[E;Environment ⓒESG.ONL/ESG Today]
ESG is an acronym created from the first letters of Environmental, Social, and Governance. Until now, key standards for evaluating business value were quantitative metrics and financial performance, such as financial statements. However, ESG is an index designed to examine what enables long-term, sustainable corporate operations. Driven by a global recognition that metrics determining enterprise perception and investment direction can no longer be limited to financial performance, it demands attention to the actual environment surrounding companies. In fact, renowned international credit rating agencies such as Moody’s, Fitch, and Standard & Poor’s have included ESG criteria when assessing corporate credit since 2019. As highlighted by the widely used phrase 'ESG Management', ESG serves as three core non-financial indicators to stably enhance the value of companies and their businesses over the mid-to-long term.
The 'E' in ESG stands for Environment.
The indicators recommended by the Korea Exchange to evaluate the environmental aspect of a company's ESG activities consist of five key areas: greenhouse gas emissions, energy usage, water usage, waste discharge, and legal compliance/accidents.
[ⓒ Korea Exchange, ESG Information Disclosure Guidance]
Among these, the most critical issue is carbon and greenhouse gas emissions. Concern regarding carbon emissions generated by corporate business activities has existed for a long time. Recently, as opportunities to experience the real impact of climate change have increased, the awareness that we are threatening human survival ourselves has grown significantly, driving intense interest in this issue. Consequently, companies are continuing activities aimed at carbon reduction and net-zero goals, such as improving energy efficiency, consuming fewer resources, managing waste, and supporting organizations working for the environment.
by Editor O