Corporations fall behind in ESG communication: EY Korea

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By Anna J. Park

While environmental, social and governmental (ESG) principles are expected to continue to wield increased influence in consumer decisions, corporations surveyed recently, showed that they were lacking when it came to their communication efforts about ESG activities.

This finding was discovered by EY Korea's survey of 115 participants of the “ESG Best Practice” forum, which was recently jointly hosted by the company and the Korean Society of Consumer and Advertising Psychology (KSCAP). The participants are current ESG-related officials at various corporations.

Seventy-nine percent of those surveyed said that a company's ESG-principled investments and achievements affect consumer decision-making. In particular, 93 percent of them forecast that ESG-conscious consumption for sustainable growth will further grow within the next five years. The remaining six percent said that it will be at a similar level as at present, while only one percent of respondents had a negative outlook, saying that ESG principles are just a temporary fad.

In addition, nearly 30 percent of them said they believe ESG-conscious consumption will greatly transform the paradigm of consumption markets in the future.

Contrary to such forecasts, corporations are assessed to still be lacking in their efforts to communicate with consumers about their ESG activities. Only seven percent of respondents said that corporations are actively communicating with consumers on the matter, while 21 percent said that companies do not have any kind of communication with consumers on the topic of ESG activities.

The survey added that as locally listed corporations will be required to disclose their ESG-related activities in the future, they will be facing a heightened necessity to address both opportunities and the difficulties created by the increased importance of management and practices based on ESG principles.