SK Group Chairman Chey Tae-won called for an incentive system that compensates for companies’ ESG -- environmental, social and governance -- efforts, according to industry sources Sunday.

Speaking at Beijing Forum 2020, an event held jointly by the Chey Institute for Advanced Studies and Peking University, Chey stressed the necessity of an ESG incentive system that provides reasonable compensations for companies to promote ESG value creation in both private and public sectors.

Chey said “major global companies are already evaluated by the market depending on their ESG efforts and results. The more advanced the ESG evaluation system becomes, the faster companies will seek changes in business management strategies and actions.”

SK currently runs the “Social Progress Credit” system.

Earlier on Friday, Chey also underscored ESG during Tokyo Forum 2020, which the Chey Institute co-hosted with the University of Tokyo.

Chey said the “world is in urgent need” of a new system and methods to “change our behaviors that harm the environment,” saying that ESG values are the answer to overcoming crises such as the COVID-19 pandemic.

In lockstep with Chey’s ESG drive, SK Innovation, a refinery-to-battery unit under SK Group, expanded its social value division to the ESG strategy division on Thursday to ramp up its “Green Balance 2030” initiative, which targets zero adverse impact on the environment by minimizing existing businesses’ impact on the environment and developing eco-friendly businesses.

By Kim Byung-wook (kbw@heraldcorp.com)