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Evening ESG news and briefings to wrap up your day.
The European Union (hereafter EU) haS shifted its policy in a direction that greatly reduces companies' sustainability-reporting burden. On August 1, the "European Financial Reporting Advisory Group (hereafter EFRAG)" released a revised draft of the European Sustainability Reporting Standards (hereafter ESRS), stating that it had greatly simplified the reporting requirements under the Corporate Sustainability Reporting Directive (CSRD).Seeking a Balance Between Corporate Competitiveness and Sustainability ReportingThe core of this revision is the easing of the reporting burden. EFRAG removed all voluntary disclosure items and cut reporting data points by 68%. Mandatory data requirements were also reduced by 57%. This standard simplification was pursued as part of the European Commission's "Omnibus I" proposal. This proposal aims to reduce the burden of sustainability-related regulations—not only the CSRD but also the Corporate Sustainability Due Diligence Directive, the Taxonomy Regulation, and the Carbon Border Adjustment Mechanism.In the revision process, EFRAG focused on organizing sustainability reports to be more readable and concise and on strengthening their connectivity with corporate reporting. It also adopted the same terminology as far as possible to increase interoperability with the sustainability-reporting standards of the "International Financial Reporting Standards (hereafter IFRS)," and it emphasized a "Fair Presentation" framework.Patrick de Cambourg, chair of EFRAG's Sustainability Reporting Board, explained that "EFRAG is fully aligned with the strategic vision presented by the European Commission," and that "this revision provides what Europe needs at this point—a more focused and practical sustainability-reporting system that maintains ambitious goals while not placing an excessive burden on companies."[EFRAG releases simplified draft ESRS standards ©ESG.ONL/ESG Today]The Strategic Meaning in the Global ESG-Reporting Standardization CompetitionThis ESRS simplification is interpreted as aiming, beyond mere regulatory easing, for the EU's strategic repositioning in the global ESG-reporting-standard competition. Amid the U.S.'s ESG-policy retreat and the accelerating establishment of Asia's own ESG frameworks, the EU is assessed as having presented a "third way" that satisfies both practicality and effectiveness.In particular, strengthening consistency with IFRS sustainability standards is analyzed as an intention to reduce global companies' multiple-reporting burden. This can be seen as the EU taking a practical approach for the global spread of its own standards.The ESRS simplification also offers several implications for Korean companies. First, the practical burden on Korean companies operating in the EU is expected to decrease considerably. The 68% reduction in data points allows for great savings in report-writing time and cost. It is also expected to affect the domestic ESG-disclosure standards being developed by the "Korea Sustainability Standards Board (hereafter KSSB)." The KSSB is already preparing Korean-style standards based on IFRS sustainability standards, and the EU's simplification direction can be a reference for enhancing the practicality of Korean standards.In a situation where Korea's large companies are subject to the CSRD, this simplification is welcome news. CSRD reporting obligations apply in stages from 2025 to Korean companies operating in the EU, such as Samsung Electronics, LG Electronics, and Hyundai Motor, and the reporting burden is expected to decrease greatly under the revised standards.The Future of Sustainability-Reporting StandardsEFRAG plans to conduct 60 days of public consultation on this draft. The European Commission extended the deadline for EFRAG's technical advice submission, originally scheduled for the end of October, to the end of November. The final standards are scheduled to be finalized at the end of 2025. Experts assess that this simplification will greatly improve the practicality and efficiency of ESG reporting. However, how the delicate balance—reducing the reporting burden while maintaining the transparency of core ESG information—will work in the actual application process remains to be seen. by Editor N
[The AI and ESG dilemma ©ESG.ONL/ESG Today, Google]As of July 2025, there is a common conundrum companies worldwide face. Google announced it would invest 75 billion dollars in AI infrastructure this year. At the same time, it also reported that its greenhouse-gas emissions increased 13% in 2023. That very conundrum is the contradiction that, if you use AI to aim for ESG-based results, the environmental impact from AI's own energy consumption grows.The Reality of AI Energy ConsumptionMIT researchers have stated that a generative-AI training cluster consumes 7–8 times more power than ordinary computer operation. The more AI becomes personalized and reasons through complex problems, the more power consumption and carbon emissions inevitably increase. There is also a forecast that by 2028, more than half of U.S. data-center power will go to running AI. The "Stargate Initiative," a 500-billion-dollar cooperation project led by OpenAI and SoftBank unveiled this past January, aims to build cutting-edge AI infrastructure across the United States. The core project of the Stargate Initiative, planned to be pursued over four years, is the construction of AI data centers. Starting with Abilene, Texas, some 20 data centers are planned to be located within the U.S. It is a point at which we should of course be concerned about expanding a stable power-supply network for data centers and the enormous carbon emissions that follow.[Google's Georgia data center ©Google]The Difficulty of Measuring AI Technology's Contribution to ESG, and Companies' Efforts to Cover EnergyIt is not easy to accurately measure how much AI will affect ESG. The global AI-ESG market is expected to grow from 1.24 billion dollars in 2024 to 14.87 billion dollars in 2034, at an average annual rate of 28.2%. But quantifying whether there will be an actual ESG-improvement effect relative to AI investment, and to what degree, is still a challenge. The generative-AI field is leading the overall market growth, but investors are expressing both the expectation of ESG improvement through the use of AI and concern about the environmental impact caused by AI. In a situation where companies must find a balance among AI-adoption costs, environmental costs, and ESG-improvement effects, some companies are also trying to solve the problem in the direction of raising AI's own efficiency. Google announced that its next-generation "6th-generation Tensor Processing Unit (TPU)" chip is 67% more energy-efficient than the previous generation. Through this, it expects to be able to reduce the energy needed for AI-model training by up to 100-fold and related emissions by up to 1,000-fold. Microsoft and Meta are pursuing the operation of new nuclear power plants. Microsoft stated last September that it would cover the energy for its AI and data centers by purchasing power from Unit 1 of the "Three Mile Island" nuclear power plant in Pennsylvania, and Meta stated this June that it would do so by purchasing power from the "Clinton Clean Energy Center" nuclear power plant in Illinois.The AI-ESG Dilemma Is the Most Complex Challenge Companies Face in 2025Faced with the reality of surging energy consumption—as great as the opportunities of the rapidly growing AI and ESG markets—companies are striving to find a new balance. They cannot give up AI adoption itself. In that case, through building a transparent effect-measurement system and securing efficiency, they must prove ESG-improvement effects while minimizing the environmental costs AI creates. Companies that find the way will be able to continue opening a sustainable AI era. by Editor N
[Japan's GPIF runs against the global investment trend by expanding ESG investment ©ESG.ONL/ESG Today]The world's largest pension fund, the "Government Pension Investment Fund (GPIF)" of Japan, has expanded its ESG investment. The reason this news is surprising is that it is a move running against the current global trend. Amid political pressure centered on the U.S., fatigue with regulation, and doubts about returns, global asset managers' investment in ESG funds had been declining. According to the investment-research firm "Morningstar," the funds that flowed into ESG funds in the U.S. in 2023 came to just 3 billion dollars, down 78% from the previous year. It was in a situation where major U.S. asset managers, including BlackRock, were pulling out of climate-related investment citing pressure from state governments, or changing the names of their ESG funds, that the GPIF increased its ESG investment.GPIF's Investment Management, Contrary to the Global Flow—Where Did It Begin?This GPIF ESG-investment expansion can be seen as originating from a fundamental difference in investment philosophy. The GPIF emphasizes the roles of a "Universal Owner" and a "Cross-Generational Investor," maintaining the position that sustainable corporate growth is essential to maintaining market stability and improving long-term portfolio performance. Through its FY2024 business report released on July 4, the GPIF stated that, as of the end of March, it held about 18.2 trillion yen (about 126 billion dollars) in assets included in ESG indices. This corresponds to 14.7% of the GPIF's total equity investment, an increase of 400 billion yen from the previous year's 17.8 trillion yen. What is even more notable is that the ESG-integration investment ratio increased on both the domestic-equity and foreign-equity sides. In domestic-equity management, the ESG-integration investment ratio is about 16%, and foreign equity shows a ratio of about 14%. This shows that the GPIF consistently considers ESG factors when making investment decisions.[The ESG-related indices the GPIF used for investment ©GPIF]ESG, a Strategic Choice for Pursuing Long-Term Returns, Beyond a Mere TrendThis GPIF ESG-investment expansion cannot be seen merely as a result of following the ESG trend. Moreover, the GPIF has drawn a line that it will not invest for impact alone. The GPIF is simply judging that reducing the negative impacts stemming from environmental and social problems is key to companies' long-term market stability and securing returns. It is interpreted as viewing climate change, social inequality, governance problems, and the like as crises that can affect the entire market over the long term, and reflecting them as investment considerations. The GPIF's investment-strategy approach, not buried in short-term results, is expected to be an important reference case for other large pension funds as well. In particular, in a situation where global risks related to climate change and social inequality are intensifying, the GPIF's strategy of systematically reflecting these problems in investment decisions can be assessed as an effective methodology that pursues both risk management and profitability at once.Reaffirming the Value of ESG Investment from a Long-Term PerspectiveKorea's "National Pension Service" currently allocates about 3% of its total managed assets to ESG-related investment. This is a considerable difference from the GPIF's 14.7%. Can the GPIF's investment be a reference approach for the National Pension Service in finding a balance between profitability and social responsibility? The GPIF uses a full range of ESG-investment techniques, from index investment considering ESG factors to active stewardship activities to impact investment. The National Pension Service, too, can be seen as directly and indirectly conducting an approach similar to the GPIF's, in that it has introduced a Stewardship Code and is pursuing investment that induces ESG improvement in the companies it invests in. And this can be a way of presenting a direction for ESG management to our companies.Going forward, if the GPIF's ESG-investment results induce a move to expand ESG investment among other countries—especially Asian pension funds including Korea—let us watch whether it can bring change to the ESG-investment flow of the North American and European asset-management industries.by Editor N [Reference Article] Stewardship Code
[Microsoft signs a 10-year, long-term carbon-removal contract with the Norwegian energy company Hafslund Celsio ©ESG.ONL/ESG Today]"Microsoft" signed a 10-year, 1.1-million-ton carbon-removal contract with "Hafslund Celsio," Norway's largest waste-incineration and district-heating company, on July 1. It is a starting signal that corporate carbon-neutrality strategy is evolving beyond the concept of "carbon offset" toward the direct approach of "carbon removal."Carbon Removal and Carbon Offset—What Is the Difference?Carbon removal is a fundamentally different approach from carbon offset. If a company's carbon offset is the concept of "offsetting" its own emissions through emission reductions or forest creation elsewhere, carbon removal is an approach of physically capturing and removing carbon dioxide that already exists in the atmosphere. Through the contract with Hafslund Celsio, Microsoft stated that it would directly remove carbon with "Bioenergy with Carbon Capture and Storage (BECCS)" technology using biomass waste. Here, biomass waste mainly means organic matter such as wood chips, sawdust, and agricultural residues. This method of carbon removal is carried out by burning biomass to produce energy while simultaneously capturing the carbon dioxide generated and permanently storing it underground.["Hafslund Celsio's" waste-incineration plant located in Oslo, Norway ©Hafslund Celsio]Why Carbon Removal Is Attractive to CompaniesThe reason companies pay attention to carbon removal is the practical limits of achieving carbon-neutrality goals. Regarding carbon emissions, no matter how much energy efficiency is raised and how much one transitions to renewable energy, it is hard to reduce emissions below a certain level, so the concept of "residual emissions" exists. In particular, for technology companies like Microsoft that operate large-scale data centers, such residual emissions are of considerable scale. The quality and reliability problems of the existing carbon-offset market are also a reason companies turn their eyes to carbon removal. Carbon credits based on forest creation or renewable-energy projects have been much disputed in terms of "additionality" and "permanence." Whether trading credits actually has an additional carbon-reduction effect, and whether the reduction effect can maintain its effect over the long term, still remains a concern for companies. By contrast, direct carbon removal is easy to measure and verify. It is a method by which one can hold a result value in hand.We Must Pay Attention to the Rapid Growth of the Carbon-Removal MarketThe carbon-removal market is growing rapidly. The Swiss climate-tech company "Climeworks" attracted 162 million dollars in investment in the first half of 2025 alone. That major technology companies such as Google, Amazon, and Meta, besides Microsoft, are signing carbon-removal contracts one after another also indicates the present state of the carbon-removal market. It is worth noting that these companies are playing the role of technology-development partners beyond being mere buyers. In particular, Microsoft is leading the market's expansion by investing in various carbon-removal technologies under the goal of achieving carbon negativity* by 2030.*Carbon negativity: a State in which a company or organization removes or reduces more carbon than the amount emitted by its own activities.[The "carbon negative" plan Microsoft announced in 2020 ©Microsoft]Carbon-removal contracts can be a new challenge and opportunity for our companies as well. First, we must pay attention to how carbon-removal technology will be classified in the K-Taxonomy and green-classification system, and what role it will play in the government's carbon-neutrality policy. Korea's large companies, too, bear the task of having to achieve carbon-neutrality goals. For energy-intensive manufacturers such as Samsung Electronics, LG Energy Solution, and SK Hynix, carbon removal is highly likely to become an essential option. In fact, some Korean companies are already showing related movements: "POSCO" is investing in developing technology to capture carbon dioxide generated in the hydrogen-production process, and "Hyundai E&C" is showing interest in plant projects using carbon capture, utilization, and storage (CCUS) technology. "SK Group" is newly establishing a dedicated organization for developing carbon-reduction technology and seeking investment opportunities in the carbon-removal field. At the government level, the Ministry of Trade, Industry and Energy recently presented, through a "CCUS Commercialization Roadmap," a target of capturing 12 million tons of carbon dioxide annually by 2030.Challenges and OutlookThe biggest challenge for carbon-removal technology is still the high cost. If the carbon-removal cost—currently at the level of 100–600 dollars per ton—can be lowered to an economically viable level, the pace of commercialization will become even faster. Infrastructure building and policy support for large-scale commercialization are needed. In a situation where corporate carbon-neutrality strategy has entered the process of evolving from "emission reduction" to "direct removal," it is a point at which our companies too must respond.by Editor N [Reference Article] [Climate-Tech Brands and ESG] Climeworks, Which Gave CO₂ a New Role *
In the "2025 Global 100 Most Sustainable Corporations" survey selected by the Canadian economic media outlet "Corporate Knights," the French global energy-management and automation company "Schneider Electric" took first place. Schneider Electric has been named in this survey for more than 10 years. It was also selected as No. 1 among the "2024 World's Best Sustainable Leader Companies" chosen by the U.S. magazine Time and the German global data platform "Statista." Let us look at the reasons Schneider Electric has long been recognized for—and has maintained—global leadership in the sustainability field, and further in the ESG-management field.[The world's most sustainable company, Schneider Electric ©ESG.ONL/ESG Today]The Opening of the Sustainable Workspace "The Nest" and Energy ManagementIn 2025, Schneider Electric opened the smart office "The Nest" in Dubai. The Nest is drawing attention for its features—it can be expected to cut energy consumption by 37% compared with existing workspaces and to reduce carbon dioxide by 572 tons annually. As a project that transforms a workspace into something sustainable and smart, it applied a structure that strengthens energy efficiency and resilience through a building-management system integrating the IoT-based open platform "EcoStruxure solution" and "Planon." CEO Olivier Blum emphasized that "The Nest is a space symbolizing a sustainable future and an innovative work environment."[Schneider Electric CEO Olivier Blum ©Schneider Electric]Schneider Electric is also leading innovative solutions to reduce carbon emissions. Since 2018, it has supported customers using Schneider Electric's services in cutting 679 million tons of carbon-dioxide emissions. In addition, through its "Zero Carbon Project," it is achieving results such as cooperating with its top 1,000 suppliers to reduce supply-chain carbon emissions by more than 40%. Toward the goal of cutting carbon emissions by 25% by 2030, it also has the detailed goal of realizing carbon neutrality in Scope 1 and 2 by 2025. This is assessed as one of the most progressive strategies for realizing carbon neutrality among global companies, at a pace ahead of the Paris Agreement. Schneider Electric is expected to strive to realize the decarbonization of industry as a whole through various innovation measures as well—digitalization such as AI-based energy management, and electrification such as renewable-energy integration.[Schneider Electric's microgrid ©Schneider Electric]Expanding Energy Access and EducationSchneider Electric is working to supply clean electricity to 53.4 million people worldwide and is also showing enthusiasm for improving energy access. In particular, it is concentrating on building eco-friendly energy infrastructure such as "microgrids" (small-scale power grids that independently produce, supply, and manage electricity) and solar power in regions with difficult energy access, such as Africa and Southeast Asia.In addition, it iS also diligent in social-responsibility activities to strengthen future generations' sustainability capabilities and contribute to cultivating talent prepared for the global energy transition. By providing energy-efficiency education programs for youth, 824,000 people have received education, and it aims to reach 1 million educated by 2025. At "The Nest," too, it runs EcoStruxure-based solution experiences and partner and customer education, as well as youth-talent-cultivation programs.Corporate Sustainability Presented Through Governance, Not Only the EnvironmentThrough its "Schneider Sustainability Impact program," Schneider Electric transparently discloses, every quarter, concrete goals and progress toward achieving the UN Sustainable Development Goals (UN SDGs). It aims to realize responsible governance—securing gender diversity within its management and board, and linking the management-compensation system to sustainability performance. It also operates a system in which all employees can join in practicing sustainability, by regularly conducting DEI education for employees.CEO Olivier Blum boasts that "sustainability is the core of our business and the source of inspiration for our employees," and that "together with customers, partners, and communities, we are building a sustainable future." Schneider Electric is a company that proves, through results, that ESG management is a core value driving the future of global industry. At a point when global joint discussion of ESG is rising, we need inspiration like Schneider Electric's exemplary case of global ESG management. by Editor N
Recently, at the global ESG rating agency "Sustainalytics," NVIDIA received a very excellent rating—6th among 371 companies in the semiconductor industry. NVIDIA, a technology company drawing great attention for its unrivaled technological prowess and the resulting stock-market response, is in fact drawing attention from the ESG side as well. At the leading IT technology exhibition "CES (Consumer Electronics Show) 2025," NVIDIA CEO Jensen Huang appeared as a keynote speaker and introduced eco-friendly data centers and AI innovation technology. He expressed a commitment to sustainability and environmental-value creation. Can we connect NVIDIA and ESG management by this alone? Let us look at the sustainable-development philosophy that has supported the growth of the world's most-watched company. [NVIDIA CEO Jensen Huang ©ESG.ONL/ESG Today] Maximizing Energy Efficiency with Blackwell GPUs and Eco-Friendly Data Centers NVIDIA is the world's largest AI-semiconductor company, headquartered in California, USA, and since its founding in 1993 it has led innovation in the graphics-processing-unit and AI-accelerator fields. In terms of market position, too, NVIDIA holds a world market share of 80–90% or more in AI semiconductors and, as of 2025, is No. 1 in the world by market capitalization and the leader of the global AI-semiconductor market. The chips NVIDIA makes have established themselves as core components of AI servers and data centers worldwide and are regarded as a key element in the advancement of cutting-edge technologies such as generative AI and large language models (LLMs). NVIDIA's technological leadership can be confirmed not only in the products it makes but also in the production process. NVIDIA is directly contributing to greenhouse-gas-emission reduction by optimizing its data-center networks and infrastructure to reduce total power consumption and by covering about 76% of the power it uses with renewable energy such as solar and wind. NVIDIA stated that it aims for 100% renewable-energy use by 2025. The explanation is that, through Blackwell GPUs—which provide up to more than 20 times the energy efficiency of existing products—it greatly reduces power consumption in AI-computation tasks and can cut the cost and power needed for AI-inference tasks such as large language models (LLMs) by up to 25 times. At "2025 GTC (GPU Technology Conference)," the global AI and accelerated-computing conference NVIDIA hosts each year, it also conveyed its sincerity about energy savings by presenting a case of raising the energy efficiency of industrial AI servers and network equipment by more than 3.5 times. To overcome the climate crisis, NVIDIA is actively using the climate-modeling, energy-forecasting, and weather-analysis technology of its AI platform "Earth-2," and it is expected to create energy efficiency amounting to more than 3,000 times that of existing systems. [Jensen Huang, who appeared as a CES 2025 keynote speaker ©NVIDIA blog] Aiming for Transparent, Ethical Management That Creates Market Trust Reducing carbon emissions through the energy efficiency of the production process is not NVIDIA's only ESG management. This company also emphasizes observing ethical standards within its supply chain. When selecting suppliers, it applies strict standards for environmental regulations and human-rights ethical management. Each year, in accordance with global ESG frameworks—the Global Reporting Initiative (GRI), the Sustainability Accounting Standards Board (SASB), the Task Force on Climate-related Financial Disclosures (TCFD), and the UN SDGs (Sustainable Development Goals)—it publishes a sustainability report and discloses its environmental and social impacts. In particular, it transparently shows indicators such as climate-change response, energy efficiency, renewable-energy use, carbon-emission reduction, employee welfare, diversity and inclusion, and supply-chain management. There is also criticism that AI technology, situated everywhere in our lives, makes the Earth hotter through technology competition that prizes only speed and performance. But NVIDIA has become a company that leads the advancement of AI-semiconductor technology with eco-friendly, ethical management and, through an organizational culture that practices renewable-energy use and DEI, has won the full trust of diverse stakeholders such as customers and investors. We hope that NVIDIA's ESG management—finding solutions through ESG amid the problems it faces—can be evaluated as much as its technological fame. by Editor N
A new paradigm—"sustainable security"—has raised its head. For a long time, global ESG investors treated investment in the defense industry as taboo on the grounds that it was "unethical." In ESG investment governed by sustainability regulations, the defense industry was excluded all the more. However, for reasons such as the prolonged "Russia-Ukraine War" and the ever-present threat of conflict in the Middle East, countries within Europe are showing a movement to re-examine their stance on defense-industry investment. In particular, as Trump's withdrawal from NATO (North Atlantic Treaty Organization) and the possibility of a change in the U.S. defense commitment have come up as topics related to diplomacy and security, Europe is changing the way it views the defense industry—if only as a matter of preparation.The "Institute for Economics and Peace (IEP)"—a global think tank headquartered in Sydney, Australia, with branches in major cities around the world—announced that, as of 2024, the past three years had been the most violent era of the past 30 years. The cost the world spent on war and localized conflict during this period reaches an enormous scale of 14 trillion dollars a year. In 2024, too, global defense spending surged amid growing international threats. Europe's defense spending, including Germany's, rose by as much as 16–17%. Against this backdrop, related stock prices such as European defense-sector ETFs (Exchange Traded Funds) have risen sharply, and the re-evaluation of defense investment is also gaining momentum.[Growth trend of Europe's defense-industry ESG funds ©FT (data source: Morningstar Direct)]Defense-Industry Investment: Unethical vs. a Method for Strategic SustainabilityThe defense industry, because of the calamities wrought by "lethal weapons," has long been classified as an unethical sector and excluded from ESG investment. But for the sake of guaranteeing the safety of the nation and society, the defense industry cannot simply be excluded. Currently, European countries, major sovereign wealth funds, and financial supervisory authorities are expressing the perception that the defense industry is not a mere "war industry" but an essential industry for social stability and strategic sustainability. This past March, the UK's Financial Conduct Authority officially announced that "sustainability-related regulations do not prohibit investment in a particular industry." Saying that the decision of whether to invest in defense firms is left to individual financial institutions and investors, it put forward a policy that in effect expands investment in, and financial support for, the defense industry.Not only in the UK but also in Norway, political pressure is growing that restrictions on defense investment hinder national security and economic growth. Norway—which for more than 20 years has banned investment in major defense conglomerates—recently came to discuss easing the rules precisely because it could not ignore this flow of change. Furthermore, the European Union (EU) is discussing measures to classify the defense industry as a "strategic sustainability industry" or to reflect a "contribution to security" in the ESG evaluation system.Domestically, too, the establishment of ESG-management evaluation standards and incentive measures for defense firms is being pushed. Major defense companies such as Hyundai Rotem, Hanwha, and LIG Nex1 are also strengthening ESG management—developing eco-friendly technologies, reducing greenhouse gases, and improving governance.[Growth trend of Europe's defense-industry ESG funds ©FT (data source: Bloomberg)]Restrictions on Inhumane Weapons... Responsible Investment Standards Are NeededThe boundary that had been erected between ESG investment and the defense industry is increasingly likely to be gradually dismantled. Governments and regulators of various countries are easing regulations on financing for the defense industry, and investors, too, are moving in a direction that considers sustainability and security together. That said, the UN Human Rights Council, while acknowledging the re-examination of defense-industry investment, strongly argued that companies that produce or sell "cluster munitions, landmines, and chemical weapons"—inhumane weapons banned under international law—must absolutely be excluded from investment. It also stressed that human-rights due diligence and environmental-impact assessment for the defense industry as a whole are essential.On the other hand, Mollie Thornton, senior investment manager at the UK ESG-focused investment firm "Parmenion," argued that the defense industry should continue to be excluded from investment targets, citing the point that it generates serious ESG risks such as human-rights violations, political instability, and environmental pollution. This is because it is in effect impossible to control the final end-use of the weapons produced through defense-industry investment and the possibility of human-rights violations. She posed a weighty question: "The need for defense is clear. But who can judge who the 'good forces' are? How can investors be sure that weapons will not fall into the hands of the wrong forces?"In this way, global ESG investors and related institutions are trying to break the existing taboo on defense-industry investment, citing the importance of security. Whether this turns out to be the right thing for the better future we hope for will be confirmable only after time passes. Even if the opportunities and scale of defense-industry investment are expanded, the point that—like other industries striving to do so—it must provide sustainable solutions that align with ESG-based ethical values will operate as a key criterion for judgment. by Editor N
"Invention Day" on May 19 was established to commemorate the day King Sejong unveiled to the people the world's first rain gauge, the "cheugugi" (the 23rd year of Sejong's reign, May 19, 1441). The cheugugi, commonly known to have been developed together by Jang Yeong-sil, a scientist and engineer of Joseon, and King Sejong, recently drew additional interest for the fact that it began with an idea from Crown Prince Munjong.["Invention Day" is the day King Sejong unveiled the rain gauge to the world ©ESG.ONL/ESG Today]The history King Sejong left behind makes us realize how significantly "invention"—for the benefit of all people—influences social development. The invention of the rain gauge, going beyond mere scientific and technological progress, brought about innovation and change: the scientization of Joseon's agriculture and the realization of a fair society. On Invention Day, let us look at the achievements of King Sejong—who ran state affairs creatively with a heart that deeply cared for the people—and the essence of the ESG management we pursue today.Building a Sustainable Agricultural Environment Based on Agricultural DataBefore Sejong, there were limits to determining the timing and methods of a year's farming, because rainfall could only be known roughly. But after the introduction of the rain gauge, accurate rainfall data was tallied across all eight provinces of Joseon, and farmers became able to respond scientifically to the weather changes they faced in farming. Surveying technologies introduced along with the rain gauge, such as the "calendrical system,*" also brought innovation to agricultural guidance and irrigation projects. Sejong also set about organizing farmers' experience into science. Breaking away from the practice of relying on China's past agricultural texts, he collected accounts of farmers' experience and compiled "Nongsa Jikseol," an agricultural manual that could be easily referred to when farming in our country. He spread farming methods suited to our climate and soil among the people.• The calendrical system is a method of determining the cycle and timing of a year based on the cycles of celestial bodies.Sejong—who institutionalized weather observation and compiled agricultural information to raise agriculture's sustainability—even reformed the tax system. Because rice was as good as money at the time, it was an important means of paying taxes. Listening directly to the opinions of hard-pressed farmers, Sejong abolished the unfair tax system that had been rampant and introduced the "Gongbeop," a groundbreaking tax system that fairly imposed taxes according to the fertility and productivity of the land, greatly easing the people's tax burden as well.[A rain gauge currently kept by the Korea Meteorological Administration ©JoongAng Ilbo]A Fair and Inclusive Society: Sejong's Protection of the Socially VulnerableSejong carried out various welfare policies to protect the socially vulnerable and build a country where everyone lived well together. In times of famine and disaster, he lent grain through relief systems, and to vulnerable groups such as widowers, widows, orphans, and elderly people living alone, the government distributed grain directly. He actively looked after and supported the people's livelihoods, including lending seeds and food to people whose livelihoods were difficult due to disaster.In finance, too, so that the people would not suffer from the harms of usury, he limited interest rates to within 3% per month and 10% per year and stipulated that the total interest could not exceed the principal. Beyond this, he hired people with disabilities into government posts and granted maternity leave to public slaves—implementing welfare policies so far ahead of their time that they seem striking even compared with today, thus carrying out the Diversity, Equity, and Inclusion policies that this era speaks of.[The Annals of King Sejong ©Annals of the Joseon Dynasty]The "Deliberation System" and Transparency: a Model of GovernanceSejong's rule—which leaves nothing to be desired even when viewed through ESG—also has parts worth examining on the governance side. The "deliberation system" carefully attended to the people's voices through many officials. This "deliberative politics" is quite similar to the concepts of transparent governance, stakeholder participation, and responsible management that today's companies and nations discuss—as seen in the premise that the voices of various classes are reflected in the policy decision-making process, and in fair, transparent procedures.[The statue of King Sejong at Gwanghwamun ©Yeollin Gwangjang]"Politics begins with loving the people. A good system is one suited to its time, and its core is the king's heart toward the people."Sejong's words, left in the Annals of King Sejong, resonate in our hearts amid political and social turmoil. May 15, Teachers' Day, is also King Sejong's birthday. This May, let us reflect on the ESG spirit of King Sejong—a teacher who remains a powerful inspiration as today's Republic of Korea seeks a sustainable future. by Editor N