsibility and sustainable development but also an important indicator for investors to assess the company's future growth potential. As global attention to sustainable development increases, companies that excel in ESG performance can enhance their market position and lay a solid foundation for long-term development.
 

Global ESG Development Trends

Given the growing global emphasis on sustainable development practices, ESG has become a major trend worldwide. In Taiwan, the Financial Supervisory Commission released the "Corporate Governance 3.0 - Sustainable Development Roadmap" in August 2020. The vision is to "implement corporate governance, enhance sustainable corporate development," and "a sound ESG ecosystem to strengthen the international competitiveness of the capital market." This policy also aims to promote "ESG information disclosure." The Taiwan Stock Exchange has issued regulations requiring listed companies to prepare and submit sustainability reports, revised in 2020, stating that these reports should refer to the GRI Standards (Global Reporting Initiative) to enhance corporate transparency. According to the latest regulations revised on January 31, 2024, all listed companies in Taiwan are required to prepare a sustainability report for the year 2024, starting in 2025. Therefore, ESG-related topics have become an irreversible trend globally and in Taiwan, becoming essential knowledge and a focus for all major corporations.
 

How Should Companies Manage ESG?

Corporate Transparency - Sustainability Reports

To reduce the information gap between companies and their stakeholders, a key step in sustainable operations is for companies to proactively disclose ESG information through comprehensive reports. This allows investors, employees, customers, and other relevant parties to better understand the company's operational status and social responsibility. Additionally, sustainability reports can help companies better understand their business models and risks, enabling them to adjust their operational strategies and investment directions. Enhancing a company's reputation and brand value while demonstrating its commitment to the environment and society is crucial.

Writing sustainability reports requires adherence to the GRI Standards (Global Reporting Initiative), which was introduced in 2016 as a global standard for sustainability reporting, covering key indicators across the three main ESG themes: environmental, social, and governance, as summarized in the table below:

Professional ESG Assistance

ESG rating standards, including the writing of sustainability reports, are not determined solely by the companies themselves but must comply with regulatory standards. Understanding what ESG is and systematically implementing it at all levels of the company can be challenging without specialized departments or consultants. Therefore, it is recommended to seek assistance from professional ESG experts.

WHP Group’s legal team, led by Advisory Lawyer Shen Hsin-Pei and Attorney Huang Yu-Wei, who serve as the Chair and Vice-Chair of the ESG (Corporate Sustainable Development) Committee of the Taiwan Bar Association, have long been at the forefront of ESG research, focus, and practice. The DeYi legal team actively promotes and provides consultation on ESG-related issues, the preparation and reporting of sustainability reports, ESG regulatory compliance, and legal risk analysis (litigation). The team brings years of rich experience in corporate sustainable development to practice in ESG consulting services, ensuring that companies can navigate the wave of global ESG trends effectively and sustainably.

ESG Compliance, Sustainability Report Consultation, and Planning

Providing companies with ESG-related legal compliance, sustainability report preparation and submission consultation (such as environmental and energy regulations, labor laws, gender equality, anti-discrimination, consumer protection, information security maintenance, corporate governance systems), potential risk assessments, and system planning or adjustment recommendations.

ESG Legal Risk Dispute Resolution:

1. Dispute resolution for inaccurate sustainability reports (civil, criminal, and administrative responsibilities, with ongoing attention to the latest developments in Taiwan’s court practices by the DeYi legal team).

2. Application of sustainability reports in civil, criminal, and administrative litigation (evidence strategies) and litigation risk prevention.

3. Prevention and resolution of greenwashing risks arising from over-promising, selective disclosure, or symbolic actions in ESG information disclosure.

4. Handling of lawsuits and disputes arising from ESG-related laws (such as environmental litigation, labor disputes, personal data protection, gender equality protection, corporate workplace harassment prevention, consumer disputes, intellectual property disputes, trade secret protection, corporate governance, etc.).
    

Related Links:

Taiwan Bar Association - ESG (Sustainable Development) Committee

ESG Video Introduction - Vice-Chair Huang Yu-Wei, Taiwan Bar Association ESG Committee