ESG awareness expanded but without plans implemented: survey

South Korean companies acknowledge the importance of environmental, social and corporate governance (ESG) but not many are integrating ESG into their businesses.

According to the Korea Chamber of Commerce and Industry in Seoul on Wednesday, 70 percent of 300 domestic companies that participated in their survey on ESG integration responded that ESG is important.

The main reason to why they consider ESG important was because it has a positive effect on business management performance with 42.9 percent saying so, followed by 41.9 percent saying that it is about adapting to changing consumer trends.

Despite many companies being aware of the importance of ESG, only 29 percent gave their companies high ESG rating.

Other 40.3 percent said their ESG rating is normal and 30.7 percent said it is low.

There were also not many companies that have a team or executives in charge of ESG.

Among those surveyed, only 15.7 percent had an ESG committee and only 12.7 percent had executives in charge of ESG.

Businesses considered the environment to be the most important component of ESG with 60 percent of those surveyed saying so.

In line with that, 37 percent of those surveyed said the most important issue in the future for ESG will be green taxonomy, followed by resource circulation with 28.3 percent, and mandatory disclosure of ESG information with 13 percent.

They suggested practical methods, capability-enhancing education, and creating more reliable ESG ratings as ways to proliferate ESG business management.

By Hong Yoo (yoohong@heraldcorp.com)