[ESG Evaluation] CJ Logistics, SK Discovery, Sangsangin, Heungkuk Fire & Marine Insurance 'Underdividend Companies'

[Asia Economy Reporter Park So-yeon] CJ Logistics, SK Discovery, Sangsangin, and Heungkuk Fire & Marine Insurance were evaluated as under-dividend companies.

Sustinvest, an ESG (Environmental, Social, Governance) evaluation and analysis agency, announced the results of its ESG evaluation for the first half of 2022 on the 16th, analyzing a total of 1,043 companies, including 749 companies listed on the KOSPI and 294 companies listed on the KOSDAQ.

In this evaluation, Sustinvest selected companies classified as under-dividend by comparing their dividend payment capacity with the actual dividend payment level.

Among companies with assets exceeding 2 trillion KRW, CJ Logistics, SK Discovery, Heungkuk Fire & Marine Insurance, and Sangsangin were selected as under-dividend companies.

Among companies with assets exceeding 500 billion KRW, Hyundai BN Steel, Shindaeyang Paper, Lock&Lock, Webzen, and Hugel were identified as under-dividend companies.

Information such as companies’ debt ratios, undistributed retained earnings, current assets, dividend payout ratios, and dividend yields were considered and compared to the average dividend levels within the same industry.

In the overall ESG performance evaluation grades, LG Household & Health Care, Shinhan Financial Group, and SK Square received the highest ratings.

Among companies with assets exceeding 2 trillion KRW, the top AA grade was awarded to Shinhan Financial Group, LG Household & Health Care, and SK Square. Shinhan Financial Group has been evaluated as an ESG top-performing company since 2019.

Other companies such as KB Financial Group, POSCO Chemical, NH Investment & Securities, SK Telecom, S-Oil, SK Hynix, and BGF Retail received A grades.

The evaluation for the first half of this year confirmed a clear increasing trend in ESG committees.

The number of companies that established ESG committees (including Ethics Management Committees, Governance Committees, and Internal Transaction Committees) increased from 182 last year to 263 this year.

Among them, 65% (171 companies) held committee meetings fewer than four times a year, showing insufficient activity in committee operations.

In particular, LG Chem was criticized for lack of activity after establishing an ESG committee in April 2021 and holding a meeting in October of the same year.

CEO Ryu Young-jae said, "In this first half evaluation, the expansion of sustainable management by companies, such as the establishment of ESG committees, was remarkable," but added, "there were quite disappointing points in actual activities."

Meanwhile, Sustinvest annually announces ESG management level evaluation results for about 1,000 listed companies. Considering the timing of business report disclosures and sustainability report publications, evaluations are conducted twice a year. The evaluation results are utilized by major domestic institutional investors such as pension funds and asset management companies for ESG investments.