Have you ever heard about the trending keyword, ESG? ESG represents using environmental, social, and governance criteria to estimate nations and corporations on how far developed they are regarding sustainability. Specifically, the environmental area deals with the preservation of our natural worlds such as climate change, carbon emission reduction, and deforestation. The social area considers humans and our interdependencies. In the area of governance, it cares about logistics and defined processes for running a business or organization.
Corporations that try to adhere to criteria regarding ESG put their effort to be ethical in those particular sectors. Since 2011, the Korea Corporate Governance Service has been evaluating the level of sustainability management of listed companies in Korea through ESG evaluation that includes social responsibility and environmental management. A good evaluation leads to a better investment.
A growing number of large companies are paying attention to ESG management. LG Electronics is providing ESG support for its partners through a "win-win payment system", while GS Caltex conducts "ESG self-inspection" so that its partners can check and practice ESG on their own.
What if there is a company specializing in ESG research? QESG is an on-demand ESG company that collects data by direct contact with companies requiring an evaluation. QESG was founded in 2019 and attracted 300 million won worth of seed investment from Next Dream Angel Club. The Next Dream Angel Club, which consists of 80 professional investors, cited the explosive potential of the ESG market and differentiated business models as the reasons for the investment.
Social and environmental risk factors are quantitatively examined to provide an ESG evaluation report that analyzes the level of management against the risk of businesses and assets held by companies. It utilizes a variety of non-financial and financial analysis techniques, including data analysis by artificial intelligence techniques, UNEP FI climate asset risk analysis, and technical recommendations from the Task Force on Climate-related Financial Disclosures (TCFD). QESG does not rely solely on limited observational information but secures data and reliability through active involvement and systematic Due-Diligence processes. While the existing ESG evaluation provides specific evaluation results only for companies around 120 KOSPI-listed companies, QESG can cover more than 90,000 domestic companies, from large listed companies to unlisted small and medium-sized companies. All of these processes are automated courses from data collection to verification and evaluation through a specialized platform developed by oneself.
In addition, it holds a research license for SASB, the only global sustainability accounting standard in Korea. As interest in ESG has increased significantly recently, research and evaluation results for QESG are growing rapidly. Based on these services, QESG has evaluated 1,100 private companies and financial institutions over the past year.
CEO Bae Ik-Hyun of QESG said that attracting seed investment will accelerate entry into the ESG data service market. He also said that as the impact on ESG companies gradually increases, collaboration in various fields on ESG evaluation such as companies in the financial sector, will be possible in the future.