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Evening ESG news and briefings to wrap up your day.
The 2008 Marvel film ‘Iron Man’ tells the story of Tony Stark, CEO of weapons manufacturer Stark Industries, who awakens as a superhero after witnessing the victims of the missiles he created. In this globally popular film, narratives also emerge in which those harmed by Tony Stark’s weapons awaken as villains. A weapon that is an instrument of ‘deterrence’ and ‘security’ for some can be the seed of anger and revenge for others. This paradox is not fiction. The U.S.-Iran war, which unfolded through the February 28, 2026 U.S.-Israeli airstrikes on Iran, the blockade of the Strait of Hormuz, and the death of Ayatollah Khamenei, summoned that paradox into reality. The Defense Investment Frenzy Fueled by War CrisisOn March 3, 2026, the stock market opened after the holiday and war news with the KOSPI surging to the 6,200 level before plunging to the 5,800 level, while foreign investors unleashed a massive sell-off of approximately KRW 5.1 trillion, drawing sighs from investors. Yet on the same day, defense stocks moved in the exact opposite direction. Shares of LIG Nex1, a representative defense stock, surged 27.11% to KRW 647,000, hitting an all-time high, while Hanwha Aerospace shares rose 24.85% to KRW 1,492,000, also setting a record. Hanwha Systems shares also skyrocketed 29.40% to reach an all-time high. The strength of defense stocks continued the following day. As it became known that the domestically produced air defense weapon ‘Cheongung-II’ deployed in the United Arab Emirates (UAE) had actually intercepted missiles launched by Iran in combat, it drew attention as a case in which superior domestically produced air defense weapons exported abroad were deployed in actual combat. The market, in effect, has already firmly classified defense as a ‘crisis beneficiary sector.’[Cheongung-II © LIG Nex1]Lockheed Martin, the largest U.S. defense company, saw its stock price surge by more than 40% after the first airstrikes on Iran last June, and the returns of the American aerospace technology company Northrop Grumman (NOC), which possesses stealth bomber, drone, and radar technologies, also rose overwhelmingly. Europe is no different. Mikael Johansson, CEO of Swedish defense company Saab, revealed that the number of shareholders, which was about 50,000 before the 2022 Russia-Ukraine war, rose to more than 175,000 after the war. In Europe, movements to expand investment targets to sectors including defense are already becoming visible alongside the relaxation of ESG regulations. Can the Defense Industry Be ESG?Amid Middle East instability following the U.S. attacks on Iran, news also emerged that South Korea and the UAE have confirmed USD 35 billion in defense cooperation, going beyond simple weapons exports to build a full-cycle cooperation structure encompassing everything from design to maintenance. The securities industry predicts that, independent of the Iran situation, new order momentum will be highlighted, including the final approval of major projects within the EU SAFE program (a large-scale joint borrowing/defense capability enhancement project to strengthen EU defense capabilities) in March, and the resumption of Middle East business after Ramadan in April. However, domestic pension funds including the National Pension Service have yet to codify ESG investment criteria for defense companies. Amid a situation where defense stock prices are breaking all-time highs day after day, ESG fund managers face a vacuum in the criteria for judging inclusion.[Smoke rising following the Israeli airstrike on the southern suburbs of Beirut on the 2nd (local time) © AFP]There is also strong opposition to including the defense industry in ESG. Like the villains that appeared in ‘Iron Man,’ if the weapons produced by defense companies cause civilian casualties or are supplied to authoritarian regimes, this directly collides with ESG’s ‘Do No Significant Harm’ principle. This war has dispelled the hypothesis that the era of expensive manned fighter jets is over and that the era of low-cost unmanned drones is coming, instead reaffirming the importance of stealth capabilities. While the logic that advanced weapons contribute to minimizing civilian harm could be used as a basis for ESG inclusion, the irony that the victims created by those weapons become the seeds of new threats remains unresolved.Time for Criteria That Squarely Face the Light and Shadow of the Defense IndustryThe securities industry diagnoses that since the outbreak of the Russia-Ukraine war in 2022, with conflicts expanding through Syria in 2024, Israel in 2025, and Iran in 2026, ‘the defense industry is a representative sector that cuts across the flow of the times.’ Conflicts are not one-off events, and clashes are not stopping. In this situation, the simple binary of excluding defense from ESG investment while including renewable energy no longer works. Just as Tony Stark established new principles after witnessing the damage his weapons had created, the investment industry is now at a point where it needs differentiated criteria that squarely face the light and shadow of the defense industry. Unless a multilayered evaluation system is put in place — encompassing the types of weapons, the human rights level of export destination countries, the presence of technology to minimize civilian harm, and governance transparency — the silence of ESG funds in the face of surging defense stocks can only continue. by Editor N
What drove the KOSPI index to its all-time highs were large-cap stocks such as semiconductors and secondary batteries. While the KOSPI index makes headlines day after day and we discuss the business environments and performance of large-cap stocks like those in the semiconductor industry, there is something that goes unmentioned, as if it did not exist: the ecosystem usage of electricity, water, land, minerals, and other resources that forms the very foundation of that performance. Natural Capital as the Real Foundation of Financial CapitalThe semiconductor and battery industries that have driven the recent stock surge consume enormous amounts of energy and minerals. The International Energy Agency (IEA) projected in its 2020 Net Zero Emissions scenario that, with the expansion of electric vehicles, lithium demand could increase by up to 40 times or more by 2040. While the expansion of EVs is a core strategy of the climate transition, it simultaneously accompanies the ecological burden of expanded mineral extraction and water resource use. Lithium-ion batteries — secondary batteries — the key component of electric vehicles, are connected to lithium salt flats in Chile, nickel mines in Indonesia, and cobalt mining in the Congo. At the salt flats, thousands of tons of brine evaporate daily for lithium extraction, and at the nickel mines, expanded mining is increasingly linked to tropical forest degradation and ecosystem fragmentation, heavy metal contamination, and child labor issues.[Chile’s Lithium Salt Flats © THE NET-ZERO CIRCLE]The semiconductor industry is no exception. Large-scale semiconductor complexes are known to use over 100,000 tons of industrial water per day. Industrial expansion leads to surging energy demand. The problem is that these costs are not sufficiently reflected in corporate valuations. As a result, the long-term cost burdens of labor ethics issues and ecosystem degradation become the responsibility of future society, while the immediate profits are recorded as corporate performance.In particular, the Korean stock market has a high dependence on nature given that the top market-capitalization stocks are concentrated in resource-intensive industries such as semiconductors, secondary batteries, oil refining, and chemicals. These industries create high added value while simultaneously premised on the consumption of enormous amounts of electricity, raw materials, and water resources. A rise in the KOSPI index signifies an expansion of the structure of natural resource use, making financial performance and the consumption of ecological resources an inseparable relationship.An Era Where Natural Capital Becomes a Financial VariableIn this way, the destruction of nature is moving beyond ethical debate into the realm of financial risk. According to the 2023 report ‘Nature-related Financial Risks: a Conceptual Framework to Guide Action by Central Banks and Supervisors’ issued by the Network for Greening the Financial System (NGFS), analysis and policy directions reveal that nature-related risks such as rising costs and supply chain disruptions can affect financial stability. In its ‘Global Risks Report’ published in 2023, the World Economic Forum (WEF) identified biodiversity loss and ecosystem collapse as among the most severe global risks within the next ten years. Furthermore, its 2020 report ‘Nature Risk Rising’ analyzed that 55% of global GDP, an economy of approximately USD 44 trillion, is moderately or highly dependent on nature and ecosystem services.[‘Project Natick,’ Microsoft’s eco-friendly data center development research experiment building an underwater data center. Container-type data centers were installed on the seabed to reduce cooling costs and energy use. © Microsoft]In Europe and the United States, the Taskforce on Nature-related Financial Disclosures (TNFD) is spreading. Since the final recommendations were announced in 2023, more than 300 global companies and financial institutions have endorsed or adopted them. They have begun to analyze how dependent companies are on nature and how nature degradation can lead to financial risks. This trend is also connected to the International Sustainability Standards Board (ISSB) system, which creates international disclosure standards. In 2023, the ISSB incorporated ESG disclosure into the financial reporting framework with the issuance of the climate disclosure standard (IFRS S2). The European Union is institutionalizing corporate responsibility for human rights and environmental risks through the Corporate Sustainability Due Diligence Directive (CSDDD, an EU law mandating companies to directly identify, prevent, and mitigate the adverse human rights and environmental impacts of their own operations, subsidiaries, and supply chain partners, and to disclose them transparently). South Korea likewise plans to pursue mandatory ESG disclosure from 2028.A rise in the KOSPI can clearly be a signal of economic growth. But if it is an outcome obtained at the cost of environmental degradation, it is no different from consuming future assets ahead of time. Only when the costs of resource use and sustainability are reflected in business budgets and ecosystem risks are incorporated into corporate decision-making processes can stable growth be discussed. This is why, even as we celebrate the KOSPI record, we should also ask what process produced those numbers. by Editor N
On February 25, 2026, the KOSPI broke through the 6,000 mark for the first time in history. Opening at 6,022.70, up 53.06 points (0.89%) from the previous trading day, the market capitalization also surpassed KRW 5,000 trillion for the first time on this day, as the KOSPI wrote a new chapter in Korean stock market history. In effect, 1,000 points had been added in just one month since settling above the 5,000 mark based on the closing price on January 27. The KOSPI Party Driven by Semiconductors: ESG Stocks Not InvitedThe growth engine that drove the KOSPI past the 6,000 mark for the first time was unmistakable. The share prices of Samsung Electronics and SK Hynix surged by 66.81% and 54.38% respectively this year alone, pushing up the index. This was the combined result of the explosive demand for High Bandwidth Memory (HBM) driven by the expansion of AI infrastructure and rising memory prices. In contrast, stocks in sectors classified as ESG investment leaders — new and renewable energy, carbon reduction materials, eco-friendly chemicals — largely missed out on this upward trend. Excluding Samsung Electronics and SK Hynix, the KOSPI that actual investors feel is estimated to be around the 3,900–4,000 level. This is why ‘semiconductor FOMO (fear of missing out)’ is spreading behind the glamour of the index.[KOSPI 6,000 breakthrough celebration © Korea Exchange (KRX)]At this very moment, the global financial market and industrial ecosystem can be seen as a structure led by the semiconductor and AI value chain, with defense, shipbuilding, and finance backing it up. While ESG-related stocks are lagging in short-term momentum, once ‘Korean-style transition finance,’ which supports the low-carbon transition of high-carbon, high-emission industries such as steel, chemicals, and cement, is introduced, the ESG response capabilities of these industries will immediately become a criterion for investment screening. Another Task Companies Face on the Day the KOSPI Celebration Rang OutThat said, February 25 was not a day without meaning for the ESG sector. On the very day the KOSPI celebration rang out, a quiet but meaningful announcement was also made. The Financial Services Commission (FSC) unveiled a roadmap to mandate ESG (Environmental, Social, Governance) disclosure for large listed companies starting in 2028. The FSC held the ‘Fourth Productive Finance Grand Transformation Conference’ at the Korea Chamber of Commerce and Industry in Jung-gu, Seoul. At the conference, FSC Chairman Lee Eok-won declared, “ESG is now a core task of productive finance,” and unveiled a draft roadmap for phased mandatory ESG disclosure starting from 2028 (FY 2027) for KOSPI-listed companies with consolidated total assets of KRW 30 trillion or more. The disclosure standards were prepared based on International Sustainability Standards Board (ISSB) standards, and Scope 3 disclosure — requiring the disclosure of greenhouse gas emissions occurring in supply chains and the like — will have its application deferred for three years to ease the burden on companies. [Fourth Productive Finance Grand Transformation Conference © Erounnet]The scale of climate finance (raising funds and providing financial services to respond to climate change) was also dramatically expanded from the previous plan (KRW 420 trillion for 2024–2030) to a total of KRW 790 trillion for 2026–2035, in line with the upward adjustment of the Nationally Determined Contribution (NDC). This is a measure to support the 2035 NDC target confirmed by the government last year of a 53–61% reduction compared to 2018. Given that a global investor network has officially expressed support for the amendment to the Capital Markets Act mandating sustainability disclosure, this is also expected to be a variable in the inflow of foreign capital.The moment a company’s carbon emissions and climate risk response levels are disclosed in numerical form through disclosure is the moment investors can finally begin to compare and evaluate. The surging KOSPI has already surpassed 6,300. Whether ESG-related stocks, which appear marginalized for now, will become a variable in the next growth cycle will be decided at the point when mandatory ESG disclosure truly becomes the language of the market. by Editor N
Can we trust corporate ESG management 100%? Through ESG reports, companies promise environmental protection, social responsibility, and transparent governance. A brand by a renowned domestic designer touted ‘ESG management’ and reprocessed carryover products, yet consumers did not accept this as a value provided by the brand. What these cases reveal is that the ESG that companies conceive of and the ESG that consumers experience are different.ESG as Proven by Companies: Reports Filled with Numbers and CertificationsThis past January, the security practices of the three major domestic telecommunications companies once again came under scrutiny. Telecom companies such as SK Telecom, KT, and LG U+ have been emphasizing ‘information security’ and ‘cybersecurity’ as key non-financial performance indicators in their annual ESG reports. SK Telecom touted its AI-based real-time monitoring and zero trust security architecture, while KT promoted annual information security investments on the scale of KRW 100 billion. LG U+ also received the highest grade in the government’s information security evaluation, and all three telecom companies received comprehensive A grades from the Korea ESG Standards Institute (KCGS).[SK Telecom certified dealership apology posted © Yonhap News]However, the reality was different. KT caused personal information leakage damage through poor femtocell (ultra-small base stations installed in homes or small business premises, directly connected to the mobile carrier’s core network) management, applying the same 10-year certificate to all devices. SK Telecom also experienced a massive USIM information leak and malware infection incident in April last year. LG U+ faced allegations that, after being notified of suspected personal information breaches, it reinstalled or destroyed some servers in an attempt to conceal the incident — behavior contrary to the ESG report’s promise to ‘build customer and social trust.’ [WOOYOUNGMI Black Palm Hoodie from the first half of 2025 season (top), Black Flower Patch Hoodie from the second half of 2025 season (bottom) © Shinsegae Mall and WOOYOUNGMI website captures, Hankyoreh]As the controversy grew, WOOYOUNGMI explained that it was “a process of fulfilling corporate social responsibility by reducing resource waste as part of ESG management.” They viewed the product as a new item that had undergone additional processing and redesign, and thus judged that a separate disclosure obligation was unnecessary. While they acknowledged the confusion caused to consumers and stated they would supplement their notification standards going forward, consumers reacted with shock at the fact that the brand had sold inventory products as new items. For Consumers, Action Matters More Than ClaimsWhat companies include in their ESG reports are mainly measurable quantitative indicators, such as board and ESG governance structures, environmental performance metrics, and whether policies have been established. Such indicators are good for external promotion.For consumers, however, ESG means what they ‘experience in daily life’: a company’s response and accountability when problems arise, and the safety of their personal information. It is not the dazzling figures in reports but the experience a company provides that is, in fact, ESG.[KT ESG Report © KT]In the telecom hacking incidents, the point at which consumers were angered was not ‘insufficient investment in security.’ It was the actual security systems that differed from what was stated in reports, and the opaque response. In the WOOYOUNGMI controversy as well, trust in the brand fell not so much because of the ‘use of inventory’ itself but because consumers had not been notified in advance.ESG reveals its true value not in ordinary times but in crisis situations. When a hacking incident occurs, whether the telecom company transparently discloses its response speed and routine management processes is what matters. For a brand, when there is a possibility of a product issue arising, how it explains it to consumers is the real measure of ESG management. What matters more than the fine phrases in reports is actual behavior.For ESG to become a company’s management philosophy, companies must make their ESG reports into ‘real promises.’ What matters more than the dazzling figures in reports is transparency. The evaluation criteria for reports must also be improved. Substantive items such as accident response, consumer protection, and transparency of communication must be more strongly reflected in evaluations.Aligning words with actions so that consumers do not doubt the ESG that companies speak of — this is the task for companies practicing ESG in 2026. by Editor N
At year-end, various awards ceremonies were held, and the ESG field is no exception. From environmental protection to social value creation and transparent governance, companies and institutions that sought to practice the true meaning of ESG drew attention. Which companies and institutions were recognized for ESG management, and for what activities were they recognized? Let us examine the award results across each category of the major ESG awards ceremonies held in 2025.A Representative Domestic ESG Awards Ceremony Based on the K-ESG Guidelines2025 K-ESG Management AwardsEstablished in 2022, this awards ceremony grants awards to outstanding companies that practice sustainable management across the Environmental (E), Social (S), and Governance (G) domains and have contributed to exemplary ESG management. It also selects outstanding companies and institutions based on the Ministry of Trade, Industry and Energy’s K-ESG Guidelines. The grand prizes are divided into comprehensive, environmental, and social categories, and a total of 41 companies, institutions, and organizations received awards across various categories, including the Minister of Land, Infrastructure and Transport Award and the Minister of Health and Welfare Award. Key grand prize winners are as follows.[K-ESG Management Awards Ⓟ Hanseo University][Social ESG Grand Prize — Woowa Brothers]Woowa Brothers, which operates Baedal Minjok (Baemin), is the first private company to operate a credit guarantee loan product in partnership with a first-tier domestic bank for small business owners in the food service and traditional market sectors and food service industry workers who face operational difficulties due to lack of credit and guarantees. It also contributed to fostering startups by operating ‘Startup Square’ for the growth of domestic startups.[Environmental ESG Grand Prize — Hansae Co., Ltd.]Having declared carbon neutrality in 2023, the company is transparently disclosing its target for reducing direct and indirect greenhouse gas emissions by 2030. It was recognized for having set and practiced a goal of reducing greenhouse gas emissions by 2030 through the introduction of new and renewable energy and the transition to electric vehicles. [Comprehensive ESG Grand Prize — Hanseo University]By fully adopting electronic administration to systematize ‘Paperless Administrative Work,’ the university drastically reduced its annual copy paper usage. It was also evaluated as striving for sustainable management by creating and annually operating an ESG self-diagnosis checklist. Hanseo University enjoyed the honor of winning the grand prize in this category for two consecutive years.An Awards Ceremony Recognizing ESG Practice by Companies, Institutions, and Individuals2025 Korea ESG Management Awards ‘THE BEST ESG’Held since 2023, this awards ceremony evaluates the ESG practice achievements not only of domestic companies, local governments, and educational institutions leading ESG management but also of individuals and youth. At the ‘2025 Korea ESG Management Awards THE BEST ESG’ ceremony jointly hosted by the Korea ESG Council and ESG Korea News, a total of 31 institutions and individuals were selected, comprising 5 grand prizes, 8 excellence awards, 5 merit awards, 3 youth frontier awards, 7 special awards (outstanding lawmakers), and 3 special awards (individuals). [Public Institution Grand Prize — Korea Midland Power Co., Ltd.]Korea Midland Power sought to realize carbon neutrality by expanding zero-energy housing and smart cities. It also contributed to residential stability through support for lease fraud victims and technology to reduce inter-floor noise. It was evaluated as having strengthened trust in the company through the introduction of the Labor Director System.[Local Public Enterprise Grand Prize — Chungbuk Development Corporation]It attempted carbon neutrality education campaigns and eco-friendly architectural design. It was praised for leading the low-carbon transition in the region. It was also evaluated as a transparent and trusted institution through improvements to the fair contract system and the operation of a human rights management committee.[Educational Institution Grand Prize — Chungnam National University]It strove for mutual prosperity with the local community through the provision of health and nutrition programs and lifelong learning opportunities. [Group photo of the 3rd Korea ESG Management Awards The Best ESG Ⓟ ESG Korea News]Individual awards also followed. In the Youth Frontier Award, three students, including Seo Yoo-jun of Gwanggyo High School, who participated in educational volunteer activities in the Philippines to address the educational infrastructure and learning opportunity gaps for the educationally underprivileged, received the honor of the award. ESG-Practicing Companies Recognized Directly by Consumers2025 Consumer ESG Innovation AwardsAn awards ceremony in which consumers directly evaluate the ESG management performance of companies was also held: the ‘Consumer ESG Innovation Awards.’ Last year’s ceremony was organized by Future Consumer Action and the Consumer Rights Forum, and through expert evaluation and deliberation by a panel of 50 consumer evaluators, a total of 24 companies and institutions were selected across 5 fields and 20 categories. The format involves selecting outstanding companies and institutions in each category and awarding the grand prize.[Consumer ESG Innovation Awards Ceremony Ⓟ HBN News][Environmental Innovation Award (Zero Waste Category) — Sempio]Reflecting customer VOC, the company applied a ‘removable label’ that can be easily detached under various storage conditions to its pasta sauce bottles, and obtained the ‘Glass Bottle Recycling Excellence Grade’ from the Ministry of Climate, Energy and Environment.[Consumer Rights Enhancement Award — Coreana Cosmetics]It was recognized for operating an independent customer service (CS) organization directly under the CEO and creating a system that quickly responds to consumers. [Consumer Safety Award (Child Safety Category) — Health Insurance Review & Assessment Service]Having won this category for three consecutive years, the Health Insurance Review & Assessment Service established a ‘Birth Information Linkage System’ for operating the birth notification system. The birth information linkage system links information across medical institutions, the Supreme Court, and the National Center for the Rights of the Child to ensure that birth registrations are not missed. It was recognized for its contribution to improving consumer safety by ensuring that all children can be publicly and safely protected.In this way, throughout 2025, various ESG awards recognized companies and institutions that practiced environmental protection, social value creation, and transparent governance. We look forward to seeing which companies will blaze new trails in ESG management this year as well. by Editor N
We are in an era that needs companies responsibly connected to our world more than companies that pursue mere profit. In that process, CSR (Corporate Social Responsibility) and ESG (Environment, Social, Governance) have gained prominence and are frequently mentioned, but as they are used similarly, they are often confused. The conflation of the two concepts does not stop at a simple misunderstanding of terminology. Failing to distinguish between them can lead to mistaking social contribution campaigns for sustainable management strategies, causing confusion in judging substantive performance. So what is the difference between the two terms? Let us confirm the concepts of CSR and ESG through two case studies.CSR Completed Through Participation, Going Beyond One-Way EffortsCoca-Cola has long faced criticism surrounding issues directly tied to its business structure. The point that approximately 150 liters of water are required, directly and indirectly, to produce a single 500ml bottle of beverage demonstrates that Coca-Cola’s water use issue falls within the domain of structural responsibility. Such issues surfaced as social conflict in the Plachimada region of India in the early 2000s. As agricultural damage including drinking water shortages caused by the factory’s excessive groundwater extraction came under scrutiny, the factory was eventually shut down in 2004.Subsequently, Coca-Cola shifted its CSR strategy in the direction of strengthening its responsibility for water use. From 2007, it pursued the ‘Water Replenishment Project,’ aiming to return the total amount of water used in its global production processes to local communities. In South Korea as well, Coca-Cola has been carrying out water resource restoration activities since 2017, including dredging agricultural reservoirs, improving waterways, and forest cultivation, centered on areas with high water stress. In this way, CSR refers to activities in which companies voluntarily practice social responsibility — such as environmental protection and contribution to local communities — going beyond the mere pursuit of profit. [Coca-Cola Wonderful Campaign © Coca-Cola Korea]The specific methods and character of CSR have been undergoing repeated change in response to the demands of the era and society and the corporate environment. Whereas past CSR had a strong character of one-way corporate social contribution such as donations and sponsorship, recent CSR is expanding in the direction of directly supplementing and resolving the social and environmental impacts arising from corporate activities, as in the Coca-Cola case.Coca-Cola’s ‘Wonderful (ON THE PL) Campaign,’ which began in 2020, is a case of participatory CSR designed so that consumers directly take part in the resource circulation process. It demonstrates the expanded direction of CSR in that it created a resource circulation structure through the proper segregation and collection of transparent PET bottles and led behavioral change by extending corporate responsibility to the participation of consumers and local communities.Ultimately, CSR can be said to be the philosophical foundation for companies to practice responsible management in the long term, going beyond simply doing ‘good deeds’ for society. Through CSR, companies can build brand trust, instill pride and motivation in their members, and lay the foundation for sustainable management.ESG: The Final Button for Sustainable ManagementESG is, literally, a standard for comprehensively judging the sustainability of a company by reflecting Environmental, Social, and Governance factors across management. If CSR is the philosophical foundation of the responsibility a company pursues, ESG can be seen as the concrete tool through which such philosophy is connected to actual management activities, decision-making, and evaluation indicators.McDonald’s Korea is counted among the companies actively practicing ESG management under the slogan ‘What’s Good for the World Is Good for McDonald’s.’ The ‘Taste of Korea’ project utilizing domestic ingredients created a win-win structure through collaboration with local farms and contributed to promoting the value of regional specialties. Kim Hee-soo, the county governor of Jindo-gun which participated with the ‘Jindo Green Onion Burger,’ revealed that “if McDonald’s chose it, it is trustworthy,” and that purchase inquiries about various agricultural products have since continued. McDonald’s projects together with Korean farms were estimated to have created approximately KRW 61.7 billion in social and economic value from 2021 to 2024.[McDonald’s Taste of Korea Project © McDonald’s Korea]In this way, social responsibility activities no longer remain at the level of describing a company’s attitude. ESG, which was previously classified as non-financial performance, is now directly connected to corporate value and financial performance, and operates as a standard for investment and regulation. Accordingly, ESG has established itself as an obligation rather than an option, and the trend of its utilization as a core indicator of corporate growth is becoming clear.In the end, while CSR presents the direction of the responsibilities and obligations that companies hold toward society, ESG functions as the standard for measuring and evaluating whether such responsibilities are actually leading to management activities and performance. When the two concepts are understood as existing in an organic relationship and utilized in the right places, companies can solidly practice sustainable management. Furthermore, it is companies that achieve a balanced integration of these two elements that will be able to position themselves as trusted future enterprises in the changing environment. by Editor N
On the 8th, Reuters reported that the European Union has agreed to significantly narrow the scope of the Corporate Sustainability Due Diligence Directive (CSDDD). Citing EU officials, Reuters reported that a plan to raise the applicable company thresholds to 5,000 or more employees and annual revenue of at least 1.5 billion euros (approximately KRW 2.5 trillion) has effectively reached the final coordination stage. This represents a dramatic increase from the original criteria of 1,000 or more employees or annual revenue of at least 450 million euros (approximately KRW 740 billion), and it is estimated that roughly 70% of European companies would be excluded from the regulation. As a result, concerns are growing over a retreat from corporate social responsibility obligations.[EU headquarters ⓒ European Parliament Multimedia Center]Time to Consider the Economic Burden on CompaniesCSDDD is a core piece of supply chain-based ESG legislation that the EU has been advancing for several years. The directive requires companies to prevent risks such as human rights violations and environmental destruction that may arise throughout their supply chains and to disclose these efforts. Companies that violate CSDDD could face fines of up to 5% of global revenue. The shift in circumstances is primarily attributed to economic instability. As economic concerns driven by high interest rates and slowing growth have spread across European countries, major players such as France and Germany have argued for scaling back the legislation to ease burdens on businesses. Analysts note that even the majority bloc in the European Parliament has shifted toward narrowing the scope of CSDDD.Concerns Over the EU's Retreat from Global ESG LeadershipCivic organizations focused on climate, human rights, and related issues are voicing unanimous opposition. This is because the EU, which has served as a global standard-setter for ESG regulation, climate change response, and sustainable management, now appears to be abandoning its own standards. There are growing concerns that the progress made in codifying corporate social responsibility is being undermined just over a year after formal implementation, under pressure from countries such as the United States and multinational energy giants like ExxonMobil.[Dutch MEP Lara Wolters of the Socialist Party, who resigned in protest against the CSDDD rollback ⓒ European Parliament Multimedia Center] As the obligations stipulated under CSDDD are relaxed and companies are able to focus on their direct trading partners rather than the entire supply chain, critics point out that it will become even harder to address ESG-level issues such as climate change and labor exploitation in the developing world. Global ESG Regulation: Entering a Period of Consolidation, Not ExpansionThis decision signals that the ESG regulatory trend is shifting from full-scale expansion to a phase of adjustment. The EU, which has played a pioneering role in ESG regulation, has now chosen to retreat. In the U.S., President Trump does not even acknowledge climate change and is in the process of canceling budgets for clean energy projects. The situation in Asian countries is different. Japan and China are moving forward with implementation of their established ESG regulations without reversing their existing positions. What does this mean for us? While major Korean companies operating in EU supply chains are now more likely to be partially excluded from the scope, firms that have already built ESG management systems face uncertainty about their return on investment. Demand for due diligence from European corporate clients is likely to persist for the time being, but a fluid period is likely to follow during which the extent to which ESG standards within global procurement networks are relaxed at the private-sector level cannot be confirmed.ESG's Growing Pains Have BegunThe EU's move to relax ESG regulations reveals the tension between the institutionalization of the regulatory framework and its real-world application, rather than a simple retreat. In other words, ESG as a topic is transitioning from the stage of "moral declarations" or "establishing principles" to the stage of "policy-coordination for practical implementation." As a result, full-fledged discussions on applying ESG standards among global supply chains, regulators, and investors — all within the ESG management domain — may now begin in earnest.Korean companies, too, need an approach that responds to this fluidity based on voluntary ESG strategy development and due diligence, rather than relying solely on changes in standards themselves.by Editor N
Global Big Tech companies' ESG-investment competition is growing to the level of megadeals. A representative company that closed a megadeal—meaning a large deal on the scale of a major corporation—is Google. On the 31st of last month, Google announced that it would invest 6 billion dollars (about 8.2 trillion won) in Visakhapatnam, Andhra Pradesh, India, to build Asia's largest data center and renewable-energy hub. The core of this project is the construction of a large-scale data center with 1-gigawatt capacity. Of the 6-billion-dollar amount for this project, which builds India's first large-scale data center, 2 billion dollars is to be invested in renewable-energy development.[Inside a Google data center ©Google]Why India? India's Data-Center Hub Strategy and Policy SupportBEhind Google's investment is India's active data-center hub strategy. That the Indian government classifies data centers as "infrastructure" to ease financing and provides clear guidelines is attractive to tech companies. Moreover, with a renewable-energy generation cost of 4.98–4.99 rupees per unit (about 79 won)—cheaper than natural-gas generation, which requires 5.4 rupees per unit (about 86 won)—economic viability is also secured. Google already supplies 50% of its power with renewable energy at the Yotta NM1 data center near Mumbai, and it has set and is operating toward a goal of expanding this to 70% by 2025.The Intersection of Surging Power Demand in the AI Era and a Decarbonization StrategyThis investment is also part of the 75 billion dollars Google planned to invest for global data-center expansion. In particular, it is directly connected to Google's "24/7 Carbon-Free Energy (CFE)" goal of covering the power demand surging with the spread of AI services with renewable energy. The carbon-free energy goal can be seen as an environmental goal one level higher than RE100, which matches annual renewable-energy purchases. This is because it is an aggressive plan to use only grid carbon-free power.Google plans to operate the new data center in connection with the "Blue Raman submarine cable system," scheduled for completion in Q4 2025. The submarine cable system, with a landing station in Mumbai, will greatly expand bandwidth between India and the world. Nara Lokesh, IT Minister of India's Andhra Pradesh state, stated that "the state government has already secured commitments for 1.6 GW of data-center capacity and plans to build up to 6 GW within the next five years." He also added that by building three submarine-cable landing stations in Visakhapatnam, it will secure about twice the submarine-cable capacity Mumbai currently holds.[The Big Tech ESG-investment megadeal rush ©ESG.ONL/ESG Today]A New Direction in the Big Tech ESG-Investment CompetitionGoogle's investment shows that the Big Tech industry's ESG-investment competition has entered a new dimension. In May last year, Microsoft signed a 10-billion-dollar renewable-energy development contract with Brookfield Asset Management to secure 10.5 GW of renewable-energy capacity between 2026 and 2030, and it recently signed a 10-year, 1.1-million-ton carbon-removal contract with Norway's Hafslund Celsio.Amazon signed a 650-million-dollar nuclear-power-plant power-purchase agreement with Talen Energy in Pennsylvania, and Meta also announced a 13.5-billion-dollar contract to purchase 1.1 GW of nuclear energy for 20 years from the Clinton Clean Energy Center in Illinois.What these companies have in common is that, beyond solar and wind, they include nuclear power, geothermal, and carbon-removal technology in their portfolios to try to achieve both the 24-hour power demand of the AI era and carbon-neutrality goals at once. We should pay attention to this investment competition in that the Big Tech companies leading the rapidly arrived AI era are leading not only technological pioneering but also the ways to achieve carbon-neutrality goals. by Editor N[Reference Article] The Evolution of Carbon-Neutrality Strategy—the Carbon-Removal Contract Between MS and Hafslund Celsio