Small Business Owners Unfamiliar with 'ESG Management'... Incentives Needed

Survey of 5,595 Small Businesses and Small Merchants
Awareness Level: 60.6% 'Not Aware at All'

Although 'ESG (Environmental, Social, and Governance) management' is spreading as a global trend, it appears that domestic small business owners are not well aware of it. However, since they perceive it positively, improving awareness is expected to be easy.

According to the Credit Guarantee Foundation Central Association on the 19th, a survey on awareness of ESG management was conducted by the Central Association from July 24 to September 27 among 5,595 small enterprises and small business owners using guarantees. The results showed that 60.6% had 'no knowledge at all' of the ESG term. This was followed by 'have heard of it but do not know the details (28.4%)', 'somewhat aware (8.2%)', and 'very well aware (2.8%)'.

The channels through which respondents (2,218 people) became aware of the term ESG management were led by 'newspapers and broadcasting' at 42.7%, followed by 'internet (35.6%)', 'acquaintances (6.7%)', and 'government and local government promotions (5.7%)'.

The average perception score on a 5-point scale was 3.40. Opinions categorized as 'positive (very positive or positive)' accounted for 46.0%, 'neutral' was 41.8%, and 'negative (very negative or negative)' was 12.1%, indicating an overall positive perception. By industry, the service sector scored highest at 3.48 points.

The willingness to adopt ESG management among guarantee-using businesses averaged 2.89 points, with a slightly higher percentage responding 'no intention to adopt (32.5%)' than 'intention to adopt (26.6%)'. By company size, small enterprises scored 3.31 points, indicating 'neutral' or above, but small business owners scored 2.86 points, showing a predominance of negative opinions. Except for the service sector (3.02 points), all other industries scored below 3 points.

Regarding 'possible areas for ESG management adoption,' 'difficulty in adoption (47.4%)' ranked first. However, responses also included 'environmental management (E)' at 25.3%, 'social contribution (S)' at 24.1%, and 'governance (G)' at 3.3%. Excluding 'difficulty in adoption,' manufacturing, wholesale and retail, food and lodging, and other industries tended to respond more to the environmental category, while the service sector responded more to the social contribution category.

The top policy priority needed to encourage ESG management among small enterprises and small business owners was 'tax benefits, rewards, and subsidies,' accounting for 53.7%. This was followed by 'promotion and education (16.3%)', 'expansion of government public procurement (11.2%)', 'establishment of policies mandating ESG management (8.9%)', and 'technical support (8.9%)'. When asked about their willingness to adopt ESG management if benefits such as guarantee fee reductions or interest rate subsidies from regional credit guarantee foundations were provided, the average score was 3.37 points.

Jinseong Bae, a senior research fellow at the Credit Guarantee Foundation Central Association, explained, "For the government, local governments, and related institutions, it is important to expand education related to ESG, strengthen promotion, and conduct campaigns to spread awareness and create a social atmosphere that enables small business owners to adopt ESG management." He added, "For small business owners whose costs increase due to ESG management adoption, it is worth considering measures such as providing tax benefits or subsidies."