Korean Global Companies Identify Climate, Growth, and Population as Top 3 Management Risks

Domestic global companies identified climate, growth, and population as the three major risks significantly impacting corporate management.

On the 21st, the Federation of Korean Industries building in Yeouido, Yeongdeungpo-gu, Seoul. The Federation plans to address the agenda of changing its institution name to Hankyunghyeop at the extraordinary general meeting on the 22nd. Photo by Hyunmin Kim kimhyun81@

On the 28th, the Korea Economic Association (KEA) announced that the results came from a survey on 'Corporate Perceptions of Major Domestic and International Risks' conducted among 155 executive-level personnel from global companies based in Korea.

This survey selected the risks considered important by companies in order of priority, focusing on the likelihood of occurrence and ripple effects among a total of 25 detailed risks across five major fields: politics, economy, society, technology, and environment.

21.3% of respondents chose damage caused by extreme weather such as heatwaves, heavy snow, and heavy rain as the number one core risk, followed by slowdown in growth potential (14.8%) and changes in population structure due to low birthrate and aging (13.5%) ranking second and third, respectively.

Analysis of the interrelationships among risks showed that the slowdown in growth potential had strong links with other risk factors. Next in order were changes in population structure and damage caused by extreme weather.

The three major risks were also found to be related to issues such as expanded macroeconomic uncertainty, labor shortages in key industries, global geopolitical risks like nationalism, divisions and conflicts caused by inequality, and depletion of essential food resources.

In the technology sector, it was analyzed that since responses can be managed at the individual company level, corporate preparedness is relatively more proactive compared to the urgency of the risks.

KEA suggested strengthening public-private cooperation as an alternative. Since risks arise from complex interrelations of domestic and international factors, it is necessary to establish a cooperative governance system involving role-sharing among various entities such as companies, government, and international organizations.

KEA stated, "It is also necessary to build an appropriate incentive system, such as tax benefits for in-house low birthrate countermeasures and reshoring support for supply chain reorganization, so that private companies can actively participate in responding to public risk areas."

Internally, companies were advised to establish dedicated organizations such as Chief Risk Officer (CRO) positions to enable effective monitoring and response.

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