<Anchor> This
is the time to ease the difficult economy. Friendly economy time. Today (31st) I will be with reporter Kim Hye-min. If you look at economic newspapers and economic articles, especially business-related articles, you can see the word 'ESG'. But what does this mean?
<Reporter> In
fact, I see it often in articles, but it doesn't really touch me. The abbreviation of 'ESG' is taken from the first letter of the English word for environment, society, and governance.
The history of ESG is quite longer than you think. In 2004, then former UN Secretary-General Kofi Annan sent a letter to more than 50 CEOs around the world asking them to "develop guidelines for making sustainable investments." One CEO made that standard, and that's what evolved into ESG.
Recently, ESG has become a hot topic among companies. Not only world-famous companies, but also all of you in Korea are announcing ESG management plans.
If
you look at
<Anchor>
, yes. Companies have announced ESG management plans, and articles like this appear. But this came out 17 years ago. But why is it getting so much attention now?
<Reporter> It's
very simple. This is because money flows to companies that are good at ESG. In the past, when investing in companies, we only looked at how well they make 'money'.
However, recently, I am investing in consideration of these three factors, environmental, social, and social and ethical values such as governance.
Countries around the world set a goal to reduce greenhouse gas emissions in the Paris climate agreement and set the deadline for 2030, but now there are only 9 years left.
In order to induce companies to participate in the European Union and other countries, financial regulations are being changed so that money flows to companies that are good at ESG.
Buying label-free bottled water and buying cosmetics from companies that do not test on animals are now very accustomed to. It is also evident in the recent Namyang Dairy Incident.
Namyang's stock price plummeted and its corporate image fell to a level beyond which it was impossible to recover.
It was left as a representative 'disaster' that failed to grasp the ESG culture of consumption in consideration of the ethical aspects of the company.
<Anchor> In
fact, Korean consumers say that the value of ESG is very high, and that a survey like this was also conducted?
<Reporter>
Recently, the Korea Chamber of Commerce and Industry conducted a survey targeting 300 people. When asked whether a company's ESG activities affect their purchase, 63% answered that it did.
Also, I'm talking about companies that are negative about ESG, that is, companies that cause social and ethical problems. About 7 out of 10 people who said that they had never intentionally purchased a product from such a company.
Conversely, in the case of corporate products with excellent ESG, 88.3% of respondents said they would buy them even if they cost a little more than the same product.
For example, they are willing to buy products that pollute the environment even if they pay a little more.
The amount you can pay more is not that much yet. Most of the respondents said that they could pay 2.5~5% more to the product price.
I also asked what role a company should play. The traditional role of a company is 'maximizing shareholders' profits', that is, pursuing profits. This was only 9%.
More than half of the respondents answered, 'The interests of shareholders and the interests of all members of society should be pursued together'. Also, close to 40% of respondents said that the interests of members of society, not shareholders, come first.
After
listening to the story of
<Anchor>,
ESG is a standard for identifying good companies. It seems that our consumers are very smart to look at such standards very carefully. But I think there are some parts of ESG that Korean companies think are lacking in our consumers' opinion. What are these?
<Reporter>
In other words, this ESG is the environment, society, and governance. Of these, the one that responded the least was 'government structure'. 4 out of 10 people chose this, followed by environment and society.
We asked what issues companies should be interested in by field, and if you look at the graphics that are coming out now, in the field of governance, 1 in 3 answered 'inappropriate succession of management rights'.
This means that we need to change the culture in which conglomerates such as Samsung are trying to inherit management power. In addition, a high percentage of companies answered that they needed attention even for 'moral hazard of executives' committing embezzlement or breach of trust or driving work.
In the environmental field, people were most concerned about the plastic problem, with 36.7% saying it should be prevented from polluting the ecosystem through excessive use of plastics. Climate change, environmental hormones, and fine dust were also considered important.
As an issue in the social field, most people chose the job shortage, and workers' human rights and safety were also recognized as important issues.
The sad death of workers who die from safety accidents at industrial sites has been occurring frequently recently, but it has now become an important issue that companies need to deal with ethically as well as for their business.