Low Birthrate Solution Lies in Companies... "ESG Indicators Reflecting Population Needed" [K Population Strategy]

Increased Job Satisfaction Leads to Higher Marriage and Childbirth Intentions
Current Certification System Lacks Incentives
Discussion on Expanding Corporate ESG Disclosure Indicators
"Should Include Support for Work-Family Balance"

"Companies may need to have half of their workforce composed of retirees."

This statement was made at the seminar titled "Responding to the Population Crisis with K-ESG: Why Companies Should Pay Attention," held on the afternoon of the 12th at the POSCO Center West Building in Gangnam-gu, Seoul, hosted by the Korea Future Population Research Institute (Hanmiyeon). Im Dong-geun, a research fellow at Hanmiyeon who presented at the event, projected the losses caused by population decline due to low birth rates and aging, pointing out that companies are very likely to bear all the resulting damages in the future. Attendees unanimously agreed that to respond to this crisis, companies must expand work-family balance systems internally and establish 'ESG (Environmental, Social, and Governance) indicators' that can evaluate these efforts.

Im emphasized that the key to solving the low birth rate issue lies within companies. According to Hanmiyeon's "2030 Generation Perception Survey on Marriage and Childbirth," conducted last year with 1,800 young people in their 20s and 30s, the most common response (25.1%) to the question about "effective corporate support to solve the low birth rate problem" was "guaranteeing the free use of parental leave." The same survey analyzed that increasing job satisfaction at the workplace would positively influence employees' decisions regarding marriage and childbirth. Im stated, "There was a strong demand for a workplace atmosphere where parental leave can be comfortably used," adding, "The overall role of family-friendly support programs that assist work-family balance is very important."

He added that firm government support must back these efforts. He criticized, "Although the budget for responding to low birth rates has increased annually, most of it is indirect support related to creating a low birth rate environment, such as housing support, and the budget directly supporting childbirth and childcare has not significantly increased since 2016." He further noted, "The budget related to jobs and workplaces within the Employment Insurance Fund accounted for only 3.2% of the total budget as of last year."

Regarding current corporate incentive systems such as the Ministry of Gender Equality and Family's "Family-Friendly Certification System" and the Ministry of Employment and Labor's "Excellent Company for Gender Equality Certification System," he pointed out, "In reality, aside from providing certification marks, there are very few substantial incentives for companies and workers."

On the afternoon of the 12th, Lim Dong-geun, a research fellow at the Korea Future Population Institute (Hanmiyeon), is giving a presentation at the seminar "Responding to the Population Crisis with K-ESG: Why Companies Should Pay Attention," held at the POSCO Center West Building in Gangnam-gu, Seoul.
[Photo by Park Joon-yi]

The main focus of the discussion on implementation measures was the need to utilize ESG indicators. Currently, there is no unified ESG disclosure standard in South Korea, and sustainability management reports vary by company in their formats. The Financial Services Commission is expected to announce a draft of domestic ESG disclosure standards between March and April. Participants stated that ESG indicators should be used to go beyond the evaluation criteria of the current government certification systems and specifically include aspects related to work-family balance.

Kang Sung-jin, a professor of economics at Korea University, commented on the use of ESG indicators, saying, "The purpose of ESG reports needs to be clearer, whether from the perspective of investors or the state," and added, "In the future, when deciding whether to invest in a company, not only financial factors but also whether the company considers its stakeholders will be examined."

Kim Kwang-gi, CEO of ESG Economy, said, "Domestic pension fund institutional investors are not utilizing ESG indicators much," and added, "South Korea needs to put more thought into creating good evaluation models that reflect demographic structures and ensure that the indicators are well utilized." Jang Yoon-je, head of the ESG Research Center at the law firm Sejong, also added, "In addition to quantitative evaluations, qualitative assessments that can be actually verified should also be included."

There was also an opinion on the need to set weighting factors. Lee Eun-ah, editorial writer at Maeil Business Newspaper, suggested, "Unlike large corporations, small and medium-sized enterprises often cannot properly use legally guaranteed parental leave," and proposed, "It might be worth considering assigning evaluation weights to win-win measures such as increasing daycare centers that large companies can use together with their partner company employees."