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December 31, 2009
Korean Companies Expect to Increase Sustainability Management Practices
    by Robert Kropp

Survey finds that while such issues as environmental management and supply chain management remain low among corporate priorities in Korea, climate change legislation and the outperformance of sustainable companies will lead to widespread implementation.

Sixty-five percent of 187 corporate respondents to a survey conducted by SolAbility, a provider of environmental, social, and governance (ESG) research for institutional investors, believe that the economic crisis has “highlighted the need for sustainable management thinking and management systems” in Korea.

The survey, entitled Corporate Sustainability Survey 2009: Korea, also found that 55% of responding organizations have already implemented some form of sustainability activity into their operations. Respondents were nearly unanimous in expecting that their companies will have fully implemented sustainability management practices by 2014.

One reason for such high expectations regarding sustainability management by Korean companies, of course, is forthcoming regulatory action on climate change. At present, corporate attention to climate change is a relatively low priority, according to the survey. But more than two-thirds of respondents expect climate change to become a significant issue for companies by 2014.

At present, sustainability management practices by Korean companies reflect a traditional prioritization of social and ethical considerations, as ethical management and philanthropy were reported as the top two sustainability practices implemented. Conversely, environmental management, supply chain management, and integration of sustainable practices into manufacturing processes, remain low on corporate agendas.

The survey found that the issue of climate change is not the only one expected to drive a greater attention to sustainability in Korea. A growing acknowledgement of the financial benefits of sustainable measures such as technological innovation and energy efficiency has contributed to a cultural shift in corporate attitudes toward sustainability in Korea.

The superior financial performance of the top sustainable companies in Korea has been noticed as well. SolAbility’s ESG research has found that “the most sustainable companies demonstrate a clear outperformance of the Korean stock exchange over a long range of time.”


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