hankyoreh

Katharina Herzog, co-founder and CEO of money:care, gives a presentation on trends and issues in sustainability performance using SDPI at the Asia Future Forum on Oct. 11. (Kim Jung-hyo/The Hankyoreh)

Amid a global trend toward standardized and mandatory ESG (environmental, social and governance) reporting, participants in a panel discussion on the topic of “Beyond ESG Washing, A New Sustainability Reporting Proposition” at the 14th Asia Future Forum agreed on the need for companies to properly assess sustainability.

The forum, which was hosted by the Hankyoreh Media Group, was held at the Korea Chamber of Commerce and Industry in Seoul on Wednesday.

The Sustainable Development Performance Indicators (SDPI), which were developed by the UN Research Institute for Social Development (UNRISD), were rated positively in the panel discussion for their presentation of the normative thresholds needed to make society more sustainable.

As part of the panel, Ilcheong Yi, a senior research coordinator at UNRISD, made a presentation titled, “Authentic Sustainability Assessment: Sustainable Development Performance Indicators.”

“While a number of ESG assessment indices are available, whether they accurately measure sustainability is a different question. The SDPI originated from a perceived need for a framework for assessing genuine sustainability,” Yi said in his presentation.

“[The current ESG indices] are little more than a game for big for-profit companies,” Yi said, taking issue with an incrementalist approach that is divorced from environmental carrying capacity, short-termism that only focuses on changes over the past few years, and the errors that result from overemphasizing averages.

Among the SDPI’s notable characteristics are its inclusion of small and medium-sized enterprises, which account for a large share of employment; the normative thresholds it provides; its context-based approach; and its analysis of long-term trends of five years or longer, Yi emphasized.

Katharina Herzog of money:care, an ESG assessment and consulting firm from Austria, also addressed the current limitations of ESG assessment in a presentation titled, “Recent Trends and Material Issues in Sustainability Performance of Global 200+ Companies Focusing on SDPI.”

Even companies that have received the highest ESG ranking might not be sustainable, Herzog said.

If we are to find a path to coexistence in the era of climate crisis, we need to redefine sustainability measurement, Herzog argued. When her agency assessed 200 listed companies around the world that are regarded as sustainable in terms of 12 items related to climate, society and gender among the 61 items in the SDPI assessment index, Herzog said it reached the disappointing conclusion that many companies have failed to achieve sustainability in the true sense of the word in terms of climate, the gender wage gap, and the CEO-worker pay ratio.

Yang Eun-young, the chief researcher on the social change team at the Hankyoreh Economy and Society Research Institute, delivered a presentation that used the SDPI to assess the sustainability performance of the “big five” companies in the global IT (information technology) industry: Apple, Intel, Samsung Electronics, SK Hynix and the Taiwan Semiconductor Manufacturing Company (TSMC). Her presentation was titled, “Sustainability Analysis of Global IT Companies: Focusing on the ‘Big Five’ Companies.”

“Apple and Intel showed considerable progress on implementation in the areas of environment, diversity and inclusion, while SK Hynix and Samsung Electronics did well in the areas of employee safety and quality and life. TSMC reported specific and detailed information in all areas and demonstrated a high degree of implementation in the areas of diversity, inclusion and sustainable management practices,” Yang said.

By Kwack Jung-soo, senior staff writer

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