EY Hanyoung "Only 16% Respond That They Are Very Well Prepared for ESG Disclosure"

Preparation for ESG Disclosure Varies by Company Size
Majority of Respondents Consider ESG Issues Important

Only 16% of domestic companies responded that they are 'very well prepared' for Environmental, Social, and Governance (ESG) disclosures. Additionally, one in four companies were found to lack an ESG response organization within their company.

Global accounting and consulting firm EY Hanyoung disclosed on the 13th the results of the '2023 EY Hanyoung Future of Accounting Audit Survey,' conducted last month with a total of 708 employees from accounting, finance, and audit departments of domestic companies.

According to EY Hanyoung's survey investigating companies' ESG information reporting and disclosure preparation status and awareness, only 16% of respondents answered that they are 'very well prepared for ESG disclosures.' The proportion of those who responded that 'preparation is insufficient' was 31%, and 11% answered that they are 'not prepared at all,' indicating that domestic companies are inadequately prepared for ESG disclosures.

Preparation for ESG disclosures varied according to company size. Among companies with assets of 2 trillion KRW or more, 25% responded that they are 'very well prepared' for ESG disclosures, whereas only 5% of companies with assets under 500 billion KRW gave the same response. Notably, 30% of companies with assets under 500 billion KRW answered that they are 'not prepared at all.'

Furthermore, preparation of ESG response organizations within companies was found to be necessary. The response rate indicating that there is no organization to handle ESG reporting and disclosures reached 26%. In particular, more than half (57%) of respondents from companies with assets under 500 billion KRW said they do not have an ESG response organization.

Despite the overall lack of preparation for ESG reporting and disclosures, the majority of respondents tended to consider ESG issues important. Seventy-eight percent of respondents answered that ESG issues should be addressed even if short-term financial performance and profitability decline. Compared to the results of EY’s global survey on the same question, domestic responses (78%) were 23 percentage points higher than global responses (55%). Among respondents from companies with assets of 2 trillion KRW or more, 84% answered this way, showing that larger companies are more actively committed to resolving ESG issues.

Lee Kwang-yeol, Head of the Audit Division at EY Hanyoung, said, "The results of this survey show that awareness of the importance of ESG is expanding among domestic companies, but actual preparation is not keeping pace. Especially with the mandatory ESG information disclosure approaching, companies must thoroughly prepare by establishing ESG response organizations, understanding disclosure standards, and reviewing systems for information production."

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