Chapter 1 Organizations and Enterprises
1.
Organizational Concept 4
2.
Type 5 of Organization
3.
Company 6
3.1 The Role of Business 6
3.2 Corporate Form 7
3.3 Background of the Company's Birth 7
3.4 Diversity of Corporate Purpose 8
4.
Corporate History 9
4.1 Etymology 9
4.2 History of the Corporation 10
4.3 Corporate Social Responsibility 10
5.
Modern Enterprise 11
5.1 Digitalization and the Fourth Industrial Revolution (AI) 11
6.
Management and Business Administration 13
6.1 Management 13
6.2 Manager 15
6.3 Business Administration 19


Chapter 2 Corporate Value and Environment
1.
Corporate Value 28
1.1 The Economic Value of a Firm: Profit and Stock Price 28
1.2 Corporate Profits 29
1.3 Example of an Income Statement 30
1.4 Stock Price: Discounted Cash Flow Model 31
1.5 Corporate Social Value 33
2.
The natural environment of the company 34
2.1 Products and the Natural Environment 34
2.2 Production Process and Natural Environment 36
3.
Corporate Social Environment 38
3.1 Corporate Social Environment 38
3.2 Interactions of Politics, Economy, and Society 39
3.3 Relationships between Government, Business, and Society 39
3.4 Capitalism and Socialism 40
3.5 The Corporate Social Role Debate (USA) 41
4.
Stakeholder 42
4.1 Stakeholder Concept and Importance 42
4.2 Key Stakeholders 44
4.3 Stakeholder-Centered Management 44
4.4 Freeman's Principles of Stakeholder Capitalism 45

Chapter 3 Corporate Ethics and Responsibility
1.
Business Ethics 50
1.1 Definition of Ethics 50
1.2 Content and Types of Ethics 51
1.3 Ethics and Similar Concepts: Morality, Law 52
2.
Normative Ethics (Ethical Principles) 54
2.1 Utilitarianism 54
2.2 Deontology or Rights Theory 56
2.3 Theory of Justice 56
2.4 Care Theory 59
2.5 Virtue Theory 60
3.
Business Ethics 61
3.1 Concept 61
3.2 The Need for Ethical Management 61
4.
Corporate Responsibility 63
4.1 The Concept of Responsibility 63
4.2 Types of Responsibility 64
4.3 The Concept of Corporate Social Responsibility 66
4.4 Expanding Corporate Responsibility 67
4.5 The Evolution of Corporate Responsibility 70

Chapter 4 Globalization and Business: Opportunities, Threats, and Growing Responsibilities
1.
Globalization 76
1.1 Concept 76
1.2 National Diversity 77
1.3 The Phenomenon and Background of Globalization 78
1.4 Measuring Globalization 78
1.5 The Meaning and Impact of Globalization 79
2.
Corporate Globalization 80
2.1 Opportunity Aspect 80
2.2 Threat Aspects 81
2.3 Responsibility Aspect 87



Chapter 5 Environmental Responsibility and Sustainable Management
1.
The Importance of the Environment 92
1.1 Environment and Humans 92
1.2 Types of Environmental Problems 93
1.3 Global Concern for Environmental Issues 104
2.
Environmental Issues and Corporate Responsibility 109
2.1 Causal Responsibility 110
2.2 Liability for Damages 110
2.3 Competency Responsibility 110
2.4 Role Responsibilities 111
3.
Sustainable Management 113
3.1 The Meaning of Sustainability 113
3.2 Case Study of Sustainable Management 115

Chapter 6 Social Responsibility and CSR Management
1.
Social Responsibility 122
1.1 The Meaning of Society 122
1.2 Distinguishing the nature of responsibility 123
1.3 Categories of Corporate Social Responsibility 123
1.4 CSR Management (Social Responsibility Management) Example 124
2. Historical Development of the CSR Concept 128
2.1 Europe: Social Solidarity and Institution-Based CSR 128
2.2 United States: Market-Oriented, Voluntary CSR 129
2.3 Asia: Religious and Cultural Influences and Government-led 129
3. CSR Management and CSV Management 130
3.1 CSR Management 130
3.2 CSV Management 132
4.
Human Rights and Human Rights Management 134
4.1 Human Rights Concept 134
5.
Responsibilities to Key Stakeholders of the Company 136
5.1 Consumer Responsibilities 136
5.2 Worker Responsibilities 137
5.3 Partner Responsibilities 139
5.4 Community Responsibility 141
5.5 Case Studies of Corporate Social Responsibility Activities 143
6.
Social Enterprise 144
6.1 Concept 144
6.2 Definition of Social Enterprise 144
6.3 Key Characteristics of Social Enterprises 145
6.4 Social Enterprises vs. General Corporations vs. Nonprofits 145
6.5 Types of Social Enterprises (Korean Standards) 145
6.6 Social Enterprise Case 146

Chapter 7 Economic Responsibility and Governance
1.
The Concept of Economic Responsibility 152
1.1 Essential Economic Responsibility 153
1.2 Shift from Ancillary Economic Responsibility to Social Responsibility 154
1.3 Shareholders 155
2.
Liability for Compensation to Investors 158
2.1 Profit 158
2.2 Stock price 159
3.
Sustainability Responsibility 161
3.1 Strategic Risk 161
3.2 Operational Risk 161
3.3 Financial Risk 161
3.4 Other Risks 162
4.
Governance Structure 163
4.1 The Concept of Governance Structure 163
4.2 The Importance of Governance Structure 164
4.3 Governance Principles 168
4.4 Previous research results on the governance structure effect 171
5. ESG Management 172
5.1 Concept 172
5.2 Stakeholder-Centered Management and Shareholder-Centered Management 175
5.3 Case Studies of Corporate Activities to Strengthen Governance Structures 176
5.4 ESG Management Case 176

Chapter 8: Ethical Cultures of the World
1.
Cultural Diversity by Country 182
1.1 Overview 182
1.2 Cultural Dimensions and Comparative Studies of International Cultures 183
1.3 Cultural Characteristics of Major Countries 184
1.4 Regional Differences in Ethical Culture 186
2.
European Ethical Culture 186
2.1 Historical and Ideological Background 184
2.2 Core Ethical Values ​​187
2.3 Country differences 187
2.4 Case Study of Ethical Issues in Europe: The Volkswagen Scandal 188
3.
American Ethical Culture 189
3.1 Background 189
3.2 Core Ethical Values ​​189
3.3 Modern American Ethical Culture and Publicism 190
3.4 Case Study of Ethical Issues in the United States 191
3.5 Comparison of Ethical Cultures in Europe and the United States 192
4.
Chinese Ethical Culture 195
4.1 Historical and Ideological Background 195
4.2 Core Ethical Values ​​196
5.
Japanese Ethical Culture 198
5.1 Historical and Ideological Background 198
5.2 Core Ethical Values ​​198
5.3 Today's Ethical Culture 199
6.
Korean Ethical Culture 200
6.1 Historical and Ideological Background 201
6.2 Core Ethical Values ​​201

Chapter 9 International Development Cooperation and the UN
1.
International Development Cooperation 209
1.1 The Concept of International Development Cooperation 209
1.2 World Poverty 211
2.
Official Development Assistance 214
2.1 Definition 214
2.2 Types of ODA Support 217
2.3 Purpose of ODA (from the perspective of donor countries) 217
3. UN and International Development Cooperation 219
3.1 Significance 219
3.2 Poverty Eradication and International Development Cooperation 221
3.3 ODA (Official Development Assistance) 221
3.4 SDGs (Sustainable Development Goals) 221
4. UN Corporate Responsibility Activities 225
4.1 UN Global Compact 225
4.2 Responsible Investment Principles 226
4.3 Principles of Responsible Management Education 226

Chapter 10 Corporate Responsibility Standards of OECD, ISO, etc.
1. OECD Guidelines for Multinational Enterprises 230
1.1 OECD 231
1.2 The Nature of the OECD Guidelines for Multinational Enterprises 232
1.3 Guideline Components 233
1.4 Guideline Evolution 238
1.5 Dew Diligence 239
1.6 OECD NCP 240
2. ISO 26000 241
2.1 ISO 241
2.2 ISO 26000 241
3. UNGP 243
4. IFC Performance Standards (244)

Chapter 11 ESG Reporting and Disclosure
1. Concept of ESG Reporting and Disclosure 251
1.1 Significance 251
1.2 Purpose of Reporting and Disclosure 251
1.3 Classification of Reports and Disclosures 252
2.
Materiality: Criteria for Determining the Content and Scope of Disclosure 253
2.1 Concept 253
2.2 Classification of severity 254
2.3 Effectiveness of Materiality (Research) 256
3.
Global ESG Reporting and Disclosure Standards 257
3.1 GRI Standard 257
3.2 ESRS 260
3.3 ISSB 262
3.4 SASB Standard 263
3.5 Comparison of Key Global Disclosure Standards 264
3.6 TCFD Guideline 269
3.7 CDP 270
3.8 Current Status of Public Disclosure Standards 271
4.
273 by domestic standards
4.1 Background and Characteristics of the Enactment 273
4.2 Disclosure Item 274

Chapter 12 ESG Rating
1.
Concept of Evaluation 279
1.1 Definition of Evaluation 279
1.2 Classification of Evaluations 280
1.3 The Need and Importance of ESG Evaluation 280
1.4 Purpose of ESG Ratings 281
1.5 ESG Evaluation Procedures and Structure 282
1.6 Similarities and Differences Between Credit Rating and ESG Rating 283
1.7 Impact and Issues of ESG Assessments 283
2.
285 Major ESG Evaluation Criteria (Institutions) Around the World
2.1 History of Global ESG Ratings 285
2.2 MSCI's ESG Rating 286
2.3 Moody's ESG Rating 288
3.
291 major domestic ESG rating agencies
3.1 Overview 291
3.2 Korea ESG Standards Institute 291
3.3 SustainVest 292
4. Key Attributes of ESG Ratings 297
4.1 Evaluation Progress: Information Demand Centered 297
4.2 Informal and Private Evaluation Agencies 297
4.3 Data-Based Independent Evaluation 297
4.4 Competition through market mechanisms 297
4.5 Not subject to regulation (currently mostly unregulated) 298
4.6 The existence of evaluation sovereignty issues 298

Chapter 13 ESG Finance (Investment)
1.
Concept of Finance (Investment) 302
1.1 The Role and Importance of Finance 302
1.2 Classification of Financial Industries 304
1.3 Characteristics of the Financial Industry 305
1.4 History and Ethics of the Financial Industry 306
1.5 The world's top three pension funds and asset management companies 307
2. ESG Finance (Investment) 308
2.1 The Concept of ESG Finance (Investment) 308
2.2 Key Considerations for ESG Investing 309
2.3 Impact Measurement Method 311
2.4 Domestic and International ESG Investment Trends 312
2.5 Green Finance and Transition Finance 313
2.6 Evaluating the Performance of ESG Investments 315
2.7 Impact Investment Cases 319

Chapter 14 ESG (Strategic) Management
1.
The Concept of Management Strategy 326
1.1 Strategy 326
1.2 Management Strategy 327
1.3 The process of establishing a management strategy 328
2. ESG Management Strategy 329
2.1 Definition 329
2.2 Steps in Establishing an ESG Management Strategy 330
2.3 Implementation and Review of ESG Management Strategies 331
3. Detailed ESG Strategic Management Procedures 332
3.1 Step 1: Identifying Organizational Characteristics (Industry, Identity, Purpose) 332
3.2 Step 2: Review Management Strategy and Establish an Implementation Organization 333
3.3 Step 3: Establishing an ESG Strategy Organization 333
3.4 Step 4: External Environment Analysis 333
3.5 Step 5: Internal Analysis and Establishing Responsible Competitive Advantage 334
3.6 Establishing a 6-Step ESG Implementation Strategy 334
3.7 Implementing, Monitoring, and Controlling the 7-Step ESG Implementation Strategy 335
4. ESG Management in Each Sector 335
4.1 Operational Aspects 335
4.2 Production and Supply Chain Management 336
4.3 Marketing Management 336
4.4 Financial and Investment Aspects 337
4.5 Human Resources Management 338
4.6 Accounting and Disclosure 338
4.7 Risk Management 339

Search 341

introduction

This book, "Global ESG," was written based on lecture notes and various research findings compiled over the past 20 years while teaching courses on corporate ethics and sustainable management (ESG) at Sungkyunkwan University. With ESG emerging as a key management topic both domestically and internationally, and a flood of publications, we recognized the need for a foundational textbook for learners seeking a systematic understanding of the essence and principles of ESG concepts.

This book focuses on the following five perspectives related to ESG or sustainable management.
First, an evolutionary perspective that leads to ethical management, CSR (corporate social responsibility), and ESG management.
Second, a global perspective that emphasizes how ESG operates within the diversity of global norms, markets, and investment flows.
Third, a principle-centered perspective that approaches ESG not as a mere formal practice, but as a matter of value judgment based on ethics and responsibility.
Fourth, a systems perspective that views the flow of management, disclosure, evaluation, and investment as a single organic circulation system.
Fifth, the ultimate meaning of ESG was reinterpreted through the ‘Triple (3) Sustainability Perspective’, where E represents the sustainability of humanity, S represents the sustainability of stakeholders (relationships), and G represents the sustainability of the company.

We must note that ESG management today operates with different objectives: normative and practical.
Some view ESG as a proactive and unconditional commitment to environmental and social responsibility (normative objective), while others view ESG as an instrumental activity (practical objective) for strategic risk management of non-financial value drivers to enhance corporate value.
Due to the realistic coexistence of these different objectives, people who encounter ESG can easily feel confused, and the direction of ESG implementation can also be perceived as ambiguous.
This duality of the ESG concept suggests the need for learning ESG principles, and this book aims to convey this in a balanced way.

ESG is a truly vast topic.
In the process of writing this book, the author's graduate school experience in risk management (finance) (minor), 35 years of teaching experience in trade, global travel experience in 95 countries, 10 years of industrial accident research at the Ministry of Employment and Labor, and activities in financial consumer societies (domestic and international) served as a crucial foundation for shaping the direction and content of this book.
Additionally, the recently developed artificial intelligence (ChatGPT) was extensively referenced in this book.

This book is an introductory text for undergraduate and graduate students who wish to understand the basic concepts and principles of ESG.
For actual corporate ESG practices or strategy formulation, it is necessary to utilize separate practice books or reference materials.
I would like to express my gratitude to Jeong Se-jeong, a graduate student in the Department of Trade, who helped me with typing the data during the writing process. I would also like to express my gratitude to my wife, son, and daughter-in-law for encouraging me during the writing process, and to the people involved, including Manager Jeong Yeon-hwan and Professor Woo Seok-jin of Park Young-sa, who helped with the publication.
Any inadequacies or areas requiring supplementation in citation notation will be faithfully addressed in future revisions.

Summer 2025
Author Jeong Hong-ju