Several Taiwanese companies, however, are not waiting for legislation, but taking steps to curb their greenhouse-gas emissions. Two recent surveys show that household names such as Acer Inc. and Taiwan Semiconductor Manufacturing Co. Ltd. now follow corporate environmental policies that are among the most advanced in Asia.
"CG Watch 2007," a report on corporate-governance issues throughout Asia, rated seven Taiwanese enterprises among the regional top 30 in terms of environmental awareness and leadership. For the report, CLSA, a brokerage and private-equity group headquartered in Hong Kong, surveyed 582 companies.
According to the report, subtitled "On a Wing and a Prayer--The Greening of Governance," Asian enterprises "mostly appear oblivious" to climate-change issues. "The response of many companies is that their businesses are not polluting," the report states. "It has not yet sunk in for most corporate managers in Asia that whatever business one is in, it will have a carbon footprint."
Just 58 percent of the companies contacted completed the "clean and green" section of the questionnaire, and several of those that did scored zero. The C&G section featured 20 Yes/No questions including: whether any individual or committee within the company was responsible for the enterprise's greenhouse-gas emissions; whether the enterprise uses any renewable energy sources; whether it is ISO14000 accredited; and if the company is researching new technologies that might cut emissions.
Some 96 Taiwanese companies were included in the survey, and the response rate for the C&G section was 48 percent--above that of Hong Kong, China and Indonesia, but below comparable economies such as South Korea (70 percent) and Singapore (54 percent). Only Japan, however, had more companies in the Top 30, with nine to Taiwan's seven.
The seven leading Taiwanese companies were China Steel, Nan Ya Plastics, Nan Ya PCB, Taiwan Cement, TSMC, United Microelectronics and ZyXEL Communications. ZyXEL is perhaps not as well known as the other six, but it scored 95 out of a possible 100 in the C&G survey. Only South Korea's Samsung SDI Co. Ltd., which received a perfect grade, did better. Five other companies--three of them Japanese--also scored 95.
ZyXEL, which has more than 1,800 workers at its headquarters in the Hsinchu Science Park and 1,000-plus overseas, was founded in 1989 as an analog modem manufacturer. "As social responsibility is part of ZyXEL's core corporate values, we are eager to become a 'green enterprise,'" ZyXEL President Chen Yuh-long said in a press release issued Nov. 10.
One thing ZyXEL does for the environment is obvious to anyone passing the company's head office. ZyXEL Park, situated right beside the complex, is a 5,140-square-meter plot rich in tree and plant species that not only remove CO2, but enhance local biodiversity. The press release also touches on external factors that are helping to drive the greening of Taiwan's information-technology sector. "ZyXEL not only makes its operations comply fully with the three E.U. directives: WEEE, RoHS and the recent EuP, but also enforces the policy on its suppliers," it stated.
The European Union's WEEE (waste electronics and electrical equipment) directive stipulates that discarded electronic items must be kept separate from regular trash, and that the makers must take them back for recycling and proper disposal, or pay others to do this. The restriction of hazardous substances--known simply as RoHS--bans six substances, including lead and mercury, from consumer electronics. Meanwhile, the Eco-Design Requirements for Energy Using Products directive (EuP) requires that the physical inputs and outputs of certain products throughout their entire life cycle be measured and minimized; and this includes materials, packaging, distribution, emissions and waste.
Companies that do not comply with the directives face exclusion from European markets.
Between mid-2005 and the implementation of RoHS in July 2006, the Sustainable Development Division of the Industrial Development Bureau under the Ministry of Economic Affairs "dispatched engineers to help every listed domestic company that exports to the European Union transition their production lines over to RoHS-compliant processes. The massive effort involved more than 4,000 companies," the Electronic Engineering News Digest reported July 28, 2006.
If E.U. rules are one of the sticks motivating local companies to go green, then awards given out by various central government agencies are some of the carrots. TSMC, which scored 80 in the "clean and green" section of "CG Watch 2007," has been honored by the MOEA for energy conservation, by the Water Resources Agency for water conservation, by the IDB for pollution control, and by the Environmental Protection Administration for "outstanding achievements in industrial waste disposal, resource conservation and recycling."
In 2006, TSMC was one of the winners of the Executive Yuan's National Sustainable Enterprise Award. A year earlier, Taiwan's other major semiconductor company, UMC--which scored 90 in "CG Watch 2007"--received the same accolade.
Makers of electronics have an important role to play in combating climate change, because of the use of perfluorocarbon compounds during the manufacturing process. PFCs are extremely potent greenhouse gases. Common PFCs have warming potentials of between 6,500 and 9,200 times greater than CO2.
Both the Taiwan Semiconductor Industry Association and the Taiwan TFT-LCD Association have pledged to join a commitment made by the World Semiconductor Council that its members should reduce PFC emissions to 10 percent below their 1995 levels by 2010. For five years UMC has been publishing an annual Corporate Environmental Report, and it was the only Taiwanese company to include CO2-emissions data in its response to the 2007 Carbon Disclosure Project.
The Asian section of the report, which excluded Japan, was compiled by the Association for Sustainable and Responsible Investment in Asia, a not-for-profit body that promotes corporate responsibility and sustainable investment practice in the Asia-Pacific region.
Of the 166 companies contacted by ASrIA, 26 percent responded before the June 30 deadline. Taiwan's response rate was slightly below average--just five of the 21 enterprises contacted completed the questionnaire. They were UMC, TSMC, Acer, Chunghwa Telecom Co. Ltd. and Delta Electronics Inc. "The Taiwan sample was predictably dominated by the leading names in Taiwan's listed technology sector," the report stated. "Responses displayed good familiarity with the vocabulary of environmental and carbon management."
Among companies declining to participate was Formosa Plastics Corp. According to the website of the Wild at Heart Legal Defense Association, an environmental group, FPC's No. 6 naphtha cracker plant in Yunlin County produces 67.5 million metric tons of CO2 annually, more than 26 percent of Taiwan's total CO2 emissions.
Two major Taiwanese companies submitted late responses, ASrIA Director Scott Linder said Nov. 21. Fubon Financial Holding, a banking group, stated: "Climate change is not really relevant to our operations." "CG Watch 2007" suggests that Taiwan's other banks are even further behind the curve. Fubon scored 40 in that survey, making it the only local financial-sector enterprise to score above zero.
In contrast, AU Optronics Corp., Taiwan's largest manufacturer of thin-film-transistor liquid-crystal-display panels, said they regard the growth of environmental consciousness as a business opportunity, because LCD products are more energy-efficient than the cathode-ray-tube equivalents.
Outlining their climate-change policy, AUO stated: "PFC-reduction and process-optimization projects have been in place for a number of years. AUO's CO2-emissions reduction efforts will continually focus on the application of new technologies in energy conservation and PFC reduction."
"CG Watch 2007" lists 40 Taiwanese enterprises that scored 30 or higher in the "clean and green" category. AUO recorded 75, Delta Electronics, 45 and Chunghwa Telecom, 30. Surprisingly, Acer is not among the Top 40. CLSA refused to disclose the company's score, or even if it answered the C&G questions.
According to the CDP, however, Acer is not only an environmental leader nationally, but regionally as well. The report lauds the computer maker as just one of nine Asian companies to have a strategic response to the issue of global warming. In Acer's case, the initiative involves requesting suppliers to disclose annual environmental performance information, including data on greenhouse-gas emissions.
A high score in "CG Watch 2007" does not, as the report notes, signify that an enterprise is greener than other companies. An example is FPC, which scored 75. But, the report states, enterprises that did well have at least "started to deal with the carbon footprint of their business activities."
Some of the companies trying to reduce their impact on the environment have adopted "green building" technologies, or arrange transportation so their employees need not drive to work. ZyXEL's head office has skylights that save electricity by increasing the amount of natural light reaching the interior; the bathrooms have been fitted with water-saving faucets; lights in hallways and offices where no one is currently working are dimmed; the air conditioning is set at 26 to 28 degrees Celsius; and employees are encouraged to climb the stairs instead of taking the elevator.
ZyXEL has been providing a bus service for its workers since 1996, and encouraging car-pooling since 2005, Emily Chen, head of the company's Marketing Communications Department, said Nov. 15. According to Alex Hinnawi, UMC's director of corporate communications, many of his company's business premises have rainwater-harvesting systems. UMC's new fab in the Southern Taiwan Science Park, which will be completed in the second half of 2008, boasts photovoltaic solar cells that can generate 100 kilowatts of electricity. UMC also provides free bus services for its workers, Hinnawi said Nov. 17.
Some major local enterprises mentioned in neither "CG Watch 2007" nor the CDP report have significant emission-reduction plans. According to its website, the Chinese Petroleum Corp. Taiwan is endeavoring to cut its CO2 emissions, stating: "From 2006 to 2009, the total accumulated reduction is expected to reach 1,000,000 tons."
The draft bill of Taiwan's Greenhouse Gas Reduction Act has yet to make it to the statute books, but government agencies are already taking action to counter climate change. The Central News Agency reported Nov. 28 that 229 local enterprises--which between them account for 30 percent of the country's CO2 emissions--have registered with the IDB for assistance on how best to reduce their greenhouse-gas emissions.
Copyright 2007 by Steven Crook
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