Since the concept of ESG was first introduced in 2005, interest in it has grown rapidly in the industry over the past five years. ESG began as a movement for environmental practices and has now become a concept that determines the success or failure of capital markets and a country.

In 2023, it is expected that we will enter the institutionalization phase of ESG, focusing on the circular economy, which is a key keyword.

The circular economy refers to an eco-friendly economic model that pursues sustainability through resource conservation and recycling. It has recently spread throughout the world, centered around Europe.

Kim Dong-soo, head of Kim & Chang's ESG Management Research Institute, presented the latest domestic and international ESG trends and outlook at the last Korea Chamber of Commerce and Industry's ESG Management Forum. CEO Kim emphasized, “In order to practice a circular economy for ESG innovation, attention will be paid to how companies connect social and environmental demands to their business.”

In his presentation, Director Kim said that as interest in ESG has increased, so has controversy. Anti-ESG, which has recently been raised mainly in the US, refers to a temporary increase in the introduction of regulations on major financial institutions that conduct ESG investments. For example, in the US, conservative states including Texas have enacted investment restriction laws. Director Kim predicted that careful observation of this trend will be necessary in the future.

Recently, interest in transparency and authenticity in corporate activities has also increased. Major countries are taking the form of sanctions and lawsuits. Climate change lawsuits are rapidly increasing and are expected to continue in the future.

The 'Saying-Doing Difference' refers to the controversy that arises when a company attempts to implement ESG policies but does not see results. In 2023, as ESG becomes officially mandatory, the debate over the 'Saying-Saying Defference', which is one step further, is expected to become mainstream.

This refers to the controversy over changes in future disclosures due to lack of results after announcing the implementation of ESG policies and disclosing specific information.

Director Kim said, “Although various controversies surrounding ESG coexist and an overall gradual increase is predicted, this is not a decline in interest in ESG, but rather a path toward institutionalization.”

■ Achieving Net Zero by 2030... Rapid Response from Countries and Companies Is Essential
It is no exaggeration to say that the most important concept in ESG is 'Net Zero'. Most advanced countries are aiming to achieve this by 2030.

Our country agrees with RE100, but it is still realistically difficult to achieve. The number of RE100 participating companies increased rapidly in 2021 compared to 2020, but it only reached 12% in 2022. We need to respond quickly by continuously establishing practical standards for our country that are different from global standards.

In particular, IT big tech companies such as Amazon, Apple, Google, and Microsoft attach great importance to RE100, so responses to the relevant supply chain are expected to become an important agenda.

Meanwhile, 'TCFD' is being continuously promoted for public discussion and internationalization.

TCFD, along with SASB (Sustainability Accounting Standards Board), is a representative ESG disclosure standard whose influence has grown explosively since 2020. It aims to enable companies to identify, assess, and manage climate risks and to understand the extent of corporate financial risks that may arise due to climate crises.

Director Kim said that as of November 2022, more than 4,000 organizations in 101 countries are supported, and this number is expected to continue in 2023. In Korea, the number of member organizations has also increased by about 700% over the past two years compared to January 2022.
Finally, Director Kim emphasized ‘ESG innovation.’ The core keyword of this word, which has been gaining attention since the second half of 2022, is the concept of a circular economy.

The circular economy is a process of finding a link between how companies address global social and environmental needs through their business models. Accordingly, corporate interest in innovative technologies is expected to increase.

POSCO recycled shellfish waste such as oysters. It announced that it commercialized the project after confirming that replacing 1 ton of limestone with shell waste could reduce carbon emissions by 460 kg.

Samsung Electronics announced its 'New Environmental Management Strategy' in September last year and switched to eco-friendly management. It will invest a total of more than 7 trillion won by 2030, including the development of ultra-low-power semiconductors and products and new technologies for process gas treatment efficiency. As part of this, it created a pond with purified water through the 'Green Center' at its Hwaseong plant.

On the 12th, Renault Group introduced Schneider's SM AirSeT to eliminate the use of SF6, a representative greenhouse gas used in high-pressure switchgear at refactories. The product is not only SF6-free, but also eliminates the need to consider greenhouse gas recycling costs, and can even reduce equipment maintenance and replacement costs.

SK Ecoplant acquired TES, a company specializing in E-waste (waste electrical and electronic products), last year. TES has the technology to recycle batteries by extracting rare materials from used batteries with a purity high enough to be reused in the manufacturing supply chain. On the 5th, it signed a strategic partnership with CSCEC (China State Construction Engineering Corp.) and began jointly developing overseas renewable energy projects.

Companies that can solve various ESG issues by utilizing next-generation innovative technologies will increasingly receive attention, and the government's continued efforts to foster such companies are urged.