New Report Exposes Formosa Plastics
A groundbreaking new report released today offers a comprehensive Environmental, Social, and Governance (ESG) analysis of Formosa Plastics Group (FPG), one of the world’s largest petrochemical conglomerates. The report, Unchecked and Unaccountable: The Sustainability Crisis at Formosa Plastics Group, reveals systemic environmental violations and raises human rights concerns, posing urgent questions about the credibility of ESG investment frameworks.
Published by the Environmental Rights Foundation and Friends of the Earth U.S., the report finds that FPG—despite being included in over 40 ESG-labelled funds and receiving nearly US$2 billion in sustainability-linked loans—is a “serial offender” with a long track record of environmental pollution, labour violations, and governance failures. These include the 2016 marine disaster in Vietnam, described as the country’s worst industrial catastrophe, and the controversial Sunshine Project in Louisiana, condemned by UN experts as a case of environmental racism.
“This report links Formosa Plastics’ global impacts directly to international human rights and environmental norms,” said Hsin Hsuan Sun, Director of Corporate Accountability and International Affairs at Environmental Rights Foundation. “It exposes a company deeply misaligned with sustainability principles while benefitting from ESG-labelled capital.”
“Formosa Plastics Group sells itself to financiers with promises of sustainability, but its track record shows a consistent pattern of environmental violations, health risks, and governance failures,” said Zoe Reyes, Petrochemicals Researcher at Friends of the Earth U.S.. “From Texas to Taiwan, FPG has shown itself to be a bad neighbour. If banks and investors want to show that they can be responsible, then they need to say no to Formosa Plastics Group.”
Key findings include:
- Environmental harms, labour violations, and alleged human rights abuses across Vietnam, Taiwan, and the U.S., contravening standards under the UN Guiding Principles on Business and Human Rights, ILO conventions, and OECD Guidelines.
- Climate misalignment, with emissions from FPG’s main companies surpassing those of 165 countries and showing no credible path to net-zero by 2050.
- Governance risks, including opaque ownership structures and cash flow deficits masked by intra-group dividend payments.
- Failure of ESG benchmarks, with leading ESG ratings agencies understating or missing FPG’s severe and ongoing violations. The report highlights how ratings often rely on self-reported policies rather than real-world impact.
The report also features cases affected by FPG’s operations, bringing into sharp focus the real-world impact of the company’s misconduct.
“Nine years after the Formosa environmental disaster, thousands of victims are still waiting for justice. Despite the pain, displacement, and lasting environmental damage, Formosa and the Vietnamese government continue to deny responsibility while silencing those who speak out. This is not just a failure of accountability—it is a betrayal of human dignity,”
— Nancy Bui, Founder / VP of External Affairs, Justice for Formosa Victims
“The Sixth Naphtha Cracker Complex has nearly 400 chimneys that continuously emit toxic pollutants, forming thick clouds that drift with the monsoon winds into nearby villages. Studies have confirmed high levels of heavy metals and toxic substances in local residents, along with elevated cancer rates. After over 20 years of operation, the complex continues to seriously harm the health and environmental rights of communities in coastal Changhua and Yunlin.”
— Shih Yue-Ying, Executive Director, Changhua Environmental Protection Union
This case study of FPG reveals broader structural flaws in ESG finance. The report underscores how ESG-labelled investments can fail to protect people or the planet when underpinned by weak benchmarks and inadequate due diligence.
“FPG gives the appearance of financial strength, but in reality, several of its companies are paying out more in dividends than they generate in free cash flow. These payments are often recycled within the Group due to its complex ownership structure, artificially inflating reported profits and masking deeper financial weaknesses,” said Mark Hsu, Deputy CEO of Environmental Rights Foundation. “This raises serious concerns about corporate governance and long-term sustainability.”
The report concludes with detailed recommendations for financial institutions and investors, Formosa Plastics Group, and ESG and credit ratings agencies, calling for greater transparency, alignment with international standards, and exclusion of companies with persistent harmful impacts.
Media Contacts:
- Hsin Hsuan Sun, Environmental Rights Foundation [email protected]
- Erika Seiber, Friends of the Earth, [email protected]
Link to full report: