Local Government's First ESG Win-Win Cooperation Model Launched … Busan City Promotes 'This Year's Win-Win Management Support Project'

Recruitment of Companies from April 21 to May 8, Apply on Chamber of Commerce Website

Support for 30 Companies Including Prime Contractors and Partners in ESG Implementation Process Management

Busan City, together with the Busan Chamber of Commerce and Industry (Chairman Jang In-hwa), is promoting the ‘2023 ESG Win-Win Management Support Project.’

Busan City Hall.

The ‘ESG Win-Win Management Support Project’ is a newly launched initiative this year aimed at enhancing the competitiveness of local companies and spreading sustainable corporate growth models, as environmental, social, and governance (hereinafter ESG) management has emerged as a key factor for corporate survival and growth.

In light of the urgent need for countermeasures for domestic export companies that are insufficient in ESG management due to the ‘Corporate ESG Supply Chain Due Diligence Act’ being promoted by the European Parliament and the ‘Carbon Border Adjustment Mechanism (CBAM)’ in the United States and Europe, this project represents the first local government-led win-win model where prime contractors and partner companies jointly discover and establish ESG management as a ‘one team.’

The European Union ESG Supply Chain Due Diligence Act requires not only large companies operating within the EU but also their suppliers providing intermediate goods to undergo ESG management due diligence, with mandatory disclosure of corrective actions based on the results. This law is scheduled to officially take effect in 2024.

Currently, local company A, which exports automotive parts to the United States, has expressed interest in participating in the project, noting that the ESG evaluation score requirements for supply chains demanded by U.S. company B are steadily increasing, making a win-win cooperation project with partner companies necessary.

The project is divided into ▲‘Prime Contractor-Partner Company Win-Win Cooperation Project’ and ▲‘SME ESG Expansion Support Project.’

First, the ▲‘Prime Contractor-Partner Company Win-Win Cooperation Project’ is designed as a proactive response to supply chain ESG due diligence for export companies, requiring the participation of a prime contractor along with five or more partner companies.

If selected as a support target, ESG consultants from specialized institutions will provide ESG consulting to the prime contractors and in-depth ESG diagnosis to the partner companies. Based on the ESG level diagnosis, they will assist in identifying improvement tasks, establishing execution plans for each task, conducting industry-specific benchmarking research, formulating mid- to long-term ESG management strategies, and managing and supporting implementation tasks such as process improvements for participating companies.

The city plans to recruit a total of more than 30 companies, including five prime contractors and their participating partner companies.

Amid ongoing uncertainties in the global business environment, the city places great significance on prime contractors and partner companies building ESG management systems through win-win cooperation and growing together. It aims to create and disseminate this as a regional win-win model case where companies overcome difficulties through mutual cooperation and achieve co-growth, thereby encouraging and expanding ESG management participation among local companies.

In particular, since most partner companies are small local SMEs facing difficulties in preemptive responses and financial investment related to ESG management adoption, the ESG Win-Win Cooperation Project is expected to provide practical support for securing stable export channels, co-growth with prime contractors, and the expansion of ESG.

Next, the ▲‘SME ESG Expansion Support Project’ will select eight SMEs wishing to introduce ESG management and support them in constructing ESG evaluation indicators, conducting preliminary diagnosis and evaluation, and preparing diagnostic result reports.

Applications can be submitted from the 21st to May 8th via the Busan Chamber of Commerce and Industry website, and detailed information can be obtained by contacting the Busan Chamber of Commerce and Industry.

Shin Chang-ho, Director of the Digital Economy Innovation Office of Busan City, stated, “The whole world is rapidly emphasizing corporate responsibility regarding environmental, social, and transparent management, making it difficult to ignore this era’s demands. We hope this project will help local companies struggling to adopt ESG management, and we will spare no support to promote the spread of ESG management.”

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