Large Corporations' Reckless Entry into Environmental Industry Strangles Small and Medium Enterprises

Entry of Large Corporations into the Recycling Industry "Criticism of Market Invasion Acts Like Taking the Entire Dining Table"

On the 8th, at the Win-Win Room of the Korea Federation of Small and Medium Business in Yeouido, Seoul, Noh Min-seon, head of the Future Strategy Research Group at the Small and Medium Business Research Institute (pictured left), is delivering the keynote speech at the "Discussion on the Current Status of Large Corporations Entering the Resource Recycling Industry and Win-Win Measures to Protect Small and Medium Resource Recycling Companies."
Photo by Korea Federation of Small and Medium Business Owners and Self-Employed Entrepreneurs

[Asia Economy Reporter Kim Jong-hwa] "It is an almost tyrannical, indiscriminate, and reckless intrusion that kills small-scale recycling businesses."

Recently, criticism is growing against large corporations entering the recycling industry under the banner of ESG (Environmental, Social, and Governance) management.

On the 8th, Shin Chang-eon, chairman of the Korea Resource Circulation Federation, said this at the "Discussion on the Actual Conditions of Large Corporations Entering the Recycling Industry and Win-Win Measures to Protect Small and Medium Recycling Companies" held at the Win-Win Room of the Korea Federation of SMEs in Yeouido, Seoul. He pointed out, "If large corporations want to fulfill their social responsibility by pursuing ESG management and enter the environmental business, it should be in the area of research and development of advanced recycling technologies, not the domain of small-scale recycling businesses in poor conditions."

Bang Ki-hong, executive chairman of the Korea Federation of Small Merchants and Self-Employed, also said, "It is very concerning that the tentacles of large corporations are now extending into the recycling industry," and Roh Hwan, vice chairman of the Korea Plastic Single Material Association, strongly opposed, saying, "It is a market invasion act that goes beyond just putting a spoon on a fully prepared table to taking the entire table away."

In particular, Vice Chairman Roh directly targeted companies such as SK (Construction, Chemicals, Innovation), Bokwang Group (CU), Lotte, LG, Hanwha, Daelim, Kolon, and National Plastic, saying, "These large and medium-sized corporations have so far put the environment aside, pursued only profits through production and sales, and as a result, amassed enormous wealth."

He added, "They have consistently acted as if they fulfilled their responsibilities by paying only a small amount of fees while producing massive amounts of waste without any interest in the recycling industry's ecosystem. Recently, as environmental values such as carbon neutrality, ESG, and the hydrogen economy have gained attention and the recycling industry has emerged, they have hastily and aggressively carried out inducement and acquisition of recycling companies."

Win-win measures proposed included "designation of suitable industries," "expansion of ESG cooperation between large and small-medium enterprises," and "structural improvement." Roh Min-seon, head of the Future Strategy Research Group at the Korea Institute for Industrial Economics & Trade, said in a keynote speech, "Cooperation between large and small-medium enterprises should be activated to spread ESG management among SMEs."

He also stated, "Among ESG-related industries such as low carbon, there are fields suitable for SMEs to operate businesses to induce reasonable role-sharing between large and small-medium enterprises," and "It can be recommended as a suitable industry for SMEs, or through cooperation between large and small-medium enterprises, large corporations can support technology and manpower when SMEs introduce ESG management facilities and establish strategies, enabling mutual growth."

Professor Bae Jae-geun of Seoul National University of Science and Technology emphasized, "Investment for structural improvement is necessary." Professor Bae argued, "The collection system for recyclable resources should be converted into a reporting and licensing system that allows eligibility screening, and the system should be organized to secure expertise in equipment and manpower and enable complete recycling."

Jo Nam-jun, chairman of the Korea Scrap Dealers Federation, stressed, "The existing recycling industry should be designated as a suitable industry for SMEs or a livelihood-type suitable industry." Chairman Jo appealed, "Large corporations should not enter the market through equity participation in small businesses, mergers and acquisitions, or new business expansions. Instead, they should purchase and use recycled materials produced by small recycling companies, support technological capabilities, cooperate in nurturing manpower needed for the recycling industry, and create a foundation to produce high-quality recycled materials. This is true win-win cooperation and the path for industrial development."

Choi Jae-hyuk, head of the Suitable Industry Support Office at the Win-Win Growth Committee, said, "Government support is needed to improve the current separate collection and recovery system, modernize facilities of intermediate and final recycling companies, and revitalize the recycling industry using waste resources," and added, "We will consider expanding the participation of large corporations in demand-related businesses in the recycling industry by supporting ESG activities of cooperating SMEs."

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