CSR Report for Taiwan_VKane

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Prepared by Victor L. Kane, PhD | MOFA Research Fellow | August 1, 2016
Email: vkane54@gmail.com
Rosemead, California USA
Corporate Social Responsibility
Development and Trends in
Taiwan (R.O.C.)

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TABLE OF CONTENTS
1. Foreword 2
1.1 Letter from the Research Director 2
2. Executive Summary 3
3. Study Background 6
3.1 Purpose of the Study 6
3.2 Methodology 6
4. An Overview of the CSR Landscape in Taiwan 10
4.1 Perceptions of current state and effectiveness of CSR 10
4.2 Regional differences 16
4.3 Differences across ownership models 16
4.4 Differences across industries 18
5. Drivers of CSR Development in Taiwan 19
5.1 Overview of incentives, drivers and obstacles to CSR development 19
5.2 The role of the media 20
5.3 The role of the government and compliance 21
5.4 The role of the Taiwan Stock Exchange 22
5.5 The role of industry associations 22
5.6 The role of international organizations 23
5.7 The role of international clients 24
5.8 The public 24
6. CSR Implementation by Corporations in Taiwan 25
6.1 CSR reports 25
6.2 Operational integration of CSR 26
7. The Future of CSR in Taiwan 28
8. References 31
9. Acknowledgement 32

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1. FOREWORD
1.1 Letter from the Research Director
As the 5th
leading economy in Asia and one of the “Four Asian Tigers”, Taiwan (Republic of China)
offers one of the great models of economic development in the Asia Pacific. The growth of this
modern, industrialized economy has witnessed steady interest and growth in corporate social
responsibility (CSR) initiatives in this island country. In December of 2014, the Financial Supervisory
Commission (FSC) issued its “Corporate Governance Best-Practice Principles for TWSE/GTSM Listed
Companies.” This issuance requires listed companies from the food processing, financial and chemical
sectors with paid-in capital of at least NT$10 billion to prepare CSR reports annually starting in June
2015. From this government mandate, and with support from the Taiwan Stock Exchange (TWSE), 2015
marked a watershed year for CSR reporting in Taiwan. Taiwan topped the worldwide rankings in 2015
for the number of CSR reports using the Global Reporting Initiative (GRI) G4 guidelines.
It is with this heightened interest in CSR development in Taiwan that the “Study on Corporate Social
Responsibility Development and Trends in Taiwan” contained herein was conceived. With a grant
from the Taiwan Ministry of Foreign Affairs (MOFA), the study got underway in May 2016. The study
examines the views and perceptions of various stakeholders in the Taiwan business community about
the current state and future course of CSR. As such, it is my hope that the findings will add to the
increasing level of knowledge about CSR in Taiwan and serve as a benchmark for other CSR studies in
the Asia Pacific.
It has been a great pleasure to have worked with my colleagues at Fo Guang University and Nanhua
University in Taiwan whose technical research and professional networking contributions were critical
to the success of this study. I would like to particularly extend my thanks to Ms. Adriana Amaya Arivas
for her relentless research support, and to Dr. Hector Ming-ta Tsai at Fo Guang University and Dr.
Wann-yih Wu at Nanhua University for their help in identifying the many companies and their
representatives who participated in the interviews and online survey.
I’m confident that CSR will play an important role in the future of Taiwan’s business community. The
already accumulated knowledge that CSR is not just beneficial for society and the environment but
also translates to increased value and profitability for the firm poses an optimistic future for the
growth of CSR in Taiwan.
Victor L. Kane, Ph.D.
Chair & Associate Professor
Business Administration
University of the West
Rosemead, California USA
E-mail: victork@uwest.edu

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2. EXECUTIVE SUMMARY
Driven by the efforts of Taiwan’s Central Government and many non-state actors
including the public stock exchanges, industry associations, and international
organizations focusing on sustainability, corporate social responsibility (CSR) in Taiwan
has received increased attention and recognition in the business community. The study
findings contained herein provide a glimpse into the current state and possible future
trends of CSR based on the views and perceptions of the study participants who include
representatives from publicly listed companies, private companies, NGOs, industry
associations, and academic institutions. The key findings and insights presented in the
study are based on a review of the literature and research, the results of an online survey,
and qualitative analysis of comments from a series of interviews with corporate
executives/managers at leading companies, industry associations, and NGOs in Taiwan.
Overview of CSR Landscape
About one-third (35%) of respondents believe that CSR is either “very effective” or
“effective” in addressing social and environmental issues in Taiwan. However, what is
telling from these findings is that only 2% believe that CSR has been “very effective”, with
nearly half (49%) of respondents remaining neutral on this matter. Further, while the
majority (67%) say they are satisfied with the current state of CSR in the country, 16% said
they were dissatisfied. These findings suggest that there is much room for improvement in
CSR that may ultimately sway opinion toward a more favorable perception of CSR
effectiveness in the country.
Respondents believe that the most important CSR themes for companies in Taiwan are
corporate governance/ethics/transparency, workplace issues (i.e. working hours,
occupational health and safety), and economic (i.e. financial performance, investing in
local economic development). These themes are viewed as important areas requiring
attention by companies to improve their overall relationship and obligations to their
workers and other stakeholders as well as to the local communities in which they operate.
They believe that fair operating practices (i.e. anti-corruption, fair competition) and
human rights (e.g., non-discrimination, child labor) are considered the least important
priorities on the CSR agenda for companies.
Geographically, the Northern and Central regions of Taiwan are seen as the most
developed in terms of CSR knowledge and performance. This is not surprising given that
these regions (particularly the Northern region) contain the most advanced and well-
financed companies in the country.
Drivers and incentives
International clients with CSR requirements, public stock exchanges, international
organizations that promote CSR, and the government are all considered to be key drivers
of CSR development. Noteworthy is the perception that companies in the ICT sector,

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which represent a large part of the international supply chain in Taiwan, have been
strongly influenced by the manufacturers with whom they contract regarding CSR
specifications. Additionally, respondents believe that the Taiwan Stock Exchange (TWSE)
continues to play a key role in helping publicly listed companies comply with the Central
Government’s mandate to produce CSR reports. The strong influence of the Global
Reporting Initiative’s (GRI) G4 framework has also been a key driver for CSR development
and reporting not only in Taiwan but throughout the Asia Pacific region and beyond.
Positive coverage by the media is considered to be a key incentive for CSR development.
For example, the yearly CSR awards given by the CommonWealth and Global Views
Monthly magazines have figured prominently in promoting the reputations of the winning
companies and showcasing their successes in the area of CSR.
Lack of long-term CSR strategy/policy, insufficient support from top management, and
insufficient support from stakeholders/shareholders are ranked as the top obstacles
impeding companies from better implementing CSR strategies. Another key obstacle
mentioned is the lack of CSR professionals and low level of CSR knowledge.
Trends and Expectations
Most respondents are confident about the future of CSR in Taiwan. There is general
agreement that over the next decade CSR knowledge, communication, and
implementation will grow dramatically and that disparities between CSR development
levels in different regions of the country will continue to shrink.
Respondents are generally of the opinion that the government will remain a key driver of
future CSR development, but that this may only impact the larger companies operating in
Taiwan. While many believe that the small and medium enterprises (SMEs) can do just as
an effective job as the larger companies with respect to CSR, there is common agreement
that CSR programming rests heavily on financial resources to invest in CSR and
sustainability initiatives. This will likely be a key challenge for SMEs as they strive to
create value-driven CSR strategies and initiatives both within and outside their
companies.
Driven in part by rising public awareness and concerns, environmental performance, labor
rights/working conditions, and consumer safety/welfare are viewed as the most pressing
issues for businesses in Taiwan over the next five years. Corporate transparency/anti-
corruption/ethical behavior and community involvement/local development are also
considered important priorities on the CSR agenda.
Respondents recommend companies focus on enhancing their CSR strategy and following
through on CSR with better action plans and reports. In addition, corporate board
support/oversight and the assignment of a senior-level manager to the CSR function are
viewed as important elements for effective, long-term CSR strategy and implementation.

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The government is expected to strengthen the enforcement of related legislation, and
companies, NGOs, and industry associations are expected to increase collaboration on
CSR in the future. Partnerships between major brands and suppliers, large companies and
SMEs, and local and foreign corporations are all viewed as playing an important
collaborative role in driving the CSR development agenda forward.

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3. STUDY BACKGROUND
Corporate social responsibility (CSR) has been widely embraced by leading corporations
worldwide as a result of a myriad of forces coming together to propel CSR into the global
spotlight. These forces have included government and industry regulations, global
sustainability reporting guidelines, the rise in sustainable investing, pressure from society
and consumer advocacy groups, and the trend toward globalization. CSR has largely been
a Western phenomenon but over the past decade has taken on increasing importance
among the developed and developing nations in Asia – among them, the Republic of
China (referred to hereinafter as “Taiwan”).
In 2014 CSR Asia, a leading global advisory and research, in collaboration with the
Embassy of Sweden in Beijing, undertook a “Study on Corporate Social Responsibility
Development and Trends in China” (CSR Asia, 2014). This study gave rise to a proposal by
this author to submit a grant to the Ministry of Foreign Affairs (MOFA), Republic of
China, to conduct a similar study in Taiwan. The grant was approved in March 2016, and
the “Study on Corporate Social Responsibility Development and Trends in Taiwan”
formally got underway in May 2016.
3.1 Purpose of the study
The CSR study reported herein was undertaken to explore the landscape of CSR in Taiwan
and collect views about the current status and future directions of CSR among various
stakeholders representing a mix of organizations, including public and private companies,
NGOs, state-owned enterprises (SOEs), industry associations, consultancies and advisory
bodies, and academic institutions. The study focused specifically on stakeholder views and
perceptions about major CSR concerns and challenges, socially responsible performance
among businesses in Taiwan, drivers and obstacles to CSR development, and the future
course of CSR in Taiwan. By collecting similar information from the CSR Asia study in
China, it is hoped that the findings would serve as a framework for those interested in
comparing and contrasting CSR trends and issues between mainland China and the
Republic of China (Taiwan).
It is important to note that the report contained herein focuses only on the findings from
the Taiwan study and does not attempt to draw any comparisons or make any conclusions
from the CSR Asia “Study on Corporate Social Responsibility Development and Trends in
China”.
3.2 Methodology
The study results relied on both qualitative and quantitative research and was carried out
during the period from May through July 2016. Data were collected over a three-stage
process:

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Stage 1: Literature Review (May 2016)
The study began with a review of the existing literature and studies on CSR development
in Taiwan published in academic, consultancy, media, and conference proceedings. Since
the government and industry organizations commonly play an important role as drivers of
CSR development, the review also included CSR-related policies, legislation, regulations
and guidelines issued by the Taiwan Central Government and domestic industry
associations.
Stage 2: Individual Interviews (June 2016)
Participants with diverse profiles and backgrounds were invited to participate in
interviews conducted at their place of business. It was important to involve a diverse mix
of participants from a variety of organizations in order to ensure that a broad range of
views were represented. The purpose of the interviews was to collect in-depth views and
perceptions of CSR development and performance in Taiwan. The findings from the on-
site interviews helped to inform the content of the survey questionnaire in Stage 3.
A total of 12 interviews were conducted on-site with executives and managers (involving a
total of 18 participants), all of whom either have direct responsibility for CSR in their
organizations or are knowledgeable about the subject matter. The organizations include
publicly-traded enterprises (including subsidiaries of multinational corporations), private
corporations, industry associations focusing on sustainable business practices,
advisory/consulting arms of financial services organizations, and academic institutions. A
few executives had held previous positions in local and central government. The
professionals taking part in the individual interviews will be referred to as “interviewees”
hereinafter in this report.
Stage 3: Online Survey (July 2016)
A bilingual (Chinese and English) online survey was sent to a database of 655 people that
included CSR professionals/advisors, corporate and NGO managers/executives, and
academics who are considered to have knowledge of CSR practices in Taiwan and the
larger CSR community. The database was compiled from multiple sources including
publicly listed companies in the Taiwan Stock Exchange (TWSE), organizational members
of the Business Council for Sustainable Development (BCSD Taiwan) and Foundation of
Taiwan Industry Service (FTIS), and NGO contacts from executives participating in the
individual interviews. All efforts were made to compile a final database that did not
include duplicative target respondents listed across multiple database sources. During a
survey period of four weeks, 135 responses were received.
Participants in the online survey will all be referred to as “respondents” hereinafter in the
report.

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The organizational profile of the survey respondents is as follows.

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4. An overview of the CSR landscape in Taiwan
4.1 Perceptions of current state and effectiveness of CSR
The online survey results reveal that only a small minority (2%) believe that companies in
Taiwan are doing a “very effective” job, with about one-third (32%) saying they are doing
an “effective” job in addressing social/environmental issues in the country. The majority
(49%) have a neutral opinion, while others feel performance has “not been effective” (17%)
(Chart 4-1). Notably, only 17% indicated they are satisfied with the current level of CSR
development in Taiwan. The vast majority indicated they are either “disappointed” (16%)
or “neutral” (67%) about the current state of CSR development in the country (Chart 4-2).
A common view among the interviewees is that the majority of Taiwanese companies still
view CSR as either a proscribed mandate by the Central Government for certain publicly
listed companies, or a matter of improving public relations and marketing (and in some
cases a response to crisis management). However, there is a general expectation that
companies will improve their CSR knowledge and performance over the next decade (see
Section 7).

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In the interviews, participants noted that they had witnessed a significant increase in CSR
awareness and practices in Taiwan with many of the larger companies and MNCs taking
the lead in CSR implementation and reporting. Notably, in a “Non-Financial Reporting
Survey in Taiwan 2015” sponsored by the Global Reporting Initiative (GRI), the Business
Council for Sustainable Development (BCSD Taiwan), the Taiwan Stock Exchange
(TWSE), and the Taipei Exchange (TPEx), the findings indicated that the number of
reports using the GRI guidelines and the number in accordance with GRI G4 guidelines
ranked Taiwan at the head of the world rankings in 2015. In fact, over 80% of Taiwanese
companies’ reports used the GRI G4 reporting standards.
It is clear that the role of non-state actors – including the aforementioned organizations
above – are contributing to the overall level of awareness and commitment to CSR among
the larger enterprises in Taiwan. As many of the interviewees indicated, the challenge
going forward will be to raise awareness of CSR as a voluntary, long-term strategy and
reporting initiative among the many private SMEs in Taiwan. CSR programming is viewed
as a challenge for many SMEs since it requires capital to implement CSR initiatives and
therefore cuts into the profits of these businesses. As many interviewees noted, the
realization (and continued build-up of evidence) that CSR is indeed something that can
create value and help improve business performance is something that must be embraced
by executives and management at all levels in order for CSR to take a stronger foothold in
the Taiwan business community.
4.2 Key CSR issues
The online survey results show that the CSR issues considered to be the most important
for companies in Taiwan are “corporate governance/ethics/transparency”, “workplace
issues” (e.g., occupational health and safety, wages, working time) and “economics” (e.g.,
company financial performance, employment and impacts on local economy) (Chart 4-3).
When asked to rank the top three most important issues, “environment”, “workplace
issues”, and “corporate governance” topped the list (Chart 4-4). The online survey results
are consistent with the interviews wherein the participants frequently discussed the
importance of preserving the environment and conserving resources (particularly water)
as well as addressing wages and long working hours in many companies. Corporate
governance and transparency was often cited as particularly important in supporting CSR
values and strategies in the corporate environment.
Economic performance
Taiwan offers one of the great success stories of modern economic development. In 1960
Taiwan had GDP per capita and human development levels that placed it among the least
developed countries in the world. Subsequent decades saw economic growth and
industrialization that not only transformed Taiwan into one of Asia’s “Tiger Economies”,
but also provided an economic model that has been successfully replicated by other
regional economies.

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Taiwan’s success—from an underdeveloped and resource poor island, to a regional
economic powerhouse with a multiparty democratic system—comes from its national
commitment to investing in its people and industry. Its economy is export-oriented and
specialized in production of electronics and machinery. In fact, Taiwan is one of the
world’s largest suppliers of computer chips, LCD panels, DRAM computer memory,
networking equipment, and consumer electronics. Textile production, although in
decline, is another major industrial export sector.
It is no surprise, then, that economic development ranks among the top-three most
important CSR issues in the online survey (Chart 4-3). Economic development in the
context of CSR is viewed by participants as reflecting not only the financial performance of
the company, but also the extent to which the company can contribute to the economic
development and sustainability of local communities. In fact, the two are very much
related; sound financial performance and profitability is central in equipping a company
with financial and other capital resources to invest in local economies.
Environmental performance
Environmental performance of companies in Taiwan ranks as the most important CSR
issue in the online survey (Chart 4-4). Indeed, environmental performance (e.g., energy
and water conservation, use of alternative energy sources, reduction in CO2 emissions) is
one of the central components among GRI G4 sustainability measures used in CSR report
filings.
Due to the rapid increase in population and of economic development, the ecology and
natural environment of Taiwan have been gradually damaged by various pollution
problems threatening public health and living environment. In addition to cracking down
on pollutant emissions, the Central Government has implemented "emission permits" as
an active preventive measure. At the same time, efforts are being made to strengthen
waste disposal, prevent water and air pollution, control toxic materials, keep the
environment clean, boost environmental protection regulations, improve environmental
monitoring equipment, promote greening and beautification drives, and strengthen
ecological conservation.
Taiwan's rapidly growing factories and businesses, coupled with the fact that it has the
world's highest density of motorcycles and motor scooters, have had an enormous impact
on air quality in recent years. The Central Government has adopted a number of control
measures to effectively protect Taiwan's air quality: instituting expanded inspection and
control of fixed sources of air pollution and urging pollution sources to strengthen
abatement; mapping out plans for air pollution improvement on an industry-by-industry
basis, urging industries to complete pollution abatement projects; introducing control
permits for utilization and sale of high polluting fuels; implementing control permits for
sale of special chemicals under the Montreal Treaty; promoting a unified system of vehicle
emission standards, inspection and maintenance; encouraging the private sector to set up
free motorcycle exhaust testing centers; setting up automated online monitoring systems

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for fixed pollution sources to control emissions; and strengthening control of suspended
dust particles to reduce pollution indicators.
Labor conditions
Taiwan ranks among the top countries with the longest working day, based on statistics.
On average, Taiwanese employees work about 2,200 hours annually - which is 20% more
than Japan and the US; 30% more than the UK, and 50% more than Germany, according to
government data.
One of the most important labor laws in Taiwan is the 1984 Labor Standards Law. It
supplies the basic legal definitions of worker, employer, wages, and contract, and outlines
the rights and obligations of workers and employers including protections against
unreasonable work hours and forced labor. Despite these legal safeguards, there have been
rising allegations about Taiwan’s ‘overworked culture’ highlighted by a number of high-
profile cases of worker deaths due to excessive overtime hours.
The concern over working hours and occupational health/safety often was expressed in
discussions with participants during the interviews. Based on the survey findings,
“workplace issues” was ranked among the top three most important CSR issues (Chart 4-4).
Business and Human Rights
In 2009, the Taiwanese legislature (known as the Legislative Yuan) passed, and former
President Ma Ying-jeou ratified, two United Nations treaties: The International Covenant
on Civil and Political Rights (ICCPR) and the International Covenant on Economic, Social
and Cultural Rights (ICESCR). The UN Secretary General rejected Taiwan’s request to
deposit the instruments of ratification because it is not a UN member state. The
government nevertheless passed the Implementation Act, which gives both treaties special
status in domestic law just below that of the Constitution.
The government issued Taiwan’s first official state report in April 2012, and then invited a
group of international experts to evaluate Taiwan’s compliance with the two covenants. Prior
to the review, the government and NGOs were not well versed in international human rights
processes, a product of Taiwan’s long separation from the UN. Now they are familiar with a
set of international documents and standards.
After three days of public hearings, on 1 March, 2012, the experts released their concluding
observations and recommendations, directed at enabling the government to better meet
the requirements of the two treaties. The international experts were impressed with the
government’s strong commitment, and they praised civil society’s very active engagement
in all aspects of the process for having helped them to gain a deeper understanding of
many complex issues. Taiwan’s onsite review sent a signal to the international community
that Taiwan’s people aspire to abide by international norms, regardless of Taiwan’s
diplomatic status.

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Based on the online survey results, only 8% of the respondents view human rights as an
important CSR issue (Chart 4-3), and only 5% rank it as among the top-three most
important CSR issues (Chart 4-4). These findings may suggest that respondents view
Taiwan as having made major advances in human rights over the past decade and is
therefore not a critical issue. Alternatively, one can surmise that human rights (except for
basic worker rights) is not viewed as a central responsibility of companies but rather more
appropriate for the country’s government to handle.
Anti-corruption in the private sector
Until recently, public officials have been the main focus of anti-corruption efforts, both in
Asia Pacific and other parts of the world. Recently, however, that focus has broadened to
include bribery in the private sector, largely due to market pressures. While private sector
bribery does not directly affect the public trust vested in the government, it directly
impacts fair competition standards and hampers economic development in many regions
including some Asia Pacific countries.
A few international instruments or organizations have addressed this issue. The best
example is Article 21 of the United Nations Convention Against Corruption, which
recommends (on a non-compulsory basis) that the State parties to the Convention take
measures to criminalize private sector bribery, as to both the offeror (“active” bribery) and
the recipient (“passive” bribery). Although this Convention is signed by all the Asia Pacific
countries, there has been no strong regional initiative focusing on this specific issue.
Anti-corruption initiatives in Taiwan in recent years have been focused primarily on the
public sector. On April 1, 2011, the Legislative Yuan, Taiwan's highest legislative body,
passed the Ministry of Justice Anti-Corruption Administration Organic Act. The nine-
article Act established a new agency under the Ministry of Justice (MOJ) that is
responsible for formulating, promoting, and coordinating Taiwan's anti-corruption
policies; investigating and prosecuting corruption cases; and supervising the ethics
divisions of government agencies. The Act also calls for the formation of a review
committee, comprising 11 to 15 members, to provide the agency with professional advice.
Despite anti-corruption legislation passed by the Legislative Yuan, Taiwan does not
currently have a specific anti-corruption law for the private sector.
“Fair operating practices”, which include anti-corruption and fair competition, are ranked
low as an important CSR issue in the online survey (Charts 4-3 and 4-4). Interviewees note
that companies tend to avoid this topic for fear that any efforts taken or information
disclosed related to anti-corruption could attract suspicion or increased scrutiny of their
business practices.
Community involvement
“Community involvement” in the form of philanthropy and local economic development
support was ranked the lowest in terms of being the most important CSR issue facing
companies in Taiwan (Chart 4-3). This rather low ranking may be explained in a number

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of ways. First, community involvement is often perceived as making financial donations to
the community which comprise a large part of CSR initiatives by companies in Taiwan.
Secondly, community involvement’s low ranking in importance may be driven by the
overriding perception that other areas of import – including corporate governance,
workplace issues, economic and the environment – have a more critical place on the CSR
agendas of companies.

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4.3 Regional differences
In the online survey, Northern Taiwan and Central Taiwan were ranked as the areas in
which CSR knowledge and performance of companies is considered to be the most
advanced in the country (Chart 4-5). This is most likely due to the higher concentration of
more advanced companies and MNC subsidiaries in these regions where CSR is also more
advanced in terms of knowledge and performance.
4.4 Differences across ownership models
There is a general impression among respondents that the international companies
(particularly the MNCs and their subsidiaries), along with NGOs/charitable organizations,
are doing better in terms of their CSR knowledge and performance than companies with
other types of ownership (local private companies and state-owned enterprises) (Chart 4-6).
This is not surprising given that many MNCs and/or their subsidiaries typically have greater
financial resources to devote to CSR (particularly for sustainability initiatives) and have
shown better ability at integrating CSR into their daily operations. For NGOs and charitable
organizations, their missions are directly related already to improving the general welfare of
society and applying their efforts towards specific societal ills in which their organizations
are more equipped to address (e.g., poverty, educational and housing resources, health
care).

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Among those respondents who believe that larger companies are better than SMEs with
respect to CSR knowledge and performance, the main reasons cited were “higher
expectations from the public”, “more financial and human resources”, and “more pressure
from the government” (Chart 4-7).

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4.5 Differences across industries
Respondents were asked about which industry sectors they believed are doing the best job
in terms of CSR knowledge and performance. The top three industry sectors are “Finance
& Insurance”, “Technology”, and “Electronics” (Chart 4-8). These findings are consistent
with comments from interviewees who acknowledge that these sectors not only have the
financial resources to invest in CSR programs (particularly the financial services sector),
but also represent dominant industries in Taiwan. The large, publicly listed financial
services companies are also required to prepare CSR reports pursuant to government and
stock exchange (TWSE) requirements and therefore are typically out in front in funding
and implementing CSR and sustainability practices. Some of the more prominent
financial/insurance companies in Taiwan have made great strides in providing funding to
support local community efforts in providing housing, education, and insurance to the
poor.

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5. Drivers of CSR Development in Taiwan
5.1 Overview of incentives, drivers and obstacles to CSR development
Based on the online survey results, “positive coverage by the media”, “requirements from
government policy”, and “requirements from international clients” are perceived as the
top three incentives for companies to implement CSR in Taiwan (Chart 5-1).
When queried about the key drivers of CSR development, respondents most often cited
“international clients with CSR requirements”, “Public stock exchanges”, and
“international organizations that promote CSR” (Chart 5-2).
“Lack of long-term CSR strategy/policy”, “insufficient support from top management”, and
“insufficient support from stakeholders/investors” rank as the top three obstacles for
companies in the implementation of CSR initiatives (Chart 5-3). These findings were
echoed by interviewees who overwhelmingly supported the notion that the ultimate
success of CSR development among companies of all sizes and types will be driven by top-
down support from their boards and senior management.

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5.2 The role of the media
The media has played a key role in bringing to the public not only negative press – such as
corporate scandals and environmental and food safety issues – but also showcasing
positive CSR progress in the country. In terms of negative corporate press, some high-
profile food scandals which rocked Taiwan over the past few years became prominent
news in the media. In 2011, some companies were found to be illegally using plasticizer to
replace palm oil as a clouding agent in bottled drinks. A subsequent widespread recall of
drinks from nearly 40,000 retailers in Taiwan was a huge blow to the island’s reputation as
a reliable food manufacturer hub in the Greater China region. In 2013 the health authority

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discovered that more than 12 cooking oil products were blended with inferior oil and
failed to label its contents. Other food safety incidents including chemical substances
found in processed meat, and toxic starch found in a wide range of dairy products also
contributed to consumers losing trust in the government and wondering about what they
can and cannot eat. In 2014, then President Ma Ying-jeou announced plans to create a
food safety agency in an effort to combat problems with tainted food and other food safety
concerns that have plagued Taiwan in recent years.
On the positive side, some media have played an important role in showcasing CSR
progress in the Taiwan business community. For example, CommonWealth, a well-known
magazine in Taiwan that reports on economic, social and political issues, began including
a CSR index in its “Most Admired Company” survey. In 2008, as a result of a global trend
putting more emphasis on the role of corporate citizens, it decided to conduct its own
independent CSR survey and released its ranking of Taiwan’s Top 50 corporate citizens.
The annual survey draws on a number of international indexes and measuring tools such
as the Global Compact, the OECD’s Guidelines for Multinational Enterprises, and the Dow
Jones Sustainability Index. The survey covers three separate groups: large enterprises with
an annual turnover above NT$20 billion, medium-size enterprises with an annual turnover
below NT$20 billion, and foreign enterprises. In 2015, the survey was expanded to include
a new category for “small giants” with annual revenue of less than NT$5 billion. Now the
CommonWealth awards, which previously selected 50 award winners, has been expanded
to the CSR Top 100.
Global Views Monthly (GVM), a well-known Chinese-language magazine in Taiwan that
covers social and political issues, also conducts an annual survey that honors the best CSR
companies. Together with the CommonWealth magazine, these media have helped to
raise overall awareness of CSR among both companies and the public and continue to
serve as both an incentive and driver of CSR development for companies of all sizes.
5.2 The role of the government and compliance
With the ever-increasing importance of CSR as a global trend, Taiwan’s Central Government
has played a key role in promoting and regulating CSR in the corporate sector. The
government has been educating public companies on the importance of corporate
governance since 1988. The Executive Yuan formed the “Corporate Governance Reform Task
Force” on January 7, 2003 to study various policies, such as practices enhancing the
independence of the Board, incentives for incremental establishment of functional
committees in corporate boards, issues of corporate governance best practices, and more
transparent corporate information.
Since forming the Corporate Governance Reform Task Force under the Executive Yuan in
2003, the Central Government has improved the legal infrastructure to support corporate
governance and CSR reporting. In December 2013, the Financial Supervisory Commission
(“FSC”) issued a five-year Corporate Governance Roadmap (“Roadmap”) with an eye
towards accelerating steps to promoting corporate governance, assisting sound corporate

22 | P A G E
development, and safeguarding the interests of investors. One of the major projects of the
Roadmap was the implementation of corporate governance evaluation. The purpose was
to provide comparisons of corporate governance performance among all listed companies
so that investors and companies can better understand how well specific companies are
implementing corporate governance.
Issued in December 2014 by the FSC, the “Corporate Governance Best-Practice Principles
for TWSE/GTSM Listed Companies” has become a driving force for CSR development and
reporting. It requires listed companies from the food processing, financial and chemical
sectors with paid-in capital more than NT$10 billion, as well as companies which have over
50% of their total revenues coming from food and beverage businesses, to prepare CSR
reports annually starting in 2015.
FSC Chairman Tseng Ming-chung warned that the obligation to publish a CSR report will
be expanded to smaller listed enterprises with paid-in capital of more than NT$5 billion in
2017 that would force an estimated 100 more companies to “do their CSR homework” by
the end of 2016.
5.3 The role of the Taiwan Stock Exchange
In compliance with the FSC’s “Corporate Governance Best-Practice Principles for
TWSE/GTSM Listed Companies”, the Taiwan Stock Exchange (TWSE) codified these
measures by becoming the first market in Asia-Pacific to implement mandatory CSR
reporting, adhering to the Global Reporting Initiative G4 principles. As stated above, a list
of specified companies in the food processing, financial and chemical sectors with paid-in
capital of no less than NT$10 billion are now required to file an annual CSR report by the
end of June each year.
Noteworthy is that food processing companies must obtain external verification on their
CSR reporting. This requirement follows on the heels of some of the high-profile food
scandals that were reported earlier in this report.
Through its Corporate Governance Center, TWSE continues to offer corporate governance
conferences, training seminars for business communities, and information sharing
sessions to help the business community understand and report on its CSR priorities and
initiatives. TWSE expects that its CSR reporting measures will help Taiwan’s capital
market to attract more investors looking for sustainable investment opportunities.
5.4 The role of industry associations
International and domestic industry associations are ranked relatively low in the online
survey as drivers for CSR development in Taiwan (Chart 5-2). Importantly, however, there
are a few industry associations in Taiwan that have made major inroads in helping to
promote CSR and sustainability reporting among its organizational members. Noteworthy
is the Business Coalition of Sustainable Development (BCSD Taiwan), which aims to help
Taiwanese companies take the lead globally not only with the quantity of CSR reports but

23 | P A G E
also with the quality and communication effectiveness of their content. BCSD Taiwan has
collected a total of 406 CSR reports issued by Taiwanese companies in 2015 in order to
analyze content within the framework of GRI G4 guidelines.
The Foundation of Taiwan Industry Services (FTIS) has also played a key role in advising
its organizational members on CSR content and reporting. These organizations, along
with the Central Government and TWSE, will continue to play a positive role in driving
CSR development by providing communication platforms, research, and advisory services.
5.5 The role of international organizations
“International organizations that promote CSR” are perceived to be an important driver of
CSR development (Chart-5-2). Such organizations as the Global Reporting Initiative (GRI),
the World Business Council for Sustainable Development (WBCSD), the International
Organization for Standardization (ISO), the UN Global Compact, and CSR Asia are just
some of the international organizations that are out in front in providing resources and
shaping the guidelines and frameworks for CSR and sustainability reporting worldwide.
5.6 The role of international clients
“International clients with CSR requirements” is perceived to be a key incentive and driver
of CSR in Taiwan (Charts 5-1 and 5-2). As many of the interviewees commented, the ICT
industry in Taiwan, a dominant sector in the country, has been strongly influenced by the
international firms with whom they contract to supply ICT components. Many of these
international manufacturers provide specifications to ICT suppliers in conformance with
manufacturing and sustainability guidelines.
Based on the online survey results, over half of the respondents (53%) said their
companies have received CSR requirements from international clients in the past two
years (Chart 5-3).

24 | P A G E
5.7 The Public
“The role of the public” was perceived by respondents to have little influence on CSR
development (Charts 5-1 and 5-2). The perception is that the general public in Taiwan
tends to react to corporate scandals and issues when they arise and will only be active in
their organized response based on the severity of the problems that affect public safety,
such as food contaminants, environmental pollution, and work safety. Most respondents
believe that CSR is still largely a corporate-based concept and has not penetrated the
mainstream population. The emerging role of the print media in showcasing exemplary
CSR programs by Taiwanese companies – as highlighted earlier by CommonWealth and
Global Views Monthly CSR awards – will likely play a contributing role in the future in
raising the public’s awareness of CSR generally and the contributions of CSR award
winners specifically.

25 | P A G E
6. CSR Implementation by Corporations in Taiwan
6.1 CSR reporting
The combined efforts of Taiwan’s Central Government, the Taiwan Stock Exchange
(TWSE), and several of the previously mentioned industry associations in promoting CSR
has clearly influenced the reporting activity of Taiwan’s publicly listed companies. As
indicated earlier in this report, the number of reports using GRI’s G4 guidelines ranked
Taiwan at the head of the world rankings in 2015 (“Non-Financial Reporting Survey in
Taiwan 2015”). Over 80% of the Taiwanese companies’ reports used the GRI G4 reporting
standards.
Consistent with this high reporting frequency, the online survey results indicate that a high
percentage of the responding companies are preparing CSR reports (82%), most on an
annual basis (94%), and most available on the company’s website (95%) (Charts 6-1, 6-2, and
6-3). In addition, three-quarters of respondents indicated that their CSR report is certified
or audited by an external organization (Chart 6-4).

26 | P A G E
6.2 Operational integration of CSR
The integration of CSR strategy into daily operations of a company is critical to overall
successful CSR implementation. As many of the interview participants discussed, CSR
reporting is important but falls short if the company itself does not deploy resources to
operationalize the effort. Some participants believe that CSR reporting is merely in
response to Taiwan Central Government mandates and codification by TWSE and may be
disconnected from a company’s operational and long-term strategy for CSR.
In the online survey, all of the queried operational functions were viewed as well
integrated into the daily operations of companies. The most highly ranked functions in
terms of integration were “after-sales services”, “recycle/reuse/eco-efficiency” of resources,
and “human resources management” (Chart 6-4).

28 | P A G E
7. THE FUTURE OF CSR IN TAIWAN
Respondents of the online survey express optimism about the future development of CSR
in Taiwan, with 87% believing that the level of CSR knowledge, implementation and
communication will grow dramatically in the next decade (Chart 7-1).
Slightly over half (56%) believe that the disparity of CSR development amongst the
different regions will diminish over the next decade (Chart 7-2).
Respondents believe that the most pressing concerns for companies over the next five
years will be the environment, labor rights and working conditions, and consumer issues
(Chart 7-3).
Areas in which companies are viewed as needing most improvement in strengthening
their CSR performance include:
-- Creating long-term CSR strategies
-- Creating and implementing CSR action plans, reports and follow-ups
-- Building CSR management and capacity building
These areas needing improvement were widely discussed in the interview phase of the
study and are highly consistent with the general evidence on CSR best practices showing
that management support (including relegating CSR oversight to a top manager in the
company) and tactical CSR planning and resource deployment are critical to successful
implementation.

31 | P A G E
8. REFERENCES
A Study on Corporate Social Responsibility Development and Trends in China, CSR Asia,
2014, http://www.csr-asia.com/report/CSR-development-and-trends-in-China-FINAL-
hires.pdf.
Corporate Social Responsibility Overview, Taiwan Stock Exchange, Corporate Governance
Center, http://cgc.twse.com.tw/frontEN/responsibility.
Corporate Governance Roadmap 2013, Financial Supervisory Commission, Executive Yuan,
Republic of China.
Corporate Social Responsibility and Sustainability: Emerging Trends in Developing
Economies, Minyu Wu, Critical Studies on Corporate Responsibility, Governance and
Sustainability, Volume 8, 347-369, 2014.
Food safety in Taiwan is an important issue, The China Post (International Edition), July 10,
2016.
Non-Financial Reporting Survey in Taiwan 2015, BCSD Taiwan, Taiwan Stock Exchange,
Taipei Exchange.
Pollution, water supply need action, Taipei Times, April 11, 2013.
The 2016 Corporate Governance Evaluation System, Financial Supervisory Commission,
Executive Yuan, Republic of China, January 2016.

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9. ACKNOWLEDGEMENT
I am immensely grateful to all participants in the online survey and the interviews for
whom their support and feedback provided valuable data and insights for this report. I
would also like to thank the staff at the Ministry of Foreign Affairs (MOFA) for providing
guidance on the research fellowship and grant funding for this project.
A special thanks goes out to the following people who provided valuable technical and
networking support throughout the study:
Technical and Research Support
 Adriana Amaya Arivas, Ph.D. Candidate, Department of International Business,
Chinese Culture University, Taipei, Taiwan
 Dr. Hector Ming-ta Tsai, Head of General Affairs, Associate Professor, Department
of Management, Fo Guang University
 Dr. Wann-Yih Wu, Professor & Dean, College of Management, Nanhua University,
Dalin, Chiayi, Taiwan
Networking Support
 Wayne W. Wu, Secretary General, Business Council for Sustainable Development
(BCSD Taiwan), Taipei, Taiwan
 Tony Mo, Deputy Secretary General, Business Council for Sustainable Development
 Kenny Chang, Assistant Manager, Business Council for Sustainable Development
 Vincent Yang, Manager Markets & Strategies, PricewaterhouseCoopers Taipei, Taiwan
 Ken Lin, Corporate Governance Department, Taiwan Stock Exchange, Taipei, Taiwan
 Cheng-hua Yuan, Vice President, Corporate Governance Department, Taiwan Stock
Exchange, Taipei, Taiwan
 Chad Yuan, Deputy Executive Secretary, Corporate Governance Department, Taiwan Stock
Exchange, Taipei, Taiwan
 Dinah Tai, Project Manager, Foundation of Taiwan Industry Services, Taipei, Taiwan
 Jack Lin, Administrative Department Director, Chuan Lian Enterprise Co., Ltd., Taipei,
Taiwan

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