The Korea Exchange, the operator of Seoul’s bourse, has decided to create a social, environmental, and governance (ESG) team to help investors better determine the future financial performance of companies by providing information in measuring sustainability and social impact of investment.

The Korea Exchange said Friday that it will set up a team dedicated to reviewing and reporting on companies’ ESG practices. It will also organize an ESG committee with external experts to provide consultation on ESG related matters. The organizational change will take place on Feb. 17.

With the establishment of the ESG-dedicated team, the stock exchange operator plans to revise its disclosure rule to recommend listed companies to disclose changes in their ESG information such as governance structure. The disclosure is not mandatory, but the revision will be made to increase awareness on ESG information, said a Korea Exchange official.

Market watchers expect a greater access to corporate ESG information to result in more investment opportunities on top of increased transparency in corporate governance for listed companies in the country. So far, ESG information has been available mostly on large companies such as those included in Kospi 200 index.

“Greater access to ESG would lead to stronger trust on socially responsible investment and also helps investors judge better on their investment,” said Song Hong-seon, senior researcher at Korea Capital Market Institute.

By Pulse

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