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ESG

Environment, Social, and Governance

Concept of ESG

ESG Concept

ESG stands for Environment, Social, and Governance. It refers to the three key elements of corporate management aimed at achieving sustainability by focusing on environmental management, social responsibility, and sound and transparent governance.

* Sustainability is defined as "meeting the needs of the present generation without wasting or depleting the economic, social, and environmental resources that future generations will use, and achieving harmony and balance among these elements" [(Sustainable Development Act) enacted on 2020.05.26].

E - Environmental Protection S - Social Responsibility G - Governance
  • Climate Change and Risk
  • Resource Depletion
    (including natural resources)
  • Waste
  • Pollution
  • Deforestation
  • Human Rights
    (gender, age, ethnicity, etc.)
  • Working Conditions (health and safety)
  • Employment Relations
  • Labor Standards
  • Responsible Production
  • Bribery and Corruption
  • Executive Compensation
  • Board Diversity and Structure
  • Political Lobbying and Donations
  • Tax Strategy

* Main Components of ESG (Source: UNPRI, www.unpri.org)

Necessity

  • Recently, ESG has expanded into a global trend. As interest in social components from consumers, investors, and governments increases, ESG has become a critical factor for the survival and growth of companies.
  • From a corporate perspective, ESG is an essential element that can strengthen global competitiveness by enhancing the social value of the company's mission and vision for the future society.
  • From a capital market perspective, ESG is a critical management factor for businesses as it influences investors' core values across various sectors, helping to build trust with stakeholders and investors.
  • From a sustainability management perspective, integrating ESG elements into the company's sustainable development concept can minimize business risks and support sustainable growth.

Domestic and International Issues

  • Since the rise of ESG, global interest has been focused on regulatory enhancement and the demand from investors for ESG information disclosure. Companies are making efforts to respond to ESG evaluations.
  • In 2006, the UN PRI announced six principles related to sustainable growth, and major global players are strengthening regulations related to the obligation of ESG information disclosure, supply chain implementation, and other ESG-related requirements.
  • Global rating agencies are incorporating ESG into their evaluations, and private investors recognize ESG as a future value of companies, thereby increasing the demand for corporate ESG information disclosure.
  • As the demand for ESG-related information disclosure increases, companies are enhancing their evaluation responses, and evaluation agencies conducting evaluations, assessments, and consulting on ESG are rapidly expanding. Domestic associations are also actively responding to this trend.
  • ESG is becoming a standard for both corporate credibility and investor confidence, significantly influencing investment decisions.

ESG-Related Certifications

Environment
Social
Governance

  • Environment Sector

    • ISO 14001 (Environmental Management), ISO 50001 (Energy Management), ISO 14064-1 (Greenhouse Gases),
      ISO 46001 (Water Efficiency Management), ISO 13065 (Sustainability Criteria for Bioenergy), among 40 other fields.

  • Social Sector

    • ISO 9001 (Quality Management)
    • ISO 26000 (Social Responsibility)
    • ISO 30415 (Human Resource Management)
    • ISO 45001 (Occupational Health and Safety Management)
    • ISO 13485 (Medical Devices)
    • ISO 22301 (Business Continuity Management)
    • ISO/IEC 27001 (Information Security Management)
      among 30 other fields.

  • Governance Sector

    • ISO 37001 (Anti-Bribery Management)
    • ISO 37301 (Compliance Management)
    • ISO/CD 32210 (Sustainable Finance)
    • ISO 31000 (Risk Management)
    • ISO/IEC 38500 (IT Governance)
      among 30 other fields.