Distribution and Consumer Goods Industry ESG... "Upcycle, Vegan, Social Responsibility"

[Asia Economy Reporter Ji-hwan Park] In the distribution and consumer goods industries, ESG (Environmental, Social, and Governance) business trends such as Upcycle, Vegan, and social responsibility have been presented.

According to the report "The Future Strategy of Distribution and Consumer Goods Companies in the ESG Era" published by Samjong KPMG on the 6th, it emphasized that ESG business implementation should be focused on as a core management strategy for distribution and consumer goods companies.

According to the "2021 KPMG Global Consumer Trends Survey," recent consumers place high value on corporate social responsibility as well as transparency and honesty. Ninety percent of consumers showed a higher willingness to pay for products from ethical companies that contribute to society. Thirty-seven percent of consumers responded that they have come to prefer sustainable products and services more since COVID-19.

The report analyzed ESG business trend cases by sector, including distribution, food and beverage, fashion, and cosmetics. The number of consumers deciding purchases based on the eco-friendliness or ethical nature of brands and products has increased. In particular, the upcycle trend is gaining attention as part of environmental activities within ESG. Food companies are practicing ESG management through "food upcycling," which reprocesses by-products or hard-to-sell ingredients generated during food manufacturing into completely different foods. Examples include gluten-free flour made from soybean pulp or vegan cookie dough made using beer by-products.

In the fashion industry, there is active engagement in "fashion upcycling," which develops eco-friendly fibers or fashion products from waste plastics. Domestic textile company Hyosung TNC developed an eco-friendly fiber called Regen by removing impurities from discarded PET bottles and melting the plastic. Fashion company Handsome is producing eco-friendly interior finishing materials using inventory.

The vegan trend is also spreading. In the food market, interest in plant-based alternative foods is high. In the cosmetics industry, "clean beauty" is gaining attention. There is a noticeable movement to strengthen ESG business by launching vegan beauty products certified as vegan and organic. In the fashion industry, efforts are being made to develop vegan leather using mushroom mycelium or sugarcane. The number of fashion companies attempting to replace animal leather used in bags and sneakers with vegan leather is increasing.

As corporate social responsibility is emphasized, distribution and consumer goods companies are also active in social-related activities. Food and beverage companies are forming partnerships with local farms and municipalities to promote win-win management across the supply chain, engaging in local sourcing or strengthening contract farming. Domestic and international cosmetics companies are focusing on social responsibility activities through fair trade procurement of cosmetic ingredients.

The report urged distribution and consumer goods companies to leap forward as frontiers leading the ESG paradigm. It explained that ESG management beyond just establishing ESG strategies is essential.

Shin Jang-hoon, leader of the Distribution and Consumer Goods Industry at Samjong KPMG, said, "To be chosen by consumers, distribution and consumer goods companies must inevitably engage in ESG management strategies to survive," adding, "ESG is a long-term momentum and a trend of the times, and domestic distribution and consumer goods companies must establish and execute leading ESG management strategies to enhance corporate value."

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