|Participants listen to speakers during the "2021 Europe-Korea Virtual Business Conference" jointly hosted by the Korea Chamber of Commerce and Industry (KCCI) and the European Chamber of Commerce in Korea (ECCK) in Seoul, July 2. Courtesy of KCCI|
Large firms asked to cope with global, domestic issues on environment
By Yi Whan-woo
Biodiversity is becoming another keyword after climate change for listed companies in disclosing environmental, social and governance (ESG) information, according to multiple business and finance experts.
During the "2021 Europe-Korea Virtual Business Conference" jointly hosted by the Korea Chamber of Commerce and Industry (KCCI) and the European Chamber of Commerce in Korea (ECCK) in Seoul, July 2, participating experts said large business groups should cope with both global and domestic issues at the same time when it comes to ESG management.
The two chambers co-hosted the conference to share each other's experience of ESG that seeks joint prosperity between the business community and society.
For listed firms, ESG management is becoming increasingly important with regards to their share values. Companies will be required accordingly to disclose mandatory ESG reports from 2025.
"To predict future changes in the ESG ecosystem, we need to pay attention to the newly proposed disclosure standards along with monitoring major global disclosure standards," said Kim Dong-soo, head of the Korea Productivity Center and one of the speakers on ESG disclosure.
Among the global criteria, he said the firms should especially pay attention to a taskforce on nature-related financial disclosures (TNFD), an initiative jointly launched by a coalition of international organizations, including the U.N. Development Programme, U.N. Environment Programme Finance Initiative (UNEP FI) and World Wide Fund for Nature.
Lim Dae-woong, the UNEP FI Korea representative, voiced a similar view, noting that the G7 decided in June to make the disclosure of climate change measures in financial information in accordance with TNFD
"TNFD has become a hot issue in the capital market as it is being integrated into financial supervision," Lim said.
Kim Jin-sung, a team head at the Korea Corporate Governance Service, called the expansion and standardization of ESG disclosure "an irresistible international trend."
"And preemptive response is a way to reduce risks and costs. Rather, the use is increasing, and if companies use it well, it can be an opportunity to raise capital," he emphasized.
In relation to ESG management strategy, Korea University professor Rhee Jay-hyuk said related discussions have begun only recently in Korea while such management is a global phenomenon.
He accordingly said, "Large companies need a dual strategy that considers global and local issues at the same time, while SMEs need to understand ESG and recognize the necessity first."
Christian Heller, Value Balancing Alliance (VBA) president and vice president of German multinational chemicals firm BASF, said VBA enables corporate decision-makers to include sustainability in their business strategies to create long-term value and meet disclosure needs.
VBA refers to a business alliance that develops a global standard model for measuring ESG values.
The conference was participated in by KCCI Vice Chairman Woo Tae-hee, ECCK Chairman Dirk Lukat, and EU Ambassador to Korea Maria Castillo-Fernandez, among others.
Yoon Chul-min, head of the ESG management team at the KCCI explained the chamber plans to hold occasional conferences to quickly inform domestic companies of the latest global trends in ESG disclosure and establish response strategies.