Large Korean companies have begun efforts to strengthen carbon reduction and ESG competitiveness that extend to their suppliers. The move is interpreted as a preemptive response to tightening global environmental regulations, including the European Union's Carbon Border Adjustment Mechanism (CBAM).
The Korea Commission for Corporate Partnership said on the 7th that it had signed an agreement with Hyundai Transys, Doosan Bobcat Korea, and LG Energy Solution (373220.KS) to contribute to a win-win cooperation fund for a "pilot project to support ESG in high-carbon-emitting supply chains."
The agreement marks the first fund contribution case for a pilot project pursued by linking government subsidies with the win-win cooperation fund. At its core, large companies in representative high-carbon-emitting industries such as automobiles, construction machinery, and batteries voluntarily create a win-win fund to support the decarbonization transition of their partner small and mid-sized companies.
The project will be operated by matching government subsidies from the Korea Environmental Industry and Technology Institute with the win-win cooperation fund contributed by large companies. Partner companies can receive customized decarbonization consulting worth up to 15 million won per company, and based on the consulting results, they will also be supported for the cost of introducing or replacing eco-friendly process improvement equipment.
The support includes building greenhouse gas emission management systems at workplaces, establishing mid- to long-term reduction targets, deriving optimal reduction measures, and supporting third-party greenhouse gas verification. Process diagnosis for improving resource and energy efficiency and introducing renewable energy will also be conducted, establishing a one-stop support system that links consulting to equipment investment.
Hyundai Transys, Doosan Bobcat Korea, and LG Energy Solution, which participated in the agreement, will also take part in selecting beneficiary companies and managing the project. Decarbonization consulting is scheduled to proceed in earnest from the second half of this year.
"For large companies to take the lead in contributing to the fund to support the decarbonization of their partner companies is a meaningful practice of win-win cooperation," said Byun Tae-seop, Secretary-General of the Win-Win Foundation. "Through this pilot project, we will expand the supply chain cooperation model, once verified, to other high-carbon-emitting industries."
