FKI: 76% of Top 30 Groups Support ESG Management of Partner Companies

Supporting Partners to Actively Participate in ESG Management

[Asia Economy Reporter Park Sun-mi] It has been revealed that 76% of companies affiliated with Korea’s top 30 conglomerates support their partners’ ESG (Environmental, Social, and Governance) management. These companies assist their partners in enhancing sustainability capabilities through ESG evaluation, consulting, education, establishing codes of conduct, and direct support for environmental and safety management.

On the 14th, the Federation of Korean Industries announced the results of the "Survey on ESG Management in the Supply Chains of the Top 30 Groups," stating that 57 out of 75 companies publishing sustainability management reports?accounting for 76%?manage their partners’ ESG operations. Examining the types of support among these 75 companies publishing sustainability management reports, it was found that ▲62.7% (47 companies) conduct ESG evaluations of partners, ▲60.0% (45 companies) provide ESG consulting and education, ▲58.7% (44 companies) establish codes of conduct, and ▲40.0% (30 companies) offer direct support for environmental and safety management.

Companies assess the sustainability of their partners to identify ESG risks, and if any risk factors are found, they require corrective actions. ESG evaluations are mostly conducted through procedures including ▲partners’ online or written self-assessments, ▲on-site inspections and audits by evaluation firms, ▲risk identification, and ▲incentives for excellent companies as well as improvement measures and sanctions for high-risk groups.

Consulting and education programs aimed at enhancing ESG management capabilities include consulting for acquiring environmental and safety-related certifications, planning environmental management policies, and setting goals. On-site inspections and consulting support for information security and compliance ethics management are also provided.

Many companies also assist in managing their partners’ sustainability. Hyosung Heavy Industries supports the installation of dedicated rest areas for workers and dust collection systems at partner sites to improve working conditions. LS Electric reviews permits with a focus on pollutant emissions and risk levels for partners and supports pollutant treatment technologies accordingly.

Some companies establish a “Partner Code of Conduct” and support partners in complying with it. The code of conduct mainly covers areas such as human rights and labor, safety and health, environment, corporate ethics, and management systems. While it is common to encourage partners to voluntarily implement the code of conduct, Samsung Electronics, Samsung Biologics, SK Telecom, and SK Inc. explicitly include the obligation to comply with the partner code of conduct in contracts to actively involve partners in ESG management.

Lee Sang-yoon, Head of Communications at the Federation of Korean Industries, stated, “ESG is still an unfamiliar concept to small and medium-sized enterprises, but it has become an essential factor, not a choice, for growth and sustainability.” He emphasized, “SMEs need to apply ESG codes of conduct to their business and actively utilize various ESG support programs from primary contractors and government ESG support projects.”

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