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'Quantifying ESG performance crucial for sustainable growth'

Korea Chamber of Commerce and Industry (KCCI) Vice President Woo Tae-hee, front row fourth from left; head of the Industrial Policy Office of the Ministry of Trade, Industry and Energy Kang Kyung-sung, front row fifth from left; and SK Social Value Committee Chairman Lee Hyung-hee, front row sixth from left; pose with other participants during the 1st KCCI ESG Management Forum held at the KCCI headquarters in downtown Seoul, Thursday. Courtesy of KCCI
Korea Chamber of Commerce and Industry (KCCI) Vice President Woo Tae-hee, front row fourth from left; head of the Industrial Policy Office of the Ministry of Trade, Industry and Energy Kang Kyung-sung, front row fifth from left; and SK Social Value Committee Chairman Lee Hyung-hee, front row sixth from left; pose with other participants during the 1st KCCI ESG Management Forum held at the KCCI headquarters in downtown Seoul, Thursday. Courtesy of KCCI

By Yi Whan-woo

Any efforts and activities related to environmental, social and corporate governance (ESG) should be measureable as monetary value for the companies to better cope with sustainable growth, according to an expert.

Speaking at the 1st Korea Chamber of Commerce and Industry (KCCI) ESG Management Forum, Thursday, Na Seok-kwon, president of the Center for Social Value Enhancement Studies, said quantifying ESG performance should be a "top priority."

"If you don't measure it, you can't manage it," Na said, citing business management guru Peter Drucker. "It is important to be able to recognize where each company is located by quantifying the monetary value of ESG activities."

He also said ESG measurement efforts are needed to "counter the big wave" of ESG and that they should "choose a surfing strategy."

Na was one of the three presenters at the forum.

KCCI Vice President Woo Tae-hee, second from right, speaks during the 1st KCCI ESG Management Forum held at KCCI headquarters in downtown Seoul, Thursday. Courtesy of KCCI
KCCI Vice President Woo Tae-hee, second from right, speaks during the 1st KCCI ESG Management Forum held at KCCI headquarters in downtown Seoul, Thursday. Courtesy of KCCI

Jointly organized by the Ministry of Trade, Industry and Energy and the law firm YOON & YANG LLC, the forum was the first of its kind after SK Group Chairman Chey Tae-won took office as KCCI chairman in March. It was held at KCCI headquarters in central Seoul.

The forum focused on how Korean companies can enhance ESG management that has become a buzzword for businesses around the world, as well as manage related risks and offer policy support.

The country's third-largest conglomerate, SK Group, has been at the forefront in joining the global ESG bandwagon, with its key affiliates taking aggressive steps for eco-friendly management.

The forum was attended by KCCI Vice President Woo Tae-hee; head of the Industrial Policy Office of the Ministry of Trade, Industry and Energy Kang Kyung-sung; SK Social Value Committee Chairman Lee Hyung-hee; Federation of Middle Market Enterprises of Korea Vice President Bahn Won-ik; POSCO Executive Director Yang Won-joon; Hyundai Motor Managing Director Lee Byung-hoon; KT Managing Director Lee Seon-joo; Pulmuone's management department head Lee Jae-hyuk; Korea University professor Kim Sun-woo; and Advanced Institutes of Convergence Technology Director Kim Sun-woo, among other guests.

Woo noted that ESG has become "a prerequisite for the survival of companies around the world" and that companies here are no exception.

He accordingly urged firms to adopt "an attitude of recognizing ESG as a new opportunity rather than a burden."

"To this end, an approach of providing incentives such as policy financing rather than regulation is required," he added.

Kang said the government is recognizing ESG as "a new challenge as well as a golden opportunity to advance the competitiveness of companies and industries to the next level."

He promised to provide necessary support, such as expanding incentives.

One of the three presenters, Kim Dong-soo, director of the Substantiality Management Promotion Group at the Korea Productivity Center, said ESG is "entering the stage of becoming the standard for corporate management and investment."

He stressed that companies should pay attention to achieving ESG performance rather than symbolic activities.

"There are many companies that set up ESG committees, but the establishment of such committees should not be the goal," he said. "The key is whether the committee has the function and role to proactively manage ESG risks and derive new business opportunities."

The remaining presenter, Lee Geun-woo from YOON & YANG LLC, assessed companies that are just starting to respond to ESG are confused due to the existence of varying domestic and foreign ESG evaluation criteria.

He pointed out that domestic companies that have been effective in pursuing ESG policies also use foreign standards, such as Global Reporting Initiative (GRI) guidelines, Sustainability Accounting Standards Board (SASB), Task Force on Climate-related Financial Disclosure (TCFD) and, at the same time, respond well to specialized domestic issues such as fair trade and shared growth.

He went on to say companies that are just starting ESG do not need to be perfect from the beginning, but focus on "a step-by-step response from the perspective of investors' demands, their own needs and legislation."

KCCI plans to hold the 2nd KCCI ESG Management Forum in May. It will deal with investment issues related to ESG in the future.


Yi Whan-woo yistory@koreatimes.co.kr


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