According to the 2023 Informatization Statistics Survey released by the Ministry of Science and ICT, about 28% of domestic businesses with 10 or more employees were using AI in 2023. This is an 11-fold increase in three years compared with 2020, when AI-using companies were a mere 2.5%. Among large companies, the AI-technology utilization rate reaches a full 36.4%. Riding that trend, this article introduces a conversation about "the future of ESG" that we had with ChatGPT-4, which opened the AI era and was included in "Nature's 10," the journal Nature's annual list of those who helped shape science in 2023.
[The thumbnail for this article, drawn by the image-generating AI DALL·E — from DALL·E]
L: Hi :) I'm Editor L, who writes articles at the ESG webzine "ESG.ONL." I'm in charge of tenacious, long-form, sustainable stories. Today I'd like to talk about ESG with ChatGPT-4—is that okay?
GPT-4: Hello, Editor L! Of course! A Q&A about ESG with ChatGPT-4—how interesting. I'm also curious about how AI technology like GPT-4's capabilities can be applied to ESG communication. Go ahead and ask. I'll do my best to answer!
L: The topic of this article is "the future of ESG." I want to explain to readers how ESG will change the perspective of companies and brands in an era of low growth. If ChatGPT-4 were to interview an expert on the theme of "the future of ESG," what questions would you want to ask?
GPT-4: Based on the background you've given, if I were to conduct an expert interview on the theme of "the future of ESG," I could consider the following questions. These questions would help draw out an expert's in-depth insights and outlook on "the future of ESG."
1. The importance of ESG in an era of low growth — Why is ESG important to corporate strategy in a low-growth economy?
2. The relationship between ESG and financial performance — How can ESG initiatives affect a company's long-term financial performance?
3. Changes in sustainability strategy — How are companies' sustainability strategies changing in response to the recent economic environment?
4. Consumer perception and ESG — How is consumer perception of ESG changing, and how is this affecting brand strategy?
5. The role of technology — How can the latest technologies, such as AI, contribute to companies achieving their ESG goals?
6. Changes in the regulatory environment — How are governments' ESG-related regulations and policies affecting corporate strategy?
7. ESG investment trends — How can ESG investment contribute to corporate growth and innovation?
8. The importance of global cooperation — Why are international cooperation and partnerships important for solving ESG-related problems?
9. Risk management — How can ESG-related risks be managed and mitigated?
10. Future vision — What changes do you expect ESG to bring to corporate activity and industry over the next 10 years?
L: Thank you. Of the 10 questions, I'd like to ask further about "No. 1, the importance of ESG in an era of low growth." As an era of low growth and high prices continues, there are voices from companies saying it's too hard to even consider ESG. What do you think?
GPT-4: This is a very important matter. In a situation of slowing economic growth, companies come to focus on cost-cutting and improving efficiency, and in that process they may regard considering ESG factors as a burden. ESG must be viewed from a long-term perspective. Investing in ESG is an essential measure for a company's sustainability and long-term success. Environmental protection, social responsibility, and transparent governance become key factors in a company maintaining competitiveness in the market over the long term and managing risk. A strategy centered on ESG plays an important role in strengthening a company's brand value and reputation and in inducing long-term investment and customer loyalty. Therefore, in a low-growth era when consumers and investors move more cautiously, the value of a sustainable, ethical business model will shine all the brighter.
L: Would it be okay to view a company's survival through these two distinctions—short-term survival and sustainable survival?
GPT-4: Yes, that's right. Viewing the importance of ESG as a criterion that distinguishes short-term survival from sustainable survival is a very useful perspective. Comparing these two concepts helps us better understand the key factors a company must consider for long-term success.
[Short-term survival] Mainly a method companies focus on to survive amid current economic challenges and crises. It includes cost-cutting, cash-flow management, and crisis-response mechanisms. Short-term survival emphasizes overcoming immediate problem situations and maintaining competitiveness in the present market.
[Sustainable survival] Focuses on strategies that guarantee a company's growth and prosperity from a long-term perspective. It includes ESG factors such as environmental protection, social responsibility, and ethical governance. Sustainable survival emphasizes a company adapting to market changes over the long term, managing risk, and growing in a sustainable manner.
It is very important for a company to find a balance between short-term survival and long-term goals. Pursuing only short-term survival strategies risks neglecting long-term sustainability or the company's social responsibility. On the other hand, a sustainable-survival strategy may involve greater costs and effort in overcoming short-term challenges, but it will contribute to building a stronger and more solid company over the long term.
L: I largely agree. Then let me ask the next question. Do you know that ESG disclosure for Korea's large companies has been postponed from 2025 to 2026? What do you think caused it?
GPT-4: As for the postponement of ESG disclosure for Korea's large companies, several causes can be cited for such a decision. The exact reasons may differ depending on the policy-making process of the government and relevant agencies, but looking at generally considerable factors, they are as follows. Of course, this is only speculation, and the actual background of the decision could be explained in more detail by the Korean government or relevant agencies.
1. Insufficient preparation period: It may be postponed to allow companies enough time for the data collection, management-system building, and internal-process improvements needed for ESG disclosure.
2. Clarifying regulatory standards and guidelines: More time may be needed to make the regulatory standards and guidelines related to ESG disclosure clearer and to help companies understand and comply with them.
3. Consideration of economic conditions: A decision to postpone disclosure requirements may be made so as not to place an additional burden on companies amid economic uncertainty or challenges.
4. Reflecting stakeholder opinions: More time may be needed to gather the opinions of companies, investors, and other stakeholders and to reflect their requirements.
5. Harmonization with international standards: It may be postponed to adjust domestic regulations to align with global ESG standards and to provide an adaptation period for this.
L: Right, there must be more complex circumstances. Then what impacts can ESG disclosure have on ordinary consumers? Could you talk about the positive and negative aspects?
GPT-4: Let me explain the impact of ESG disclosure on consumers.
[Positive aspects]
1. Increased transparency: Through ESG disclosure, companies more transparently reveal their activities and performance regarding the environment, society, and governance. Consumers can make careful purchasing decisions based on more information.
2. Building trust: Disclosing a company's efforts and performance on ESG leads consumers to trust that company more, and companies can raise customer loyalty over the long term.
3. Inducing better corporate behavior: ESG disclosure leads companies to pay more attention to environmental protection, social responsibility, and transparent operation. This can result in providing consumers with more sustainable and ethical products and services.
[Negative aspects]
1. Information overload: If too much ESG information is provided, consumers may have difficulty properly understanding and processing it. It can also make the consumption or investment decision-making process more complex.
2. The risk of inadequate disclosure: Some companies may perform ESG disclosure only as a formality or omit important information. In this case, there is a risk that consumers make consumption or investment decisions based on incorrect or insufficient information.
3. Cost pass-through: The costs of strengthening and disclosing ESG-related activities may be reflected in the prices of products or services. Accordingly, consumers' economic burden may increase.
In conclusion, ESG disclosure is an important means of strengthening transparency and corporate responsibility, but the information must be provided in a way consumers can understand and must be well managed over the long term.
L: ESG may make companies operate more ethically, but it sounds like you're saying that, whether policy or information, judging with a sense of balance is ultimately the consumer's part. I'm also curious whether you think ESG is a short-term fad or a theme that will operate over the long term.
GPT-4: I believe ESG is not a passing fad but is settling in as a long-term trend. There are several reasons.
1. A change in social awareness: Over the past few years, worldwide awareness of environmental protection and social responsibility has changed greatly. More and more people are supporting sustainable, ethical business models. This change in awareness is strong grounds that ESG will be a long-term trend.
2. Growing investor interest: Investors, especially large institutional investors, regard ESG factors as an important part of investment decisions. They tend to invest, for long-term returns, in companies that act sustainably and in a socially responsible way.
3. Strengthening of regulation and policy: Worldwide, regulations and laws related to ESG are being strengthened. This regulatory environment is forcing companies to take ESG more seriously and include it in their long-term strategy.
4. Risk management: Considering ESG factors becomes an important risk-management tool for companies. For example, managing environment-related risks or strengthening diversity and inclusion will be advantageous to a company over the long term.
5. A company's competitive advantage: Companies that focus on ESG tend to experience better customer loyalty, brand-value perception, and employee satisfaction. These factors will strengthen a company's competitiveness over the long term.
In this way, ESG is settling in not as a short-term fad but as a core element of corporate operation. As part of a worldwide movement toward a sustainable future, it will continue to grow in importance.
L: Thank you for giving consistent answers from beginning to end. I'm about to wrap up the interview now—could you say one last word to the readers of ESG.ONL?
GPT-4: A sustainable future depends on all of our choices and actions. ESG is not a mere trend but an essential path for our society, our environment, and future generations. Please recognize each of your roles and responsibilities and join in moving forward together toward sustainable development. Your small interest and effort can gather to create big change. The road of ESG is not easy, but I believe that if we all work together, we can create a better future.
L: It's okay if I ask for another interview next time, right? After all, there are still 9 questions left that you gave me on "the future of ESG."
GPT-4: I look forward to being able to have deep and useful conversations about the remaining questions on "the future of ESG" as well. Please contact me anytime. Thank you for conducting a good interview!
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And so the interview with ChatGPT-4 about "the future of ESG" came to a close. ESG, which is still closer to its nascent stage. We may not be able to hastily predict the future, but one thing is clear: ESG is presenting a new guide for how we look at companies.
by Editor L