Formosa Petrochemical

Formosa has scope 1 and 2 emissions targets covering the short- and long-term. It aims for a 22% reduction in these emissions by 2025, a 28% reduction by 2030, and zero scope 1 and 2 emissions by 2050, compared to 2007. However, these targets could not be assessed in the benchmark as the company has not quantified its use of offsets. The company lacks sufficient interim targets between 2030 and 2050. Setting regularly spaced intermediate targets will help the company incentivise near-term actions on its long-term goals. Furthermore, a baseline year of 2007 is unambitious as it is not representative of the company’s current emissions profile. In order to align with best practices set by the Science Based Targets initiative, Formosa should set a base year not further back than 2015.

Formosa has board-level oversight of climate issues. However, there is no evidence that any of its board members have sufficient expertise on the climate crisis. Furthermore, there is no evidence that the company’s management has financial incentives based on climate criteria. To drive top-down action, Formosa should ensure it has board members with climate crisis expertise and that its management has financial incentives to reach the company’s emissions goals. Crucially, Formosa should ensure that it does not incentivise fossil fuel growth.

Formosa does not have any low-carbon business activities. There is also no evidence that the company is developing any low-carbon activities, with no disclosure by the company of any R&D or CapEx on low-carbon or carbon mitigation technologies. Formosa will need to transition to low-carbon activities to remain profitable in a low-carbon future.

Formosa has set targets to reduce scope 1 and 2 emissions by 22% by 2025, 28% by 2030, and 100% by 2050, from a 2007 baseline. It has not set any scope 3 targets, despite scope 3 emissions forming 80% of its total emissions in 2021. It has not set a net-zero target.

Formosa does not have any established low-carbon activities and is not developing any either. Furthermore, the company does not have a policy for emissions reduction engagement with either suppliers or clients.

In 2021, Formosa did not invest in the R&D of low-carbon or climate mitigation technologies, despite spending USD 22 million on R&D activities. The company has remained committed to petrochemicals.

Formosa’s scope 1, 2 and 3 emissions intensities have increased between 2017 and 2021. To align with its 1.5°C pathway, Formosa needs to decrease its scope 1 and 2 emissions intensity by approximately 6% and scope 1, 2 and 3 emissions intensity by approximately 4% annually.

Formosa has set emissions reduction targets but has not given any indication that it is strategically repositioning itself away from oil and gas activities. The company should invest in low-carbon R&D and established low-carbon technologies to remain profitable in the low-carbon future.

No evidence was found of the company’s commitment to social dialogue or of the categories of stakeholders the company engages with on a just transition. Furthermore, no evidence was found to demonstrate the company’s ongoing social dialogue and meaningful engagement with affected stakeholders. No evidence was found of the company undertaking just transition planning to mitigate the social impacts of the transition on workers, affected stakeholders and its business relationships. Additionally, no evidence was found to demonstrate the company’s engagement in social dialogue and with stakeholders in just transition planning.

No public commitment by the company was found stating its intention to create and support access to green and decent jobs as part of the low-carbon transition. Moreover, no evidence was found of the company’s action to promote these jobs in a way that ensures gender balance and inclusion of vulnerable groups. Additionally, no relevant disclosure was found of the company’s assessment of employment dislocation risks. No public commitment by the company was found stating its intention to re-skill and up-skill workers displaced by the transition to a low-carbon economy. Additionally, no evidence was found that the company re-skills and up-skills workers in a way that ensures gender balance and inclusion of vulnerable groups.

No relevant disclosure was found to show if the company identifies impacts of the low-carbon transition on social protection for workers and affected stakeholders, nor how it contributes to social protection. Additionally, no evidence was found that the company expects its business relationships to contribute to the social protection of their workers and affected stakeholders. No relevant disclosure was found to show how the company identifies any misalignment of its lobbying activities with policies and regulations that support the just transition, nor of the measures it takes to address misalignment. Furthermore, no evidence was found that the company lobbies for policies and regulations for green and decent job creation; retention, education and reskilling; and social protection for workers.

No policies or commitments of the company related to respect for human rights were found in the public domain. This includes the necessary policies and systems by which the company can ensure respect for basic human rights in its operations and supply chain.

No evidence was found that the company commits to respecting the health and safety of its workers and that it expects the same commitment of its business relationships. Further, no evidence was found of the company having a time-bound target for paying all workers a living wage. While the company discloses the proportion of its direct workforce covered by collective bargaining agreements, no relevant disclosure was found of the company’s required working hours. The company discloses the gender of its workforce by employee category. However, no relevant disclosure was found of additional indicators of workforce diversity. Additionally, no evidence was found that the company commits to gender equality and women’s empowerment.

No policies or commitments of the company related to key ethical business topics –personal data protection, tax, bribery and corruption, and lobbying and political engagement – were found in the public domain. This includes ensuring ethical business conduct throughout its operations and in its relationships with business partners.