From Contentious Politics to Net Zero: The Changing Regulation on CSR/ESG Reports in Taiwan

• In Event: 50620 - Section on Environmental Sociology Roundtables
  In Refereed Roundtable (60 minute): Table 1: Corporate Power and Strategy Amid Environmental Problems

Abstract

How does the state use financial regulation to govern corporate non-financial performance? Sociologists have extensively examined the role of transnational organizations in global governance but have paid less attention to the intermediary role of the state. While prior research has highlighted how developmental states implement policies for economic growth, I extend this discussion by investigating how the state increasingly responds to transnational regulations and coordinates domestic markets in this evolving governance landscape. In recent years, Corporate Social Responsibility (CSR) and Environmental, Social, and Governance (ESG) have evolved from voluntary practices to mandatory mechanisms worldwide, impacting not only investment decisions but also emerging regulations. This paper adopts Fligstein’s “markets as politics” approach to examine the political construction of market regulations, focusing on the interactions and political struggles among the state, corporations, and civil society. By analyzing government archives and news reports, I detail the trajectory and implications of these regulations. The Taiwan case offers a unique opportunity to investigate how a state, one that is deeply embedded in international markets and yet retains significant developmental state legacies, responds to the global transformations of a new era. I found that the Taiwanese state pivoted from passively encouraging corporate social responsibility disclosures to mandating standardized reporting requirements. The ultimate driver of this transformation has been global pressure for net-zero carbon emissions, while the proximate cause was domestic corporate scandals. This paper suggests how the state's bureaucratic capacity and specific willingness to develop emerged at different times, leading to distinct policy trajectories across three phases. I contribute to the scholarship in economic sociology and environmental sociology by revisiting the scholarship on how developmental states construct policies and clarifying the intermediary role of the state with regard to debates on global governance. The construction of corporate environmental and social information disclosure regulations is heavily impacted by international pressures and dominated by financial power elites, with limited civil participation.

Author

• Chun-Ching Tu, Academia Sinica