[2021 Asia Financial Forum] Experts Emphasize Focusing on the G (Governance) Value in ESG Management

Panel of 4 Domestic and International Experts on ESG Management
"Corporate Governance Improvement Ultimately Benefits Shareholders"

On the 25th, at the Westin Chosun Hotel in Jung-gu, Seoul, a panel discussion chaired by Professor Hong Jong-ho of Seoul National University Graduate School of Environmental Studies is underway at the 10th 2021 Seoul Asia Financial Forum, held under the theme of future financial innovation and sustainable growth. Park Kwang-woo, Dean of the Graduate School of Finance at KAIST College of Business, is speaking. Photo by Moon Ho-nam munonam@

[Asia Economy Reporter Kiho Sung] “Harvey Weinstein, a major Hollywood film producer in the United States, treated employees and clients carelessly and committed wrongful acts. The board of directors knew about Weinstein’s misconduct but took no action. Ultimately, the company went bankrupt and its stocks became worthless.”

Experts related to ESG (Environment, Social, Governance), which has recently emerged as a key topic in corporate management, emphasized that the importance of governance (G) is increasing as much as the environment (E) due to climate change. They explained that management based on the importance of G expands the overall 'pie' of the company, which will also benefit shareholders.

On the 25th, at the second session titled 'Green Leadership for Sustainable Management' of the '2021 Seoul Asia Financial Forum' held at the Westin Chosun Hotel on Sogong-ro, Jung-gu, Seoul, Park Kwang-woo, Dean of the Graduate School of Finance at KAIST Business School; Ben Caldecott, Director of the UK Green Finance Institute and Professor of Sustainable Finance at Oxford University; Michael Sheren, Senior Advisor at the Bank of England (BOE); and Pierce Haben, Director of the European Banking Authority (EBA), stated this. The moderator of the discussion was Professor Hong Jong-ho of Seoul National University’s Graduate School of Environmental Studies.

When Professor Hong asked, “Among the overall ESG evaluations, which element seems to be the most important?” the experts said that attention should be paid to 'G,' which stands for governance.

Senior Advisor Sheren emphasized, “The importance of each ESG element may vary by industry, but G is about how a company makes and executes decisions, so it is the most important.” This means that in a governance environment where the CEO cannot demonstrate leadership, like Harvey Weinstein who triggered the MeToo movement, neither E nor Social (S) can be properly achieved.

Dean Park explained that the scope should be expanded from G to S. He said, “The time has come to redefine corporate goals,” and argued, “With the rise of ESG management, corporate goals are no longer just maximizing shareholder wealth but are expanding to social roles.” He emphasized that it is time to rethink the fundamentals of companies, stating, “Minimizing and zeroing carbon emissions, social contributions including communities, and employee-centered management are gaining attention,” and “Accordingly, the goals of the board of directors also need to be redefined.”

On the 25th, a panel discussion chaired by Professor Hong Jong-ho of Seoul National University Graduate School of Environmental Studies is taking place at the 10th 2021 Seoul Asia Financial Forum held at the Westin Chosun Hotel in Jung-gu, Seoul, under the theme of future financial innovation and sustainable growth. Photo by Moon Ho-nam munonam@

Dean Park also addressed the traditional notion that “the goal of a company is to maximize shareholder profits,” saying, “Stakeholder capitalism based on ESG management does not infringe on shareholder interests.” He explained, “Becoming a respected company can enhance employees’ pride and motivate their work, and also gain recognition from society. Ultimately, it can increase the overall pie that all stakeholders can share.”

"The Environment Is an Unavoidable Challenge... 'Greenwashing' Should Not Be Neglected"

Advice on the environment also followed. Director Haben said the reason ESG management has recently gained attention is that “public awareness of the risks of climate change and the need to take action has increased,” adding, “Since the COVID-19 pandemic, there have been growing calls for environmentally friendly economic reconstruction.”

He emphasized, “Currently, more attention is focused on the environment in terms of priority, but all ESG elements are important.” He said, “In the case of the environment, it is concretized because it can be measured in specific areas like carbon related to climate change, but qualitative evaluations are also important for social and governance risks.”

Professor Caldecott also pointed out the importance of E, saying, “Climate-related ‘physical risks’ and ‘transition risks’ are urgent issues within ESG,” but he noted, “Biodiversity is becoming increasingly important over time.”

He criticized the green taxonomy as unsuitable for preventing 'greenwashing,' which is the practice of promoting something as environmentally friendly when it is not. He said, “For example, excessive classification systems are rife with corporate lobbying to lower thresholds during the classification process,” and argued, “Personally, green taxonomy is not suitable as a method to address greenwashing.” He explained that the best way to prevent greenwashing is to empower regulatory agencies to enforce regulations. He also added, “Providing customers with information about whether the products and services sold to them have an impact on greenwashing can also be effective.”

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