Deloitte Korea: "Responsible Investment for Private Equity, a New Market Standard Not Just Regulation"

ESG Strategies Proposed
for Transitioning Domestic Private Equity to Responsible Investment

Deloitte Korea Group has proposed environmental, social, and governance (ESG) promotion strategies to support the transition of domestic private equity (PE) to responsible investment.

Byungsam Kim, Partner of the Management Consulting Division at Deloitte Korea Group, participated as a speaker on March 25 at the “National Assembly Policy Forum for the Trends and Expansion of Responsible Investment at Home and Abroad,” co-hosted by Assemblyman Kim Yoon of the Democratic Party of Korea and the Korea Sustainability Investing Forum (KoSIF). Delivering the keynote presentation, he emphasized, “Alternative investments are no longer solely focused on returns but are being redefined as responsible investments based on ESG.” He identified regulatory changes—especially in Europe—as the main driver of this transition. The European Union (EU) has mandated ESG disclosures for financial institutions and investment products through the Sustainable Finance Disclosure Regulation (SFDR) and the Corporate Sustainability Reporting Directive (CSRD). He explained that ESG now functions as a policy tool that not only requires the disclosure of information but also controls the flow of capital itself.

Byungsam Kim, Partner of the Management Consulting Division at Deloitte Korea Group, participated as a speaker at the "National Assembly Policy Forum for the Trends and Expansion of Responsible Investment at Home and Abroad," where he suggested ESG promotion strategies for the transition to responsible investment by domestic private equity funds (PE). Deloitte Korea Group

Kim also highlighted the changing role of pension funds (LPs), stating, “ESG now serves as a core criterion not only in post-investment management but also from the investment screening stage.” In practice, major European pension funds are requiring ESG Due Diligence Questionnaires (ESG DDQ) and reflecting ESG obligations in investment contracts, establishing a concrete responsible investment framework.

He pointed out that ESG disclosure is becoming increasingly data-driven, citing major trends such as KPI management based on EDCI (ESG Data Convergence Initiative), expansion from Scope 1 and 2 to Scope 3 and financed emissions, and the introduction of third-party verification. He stressed that the next three years will be a decisive turning point for domestic private equity. He added, “In the future, capital will move to asset managers who can explain their ESG approaches. Responsible investment is not a matter of regulation, but a new standard in the market.”

Finally, Kim stated, “Private equity plays a key investor role in the capital market by enhancing corporate value and supplying growth capital. I hope that, in pursuit of responsible investment, the integration of ESG factors throughout all investment processes, KPI-based management, and transparent disclosure will be further promoted through this opportunity.”

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