[팩플] ‘ESG Declaration’ of a continuous tech company… “Why ESG is different from CSR”

Domestic and foreign IT companies such as Apple and Kakao are presenting ESG as a new year management topic. ESG, collectively referred to as Environment, Social, and Governance, refers to the act of linking social and ethical values ​​to overall management activities for the sustainable development of a company. Even in the corona 19 pandemic, why are tech companies proclaiming ESG one after another?

· Tim Cook, Apple’s CEO, appeared on CBS on the 13th, “I will invest 100 million dollars (about 109.8 billion won) to resolve racial discrimination by establishing more than 100 learning hubs nationwide in cooperation with Black University.” Said. When CBS announced the day before that “Tomorrow Apple will make a big announcement,” there was a high expectation that news related to core business such as Apple Car would come out, but the prediction was wrong. The major announcement announced by Tim Cook is’ESG Management’.

Tim Cook, CEO of Apple. [AP]

· ESG was also a key keyword in CES 2021, which closed on the 14th. Samsung Electronics announced that it will develop artificial intelligence (AI) technology that saves water and electricity from washing machines and dryers, and will change all TV packaging boxes into’eco packages’ that can be reused as small furniture or cat houses in the future. Auto parts maker Bosch introduced’AIoT’ technology that combines AI and the Internet of Things (IoT) and emphasized, “We will let AI be used to improve lives and prevent climate change.”

· Tech companies are applying their innovative technologies to social and environmental issues as well as to the problems they face. In particular, since last year, global IT companies such as Google, Facebook, and Microsoft (MS) have been significantly increasing the proportion of ESG-related activities.
· Google announced its plan for the’Carbon Zero Energy Project’ in July last year. It plans to invest more than 5 billion dollars (about 5,495 trillion won) over the next 10 years to secure 5 gigawatts of solar and wind power. Apple heavily introduces ESG-related activities on the company website. From 2021 onwards, executive bonuses are reflected in their ESG-related performance. It will quantitatively evaluate activities that enhance six values ​​related to eco-friendly activities, diversity promotion, and device security.
· Domestic IT companies are also engaged in ESG management. Kakao held the board of directors on the 12th and decided to establish an’ESG committee’ under the board of directors. The company subsequently announced the’Human Rights Management Statement’, which contained user information protection and digital responsibility, and the’Algorithm Ethics Charter’, which contained the contents of protecting the public good when developing AI technology. Naver also established an ESG committee in October last year and formed a dedicated organization.

Domestic and foreign tech companies are also taking the lead in ESG, collectively referred to as Environment, Social, and Governance. [셔터스톡]

· The pandemic caused by Corona 19 also promotes ESG management. The challenges facing humanity, such as infectious diseases such as Corona 19 and climate change, cannot be solved by a single government, organization, or individual. To increase the role of companies with innovative technologies.

· Tokyo University President Makoto Konokami said at the Tokyo Forum 2020 last month, “In the unprecedented crisis such as corona and climate change, finding measures to reduce energy and protect the environment using big data can lead to changes in human behavior.” Explained.

· Professor Kyung-Mook Lee (Business Administration) of Seoul National University said, “Last year, it is meaningful that Blackrock, the world’s largest asset management company, announced that’We will use ESG as a review standard for all investment and acquisition decisions in the future.’ Even if it is a company, the stock price has fallen and it has become a situation where it is impossible to receive investment.

· ESG is similar to corporate social responsibility (CSR) in that it promotes the sustainable development of companies and participates in solving social problems. However, ESG is characterized by quantitatively calculating and evaluating its activities and results. While CSR plays a positive role with consumers and local communities to enhance the image of a company, ESG links environmental, social, and governance changes to the company’s main business activities.
· The Financial Services Commission announced a plan to improve the corporate disclosure system on the 14th, and announced that it is mandatory to submit a sustainability report containing ESG information. The Sustainability Report contains improvements related to environmental companies’ response plans, labor-management relations, and gender equality.
Financial information institutions and research companies around the world, such as Dow Jones and Pitch, also develop and rank the’ESG Index’ by themselves, or announce excellent ESG companies. Seoul National University professor Lee Gyeong-mook emphasized, “Because it scores how much greenhouse gas is emitted and how transparent corporate governance is, it is meaningless to emphasize only the message of’You are good at ESG’.”

How is ESG and CSR different? Graphic = Reporter Kim Kyung-jin [email protected]

· ESG is often handled by the CEO. Kakao, founder Kim Bum-soo, has decided to lead the ESG committee directly. Amazon created a climate crisis response fund of 10 billion dollars (about 11 trillion won) last year and named it the Vegas Earth Fund after CEO Jeff Vagers.
· ESG investment and ESG bonds are also expected to increase significantly this year. ESG bonds are bonds for issuing funds to be used for sustainable management. In accordance with the guidelines of the International Capital Markets Association (ICMA), the purpose of the funds raised and post-disclosure of fund management must be consistent with ESG objectives. The National Pension Service has said it will expand ESG investment to half the total fund’s assets by 2022.

Reporter Ha Sun-young [email protected]

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