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Companies adopt ESG criteria for sustainable development Updated: 2021-04-08 17:41:28 KST

As Myanmar's army continues its bloody crackdown on protesters, multinational firms operating in the country in partnership with the military have faced sharp criticism.

"We want to call on Total to ask it to act in the face of the situation in Myanmar. We're asking it to listen to the voices of the Myanmar people, of the international community and also of the elected parliament, which is asking it to stop all support to the junta, notably by blocking its financing of the junta."

While the French energy group is yet to cut ties with Myanmar, many firms including Australia's Woodside Petroleum and Japan's Kirin Holdings have already pulled the plug and South Korea's POSCO is also reportedly looking at ways to exit a joint venture with a military-controlled firm.
This is just one example of how today's interest groups assess firms, taking broader aspects into consideration other than product quality itself perhaps why growing numbers of firms are shifting towards ESG criteria, valuing environment, social responsibility and good corporate governance in their operations.

"Consumers differentiate between good companies and bad companies, and are willing to pay more for environmentally ethical products. Young job seekers also consider if they could take pride in the company rather than just looking at the salary."

It is not just customers.
Just last year, global investment giant Blackrock decided not to invest in companies generating more than 25 percent of their revenue from thermal coal.

"After all, the bottom line of ESG is sustainable development. So each category is to promote sustainable development."

Governments across the world are also stepping up to meet this trend.
To tackle environmental issues, the U.S., China and South Korea have announced their plans to go carbon-neutral within a few decades.
The EU is in the process of formalizing a carbon tax on imported goods by 2023.
And the German government has adopted a draft law to ensure corporate compliance with human rights and environmental protection throughout supply chains.
These regulations could hit Korean companies operating overseas or looking to enter the global market.

"If companies have good carbon-neutral strategies it will become a good opportunity to enter a market, but those who are not ready could lose their export opportunities."

Experts say that growing consumer consciousness along with stronger regulations will make companies adopt ESG as a strategy for survival.
Kim Sung-min, Arirang News
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