[One year of ESG fever] Experts gathered to form the Korea ESG Society.

The ESG craze that started to blow among Korean companies since last fall.

A year after each company began to declare "ESG management," related academic societies have even emerged in Korea.

The Korea ESG Association held its inaugural meeting and first academic conference at Yonsei Severance Building in Jung-gu, Seoul on Wednesday.

ESG refers to non-financial factors such as the environment (E), society (S), and governance (G) that can affect the value and sustainability of a company.

It is a structure in which specialized rating agencies rate each company's ESG scores on a certain basis and based on the results of this evaluation, the investor decides whether to invest in the company or withdraw funds.

Cho Myung-rae, an honorary professor at Dankook University (former environment minister), who was elected president of the conference, gave a keynote speech at the conference.

"Among the assets operated by global asset management companies in 2020, ESG is worth $45 trillion, which accounts for nearly half of the total," Cho said. "This portion is expected to reach 95 percent by 2030."

They say that ESG, which had been only dealt with in terms of non-financial risk (risk) management, is now considered to be financial or investment risk management itself.

"In order to establish the ESG system in terms of social air (a tool used by all members of society), it is necessary to establish the tentatively named 'ESG Promotion Institute', which is the middle level between the government and civic organizations," said Cho.

Through this, not only support the government's ESG-related policies such as carbon neutrality, but also provide ESG-related information and provide ESG-related advice and consulting to necessary companies.

"As the ESG craze began last year, consumers, who used to only consider cost-effectiveness, are now showing a big change in their value consumption," said Jeong Hee-young, vice president of SK Group, who was in charge of presenting the topic. "The concept of ESG has also begun to come into the company's important strategies."

"Apple is demanding RE100 (100% renewable energy use) from Samsung Electronics and SK Hynix, which supply parts to Apple, but we have no choice but to follow this ecosystem," Vice President Chung said. "SK announced its RE100 membership for the first time in Korea in November last year."

Jeong Jae-kyu, a senior researcher at the Korea Corporate Governance Service, said, "Many companies at home and abroad have declared ESG management and set up an ESG committee, but we do not have a support organization. Only when we have a support organization, the ESG committee can function properly and companies can manage ESG."

Senior researcher Jeong pointed out, "It is important to disclose ESG information, and we need to think about the verification system for related information," and added, "We need to pay attention to this part at the ESG conference."

Yoon Yong-hee, a lawyer at the ESG Research Institute in Yulchon, a law firm, said, "ESG will not end up as a fad for a moment because it is in line with the company's existential theory or philosophy of maximizing shareholder profits," and added, "It is an era when we are kicked out if we don't act as a key player on a playground called ESG."

Choi Jae-chul, former ambassador for climate change at the Ministry of Foreign Affairs, said, "The European Union's carbon border adjustment system (CBAM) is linked to Europe's emission trading system, so the Korean government should discuss with the EU to ensure compatibility of the EU-ETS with Korea's emission trading system."

This is because Korean companies must receive recognition from the EU for their efforts to reduce greenhouse gas emissions through the domestic emission trading system to prevent damage caused by CBAM.

Meanwhile, at the general meeting of the ESG Association, Professor Cho Gyo-hyun of Soongsil University (former president of the Korean Constitutional Court) appointed Kim Hyung-joon, an auditor of the Korea Coach Association, as the next president of the association.