FSC Taiwan launched the “Green Finance Action Plan 2.0” for joint creation of a sustainable finance ecosystem by public and private sectors. The Action Plan was created to use financial mechanisms to increase the awareness of companies and investors of environmental, social, and governance (ESG) issues, to facilitate sustainable development and cooperation between the public and private sectors to achieve carbon-reduction and sustainable development goals of Taiwan.
The “Green Finance Action Plan 1.0” included 25 measures that covered seven aspects: credit, investment, capital market fundraising, professional development, promotion of further development of green financial products and services, information disclosure, and promotion of the concept of green sustainability. For the Green Finance Action Plan 2.0, short-term and medium-term objectives have been established and these include three core strategies and eight major aspects to be addressed through the implementation of 38 concrete measures (of which 17 measures are a continuation of Plan 1.0 while 21 have been newly added for Plan 2.0). The short-term objective for the Action Plan includes building a framework and the foundation conducive to the effective operation of green and sustainable finance market, increasing information transparency, and channeling funds to support green and sustainable development industries. The medium-term objective involves guiding the financial market on addressing the potential risks of climate change, capitalizing on the associated opportunities, and strengthening the competitiveness of our financial industry and market. The major aspects to be addressed through the implementation of various measures include the following:
- Credit—Eight measures that aim to encourage, through incentives and support programs, financial institutions to grant credit and loans to green energy industries and sustainable development projects and to adopt measures in line with international norms
- Investment—Five measures that aim to advocate responsible investment by amending relevant rules and guidelines and encourage financial institutions and government agencies to invest in sustainable development projects
- Capital market fundraising—One measure involving continued promotion of green bond issuance and investment and the other involving development of sustainability bonds to diversify the financial products and financing channels in the country's capital market
- Professional development—A measure for cultivating financial professionals with expertise in green and sustainable finance in the hope to build capability for developing sustainable finance
- Promotion of further development of green financial products or services—Seven measures that aim to encourage financial institutions to develop innovative green financial products or services that will meet the financial demands of businesses and investors pursuing low-carbon transformation and sustainable development
- Information disclosure—Five measures that aim to improve the quality, consistency, and transparency of corporate ESG disclosure by amending related regulations and establishing integration platforms in an effort to provide the financial market participants with comparable, reliable, and comprehensive information
- Prudential supervision—Two measures involving a new aspect to the Action Plan 2.0 that aims to prompt financial institutions to examine climate-related risks and their ability to address such risks
- International connections and incentive mechanisms—Eight measures pertaining to studying the scope (taxonomy) of sustainable finance in reference to international practices and through incentives
Keywords: Asia Pacific, Taiwan, Banking, Insurance, Securities, Green Finance, ESG, Climate Change Risk, Disclosure, Action Plan, Sustainable Finance, FSC Taiwan
Dr. Denton provides industry leadership in the quantification of sustainability issues, climate risk, trade credit and emerging lending risks. His deep foundations in market and credit risk provide critical perspectives on how climate/sustainability risks can be measured, communicated and used to drive commercial opportunities, policy, strategy, and compliance. He supports corporate clients and financial institutions in leveraging Moody’s tools and capabilities to improve decision-making and compliance capabilities, with particular focus on the energy, agriculture and physical commodities industries.
Previous ArticleCMF Issues Rule for Identification of Systemically Important Banks
The Board of Governors of the Federal Reserve System (FED) adopted the final rule on Adjustable Interest Rate (LIBOR) Act.
The European Central Bank (ECB) published an updated list of supervised entities, a report on the supervision of less significant institutions (LSIs), a statement on macro-prudential policy.
The Hong Kong Monetary Authority (HKMA) published a circular on the prudential treatment of crypto-asset exposures, an update on the status of transition to new interest rate benchmarks.
The European Commission (EC) adopted the standards addressing supervisory reporting of risk concentrations and intra-group transactions, benchmarking of internal approaches, and authorization of credit institutions.
The China Banking and Insurance Regulatory Commission (CBIRC) issued rules to manage the risk of off-balance sheet business of commercial banks and rules on corporate governance of financial institutions.
The Hong Kong Monetary Authority (HKMA) made announcements to address sustainability issues in the financial sector.
The European Banking Authority (EBA) published regulatory standards on identification of a group of connected clients (GCC) as well as updated the lists of identified financial conglomerates.
The General Board of the European Systemic Risk Board (ESRB), at its December meeting, issued an updated risk assessment via the quarterly risk dashboard and held discussions on key policy priorities to address the systemic risks in the European Union.
The Financial Conduct Authority (FCA) is seeking comments, until December 21, 2022, on the draft guidance for firms to support existing mortgage borrowers.
The Financial Stability Board (FSB) published a report that assesses progress on the transition from the Interbank Offered Rates, or IBORs, to overnight risk-free rates as well as a report that assesses global trends in the non-bank financial intermediation (NBFI) sector.