South Korea’s major listed companies have achieved their highest-ever environmental, social and governance (ESG) scores, a recent report has shown, hinting that responsible management is becoming a mainstream corporate norm.
According to the Korea ESG Evaluation Institute’s 2025 annual ESG assessment report released last week, the average overall ESG score of the 100 listed firms evaluated stood at 70.5, up 1 point from the previous year. This marks the first time since the institute began its assessments in 2021 that the overall grade has reached A.
The institute annually selects 100 representative Korean firms by market capitalisation that have declared ESG management commitments, evaluating their sustainability and governance reports as well as relevant media coverage.
ESG ratings in Korea are typically based on a 100-point system, where companies are graded from S (excellent) to D (poor) according to how well they manage ESG risks. An A grade indicates a firm has sound ESG systems in place and a low likelihood of value loss from non-financial risks.
This year’s assessment found that six companies, including Shinhan Financial Group, received an overall grade of S; eight, including Samsung Electronics, received A+; 35 received A; 41 received B+; nine earned B; and one company was rated C+. No firms were rated C or lower.
Among the eight industries surveyed, the financial sector again ranked highest with an average ESG score of 75, up 1.3 points from last year. All four major financial holding companies achieved S ratings, reinforcing their leadership in ESG management. They were followed by the Internet, communications, and software sector (71.9), electronics (70.9), consumer goods and pharmaceuticals (70.2), retail, transport, and leisure (69.4) and automotive and heavy industries (69.3).
The Internet and communications sector’s score was lifted largely by Kakao, whose overall rating jumped two levels in a year, joining Naver and KT as top performers. In electronics, Samsung Electronics and SK led the pack with A+ ratings, while Coway, SK Hynix, and Hanwha Systems also scored A or above.
Kakao’s rating rose sharply in the social and governance categories, reflecting improvements in transparency, employee welfare and digital responsibility disclosures, according to the report. Samsung Electronics also saw its governance score rebound as negative publicity related to governance issues subsided, improving its media evaluation component.
In consumer goods and pharmaceuticals, KT&G, LG Household & Health Care, and Yuhan Corporation stood out for their improvement.
KT recorded the highest governance score among all evaluated firms, after restructuring its board and strengthening oversight mechanisms to address governance concerns that emerged in 2023, the report said.
At the bottom of the list was the chemical sector, which averaged 66.6 points – though still a one-point improvement from last year. The industry’s low environmental score reflects its high-emission, energy-intensive production processes and reliance on non-renewable raw materials, while frequent pollution and safety risks, such as chemical leaks or industrial accidents, continue to weigh on performance despite gradual improvements in risk management and disclosure. Its relatively low A (social) and B+ (governance) grades also suggest further room for progress.
“The year 2025 marks a turning point for ESG management among Korean companies,” said Heo Chang-hyup, Evaluation Committee member at the Korea ESG Evaluation Institute in the report.
“We plan to refine our ESG evaluation model to improve reliability, taking into account new policy shifts such as the launch of the [current] Lee Jae-myung administration, revisions to commercial law and sustainability policy reforms.”
The launch of the Lee Jae-myung administration in June signalled a shift toward stronger corporate accountability and sustainability oversight. The new government has pledged to curb opaque business practices and expand climate-related disclosure requirements in line with global standards.
Recent revisions to the Commercial Act strengthened directors’ fiduciary duties and minority shareholder rights, while upcoming sustainability policy reforms are expected to mandate human-rights and environmental due-diligence for large companies, marking a decisive tightening of South Korea’s ESG regulatory framework.
