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Evening ESG news and briefings to wrap up your day.
There is a saying that the internet is a virtual planet created by humans. Through our screens, we move back and forth between that planet and Earth hundreds of times a day. The internet, which enables experiences, encounters, and collaborations previously unimaginable with ease, has become one of humanity's most vital infrastructures. Yet this essential internet planet has one problem: it is consuming the Earth's resources—and that consumption is growing rapidly. According to the International Energy Agency (IEA), the number of people using the internet doubled between 2010 and 2023, while the volume of internet traffic surged by a staggering twentyfold.Our computers and mobile devices do not themselves emit carbon dioxide directly. But we ought to give at least some thought to the data centers that, after we request data through our devices, deliver that requested data to our screens. [Naver's Data Center 'Gak' in Sejong, with the largest server capacity in South Korea © NAVER]Data Centers vs. Renewable EnergyData centers are primarily responsible for storing and processing the vast amounts of data connected to the internet. Operating 24 hours a day, 365 days a year, data centers, together with data communication networks, account for 1 to 1.5% of global electricity consumption. While efforts are being made to reduce the power consumption of data centers—such as installing renewable energy generation facilities like solar power—many experts believe these efforts are still insufficient. Forbes reported an expert analysis showing that while the electricity consumption of large data centers grew at an average annual rate of 25% from 2015 to 2021, investment in renewable energy increased by only 7%. On top of this, the recent emergence of AI, which is now making its presence felt in earnest, is adding significant momentum to the growth in power demand. AI, Studying Without RestAI appears poised to continue learning without a moment's pause until the day it can work flawlessly on behalf of humanity. The problem is that the AI era has only just begun. The AI industry is growing by the day, propelled by generative AI and AI-powered mobile services. The global accounting firm PwC has forecast that the AI market will surpass two quadrillion Korean won by 2030. This means data centers will face a corresponding volume of queries—requests for information from databases—which will in turn drive up power consumption. Researchers at Vrije Universiteit Amsterdam have released an analysis indicating that the electricity required by AI servers could reach 85 to 134 terawatt-hours (TWh) by 2027, roughly equivalent to the annual electricity consumption of the Netherlands.Could AI Solve the Problem After All?Paradoxically, the energy industry is attempting to use AI technology to solve the problem of energy efficiency. The idea is to move beyond simple power transmission and distribution by leveraging AI to manage electricity supply and demand in specific regions more precisely, and to optimize the charging and discharging cycles of energy storage systems. This concept is referred to as a "Virtual Power Plant (VPP)"—a notion that seems well suited to the virtual planet of the internet. Companies that operate hyperscale data centers, such as Microsoft, Google, and Amazon, are also reportedly working to make their data centers more environmentally friendly, especially in pursuit of the carbon neutrality goals they have each pledged. If we were to simply dichotomize the issue into AI's power demand versus the power supply from renewable energy, it would appear that AI's power demand is still growing faster for now. With AI technology having already penetrated nearly every industry, the response through renewable energy usage must accelerate at a pace matching the growth in electricity demand.by Editor N
Microsoft has claimed the top spot on the "2023 ESG 100 Best Public Companies" list* compiled by IBD, a U.S. media outlet providing stock market information. With growing interest in ESG investment portfolios over the past four years, the perception has also expanded that companies adept at managing ESG risks are stable, well-managed enterprises with high investment value. As ESG regulations have become increasingly stringent, the preference for companies prepared to respond flexibly to ESG demands has also risen.Keeping pace with this trend, IBD has been selecting its own list of the 100 Best ESG Companies for ESG investors over the past five years. And Microsoft, by applying ESG standards across multiple domains within a rapidly changing business environment, is regarded as one of the companies most actively practicing ESG management in the United States.*If you are curious about IBD's selection process for the 100 Best Companies, click here to read this article.[Microsoft IR Webpage ©MICROSOFT]Why Microsoft Took the Top SpotIBD selects its ESG 100 Best Companies from among companies that have received outstanding scores across five categories: Business Model and Innovation, Environment, Human Capital, Leadership and Governance, and Social Capital. Among these five, Human Capital and Social Capital correspond to the Social (S) dimension, while Leadership falls under the Governance (G) dimension. IBD noted that it follows the five-category classification established by the Sustainability Accounting Standards Board (SASB), a nonprofit organization founded in 2011. Microsoft achieved the top overall ranking across SASB's five criteria while also claiming first place within the computer industry, establishing itself as a company consistently practicing ESG management. IBD highlighted the following representative activities as the reasons behind Microsoft's number-one ranking:1. Leading the corporate carbon emission reduction trend2. Developing technology (e.g., Microsoft Cloud) that enables thousands of customers to set and achieve their own sustainability goals3. Supporting the White House's AI Bill of Rights and safeguarding labor rights4. CEO Satya Nadella's two promises: to deliver returns to shareholders, and to build a path toward a sustainable future for both the company and the planet together5. Setting corporate targets for carbon neutrality, water reduction, and zero waste by 2030The Light and Shadow of ESG LeadershipBeyond the environmental sphere—for which Microsoft is best known as a leading ESG responder—the company has made strides in the social dimension as well. In 2022, Microsoft formally announced that it had adopted the principle of respecting the right to form labor unions. Last year, the company partnered with the Communications Workers of America (CWA) to complete its acquisition of major gaming company Activision Blizzard*, and jointly announced a "labor neutrality principle," under which it would take a neutral stance when employees wish to join a union.*Activision Blizzard: The company behind well-known games such as Overwatch, Candy Crush, and StarCraft.[Components of the Human Capital Category ©MSCI]MSCI*, another issuer of major global investment indices, states that the human capital category consists of four elements: labor management, human capital development, health and safety, and supply chain labor standards. FTSE (Financial Times Stock Exchange) of the UK is another representative global investment indicator alongside MSCI. Unfortunately, however, Microsoft—which has been aggressively expanding its AI business this year—was reported to have notified approximately 1,900 employees, representing roughly 9% of the gaming division workforce centered on Activision Blizzard, of layoffs just three months after the acquisition.*MSCI, along with FTSE of the UK, is cited as a representative global investment index provider.ESG Management That Is Hard to Sustain ConsistentlyAccording to MSCI, ESG investing originated in the "socially responsible investing" of the 1960s. At that time, investors avoided putting money into companies associated with tobacco production or the South African apartheid* government, and as the scope expanded, it evolved into today's form of ESG investing. More recently, an investment trend has taken hold in which investment value is judged by applying both traditional financial criteria and ESG criteria.*Apartheid: The policy of racial segregation and discrimination that the South African government formalized into law during the Cold War era.However, investors differ in the investment criteria they favor, and companies find it difficult to satisfy every investor's preferences. The same holds true for ESG: among the multitude of ESG criteria, it is virtually impossible to concentrate on and satisfy only the ESG areas that investors care about. Moreover, practicing ESG management well does not mean there are no negative issues for investors to consider, and there are also voices of concern that a company might experience deterioration in its actual business performance while focusing on achieving its ESG goals. For these reasons, practicing well-balanced ESG management seems likely to remain no easy task for companies in the years ahead.by Editor N
A wave the size of a building crashed into the U.S. military base on Roi-Namur Island in the Marshall Islands. The Marshall Islands is a republic in the South Pacific composed of 1,156 islands and 24 atolls. Quite literally, a massive wave surged far inland. Fortunately, no serious casualties have been reported, but the U.S. Army stated that repairs to facilities and housing could take several months.[Roi-Namur Island, Marshall Islands © U.S. Army Garrison-Kwajalein Atoll]Footage capturing the sheer force of the waves went viral on social media, rapidly spreading news of the urgency and severity of the damage around the world. Within seconds of the video starting, the first wave smashes through the door and floods into the building, followed immediately by a second wave that raises the water to waist height. In just two waves, the scene turned into chaos, and all the lights inside the building went out as if a power outage had occurred.[Water Pouring into the U.S. Military Base @worldmaverik (Local Scuba Diving Instructor, Marshall Islands)]* Click to watch the video An Unusually High Wave: The Cause Was a Rogue WaveThe wave has been identified as being caused not by a tsunami (seismic sea wave) but by a rogue wave. A rogue wave is a phenomenon in which a wave reaching tens of meters in height suddenly appears amid ordinary waves, yet the exact causes of rogue waves and reliable methods for predicting them remain unclear. Only speculation and hypotheses exist suggesting that rogue waves may be the reason ships sometimes disappear without a trace. One thing, however, is certain: rising sea levels due to climate change have made the level of damage inflicted by rogue waves far more severe.The Marshall Islands: Fully Exposed to Climate ChangeIf the Greenland ice sheet were to melt completely, global sea levels are said to rise by at least six meters. Were that to happen, most of the Marshall Islands would also disappear from the map. This is because the average elevation of the Marshall Islands is a mere two meters, and even the highest point reaches only ten meters above sea level. Over the past twenty years, the rate at which the Greenland ice sheet is melting has accelerated fivefold. The Marshall Islands Ambassador to South Korea once appealed to developed nations through a media interview, urging them to redouble their efforts to reduce carbon emissions. While the damage from this rogue wave appears to have been concentrated on the U.S. military base, the island is naturally also home to many residents who suffered damage alongside it. For the United States, the damage is limited to one military base; for the Marshall Islands, however, it is the very foundation of the people's livelihood that has been harmed.Humanity Has Settled Close to the SeaThe problem of rising sea levels is not fatal only to island nations. Approximately 40% of the world's population lives within 100 kilometers of a coastline. According to research by the University of Melbourne, published in the journal Nature, rising sea levels could wipe out up to 20% of global GDP by 2100. Given this severity, the U.S. credit rating agency Standard & Poor's (S&P) has warned that businesses must absolutely prepare for rising sea levels. S&P is using its own analytical models to forecast the frequency of coastal flooding under various climate change scenarios, and the results confirm that rising sea levels can cause damage not only in coastal areas but also deep inland by following the flow of upstream rivers.[S&P's projected coastal flooding map for the Miami area in the 2090s (scenario assuming a doubling of greenhouse gas emissions by 2100) © 2023 S&P Global]Humanity, which has long focused on expanding its territory, now faces the crisis of that territory shrinking. While the entire world is suffering from climate change, regions like the Marshall Islands are being hit far harder. South Korea, surrounded by the sea on three sides, also has many vulnerable areas. The environmental group Greenpeace has even published a scenario in which the Marine City and Centum City areas of Haeundae in Busan are submerged. This is precisely why governments, local authorities, and businesses must all pay close attention to climate change and the resulting rise in sea levels.by Editor N
Regulatory pressure on companies regarding ESG is increasing by the day. In this environment, ESG has become a critical factor determining the future direction of business. Which American companies truly understand this reality and have prepared themselves to flexibly respond to future low-carbon policies?Since 2019, IBD (Investor's Business Daily, a media outlet providing US stock market information) has been publishing its annual list of the 100 Best ESG Companies. The IBD 100 Best ESG Companies list is known to be created by combining the Dow Jones* Sustainability scores with IBD's sophisticated technical and fundamental stock evaluation. Companies included in this list can be regarded as having achieved outstanding scores in ESG-related investment criteria and as being worthy of investment consideration.*Dow Jones: A company that provides the Dow Jones indices (industrial average) for tracking US stock market trends How IBD Selects the 100 Best ESG CompaniesLet us follow the process IBD used to select its top 100 companies. First, IBD collected ESG information on over 6,000 global companies by measuring the "ESG Sustainability Scores" compiled by its affiliate, Dow Jones Newswires*. Both officially available corporate information and media coverage analysis for each company were utilized. IBD also leveraged scores derived from thousands of English-language data sources collected through Factiva, Dow Jones's comprehensive media data and business intelligence platform.*Dow Jones Newswires: A news agency operated by Dow Jones that primarily distributes breaking news and press release-style articles./ Five-Step Selection Process for the 2023 ESG 1001. Narrow down an initial pool of 2,067 companies.2. Exclude privately held companies and those with stock prices below $10. Also exclude companies lacking sufficient information for IBD's comprehensive evaluation. This process leaves 1,559 companies as the second-round candidates.3. Remove companies that have not been included in the S&P 500, the benchmark for blue-chip companies, over the past five years.4. Among companies scoring 81 or above on the IBD Composite Rating, designate those scoring 100 as the top 20% of companies. For companies with tied scores, apply the Relative Strength Rating to rank them, and use the Earnings Per Share Rating if necessary.5. Finally, rank the 100 Best Companies according to their Dow Jones ESG scores. Companies with tied scores are ranked using the IBD Composite Rating.Microsoft Takes the Top Spot Among ESG StocksAs of August 25 last year, the company claiming the number one spot on the ESG 100 list based on these criteria was Microsoft. Second place went to Applied Materials (semiconductor and display equipment), third to Woodward (design and manufacturing of industrial engines and control systems for aircraft and other applications), fourth to Verisk Analytics (data analytics), and fifth to Mastercard.The metrics used to rank the companies are shown in the table below. To view the full list of the 100 Best ESG Companies, visit the IBD page. [2023 ESG Top 5 Companies Scorecard ©IBD]by Editor N
A directive guiding companies to take responsibility for the environmental and human rights impacts of their entire supply chain is expected to take effect in Europe soon. The Council of the European Union* and the European Parliament** have reached a provisional agreement on the Corporate Sustainability Due Diligence Directive (CSDDD). Discussions on this directive began when the European Commission*** first proposed it to the Council and Parliament in March 2022. After nearly two years of extensive negotiations, an agreement was reached on December 14. The Council stated that this directive aims to protect the environment and human rights not only within the EU but around the world.* The Council of the European Union is the upper legislative body of the European Union (EU), representing the governments of each Member State. ** The European Parliament is also a legislative body of the European Union (EU), representing the citizens of each Member State and elected through direct elections.*** The European Commission is the executive body of the European Union, representing the general interests of Europe and initiating relevant legislation. Content and Scope of the DirectiveOnce this due diligence directive takes effect, large companies of a certain size and their subsidiaries and partners will have legal obligations to protect the environment and human rights in their business operations. Notably, the directive includes provisions requiring that corporate business models and strategies align with the Paris Agreement. Companies will also bear responsibility for preventing ecosystem and biodiversity degradation. Regarding human rights, companies will be held accountable for unfair labor practices such as forced labor, child labor, and wage exploitation, as well as worker health protection issues including employee health and occupational safety.The agreement also clarified the implementation timeline and the scope of companies covered. For EU-based companies, it applies to large enterprises with 500 or more employees and a global net turnover of at least €150 million. For non-EU companies, they will be subject to the directive if their net turnover exceeds €150 million after a three-year grace period from the effective date. Of course, South Korean companies that are subsidiaries or partners of EU-based companies would be included without a grace period.Legal Binding Force of the DirectiveThe directive also includes provisions on penalties and civil liability for companies that violate their obligations. Through this agreement, the Council and Parliament announced that they have finalized the scope of the directive, corporate duties, penalty levels, and the rights and prohibitions that companies must respect.In particular, the Council emphasized that if a company is found to be adversely affecting the environment or human rights through its business partners, and cannot prevent or stop such activities, it must sever business relationships with those partners. If companies violate these guidelines and fail to pay the imposed fines, additional penalties proportional to company turnover (e.g., 5% of revenue) will be levied.Impact on South Korean CompaniesOnce the directive is announced, South Korean companies exporting to the EU will need to shoulder not only the workforce and costs required for due diligence but also the costs and personnel needed for potential litigation. According to research by the Industrial Bank of Korea (IBK), export sectors such as textiles, agriculture and fisheries, raw materials, and steel are relatively vulnerable to environmental and human rights issues, falling under ‘high-impact sectors,’ making thorough preparation all the more critical.Of course, the CSDDD has not yet come into effect. Technical meetings to examine whether there are any loopholes or issues in the agreement, as well as the final adoption process by the Council and Parliament through voting, remain. However, given the provisional agreement between the two institutions, it is highly likely to take effect in the near future. The European Coalition for Corporate Justice (ECCJ), a civil society organization, expects the relevant vote to take place in March of this year.by Editor N
Every January, leaders from governments and businesses around the world gather in Davos, Switzerland to participate in the World Economic Forum. The 2024 WEF takes place over four days through January 19, and as in previous years, participants will discuss solutions to global challenges. This year's theme is "Rebuilding Trust."[European Commission President Ursula von der Leyen (left) speaking about the severity of disinformation. ©WEF]Ongoing Efforts to Overcome Crises at the World Economic ForumLast year's World Economic Forum focused heavily on "how to overcome the Polycrisis." There was a mountain of crises to address—COVID-19, the Ukraine-Russia war, economic recession and inflation, environmental issues, and more. This year's forum will once again explore ways to resolve global-scale crises. The polycrisis that persisted throughout 2023 remains unresolved, and has in fact led to prolonged economic recession and a severe climate crisis. This year, the WEF has dubbed this situation a "Permacrisis" and plans to seek both short-term strategies and long-term plans to overcome it.The four key agenda items put forward by this year's WEF are: ① Achieving security and cooperation in a fragmented world, ② Creating growth and jobs for a new era, ③ Harnessing AI to drive the economy and society, and ④ Designing strategies for climate, nature, and energy. Among these, let us take a closer look at the WEF's "Centre for Nature and Climate," which corresponds to the fourth agenda item.From Conference to Action: The Role of the Centre for Nature and ClimateThe World Economic Forum takes place just once a year, for only five days. So how are the collaboration strategies discussed at the forum actually implemented? If the execution of decisions made at the forum were left solely to individual governments and corporations, global-scale economic cooperation would likely end up as mere words, and collaborative relationships would come to nothing. To prevent this and ensure substantive economic cooperation takes place, the WEF operates various centers. In other words, the WEF holds its annual meeting each January, and then continues to execute the matters discussed through its centers throughout the year.If the forum is where government and business leaders gather to discuss agenda items, the centers are where the public and private sectors join forces to create synergies. The WEF operates ten centers (*) related to forum discussion topics. Among these, the Centre for Nature and Climate advances projects in which diverse stakeholders manage natural resources with the goal of achieving carbon neutrality. It encourages responsible use of land and oceans, and manages resources critical to us, such as food, water, and raw materials.* The ten centers are: Centre for Advanced Manufacturing and Supply Chains, Centre for Cybersecurity, Centre for Energy and Materials, Center for Financial and Monetary Systems, Centre for Health and Healthcare, Centre for Regions, Trade and Geopolitics, Centre for the Fourth Industrial Revolution, Centre for the New Economy and Society, Centre for Urban Transformation, Centre for Nature and ClimateThe Centre for Nature and Climate first established three solution goals: decarbonizing industry to achieve carbon neutrality, preparing for systemic transformation to protect nature, and managing resources for a better life. Core initiatives were also formed to execute each goal.[The World Economic Forum's Centre for Nature and Climate webpage ©WEF]The best-known initiative of the Centre for Nature and Climate in Korea is the "First Movers Coalition"—a coalition of companies that lead and pioneer on the world stage. As the initiative responsible for the Centre's first goal of industrial decarbonization, the companies belonging to the First Movers Coalition aim to halve carbon emissions by 2050. Starting with 35 member companies at its launch, the First Movers Coalition has grown into a major initiative of 95 companies in just two years. The WEF estimates that the efforts of its current member companies alone could reduce CO2-equivalent emissions by 29 million tons by 2030.There is also a Korean company that has joined the coalition. "Hanwha Ocean" is a member, actively participating alongside familiar global names such as Apple, Coca-Cola, Microsoft, and General Motors. Hanwha Ocean was the first Korean company to join the First Movers Coalition, and Hanwha Vice Chairman Kim Dong-kwan is participating as a speaker at this year's WEF.Another noteworthy initiative in the nature protection category is "1t.org." Named with the ambition to protect, restore, and grow one trillion trees by 2030. Trees and forests are vital resources that preserve biodiversity and combat the climate crisis. 1t.org encourages corporate participation to create a "forest restoration community" that everyone can join, and helps forge partnerships among local governments, businesses, and civil society. It also devotes efforts to fostering eco-preneurship so that companies can incorporate environmental considerations into their business activities. Over the past year, 85 companies across 65 countries have invested in 1t.org to preserve forests and committed to protecting eight billion trees.[Marine plastic waste filtered from a beach in Indonesia ©WEF]According to the World Economic Forum, ocean plastic pollution is another critical issue requiring attention. Each year, 11 million tons of plastic waste flow into the world's oceans, and some projections suggest that by 2050, there could be more plastic than fish in the sea. The WEF operates the "Global Plastic Action Partnership" as one of its resource management initiatives. Launched in 2018, it seeks to break away from the take-make-waste model and find ways to turn plastic into a circulating resource. Currently, over 400 organizations participate in the initiative, and 13 countries have committed to joining the plastic action effort. Indonesia, which generates 6.8 million tons of plastic waste annually, has pledged to reduce ocean-bound plastic pollution by 70% by 2025. Vietnam has committed to a 75% reduction by 2030, and Ghana has pledged to eliminate ocean-bound plastic pollution entirely.The Path Toward Inclusive Stakeholder CapitalismTo realize "inclusive stakeholder capitalism," the World Economic Forum demands that the governments and businesses partnered with each center "demonstrate real, tangible impact." While there are no explicit penalties for failing to keep promises, stakeholders share goals and actively participate by publishing their achievement rates each year. Let us look forward to seeing what direction of cooperation the World Economic Forum—which generates active collaboration among nations and corporations to solve vast global challenges—will propose this year.by Editor N
Fossil fuels have long been denounced as the main culprit of the climate crisis. In fact, the U.S. petroleum industry is said to have known since 1968 that carbon emissions from fossil fuels could cause global climate change, as revealed in a report submitted by Stanford University. Over the 50-plus years since, humanity and fossil fuels have become a relationship that is not easily broken. Too much binds them together. Power generation, transmission and distribution infrastructure relying on fossil fuels is already densely built across many nations. Moreover, the global economy frequently turns to recession, wavering under the fatal temptation of fossil fuels’ low generation costs. Despite knowing the risks inherent in the continued use of fossil fuels, overcoming this inertia is difficult. To overcome it requires stronger decision-making, but that is no easy task. Even when decisions are made, there may be regression for various reasons. Nuclear energy experienced this. After the Fukushima disaster, nuclear power was pushed to the brink of ‘global phase-out,’ only to return under the banner of carbon-free green energy in response to the climate crisis.Late last year, global leaders gathered in the United Arab Emirates to corner fossil fuels. One of the goals of the 28th UN Climate Change Conference (COP28) was to issue a joint declaration on the ‘phase-out of fossil fuels.’ It seemed contradictory that they gathered in an oil-producing nation boasting the world’s sixth-largest oil reserves. But it could have been meaningful — if they had declared a phase-out. [Group photo of world leaders attending COP28 ©COP28UAE]The COP28 joint declaration stopped short of a fossil fuel ‘phase-out.’ Instead it was replaced with the softened expression ‘transitioning away from fossil fuels.’ In effect, they left room for ambiguity. The joint declaration at the Conference of the Parties must be determined unanimously, and opposition from oil-producing nations was fierce. Underdeveloped countries such as those in Africa also expressed opposition.There may be meaning in the fact that since the first COP in Berlin, Germany in 1995, ‘fossil fuels’ was mentioned in a joint declaration for the very first time. However, after the oil industry became aware of the climate crisis in 1968, it took 30 years before the first COP convened, and then another 30 years for fossil fuels to appear in a joint declaration. Thirty years from now, the year 2050 — by which the international community, including South Korea, has declared it will achieve carbon neutrality — will already have passed.The COP has been held annually since 1995. Yet fossil fuel and coal consumption has also hit record highs each year. The bigger problem is that advances in technology are also increasing the amount of recoverable fossil fuels. It seems that humanity will not be able to say goodbye to cheap, warm fossil fuels for quite some time.by Editor L
Major countries are successively postponing the mandatory implementation dates for ESG disclosures. First, South Korea delayed the mandatory disclosure deadline for listed large corporations, originally set for 2025, by one year. The EU will proceed with cross-industry common ESG disclosures as scheduled starting this January, but industry-specific ESG disclosure implementation has been postponed by two years from the originally planned June of this year to 2026. The U.S. Securities and Exchange Commission (SEC) has also delayed the release of its final climate disclosure rule multiple times, now scheduling it for April of this year. Of course, even this may be further delayed.Why ESG Disclosure Keeps Getting PostponedWhile there are various reasons, the biggest is widely considered to be the burden felt by companies. Unlike conventional disclosures that contain financial information such as income statements and financial statements, ESG disclosures must include fragmented non-financial information. It is not an easy task to quickly identify and organize information that previously had no legal disclosure obligation — such as greenhouse gas emissions and reduction plans.According to a survey by the Korea Chamber of Commerce and Industry, over 90% of companies conducting voluntary ESG disclosures rely on external professional agencies. Only 14.0% of companies had their own in-house ESG IT systems. Due to these difficulties, the Korea Employers Federation requested relevant government bodies, including the Financial Services Commission, to postpone the mandatory ESG disclosure deadline by one year, and the government accepted. The EU's disclosure delay was also aimed at reducing the burden on businesses.The Emergence of Disclosure Support SolutionsIn the meantime, solutions to reduce the burden of ESG disclosure for companies have emerged. Accounting firms, which already serve as financial disclosure advisors to companies, and SI (System Integrator) firms with strengths in data management have taken the lead in launching platforms that support ESG disclosure. These platforms assist obligated companies with tasks such as identifying the data they need to collect, efficiently managing that data, and processing it in accordance with international reporting frameworks like the Sustainability Accounting Standards Board (SASB), the Task Force on Climate-related Financial Disclosures (TCFD), and the Global Reporting Initiative (GRI).Accounting firms, in particular, emphasize their consulting expertise, going beyond ESG disclosure support to assist with overall ESG management. PwC Samil Accounting Corporation highlights that through its 'ESG Platform' service, it can help with 'redefining Vision for transitioning to an ESG management system,' 'establishing business strategies that integrate ESG value,' and 'building a monitoring system for strategy execution and performance.'In the SI sector, IBM, a leading company, acquired the Australian sustainability data analytics company 'Envisi' and integrated it with its own AI software to complete the IBM Envizi ESG Suite (hereafter 'Envizi Suite'). The Envizi Suite automates the collection of ESG and greenhouse gas emission data and structures and standardizes the data to create the foundation for reports. IBM emphasizes that the Envizi Suite can reduce the time companies spend on ESG disclosure by 50% and highlights a case where it saved a company 20 million dollars in energy and water usage costs.[Envizi Suite Carbon Emission Management Dashboard Demo ©IBM]Will Platforms Solve the Disclosure Burden?Of course, introducing a platform alone cannot eliminate the ESG disclosure burden in one stroke, because the absence of systems is not the only problem. According to a 2023 survey by the Federation of Korean Industries, 61.1% of domestic companies cited 'ambiguous disclosure concepts and lack of clear standards' as the biggest challenge in ESG disclosure. Export companies, moreover, struggle because disclosure standards differ from country to country. The disclosure standards of the International Sustainability Standards Board (ISSB), which will serve as the basis for South Korea's ESG disclosure, were also unveiled six months later than planned in June of last year after repeated coordination. The official Korean translation was only released just two weeks ago, in December.Nevertheless, some argue that there is no real benefit in continuing to postpone ESG disclosure. Even if South Korea delays its disclosure timeline, export companies will still have to disclose anyway, and beginning disclosure will allow businesses to adapt to the system sooner and enhance their global competitiveness. Since some companies are already voluntarily making disclosures, it is not an impossible task. Professional disclosure support solutions from specialized firms are also beginning full-scale service operations. What matters most is the will of the obligated companies. Where there is a will, there is a way.by Editor N