More than 50 percent of the country’s fashion enterprises are labeled as ‘vulnerable’ when it comes to their environmental, social, and governance (ESG) ratings. (Image courtesy of Korea Bizwire)
SEOUL, Nov. 30 (Korea Bizwire) – A recent report from the Korea ESG Standards Institute reveals that more than 50 percent of the country’s fashion enterprises are labeled as ‘vulnerable’ when it comes to their environmental, social, and governance (ESG) ratings.
The institute, a leading ESG evaluation body in South Korea, graded 11 out of 19 listed fashion companies as C and D, signaling a vulnerability in their ESG performance. The grading scale ranges from S (Excellent) to D (Very Vulnerable).
Among the companies receiving D grades both last year and this year were BYC, Vivien, Shinsung Tongsang, SsangBangWool, Hyungji Elite, and Cowell Fashion. Shinwon and HansaeMk received C grades.
Conversely, F&F Holdings, Shinsegae International, Handsome, LF, KOLON Industries, and Hansei Industrial secured higher ratings of A and B+. Notably, F&F Holdings and Hansae Industrial increased their ratings by two levels compared to last year.
F&F Holdings attributed its improved rating to initiatives like introducing eco-friendly shopping bags and making recycled furniture from discarded inventory that was then donated. The company also highlighted the establishment of an ESG task force.
In contrast to the fashion industry, companies in the cosmetics and food sectors fared relatively better in their ESG evaluations. Among the 15 listed cosmetics companies, 40 percent received the vulnerable C and D grades, while 27.5 percent of the 40 food companies received similar ratings.
Noteworthy in the cosmetics sector, Hankook Cosmetics, Hankook Cosmetics Manufacturing, and JAYJUN Cosmetic received D grades, while Able C&C, It’s Hanbul, and Tony Moly secured C grades. On the positive side, Amorepacific, Aekyung Industrial, and LG Household & Health Care received A grades.
In the food industry, 13 companies achieved an A grade, with CJ, Daesang, Lotte Chilsung Beverage, and Samyang Foods each moving up one grade from the previous year. Shinsegae Food and Harim saw a two-grade increase to A.
Shinsegae Food attributed the improvement to the establishment of an ESG committee at the end of last year, actively executing its vision and strategy for a year, resulting in a two-level rise to the A grade.
Nongshim, Dongwon Industries, Ottogi, and Harim Holdings also received a two-grade upgrade to B+, while Lotte Wellfood and SPC Samlip dropped one grade to B+ and C, respectively.
With many fashion companies navigating ESG vulnerabilities, a noteworthy few are actively working to improve their ratings, underscoring the growing significance of sustainability and responsible corporate practices in the contemporary business landscape.
Ashley Song (ashley@koreabizwire.com)
