"92% of Large Corporations Establish ESG Committees"…Hankyung Business Association Publishes ESG White Paper

"Many Companies Voluntarily Pursuing ESG Management"

The Korea Economic Association announced on the 14th through the ‘2023 K-Companies ESG White Paper’ that major domestic companies are proactively and voluntarily pursuing ESG (Environmental, Social, and Governance) management. The white paper analyzed the sustainability management reports of 162 companies that published such reports this year among the top 200 companies by consolidated sales, and included exemplary cases of ESG management.

Analysis of corporate sustainability management reports revealed that 92.0% of all companies (162 companies) have established ESG committees within their boards of directors. Separately from dedicated ESG organizations, 74.1% of companies operate company-wide ESG councils where related departments discuss ESG management together. Additionally, 96.3% of companies conduct materiality assessments to identify important ESG issues and establish appropriate ESG strategies.

The ESG issues faced by Korean companies were most prevalent in the Environmental (E) sector at 41%, followed by Social (S) at 37%, and Economic & Governance (G) at 22%. Detailed analysis of key issues by sector showed that in the Environmental sector, ‘Establishing climate change response strategies (40.0%)’ was considered most important; in the Social sector, ‘Safety and health management (34.6%)’; and in the Governance sector, ‘Building ESG governance and promoting ESG management (41.3%)’ were regarded as the top priorities.

As companies actively utilize and reflect ESG factors in their management indicators, it was also revealed that they are striving to instill an ESG mindset among employees and partner companies. In particular, 76.0% of companies incorporated ESG factors into the KPIs (Key Performance Indicators) of executives and organizations.

The white paper noted that some ESG-related achievements are emerging, highlighting environmental sector outcomes. Last year, major companies’ greenhouse gas emissions decreased by 2.1% compared to the previous year, and the use of renewable energy increased by 2.1 percentage points from 5.2% in 2021 to 7.3% in 2022. Among the surveyed companies, those joining RE100 increased from 5 companies in 2020 to 38 companies in the first half of 2023, showing active corporate movements toward carbon neutrality.

Meaningful achievements are also appearing in the social sector. Since the implementation of the female director quota system (August 2022) and the growing emphasis on diversity, equity, and inclusion in organizational culture, the proportion of female executives in major companies rose consecutively for two years: 5.0% in 2020, 5.6% in 2021, and 7.5% in 2022. The Korea Economic Association stated, “Although ESG disclosure and ESG management are not yet mandatory in Korea, many companies are voluntarily pursuing ESG management and achieving meaningful results,” adding, “The Korea Economic Association will also strive to support ESG practices and provide timely information.”