The following is a summary of the 2024 CDP publication report of Korean companies.

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It includes how much the company’s board of directors is addressing climate, how much greenhouse gases have been reduced, and how water, plastic, and biodiversity issues are perceived.

*** CDP (Carbon Disclosure Project) is an international non-profit organization that encourages companies and cities around the world to transparently disclose information about their environmental impact, especially carbon emissions and climate change response efforts.

1 Climate governance: Institutions in place, but leadership still lacking

Summary: Korean companies have ESG structures in place, but they lack executives with expertise in climate change (52%, global average 87%).
Additional information: The method of acquiring expertise mainly relies on careers, with relatively little education or degree. The incentive system is focused on bonus payments, and performance-based pay or promotion is insufficient.

2 Climate Risk and Response Strategy: Risk Awareness Increased, but Strategy Insufficient

Summary: More companies are identifying climate risks (87%), but they are focused on policy risks and lack responses to other types of risks.
Additional Information: Scenario analysis is active, but only a small number of companies are reflecting it in their management strategies.

3 Greenhouse Gas Emissions and Calculation Methods: Scope 3 Emissions Are Overwhelming

Summary: Scope 3 emissions are more than eight times that of Scope 1 and 2, and there is an urgent need to establish data collection and reduction strategies.
Additional Information: Scope 3 emissions are mainly generated in the area of ​​‘purchased products and services’, and there are also issues with consistency and transparency in the criteria for calculating emissions.

4 Greenhouse Gas Reduction Targets and Carbon Credits: Active target setting, insufficient implementation

Summary: Reduction target setting is expanding, but the actual reduction implementation rate is low. Carbon credit utilization is also low. Additional information: The number of companies that have approved SBTi science-based reduction targets is increasing, but the rate of meeting short- and long-term targets is still insufficient. Reliable carbon credits and supply chain-level reduction efforts are needed.

5 RE100 and renewable energy: Domestic PPA utilization rate is very low

Summary: The number of RE100 members has increased, but the domestic renewable energy utilization rate is still low, and in particular, the PPA utilization rate is very low (0.3%).
Additional information: REC purchases account for the majority, and institutional barriers and insufficient policies are analyzed as the causes of low PPA utilization.

6 Plastic: Response is still in the initial stage

Summary: The level of response by companies to the plastic issue is very low, and reduction plans or KPI settings are insufficient.
Additional information: CDP’s plastic-related assessment items are expanding, but companies are mostly stuck in the risk identification stage.

7 Biodiversity: Low level of response according to GBF criteria

Summary: Few companies have identified biodiversity-related risks and established response plans (44%). Additional information: The absence of a nature-related risk assessment framework and the lack of supply chain information are contributing to the difficulty in responding. Establishing a biodiversity strategy will become important in accordance with the TNFD response and disclosure requirements.

8 Realization of water risk: The era of water shortage faced by companies

Summary: Awareness of water-related risks such as water shortage and water pollution is increasing, but it is low compared to climate change.

9 Water risk management strategy: From formal structure to practical response

Summary: A water-related leadership structure is in place, but management with expertise is lacking, and incentives are also insufficient.
Additional information: CDP comprehensively evaluates governance, strategy, and performance in the water sector.

10 Status by key indicators: A grade is not possible if key evaluation criteria are not met

Summary: CDP has introduced key evaluation criteria, and does not grant an A grade to companies that do not meet the minimum requirements.
Additional information: The requirements for implementation evidence and quantitative indicators for each evaluation item have been strengthened.

11 List of Awardees: Only Companies with Substantial Leadership Can Receive an A

Summary: CDP evaluates companies that not only disclose information but also establish and implement actual strategies as leaders.

12 CDP Evaluation System: 2025, Reorganized with a Focus on Consistency with IFRS S2

Summary: The CDP evaluation framework will become more consistent with global disclosure systems such as IFRS S2.
Additional Information: The evaluation methodology has been released, and companies should prepare in advance. Scope 3 reduction and scenario-based response strategies will become important.

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