BlackRock and Vanguard, dominating Wall Street, with gold flowing behind the green-washed ESG. Composite by Hanmi Ilbo

Table of Contents

① The Essence of Green Policy is Gold Policy

② The Paradox of Solar and Wind Power — Forests Vanished, Leaving Only Debt

③ ESG Disclosure and Financial Dependence — Why Korean Companies Are Trapped

④ Citizens Pay for Electricity Bills, Corporations Issue Bonds — Costs Transferred by Green Initiatives

⑤ Korea's Path — Sustainability or Financial Dependence?

ESG: Environment or Finance?

Just over a decade ago, ESG (Environment, Social, Governance) was merely perceived as an extension of corporate social responsibility. However, it has now become the standard language of global investment markets. In January 2021, the Korean Financial Services Commission announced, "We will mandate ESG disclosure for all KOSPI-listed companies by 2025."

The issue is that ESG functions more as a mechanism for controlling capital than for improving the environment. BlackRock (approximately $11 trillion in assets under management) and Vanguard ($7 trillion), the world's largest asset managers, use ESG scores as an investment criterion. Scores assigned by rating agencies like MSCI and Sustainalytics dictate a company's survival.

An executive from a major conglomerate lamented, "The reason we are increasing eco-friendly investments is not to save the planet, but to survive in the capital market."

Quantified Sustainability

The problem with ESG lies in its 'quantification.' MSCI assigns ratings to over 8,500 global companies, and Sustainalytics evaluates 17,000 companies. These ratings are not just numbers in a report; they are a sword that determines investment decisions. If a score is low, large pension funds and global funds exclude that company from their investment portfolios.

Korean companies are no exception. Major corporations like Samsung Electronics, Hyundai Motor, and SK spend hundreds of millions of won annually on contracts with rating agencies and consulting firms to manage their scores. The problem is that while these standards are enforced under the guise of 'international standards,' they actually vary significantly among rating agencies. A Bloomberg survey revealed cases where ESG scores for the same company differed by over 30% between rating agencies. This reveals that the pretext of 'international standards' is, in reality, merely opaque private criteria.

Where Has Korea's Policy Autonomy Gone?

The Korean government and the Financial Services Commission emphasize aligning the ESG system with that of developed countries. However, in practice, it is a process of reflecting the demands of international rating agencies into domestic legislation. The Financial Services Commission has distributed a 'K-ESG Guidelines' since 2021, but it is essentially a direct adoption of global standards.

Consequently, policy autonomy has weakened. Even if Korea designs its own eco-friendly policies, fundraising will become difficult if they are not recognized by the scorecards of global rating agencies. The logic of "isolation if international standards are not followed" directly leads to the structural constraint of "being inevitably dependent on international capital."

The Flow of Finance Heads Towards Gold

Since the widespread adoption of ESG, the international financial market has undergone a massive transformation. According to the Bank for International Settlements (BIS) annual report published in 2023, the global issuance of ESG bonds has surpassed $5 trillion. Governments and corporations that do not issue green bonds find it virtually impossible to access international capital markets.

Korea is no exception. Korea Development Bank, Korea Electric Power Corporation, and large corporations have been rushing to issue 'green bonds.' As of 2024, the cumulative issuance exceeded 80 trillion won. However, during this process, financial institutions profited from fees and operating income, while in reality, there were no clear environmental improvement effects. Gold flowed under the guise of green initiatives.

International Comparison: The US Anti-ESG Trend

Interestingly, not all countries uncritically agree with the ESG order. Republican-led states in the United States are challenging asset managers like BlackRock by passing 'ESG Investment Ban Acts.' Texas declared the withdrawal of its state pension fund's ESG investments, stating, "ESG kills the energy industry and destroys jobs for our citizens."

Conversely, the EU is strengthening its ESG disclosure regulations. In 2021, it implemented the 'Sustainable Finance Disclosure Regulation (SFDR),' mandating detailed reporting for all financial institutions. Korea is currently actively importing the EU model. Ultimately, Korea has chosen the path of 'EU-style ESG dependence.'

Green Policy is Gold Policy

ESG is not a system for the environment and society, but a new order created by financial powers. Capital assigns scores in the name of ESG, and corporations and governments change their policies to meet those scores. Of course, there have been positive outcomes, such as improvements in corporate governance and some greenhouse gas reduction achievements. However, the perception that 'green policy is gold policy' is no longer a metaphor.

Korea stands at a critical crossroads. Will it choose stability by continuing to expand the import of EU-style regulations, or will it seek autonomous alternatives, like the American skepticism? One thing is clear: what flows behind the name of green is gold, and that gold is held in the hands of global finance.

Chapter ② will discuss the 'paradox of eco-friendliness' that emerged during the implementation of solar and wind power policies, including deforestation, waste panels, and community division.

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