The Taiwan Monthly

ESG

TWSE launches green stock designations to encourage corporate investment in the green economy

In alignment with the Financial Supervisory Commission’s (FSC) Green and Transformation Finance Action Plan and to encourage continuous corporate progress toward green transformation, the Taiwan Stock Exchange (TWSE) and the Taipei Exchange (TPEx) have officially launched the Green Stock Designations. This system is based on the Green Equity Principles issued by the World Federation of Exchanges (WFE) and incorporates international exchange experiences while considering domestic industrial development. By measuring the proportion of a listed company’s annual revenue derived from green sources, companies meeting specific criteria will be awarded a green stock designation to recognize their outstanding contributions to sustainable development.

The TWSE stated that the Green Stock Designations apply to all listed companies, though the financial and insurance industries are temporarily excluded. Following the official launch this year, companies whose disclosed annual green revenue meets relevant standards will be awarded Level 1 or Level 2 Green Stock Designations. Through this system, the TWSE aims to not only direct capital toward green enterprises but also provide a reference for financial institutions in their credit assessments, thereby strengthening the sustainability information disclosure mechanism within the capital market.

Regarding the certification standards for green revenue, this system uses economic activities as a foundation to evaluate whether a company's operations align with sustainability principles. These standards refer to the Taiwan Sustainable Taxonomy and the EU Taxonomy, while also integrating third-party green labels for products or services, Green Factory certifications, and the Clean Production Assessment System. The evaluation also considers whether a company has submitted SBTi 1.5°C near-term emissions reduction targets and passed validation, as well as whether its most recent CDP Climate Change questionnaire rating is A- or higher. Following a comprehensive assessment, green revenue levels are categorized into Dark Green and Light Green, and the system includes an eligibility review for inappropriate conditions and an exit mechanism to maintain the transparency and reliability of the certification.

The TWSE expects to announce the annual list of listed companies awarded the Green Stock Designations in December of each year. Detailed information regarding the certification methodology, review processes, and disclosure templates has been officially posted on the ECO-Fin website. Interested parties are encouraged to visit the platform at https://eco-fin.tpex.org.tw/ESGGreenStockDesignations for further details.


For further information, please contact Mr. Yu at 1248@twse.com.tw.