ESG management is often perceived as merely responding to ESG assessments to obtain favorable ratings. However, as seen in past cases such as Volkswagen’s Clean Diesel scandal, an approach to ESG driven primarily by ratings and marketing can be as risky as accounting fraud. Effective ESG management requires companies to integrate ESG considerations into their overall business by reshaping their vision, goals, and strategies accordingly.

ESG management begins not only with responding to ESG-related regulations and reviewing ESG impacts in investment and financing activities, but also with considering the social impacts of companies’ products and services across the entire lifecycle—from production supply chains to end-of-life disposal.

ESG management represents a shift away from traditional corporate practices that focus solely on maximizing financial profits. As the key driver of ESG management, companies can enhance their corporate value by increasing revenue, managing risks, and reducing financial costs.