Top 300 Companies by Sales to Expand ESG Initiatives This Year... "Dedicated Staff Are Insufficient"

81% of Companies Plan to Increase ESG Budgets and Personnel... Securing Dedicated Staff is Key
Carbon Reduction, Renewable Energy, and Safety and Health Identified as Priority Tasks

[Asia Economy Reporter Lee Hye-young] A survey revealed that 8 out of 10 of the top 300 companies by sales plan to increase their budgets and personnel related to ESG (Environment, Social, Governance).

The Federation of Korean Industries announced on the 8th that 81.4% of ESG officers from the top 300 companies by sales responded this way. Among the respondents, 18.6% said they would maintain the scale of their ESG projects at last year's level, and no companies said they would reduce the scale.

Regarding the establishment of ESG committees, 88.4% of the respondents said they have either established (64%) or plan to establish (24.4%) such committees. Additionally, 82.6% reported that they are already operating (71.0%) or plan to establish (11.6%) dedicated ESG departments.

Although companies are gradually expanding ESG management, there is a shortage of personnel dedicated to this area. The survey showed that 93.3% of companies have ESG department employees with less than five years of work experience, indicating difficulties in securing experts. Specifically, 54.1% of members have two years or less of experience, and 39.2% have between three and five years.

Companies reported difficulties due to a lack of ESG expertise (37.6%) and insufficient specialized personnel (10.8%), totaling 48.4%. To address this, major groups such as Samsung, Hyundai Motor, SK, and LG have been increasing recruitment of experts in strategy, disclosure, and environmental fields since the end of last year to enhance ESG expertise.

Environment (E) remains the top priority this year... Carbon reduction and renewable energy utilization are the foremost tasks

Major companies consider the environment (67.4%) as the most important among ESG factors. Social (18.6%) and governance (14.0%) were both surveyed at around 10% levels.

Companies identified the top environmental priorities as reducing carbon emissions (37.1%), utilizing renewable energy (23.0%), and developing eco-friendly technologies (13.5%).

In fact, large-scale investment plans related to these areas continue to be announced. Hyundai Steel announced a plan to invest 440 billion KRW in eco-friendly facilities, and Hanwha Construction revealed plans to develop wind power projects exceeding 2GW by 2030.

Social (S) keywords are safety and health, with supply chain ESG risk highlighted

The top priorities in the social sector were workplace safety and health management (35.6%), supply chain ESG risk management (22.0%), human rights management (12.7%), and labor-management relations (8.3%).

Companies are particularly striving to expand safety systems. Lotte Chemical plans to invest a total of 500 billion KRW by next year in safety and environmental sectors for focused management. LG Chem is promoting the Magnolia Project, which aims to align environmental and safety management systems at all global business sites with global standards.

They are also proactive in managing supply chain ESG risks. In this survey, 82.6% responded that they are already implementing (40.7%) or plan to implement (41.9%) ESG risk management support such as ESG consulting for partner companies.

Some expressed caution, noting that if large companies actively engage in supply chain ESG risk management, they might face controversies over 'gapjil' (abuse of power).

The Federation of Korean Industries also asked ESG officers about their perceptions of recent social issues. When asked about shareholder derivative lawsuits, 58.1% responded that 'excessive intervention will inevitably stifle corporate management,' more than double the 24.4% who saw it as 'normal shareholder rights exercise.'

Regarding the spread of labor director systems, 80.2% responded with 'opposition to introduction' (46.5%) or 'premature' (33.7%).

"Strengthening support for corporate disclosure capabilities is necessary"

Regarding ESG-related non-financial information disclosure regulations, 72.1% said it is a 'burden on companies.'

From 2025, KOSPI companies with assets exceeding 2 trillion KRW will be required to disclose ESG (sustainability management reports). Additionally, the ISSB (International Sustainability Standards Board), established by the IFRS Foundation, is expected to announce a draft of global ESG disclosure standards this month, increasing domestic and international pressure related to disclosure.

However, companies expressed that uniform disclosure is practically difficult. Reasons cited include 'difficulty in quantifying non-financial information' (42.9%), 'excessive scope of mandatory disclosure items' (23.0%), and 'lack of specialized disclosure personnel' (16.2%).

Meanwhile, when asked about policies that the government and National Assembly should prioritize to activate ESG management in domestic companies, responses were 'expansion of tax support such as tax cuts and deductions' (39.3%), 'relaxation of ESG-related regulations' (26.6%), and 'expansion of financial support such as funding' (17.9%).

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