"Eco-friendly Companies Are Chosen" SME Sector Accelerates ESG Management Implementation

Enhancing Corporate Image through Climate Change Response and Social Contribution Campaigns

Jin Jae-seung, President of Yuhan-Kimberly, Choi Byung-am, Administrator of the Korea Forest Service, Heo Sang-man, Chairman of the Life Forest, and other attendees pose after planting trees at the "Citizen Participation Carbon Neutral Forest No. 1 Establishment Agreement Ceremony" held at Seokpo Forest in Yongin-si, Gyeonggi-do. Photo by Yuhan-Kimberly

[Asia Economy Reporter Kim Heeyoon] Recently, domestic companies' interests have been focused on ESG (Environmental, Social, and Governance). This is because both consumers and investors are increasingly choosing companies based on ESG criteria. As ESG has become a key standard for attracting investment, ESG is no longer an option but an essential strategy for corporate survival.

On the other hand, ESG remains a distant issue for small and medium-sized enterprises (SMEs). This is due to a severe lack of resources and personnel to prepare for ESG management. According to a survey conducted last month by the Small and Medium Business Corporation targeting 1,000 companies, more than half of the respondents (58.0%) recognized the need to prepare for ESG management. However, three out of four companies (74.3%) answered that they either have no plans to prepare for ESG or are planning to prepare. Among them, only 25.7% responded that they are either prepared or in the process of preparing.

As voices from the industry grow louder, emphasizing that SMEs must also prepare for ESG management from a long-term perspective, cases of companies engaging in social contribution activities through proactive ESG management are gaining attention.

Yuhan-Kimberly recently launched an ESG committee directly under the CEO and has begun full-scale ESG management. As a non-listed company, Yuhan-Kimberly is not required to undergo ESG evaluations from the perspective of financial investors. However, based on its experience in practicing sustainable management, the company conducted a self-assessment of ESG simultaneously with the committee's launch and started a project to derive actionable tasks.

The ESG committee serves as a company-wide consultative body to realize these goals, involving full-time board members including the CEO and key executives. The committee diagnoses the current management system from an investor's ESG perspective. It also operates subcommittees by category (environment, social, governance) that oversee ESG policy development, task derivation, and monitoring of ESG management activities, playing a key role in developing related agendas for the board of directors.

Yuhan-Kimberly explained that the ESG committee plans to further develop a carbon-neutral model to respond to climate change, sustainable product innovation, strengthening positive influence for forests and people, and a value consumption model through good brands.

Coway has declared 'Net-zero Carbon Emissions by 2050' and has embarked on full-scale ESG management. Photo by Coway

Coway has declared ‘2050 Carbon Neutrality’ (Net-zero) and embarked on full-scale ESG management. The goal is to reduce greenhouse gas emissions by 50% by 2030 compared to current levels and achieve 100% reduction by 2050. Since announcing its environmental management in 2006, Coway has continued company-wide efforts to reduce environmental impact. It operates solar power facilities at four locations, including three factories in Yugu, Incheon, and Pocheon, as well as the Pocheon logistics center.

Based on this ESG management, Coway received an A grade in the ‘Listed Companies ESG Evaluation and Rating’ announced by the Korea Corporate Governance Service. Coway currently operates an Environmental Management Committee and a dedicated ESG department. A Coway representative stated, "We will continue transparent information disclosure and communication with consumers to become a sustainably growing company based on ESG management."

SK Magic recently won two awards at the 24th "Energy Winner of the Year," jointly hosted by the Citizens' Coalition for Consumer Safety and the Ministry of Trade, Industry and Energy, with its All Clean Air Purifier and Triple Care Dishwasher. Photo by SK Magic

SK Magic recently won two awards at the 24th ‘Energy Winner of the Year’ jointly hosted by the Consumer Citizens’ Organization and the Ministry of Trade, Industry and Energy, for its All Clean air purifier and Triple Care dishwasher. The awarded products received high praise for applying eco-friendly plastic (PCR-ABS), reducing environmental pollution, and further cutting greenhouse gas emissions by more than 14%, contributing to resource conservation.

Additionally, SK Magic is actively engaged in various social contribution activities such as the ‘RE:FRESH Campaign,’ which donates profits from refurbished product sales, and the ‘Good Water Project,’ which supports drinking water projects in Africa. Refurbished products are those returned due to simple customer change of mind or exhibition products that have been disassembled, cleaned, and had parts replaced before resale. SK Magic donates profits from refurbished product sales to environmental organizations, actively participating in ESG activities.

An SK Magic representative said, "We are continuously strengthening investment and research in eco-friendly materials and product development to achieve ongoing resource and energy savings," adding, "We will strive to continuously introduce eco-friendly products based on SK Magic’s differentiated technology to practice ESG management."