KOTRA Launches ESG Monitoring Service for Over 1,000 Mid-sized Companies

Providing Media Article Analysis Services
Consulting for Companies Participating in Global Support Projects

[Asia Economy Reporter Moon Chaeseok] KOTRA announced on the 8th that starting this month, it will provide ESG (Environmental, Social, and Governance) related media article monitoring services to over 1,000 mid-sized and strong small enterprises to support risk management.

KOTRA stated that it will work with the social fintech startup Jisokganbaljeonso to help these companies meet the stringent ESG management requirements demanded by global demand companies.

They will provide patented technology for detecting ESG risks in sustainability reports. The core of the risk monitoring is analyzing media articles related to about 1,000 companies using artificial intelligence (AI) algorithms. The inspection results will be posted in the World Champ newsletter, which is subscribed to by about 3,500 mid-sized company employees and related organizations.

This technology analyzes approximately 15,000 news articles reported daily by 90 media outlets using AI algorithms such as natural language processing and sentiment analysis. After classifying them into 17 ESG-related issues, it comprehensively evaluates article publication patterns, event progression speed, frequency, etc., to identify potential risks in advance. For example, the analysis results from the past month showed that ESG-related articles were most frequently reported in the order of consumer goods services, consumer goods manufacturing, and materials. On-site working conditions and consumer goods service responsibility issues are emerging potential ESG risks recently.

Additionally, KOTRA plans to support ESG English evaluation report writing services for companies participating in the 'Mid-sized Company Global Support Project.' It will provide English reports analyzing companies' ESG-related non-financial performance. This is intended for use in business with global partners. Participating companies can receive feedback such as management opportunity factors and improvement suggestions derived from ESG expert analysis results.

KOTRA also cited a survey by the Korea Chamber of Commerce and Industry, reporting that most domestic small and mid-sized enterprises have not adequately prepared for ESG necessary for exports. According to the report titled 'Current Status and Challenges of Supply Chain Due Diligence for Export Companies,' published on the 17th of last month after surveying 300 domestic export companies, 52.2% of respondents answered that "ESG management levels are still insufficient, raising concerns about contract cancellations or order losses with primary contractors." In KOTRA's own survey conducted earlier this year targeting 163 strong small and mid-sized companies participating in projects, 43.2% (multiple responses allowed) selected ESG management support as the most necessary customized service for export mid-sized companies this year.

Kim Yuntae, head of KOTRA's Small and Mid-sized Enterprise Division, emphasized, "ESG management will become a mandatory condition, not an option, for export-oriented mid-sized companies with global companies as key partners." He added, "KOTRA plans to provide various management support services to help mid-sized companies enhance ESG management capabilities and grow global companies," and hinted, "We are preparing to invite ESG officials from global companies to the 'Mid-sized Company Plus Forum' to be held this October."