Ryu Young-jae, CEO of Sustainvest, "Companies Must Present 'ESG Growth Stories' to Investors"

On the 20th, Ryu Young-jae, CEO of Sustainvest, is giving a lecture on the spread of ESG investment and corporate response strategies at the '2021 Asia Economy IPR Forum,' held via online live broadcast at the Asia Economy building in Jung-gu, Seoul. Photo by Kim Hyun-min kimhyun81@

[2021 Asia Economy IPR Forum]

Ryu Young-jae, CEO of Sustainvest, Emphasizes 'ESG Virtuous Cycle'

Importance of ESG Indicator Management... Failure in Risk Management Leads to Decline in Corporate Value

[Asia Economy Reporter Park So-yeon] "To create long-term premium value, investors must be presented with ESG (Environmental, Social, Governance) growth stories that reflect the spirit of the times. Companies need to establish a virtuous ESG cycle by incorporating the opinions of ESG investors into their management policies."

Ryu Young-jae, CEO of Sustainvest, gave a lecture on the expansion of ESG investment and corporate response strategies at the '2021 Asia Economy IPR Forum' held via YouTube Live on the 20th, under the theme of 'Changes in Corporate Activities in the Metaverse Environment.'

CEO Ryu stated, "ESG represents intangible value and accounts for a large portion of market capitalization," adding, "Since corporate value changes according to ESG performance, the need for managing ESG indicators demanded by investors is increasing." He noted that failure in ESG risk management results in an immediate decline in corporate value.

ESG investment refers to investment activities that consider not only a company's financial indicators but also non-financial performance such as environmental and social impact and transparent management. The global ESG investment asset size has increased more than threefold from $13.3 trillion in 2012 to $40.5 trillion in 2020. Asset management firms have also begun to regard ESG as the most important factor in deciding corporate investments.

CEO Ryu explained that with the emergence of new policies and regulations related to ESG, the rise of active stakeholders such as consumers and minority shareholders filing class-action lawsuits, demands for corporate transparency, and the mainstreaming of climate change and environmental issues, investors now consider whether companies manage ESG indicators as a key investment point.

He added, "The importance of risks and opportunities related to ESG is increasing," and "Because ESG is closely correlated with a company's long-term performance, to enhance corporate value, companies must discover businesses in ESG-based innovation fields and present them as a blueprint."

He continued, "Focus should be placed on ESG issues suited to the Korean context," emphasizing, "the board of directors must directly oversee ESG management, and the IR department should enhance its ESG expertise."

CEO Ryu joined Meritz Securities in 1988 and worked at securities firms for over ten years. In the early 2000s, while studying in Europe, he witnessed the spread of ESG management and founded Sustainvest in 2006. Through 15 years of ESG investment research, he is recognized as a leading ESG expert in Korea.

He said, "As ecosystems are destroyed and zoonotic infectious diseases spread, environmental concerns are growing. The Biden administration's key positions are dominated by former members of BlackRock, the world's number one asset management firm emphasizing ESG investment, signaling a global superpower shift toward ESG."

CEO Ryu remarked, "Financial statements created 100 years ago cannot evaluate future companies," and "In an era where capital and factories traditionally created added value, the growth potential of human capital companies equipped with innovative ideas, data, and democratic communication culture has increased." He added, "When attracting investors or conducting an IPO, companies need an 'ESG evaluation framework' to explain these intangible assets."

He emphasized, "In the West, ESG investment has become widespread through decades of effort, and Korea is rapidly catching up. Although all institutions and companies are suddenly advocating ESG investment, it is necessary for each institution to work together to prevent 'ESG washing,' where ESG is only superficial."

This content was produced with the assistance of AI translation services.