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On November 1, Taiwan Economic Journal (TEJ) released the latest TESG Rating for 2,462 companies. 498 companies were upgraded, 464 were downgraded, and 76 were changed by more than 2 levels, with 8 changing by more than 3 levels.
For many companies, the key factor in upgrading TESG Rating was the first release of sustainability reports aligned with the latest 2021 GRI standards. Notably, companies in the technology and communications, renewable resources and alternative energy, and resource sectors performed exceptionally well.
TESG is the first ESG indicator in Taiwan authorized by SASB. It provides comprehensive ESG ratings for Taiwan’s publicly listed companies. Using over 70 quantitative variables and covering 16 sustainability topics, TESG ratings represent not only companies’ achievements in ESG (Environmental, Social, and Governance) but also serve as a crucial reference for investors and financial institutions evaluating future potential.
Against a backdrop of evolving regulations, the number of corporate sustainability reports has steadily risen each year. With updates to the “Sustainability Report Guidelines,” corporate responsibility for disclosing sustainability information has been reinforced, aligning reporting structures with global standards.
According to TEJ data, as of October, the number of publicly traded companies in 2023 releasing sustainability reports grew by over 10% compared to the previous year, totaling 1,080 companies, or 44% of all publicly listed companies. The main drivers for this growth are increased voluntary disclosures and mandatory disclosures by securities firms under new regulations.
While sustainability reports are issued annually and TESG ratings biannually in May and November, TEJ fills the reporting gap by collecting daily news and announcements on corporate activities to build an ESG event database. The Event Radar Score (ERS) converts factors like event impact, timing, and frequency into an ESG risk value. The ERS is integrated into the TESG model to enhance rating sensitivity.
For example, a recent industrial accident at a green energy company resulted in a one-level TESG downgrade, while an overseas parent company of an electronics firm saw a two-level downgrade after senior executives were implicated in multiple violations of the Securities Exchange Act.
For financial institutions, responsible investment and lending management can benefit from the ERS, which mitigates information delays due to low reporting frequency. ERS allows daily monitoring of ESG risks, improving the efficiency and intensity of corporate ESG oversight. It can also support pre-investment and pre-loan evaluations, and ESG risk management within investment and lending processes.
With stricter reporting standards, companies must quickly adapt to regulatory changes and enhance information transparency to remain competitive. TESG ratings will become an essential tool for measuring corporate sustainability competitiveness, helping investors make informed decisions in a rapidly changing market.
Additionally, for daily monitoring, TESG Event Radar Score ERS provides daily composite event radar scores for each company, users can use the ERS to quickly assess the level of ESG event risk associated with a company, compare it with peers, or track ESG event risk trends over a specific period.
Learn more about TESG and ERS to optimize your ESG investment strategy, please visit TEJ ESG Sustainability Solution.
