GHG Inventory and Disclosure Timeline for Listed and OTC Companies 

With growing global climate policy pressure and the rapid development of sustainable finance, greenhouse gas (GHG) emissions information has become a key indicator of corporate disclosure transparency and the maturity of climate governance. In response to international trends and the increasing focus of investors on ESG requirements, Taiwan’s Financial Supervisory Commission (FSC) and the Taiwan Stock Exchange (TWSE) have actively aligned with these developments. In recent years, they have successively promoted multiple sustainability disclosure policies, formally incorporating GHG inventory and information disclosure into the core disclosure requirements of sustainability reports for listed and OTC companies, and establishing a phased implementation timeline. This serves as an institutional foundation for guiding enterprises toward low-carbon transformation and sustainable operations.

I. Regulatory Basis and Disclosure Obligations

According to the Action Plan for Sustainable Development of Listed and OTC Companies announced by the Financial Supervisory Commission (FSC), and the revised Regulations Governing the Preparation of Sustainability Reports by Listed Companies issued by the Taiwan Stock Exchange (TWSE), starting from 2025 (for FY2024 reports), all listed companies are required to disclose their greenhouse gas (GHG) emissions information in their sustainability reports. The disclosure scope covers Scope 1 (direct emissions) and Scope 2 (indirect energy emissions). Companies are also encouraged to conduct inventory and quantitative management in accordance with internationally recognized standards such as ISO 14064-1:2018 and the GHG Protocol, in order to ensure the consistency, comparability, and transparency of disclosed information.

Furthermore, with the Climate Change Adaptation Act officially coming into effect, the Ministry of Environment has initiated regulatory planning for corporate GHG inventory and carbon fee mechanisms. In the future, this system is expected to be gradually incorporated into mandatory inventory reporting and carbon pricing (carbon fee) mechanisms. This policy integration trend clearly indicates that GHG disclosure is no longer merely a voluntary corporate performance, but is rapidly transforming into a core legal obligation and a key element of operational risk management.

II. Phased Inventory and Disclosure Timeline (Based on Paid-in Capital)

To help enterprises respond to regulatory requirements in an orderly manner while ensuring adequate preparation time, the competent authorities have adopted a tiered management approach based on paid-in capital, and are promoting the implementation of GHG inventory and disclosure requirements in phases. The disclosure schedule follows the reporting deadlines of sustainability reports, and companies are required to disclose the current year’s emission results and related management strategies in their reports.

The phased implementation is described as follows:

In summary, starting from 2025, all listed and OTC companies will be required to complete at least one full-year greenhouse gas (GHG) inventory and disclose their emission status, management strategies, and reduction actions in their sustainability reports.

These disclosure requirements signify that corporate GHG information management is officially transitioning from a voluntary disclosure framework to an era of mandatory inventory and institutionalized reporting. This not only responds to regulatory demands from supervisory authorities but also lays a solid foundation for future alignment with carbon pricing mechanisms, supply chain requirements, and international standards.

III. What Emissions Information Should Be Disclosed? 

In accordance with the GRI 305: Emissions standard, the guidance issued by the Ministry of Environment, and major international disclosure frameworks (such as the GHG Protocol and ISO 14064-1:2018), listed and OTC companies are required to clearly disclose greenhouse gas (GHG) emissions information in their sustainability reports. At a minimum, the disclosure shall cover the following key items: 

•  Results of GHG Emissions by Scope:

1. Scope 1:
   Direct emissions generated from a company’s own activities, such as fuel combustion in boilers, the use of diesel or gasoline in company vehicles, and on-site process emissions.

2. Scope 2:
   Indirect energy-related emissions resulting from externally supplied electricity, steam, or heat, with electricity consumption being the most common source.

3. Scope 3 (Recommended for disclosure / Currently not mandatory):
   Other indirect emissions across the upstream and downstream value chain, such as supplier transportation, employee business travel, and emissions during the product use phase, reflecting the corporate climate impact across the full life cycle.

• Description of Inventory Methodologies and Basis:

1. The calculation method for emissions should be disclosed (such as activity data × emission factors), along with the inventory standards adopted (such as ISO 14064-1 or the GHG Protocol), and the sources of emission factors should also be explained (such as the Environmental Protection Administration, IPCC, DEFRA, etc.).

2. The version of the Global Warming Potential (GWP) coefficients adopted should be disclosed (recommended to use AR6 values).

•  Verification Status:

1. If the company commissions a third-party verification body to conduct verification of the inventory results, the verification level (reasonable assurance / limited assurance) should be disclosed.

2. The verification body and a summary of the verification opinion should be disclosed to help enhance the credibility of the information and market confidence.

•  Management Strategies and Emission Reduction Actions:

1. The company should explain how it manages emission-related risks and whether it has established short-, medium-, and long-term emission reduction targets (such as Science-Based Targets, SBT).

2. The company should disclose emission hotspot analysis, the use of renewable energy strategies, energy efficiency improvements, and product carbon footprint design, as well as other overall measures.

•  Key Points for First-Time Disclosure:

1. If the company is making its first disclosure, it should specifically explain the organizational boundary setting method (such as financial control or operational control), the selection basis for the base year, the inventory system, and the sources of data.

2. It should ensure that the disclosed information has consistency, traceability, and logical integrity, in order to facilitate long-term tracking and performance comparison in the future.

IV. How Should Companies Respond? From GHG Inventory to Carbon Governance

In response to the full legalization of greenhouse gas (GHG) information disclosure, the formal implementation of carbon pricing mechanisms in the future, and the increasing pressure from supply chain carbon disclosure, companies that remain in a passive stance will face challenges such as regulatory risks, unfavorable capital market evaluations, and even elimination from supply chains. Therefore, proactively establishing a GHG management system is not only a response to regulatory requirements but also a critical foundation for companies to advance toward low-carbon transformation and sustainable competitiveness.

Companies may adopt the following five key response strategies:

1. Establish an internal GHG inventory team and data collection procedures
Designate responsible personnel or form cross-departmental working groups to clearly define inventory responsibilities and execution schedules, and establish traceable data sources and storage systems to ensure consistency and efficiency throughout the inventory process.

2. Adopt ISO 14064-1 or conduct emissions inventory based on the GHG Protocol
It is recommended to adopt internationally recognized inventory standards as the basis, clearly define organizational and operational boundaries, inventory scopes, and activity data, and establish standardized annual inventory procedures to enhance data accuracy and comparability.

3. Engage professional institutions for training and third-party verification
For companies conducting GHG inventories for the first time or lacking experience, it is recommended to engage external consultants with accredited qualifications for assistance, while arranging internal training and preparing for third-party verification to enhance the credibility of future disclosures.

4. Conduct carbon hotspot analysis and set emission reduction targets (such as SBTi)
Through emissions analysis, identify major emission sources (such as high-energy-consuming equipment, specific departments, or upstream supply chains), further formulate concrete emission reduction strategies, and set long-term reduction targets in accordance with the Science Based Targets initiative (SBTi).

5. Assess carbon cost impacts and establish an internal carbon pricing mechanism (ICP)
Preliminarily estimate the impacts of different carbon price levels on product costs and financial performance, and introduce Internal Carbon Pricing (ICP) tools to support investment decision-making, supplier selection, and product strategy adjustments, thereby transforming carbon risks into management and competitive advantages.

Through the above strategies, companies can not only enhance their climate governance capabilities but also gain an early-mover advantage in participating in domestic and international carbon markets, obtaining green finance, and securing international procurement orders. Carbon inventory is no longer merely part of reporting requirements but has become the starting point of corporate sustainability and the foundation of core strategic capabilities.