Home Business “Korean companies strong in tech, there is potential for technology-led ESG innovation”

“Korean companies strong in tech, there is potential for technology-led ESG innovation”

by news dir

Peter Gasman PwC ESG Global Leader

“For Korean companies, ESG (Environmental/Social Responsibility/Corporate Governance) can be both a risk and an opportunity in various fields. If goals are clearly set, strategies are established, and actions are taken, the technology of Korean companies can play an important role in global business innovation and ESG. As a global tech leader, Korea has high potential to foster ESG as a technology-driven innovation engine.”

Interview with Peter Gasman, PwC Global ESG Leader

Can Korean companies do well in ESG management, which has emerged as the biggest issue in companies? Peter Gasman, global ESG leader of PwC, a global accounting consulting group, paid attention to the technological potential of Korean companies. This is an exclusive written interview.

ESG, which evaluates a company’s non-financial performance and sustainability, goes beyond a simple trend, and is changing the corporate structure, culture, and even economic trends. According to the Global Sustainable Investment Review, ESG investment in the U.S. and Europe in 2018 ($26.7 trillion) increased by 26% compared to two years ago ($20.763 trillion). Domestic conglomerates and financial institutions are also competing to establish an ESG committee, spurring improvements in corporate fundamentals.

Still, his assessment is that many companies around the world are responding to ESG at an early stage. In a PwC survey of corporate executives, 75% of respondents said that “the level of ESG response is still in its infancy”.

Although corporate social responsibility has become an important factor in management, such as consumer churn following the recent Coupang logistics center fire accident, there are also many voices that ESG is unfamiliar. There are also concerns about the cost burden of companies.

Can ESG management achieve the goal of enhancing shareholder value and coexisting or coexisting with stakeholders?
“After the global financial crisis, economic recovery was an urgent task. But now it’s different. As many stakeholders, including investors and consumers, consider sustainability in their investment and consumption decisions, companies must provide sustainable benefits beyond shareholder returns. ESG management is the value of the times.”

Unlike Europe, where governments drive the flow on ESG through regulation, in other regions, such as the US, investors are ordering ESG strategies from companies, he stressed. It is essential for companies to secure competitiveness in a situation where ESG disclosure obligations are being strengthened.

What role can ESG play in creating corporate value or securing growth potential? Are there any real examples?
“ESG plays a two-fold role in value creation. If ESG is not actively managed in advance, it can become a risk factor that can reduce the value of a company. ESG also provides opportunities to create new business areas and target new markets to stimulate growth and increase corporate value.”

He cited telecommunications companies as an example of risk management through ESG. It is said that the financial impact of extreme weather events such as heat waves and cold waves that may be caused by climate change on the business was reflected in the long-term investment decision. Industrial materials producers that were researching new energy technologies to reduce carbon emissions from plant operation have sold off existing business units and made new investments, he explained.

There is also a case of a global chemical company that conducted a product portfolio review on environmental risks in terms of ESG with PwC and came up with a new management strategy ranging from pollutants and environmental emissions, working environment and employee welfare.

Peter Gasman PwC ESG Global Leader

Peter Gasman PwC ESG Global Leader

What is needed to achieve results with ESG management.
“The success or failure of ESG management depends on how strong the company’s management is. Two things are essential for this. The first is to link ESG initiatives to the direction of the organization. Second, it is necessary to create the conditions in which the company’s available assets can be fully utilized for ESG promotion.”

This means that ESG management should not be simply a ‘wartime administration’ that keeps pace with trends. He emphasized that “ESG should not be added to the existing business challenges, but should be linked to all business strategies and focused on corporate capabilities.”

If you simply engage in ESG management to show off, you could fall into ‘Greenwashing’ and put your company at greater risk. It seems to protect the environment on the surface, but in reality, it can become a boomerang if it commits a ‘green lie’, such as polluting the environment during the production process. Agreeing with this, he said, “There is a growing concern about green washing. Transparency and reliability are important for ESG.”

There are also concerns that ESG management may become the exclusive domain of large corporations. What is needed for ESG management of SMEs?
“Small businesses can find innovative and unique ESG value propositions, but they can also engage the government by funding or subsidizing them.”

What are your future plans as a global leader in PwC ESG?
“It is very interesting to cover all aspects of ESG from strategy formulation to final stage, including issues such as tax and regulation and climate-related models. We have been discussing ESG-related capacity building with governments and large corporations, but I would like to play a more active role in cooperation with universities and major ESG institutions.”

Reporter Ha Hyun-ok [email protected]


Related Articles

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.