Son Kyung-sik, Chairman of the Korea Employers Federation, "Trade Barriers Rise Due to ESG... National-Level Response Needed"

KCCI Holds ESG Management Committee Meeting
Calls for Expanded Government-EU Consultations and Response Needed

Son Kyung-sik, Chairman of the Korea Employers Federation (KEF), is delivering the opening remarks at the '1st ESG Management Committee Meeting of 2024' held on the 9th at the Press Center in Jung-gu, Seoul. (Photo by KEF)

As trade barriers between countries increase based on ESG (Environmental, Social, and Governance) criteria, there are calls for strategic national-level responses.

On the 9th, Sohn Kyung-shik, Chairman of the Korea Employers Federation (KEF), emphasized this during his opening remarks at the '2024 1st ESG Management Committee' held at the Press Center in Jung-gu, Seoul. The ESG Management Committee is the highest-level ESG consultative body in the business sector, chaired directly by Chairman Sohn, with participation from presidents of 18 major groups.

Chairman Sohn stated, "As the world becomes economically bloc-oriented, trade barriers based on ESG are increasingly rising. The fundamental solution is for companies themselves to enhance their ESG capabilities, but since economic and industrial structures and legal environments differ between countries, there are limits to efforts by companies alone, so close public-private cooperation is necessary."

On this day, the committee members shared difficulties related to the increasingly sophisticated ESG trade regulations centered on the European Union (EU). They subsequently requested expanded intergovernmental consultations with EU countries, effective support for small and medium-sized enterprises (SMEs), and regulatory improvements to enhance export competitiveness.

In particular, regarding compliance with the EU's supply chain due diligence and reporting obligations, they proposed that the government first resolve issues such as ▲ unclear supply chain scope ▲ absence of exemption criteria for due diligence non-compliance without intent or negligence ▲ conflicts with current domestic laws such as the Fair Trade Act and Subcontracting Act that prohibit unfair management interference.

Other proposals included ▲ establishing a credible 'SME Data Platform' ▲ introducing incentives for hiring ESG specialists ▲ extending the sunset clause on tax credits for national strategic technologies ▲ and preparing ESG disclosure standards that consider domestic realities.

Kim Jae-hoon, Director of the Future Strategy Bureau at the Ministry of Economy and Finance, who attended the meeting, stated, "We will continue to work with related ministries to provide comprehensive government support to enhance the ESG competitiveness of domestic companies."