[Asia Economy Reporter Lee Seon-ae] The recent buzzword in corporate management is undoubtedly ESG (Environment, Social, Governance). Companies are rushing to declare ESG management and striving to keep pace with global management trends. This is why ESG dedicated teams are being established one after another in companies. The Korea Exchange (KRX) has also introduced an ESG Support Department. To establish the disclosure of governance structures among domestic companies, the ESG disclosure project, which was part of the Disclosure Division of the KOSPI Market Headquarters in 2020, was separated and an ESG dedicated team was formed within the Corporate Support Division, which was then upgraded and newly established as the ESG Support Department. The fact that a standalone work unit has expanded to a full department itself indicates the growing importance of ESG.
According to the Korea Exchange on the 6th, the ESG Support Department consists of two teams. The Support Team researches policies related to ESG for domestic listed companies and establishes related systems. The Disclosure Team, as per its existing duties, receives ESG reports (Governance Reports, Sustainability Management Reports) and conducts education, events, and seminars for listed companies. The total number of personnel is approximately 10.
The ESG Support Department is one of the busiest departments at the Exchange this year. Although corporate interest in ESG management is gradually increasing, since all processes are new, it is still unfamiliar and complex, and inquiries are incessant. The ESG Support Department monitors overseas case trends and researches, reviews, and implements application plans for domestic companies. Its goal is to enable listed companies to establish systems and processes to manage ESG independently.
The ESG Support Department has produced educational promotional materials related to ESG information disclosure guidance, promoted the disclosure of Sustainability Management Reports, launched the ESG portal service, and provided revised guidelines for Corporate Governance Reports.
Regarding Sustainability Management Reports, the department plans to supplement and inform companies about ESG indicators to be disclosed while updating the guidance. This is to show the linkage between financial information and ESG ratings through the ESG portal. The ESG Support Department stated, "We plan to add indicators while updating the ESG portal in the fourth quarter," and added, "Currently, we provide ESG ratings from two institutions, but we will additionally provide rating information from well-known overseas and domestic institutions within the year." The ESG portal is optimized for PC screens, but there are plans to make it easily accessible on mobile devices as well.
This year, the disclosure obligation for Corporate Governance Reports has been expanded to companies with total assets of 1 trillion won or more, so efforts are being accelerated to revise related regulations. Since the obligation will be gradually expanded to companies with assets of 500 billion won or more in 2024 and to all KOSPI-listed companies in 2026, this is an area requiring significant attention. Additionally, the ESG Support Department is reviewing the revision of guidelines that companies can refer to for Sustainability Management Reports. However, there is no specific target timeline yet, as global standards are continuously emerging.
Researcher Oh Kwang-young of Shin Young Securities said, "If ESG information, which companies voluntarily disclosed, becomes regulated and mandatory, ESG disclosure information will inevitably increase. Since it is highly likely to be implemented as early as 2023, preparations for ESG disclosure must be expedited. Starting from verifying the disclosure information itself, companies should also consider integrating ESG information systematically and supporting it with IT systemization."
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