Asia-Pacific

Taiwan to Introduce Social & Sustainability bonds by Year End

Taiwan’s FSC will direct OTC market operator Taipei Exchange to develop new guidelines for issuing social and sustainability bonds.

The FSC (Financial Supervisory Commission) is hoping to introduce social bonds and sustainability bonds in Taiwan by the end of this year, reports local media.

Social and sustainability bonds represent the FSC’s latest effort to provide new tools for companies to raise funds to meet their ESG objectives.

In 2017, the FSC allowed companies to issue green bonds on the Taipei Exchange, an OTC market.

In May, FSC chairman Thomas Huang said green finance would be promoted as a way for companies to fulfill their social responsibility, while at the same time helping Taiwan meet its economic and environmental objectives.

As of 27 July, Taiwan’s green bond market has seen the issuance of 43 bonds worth TWD 115.3 billion (USD 3.9 billion).

Unlike green bonds, used to fund green investment projects such as renewable energy development, social bonds are fund-raising instruments for projects that contribute to positive social and environmental outcomes.

The FSC expects companies to utilise social and sustainability bonds to fuel their ESG projects.

“Given that social bonds and sustainability bonds are popular overseas, Taiwan’s bond market is likely to continue advancing after these instruments are included,” said Sam Chang, director of the FSC’s Securities and Futures Bureau, at a forum on Friday (31 July).

The FSC plans to ask the Taipei Exchange to establish new guidelines for issuing social and sustainability bonds, which Chang said will be slightly different from the existing green bond guidelines.

Companies are expected to issue Taiwan’s first sustainability bonds or social bonds by the end of this year, he added.

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