Partnership Propels Korean Companies Toward Sustainable Business Practices
[Paris – January 2024] — In a significant move aimed at advancing Korea's commitment to environmental sustainability, the Korea Trade-Investment Promotion Agency (KOTRA) and the Korea Productivity Center (KPC) have formalized a partnership with EcoVadis, the leading business sustainability ratings company, through the signing of a Memorandum of Understanding.
The partnership is in part driven by escalating ESG disclosure requirements in major export destinations such as the United States and the European Union (EU). Such requirements are of paramount importance particularly for a nation like Korea, which is heavily reliant on foreign exports. Moreover, the EU mandates companies to manage Environmental, Social, and Governance (ESG) risks of partner companies through the Corporate Sustainability Due Diligence Directive (CSDDD or CS3D). In response to such mandates, it is expected that large Korean companies will also leverage the program and obtain EcoVadis assessment ratings.
Central to the agreement is the development of an effective guide tailored for Korean enterprises, helping companies understand and optimize their use of EcoVadis’ sustainability ratings. Additionally, efforts will be made to refine English-to-Korean translations of these ratings. KOTRA, KPC and EcoVadis are set to conduct a collaborative workshop, fostering a deeper understanding of ESG principles. Plans are also underway to support Korean Small and Medium-sized Enterprises (SMEs) in completing the EcoVadis assessment, with a specific focus on the automotive, electronics, semiconductor and IT sectors.
KOTRA articulated the rationale behind choosing EcoVadis: “The main reason KOTRA and KPC decided to work with EcoVadis is that their sustainability assessments are widely trusted by the global partners of Korean exporters. In addition, their vast amount of data is expected to serve as a guide to what Korean companies need to improve to respond to ESG assessments in the near future.”
This partnership is not an isolated initiative but aligns with a broader regional trend towards responsible business practices. It echoes the efforts of the Government of Japan, which recently issued guidelines emphasizing the importance of respecting human rights in responsible supply chains. Japan is also exploring the integration of global third-party supply chain assessments into its sustainability evaluation framework.
In a forward-thinking commitment, KOTRA and KPC have earmarked their resources for offering a sustainability education and consulting services to support EcoVadis assessments for Korean SMEs. These supports will facilitate comprehensive sustainability assessments, a move intended to accelerate the adoption of sustainable business practices among SMEs and contribute to the broader objectives of the Sustainable Development Goals (SDGs).
According to the stakeholders involved, the initiative is expected to bolster Korea's export competitiveness over the long term. As the number of export companies improving performance to meet ESG standards of multinational customers grows, risks like business relationship disruptions due to low ESG competitiveness should decrease. As such, the program is viewed as a pivotal starting point in enhancing the ESG competitiveness of Korean SMEs.
For those seeking an in-depth understanding of the transformative effects of sustainable business practices, download the latest edition of the EcoVadis Impact Report.
For media inquiries, please contact:
US: Corporate Ink for EcoVadis
617-969-9192, ecovadis@corporateink.com
About KPC
The Korea Productivity Center (KPC) is an organization established in 1957 in South Korea. It aims to improve the productivity and competitiveness of Korean industries. KPC offers research, consulting, and training services for productivity enhancement. It promotes quality management practices and standards and fosters innovation and technology adoption. KPC also engages in international cooperation to integrate global best practices.
About KOTRA
KOTRA, the Korea Trade-Investment Promotion Agency, is a South Korean government entity under the Ministry of Trade, Industry and Energy. It focuses on promoting international trade and attracting foreign investment into South Korea. KOTRA supports Korean companies in expanding globally, organizes trade exhibitions, and provides business matchmaking services. It also assists foreign investors in establishing businesses in Korea. With its worldwide network, KOTRA enhances the international competitiveness of Korean SMEs.
About the Author
Follow on Twitter Follow on Linkedin Visit Website More Content by EcoVadis EN
