"ESG Committees of Top 30 Domestic Groups Show Low Interest in Environment (E) and Social (S)"

FKI Announces 'Analysis and Implications of ESG Committee Agenda'
Discussion Topics Ranked: ESG Management (34.9%) > Governance (32.3%) > Investment & Management (17.4%) > Social (10.2%) > Environmental (4.4%)

[Asia Economy Reporter Han Yeju] Since the launch of ESG committees by the top 30 domestic conglomerates in 2021, these committees have primarily focused on establishing and implementing ESG strategies and improving governance.

The Federation of Korean Industries (FKI) announced on the 20th through its report "Analysis and Implications of ESG Committee Agendas" that it analyzed ESG-related activities and key agendas of 15 groups among the top 30 conglomerates that have established ESG committees and disclosed related discussions.

According to the FKI, from January 2021 to June 2022, over one and a half years, 48 committees from 15 groups held a total of 257 meetings, averaging 5.4 meetings per committee. The total number of committee members was 266, with an average of 5.5 directors participating per committee (including the chairperson), and the attendance rate of directors was 98.1%. The total number of agendas was 654, with about 2.5 agendas presented per meeting. Among these, 278 were resolutions (276 approved, 2 rejected), and the remaining 371 were reports, deliberations, or review items. (5 agendas were undisclosed)

By category, governance (G) agendas accounted for a larger proportion than environmental (E) and social (S) agendas. Specifically, the breakdown was △ ESG management agendas 34.9% △ governance (G) agendas 32.3% △ general management and investment agendas 17.4% △ social (S) agendas 10.2% △ environmental (E) agendas 4.4%. (Undisclosed agendas 0.8%)

Meanwhile, the high proportion of resolutions in the governance (G) category, excluding ESG management, was attributed to the fact that many issues in this area are regulated by law.

Among ESG management agendas, the largest share was for establishing strategies and plans to set the direction for ESG management at 39.5% (90 cases). This was followed by committee operations such as appointing chairpersons at 23.7% (54 cases), and progress on ESG initiatives at 15.8% (36 cases). Discussions on ESG-related disclosures and various report publications accounted for 11.4% (26 cases), indicating strong corporate interest in ESG disclosures. There were also 15 discussions related to ESG evaluations by organizations such as the Korea Corporate Governance Service (KCGS) and Morgan Stanley Capital International (MSCI), showing attention to managing ESG ratings.

Among governance-related discussion agendas, the most frequently discussed topic was "approval of transactions with internal parties and related parties," accounting for 64.9% (137 cases). Companies also made autonomous efforts to enhance transparency in corporate ethics (10.4%, 22 cases) and fair trade (8.1%, 17 cases) by establishing ethical codes and operating fair trade compliance programs. Next, agendas aimed at "enhancing shareholder value," such as dividends, accounted for 6.6% (14 cases) of all governance discussion agendas.

Environmental discussion agendas included carbon strategy agendas at 58.6% (17 cases) and eco-friendly business-related agendas at 41.4% (12 cases). Among social discussion agendas, social contribution agendas accounted for the largest share at 68.7% (46 cases), followed by safety and health at 17.9% (12 cases), and human rights at 6.0% (4 cases). Among investment and management discussion agendas, investment and equity participation agendas accounted for 36.8% (42 cases), other business-related agendas 18.4% (21 cases), and management planning agendas 16.7% (19 cases), indicating that ESG considerations are also integrated into general management areas.

Kim Junho, head of the ESG team at FKI, stated, "Over the past one and a half years, companies have focused on building infrastructure to activate ESG," adding, "It is necessary for the government to actively consider the ESG areas that companies are interested in when establishing ESG-related standards and policies such as disclosures and evaluations."

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