"Implementation of Business Conversion Plan Approval System for Supporting ESG Improvement in SMEs"

A system to support the improvement of Environmental, Social, and Governance (ESG) for small and medium-sized enterprises (SMEs) will be fully implemented. On the 2nd, the Ministry of SMEs and Startups announced, “The amendment to the Enforcement Decree of the Special Act on the Promotion of Business Conversion for SMEs, which includes prioritizing the approval of business conversion plans for SMEs pursuing ESG improvements, has passed the Cabinet meeting.”

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The target for business conversion plans are SMEs that find it difficult to secure competitiveness due to changes in the economic environment or are pursuing business conversion into future promising industries or national strategic industries. They must have been in business for more than 3 years and have at least 5 regular employees. The Structural Innovation and Business Conversion Support Center diagnoses and consults with applicant companies to decide on approval. Once approved, the plan must be implemented for 3 years, and the government will provide support such as funding and research and development (R&D).

With this amendment, efforts to support changes in SMEs responding to ESG management demands from advanced countries and global corporations can be reinforced. The Ministry of SMEs and Startups will reflect this system in its official notice (Operational Guidelines for the Promotion of Business Conversion for SMEs). Evaluation items will be simplified during priority approval, and the approval period will be shortened from within 30 days to within 20 days. Priority approval will be implemented starting from the 16th.

Kim Woo-jung, Regional Policy Officer at the Ministry of SMEs and Startups, said, “The business conversion plan approval system supports SMEs that seek to create new growth engines by assisting with plan establishment, financing, and research and development,” adding, “We expect that priority approval will quickly support business conversion and lead to the creation of new added value.”

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