State-run organizations to strengthen ESG values

Deputy Prime Minister and Finance Minister Hong Nam-ki / Korea Times file

By Lee Kyung-min

The government plans to require state-run entities to increase the number of environmental, social and governance (ESG) criteria in organizational governance plan subject to public disclosure, in a move to pave way for private firms to follow suit to advance sustainable growth initiative.

This is in line with similar efforts by the Financial Services Commission (FSC) and Financial Supervisory Service (FSS), oversight authorities that are increasingly being mindful of the importance of the implications of ESG values in the financial market.

The Ministry of Economy and Finance said that the organizations will have to submit specifics to meet four new overarching criteria created to place greater emphasis on EGS values. They are safety and eco-friendliness, mutual growth and cooperation, work-life-balance and social responsibility.

Their plans will be disclosed on All Public Information in One (ALIO), a ministry-operated website where management information on Korea's 350 state-run, quasi-governmental entities is available.

This includes the number of employees, hiring records, expenses and salaries of CEO and high-ranking officials, employee health benefits, union operations, punitive or disciplinary actions against employee misconduct, the number of ongoing court disputes, financial statements, tax returns, audit reports, irregularities discussed during National Assembly audits, customer satisfaction, board meeting minutes, examples of innovative management, biddings to win organization-commissioned contracts and research reports.

They will be required to disclose reports on company-wide efforts to maintaining safety and achieving carbon-neutrality backed by the number of "green" products bought and ways to contribute to emissions reductions.

Social responsibility criteria will be strengthened to require volunteer work to be mandatory, instead of optional.

Also included will be purchase records for products made by people with severe physical or intellectual disabilities, and small- and medium-sized enterprises (SMEs), a measure that will help increase their chances of earning a stable source of income.

In addition, information on paid family leave and the operation of workplace daycare centers will be available.

"The measure is expected to help state-run organizations better fulfill ESG values in a transparent and accurate manner, which in turn will encourage private firms to set and implement similar goals," the ministry said.

Financial Services Commission Chairman Eun Sung-soo / Korea Times file

The FSC said Jan. 14 that from 2025 submitting a sustainability report will no longer be optional for KOSPI-listed firms with assets of over 2 trillion won ($1.7 billion), a measure that all KOSPI-listed firms will be subject to from 2030.

The FSS set up a sustainable finance team under its international department in January to better monitor local financial services firms regarding ESG criteria. This was a follow-up measure to a meeting held between FSS Governor Yoon Suk-heun with UN Environment Programme Finance Initiative (UNEP FI) head Eric Usher in July 2018.

Site Map E-paper Subscribe Register LogIn
Site Map E-paper Subscribe Register LogIn