8-9. The Evolution of ESG Rating Models and EHS Information Disclosure Requirements

ESG evaluation models are evolving to place greater emphasis on non-financial information related to Environment (E), Social (S), and Governance (G), in addition to traditional financial data. Within this framework, information concerning EHS (Environment, Health, and Safety) is considered a crucial indicator for measuring a company's sustainability and risk management capabilities.

The evolution of ESG evaluation models is driven by the demands of investors and regulatory authorities. While many companies previously provided qualitative descriptions of their efforts to reduce environmental impact or enhance workplace safety, there is now a demand for quantitative and comparable metrics, such as CO2 emissions, workplace accident rates, and waste recycling rates. In particular, information disclosure aligned with international sustainability standards (GRI, SASB, ISSB, etc.) is highly valued, compelling companies to adapt to global evaluation criteria.

Furthermore, EHS information disclosure requirements are becoming stricter each year. For example, investors are strongly requesting the disclosure of greenhouse gas emissions across Scope 1 to 3, as well as the number of serious workplace accidents. Additionally, since a company's initiatives regarding the health and safety of local communities and employees are also subject to evaluation, it is essential to go beyond mere legal compliance and engage in proactive improvement activities and transparent data disclosure.

ESG ratings are also directly linked to a company's access to capital and brand value. Insufficient EHS-related information disclosure can lead to a low rating from investors, increasing the cost of funding and potentially damaging the company's image. Conversely, companies that proactively disclose information and demonstrate improvement efforts can achieve high scores from rating agencies, enhancing their attractiveness as an investment.

In the future, the use of AI and digital tools for EHS data management and real-time reporting will become commonplace, demanding more accurate and prompt information disclosure. It is crucial for companies, led by their EHS department, to collaborate with management and investor relations to strategically organize and disseminate information to keep up with the evolution of ESG evaluation models.

In this way, the evolution of ESG evaluation models is elevating the quality and quantity of EHS information disclosure requirements. The publication of transparent and reliable EHS data is now a key factor influencing a company's sustainability and competitiveness.