Korean companies exporting six carbon-intensive items such as steel and aluminum to Europe must prove the carbon emissions generated during production and bear the corresponding costs.
The time has come for a fundamental shift in how Korean companies view ESG.
Until now, ESG (Environmental, Social, Governance) has been treated as a means for large corporations to manage their image, or as a distant concept for small and medium-sized enterprises (SMEs). However, the EU Carbon Border Adjustment Mechanism (CBAM) is already in full implementation this year, the Korean financial authorities' disclosure roadmap is nearing finalization, and demands from large corporate supply chains are rapidly trickling down to partner companies.
If current regulatory schedules proceed without changes, ESG is highly likely to become a practical prerequisite for investments, financing, and export contracts for major exporting and listed companies around 2030.