Weekly ESG Risk Spotlight (May 13~19)

Key takeaways

• Competitive Behavior Remains Top Rank

  • For consecutive weeks, 'Competitive Behavior' continues to dominate the risk categories primarily due to HYBE’s legal disputes over management rights and competitive practices.

  
  

• Systemic Risk Management Surges

  • The 'Systemic Risk Management' category surged by 14.81%, up from 5.86% the previous week, highlighting significant concerns with Kakao's repeated service disruptions and Korea Electric Power's infrastructure issues.

  
  

• Hana Financial Group's Long-standing Issue

  • The decade-old Lone Star case has resurfaced as a prominent concern for Hana Financial Group, bringing renewed attention to long-standing business ethics issues.

  
  

• Newly Emerged Issue in Employee Health & Safety

  • The severe scrutiny on SeAH Besteel Holdings following fatalities, along with multiple incidents at Hanwha Ocean and Samsung Electronics, highlights exacerbated concerns in the 'Employee Health & Safety' category which has been an ongoing issue.

1. Competitive Behavior (26.17%)

• HYBE is at the forefront, involved in management rights and competitive practice disputes, with NAVER and Kakao also facing regulatory challenges over monopolistic practices and stock price manipulation

  
  

2. Systemic Risk Management (14.81%)

• Kakao and NAVER encounter significant systemic risks, from service disruptions at Kakao to employment stability and technology theft pressures on NAVER.

  
  

3. Business Ethics (10.76%)

• HYBE leads with allegations of insider trading and market manipulation.

• Hana Financial Group is involved in legal controversies related to the Lone Star case.

  
  

4. Employee Health & Safety (9.76%)

• SeAH Besteel Holdings faces severe scrutiny following the deaths of five workers.

• Hanwha Ocean and Samsung Electronics encounter multiple fatal accidents and alleged wrongful dismissals related to health conditions.

  
  

5. Labor Practices (8.24%)

• Asiana Airlines and Hyundai Motor Co. face notable labor issues, including recruitment, wage disputes, and union disagreements, dominating the category.

  
  

The persistent issues across various risk categories, such as HYBE's competitive behavior disputes and SEAH Besteel Holdings' safety violations, demonstrate recurring challenges that threaten to erode trust and tarnish reputations. These ongoing problems highlight systemic weaknesses within these companies that require urgent and comprehensive solutions to mitigate further reputational damage.

HYBE, Kakao, Korea Electric Power, and SEAH Besteel Holdings are repeatedly facing scrutiny for adverse issues, indicating continual operational and managerial failures. Their frequent appearances in negative headlines not only underline ongoing risks but also emphasize the critical need for these firms to implement robust corrective measures to resolve their core problems.

Addressing these enduring challenges is essential for maintaining and restoring public trust and market confidence. Without decisive action, these companies will continue to face heightened scrutiny and potential setbacks, underscoring the importance of proactive risk management and resolution strategies.

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