What is the first thing a company should do to respond to ESG regulation?

Responding to ESG regulation must begin with inspecting the existing business structure and confirming the scope of application of the regulation.

Because ESG regulation applies across various areas, such as the environment, labor, and governance, it is necessary to approach it based on the overall system rather than responding to individual issues.

The matters a company should first address in order to respond to ESG regulation are as follows.

① Confirmation of the subjects and scope of the regulation

ESG regulation does not apply identically to all companies; rather, the criteria for application vary depending on the size of the company, whether it is listed, and whether it conducts overseas business.

Therefore, a process of first confirming which ESG regulation applies to the company itself is necessary.

② Inspection of current internal standards

You must inspect whether the environmental management, human resources and labor, and internal control systems currently in operation conform to the ESG regulation standards.

In particular, it is important to also review the standards related to the management of partner companies and the supply chain.

③ Organization of the disclosure and reporting system

In ESG regulation, information disclosure and disclosure obligations act as important elements.

It is necessary to inspect whether the information a company discloses externally is consistent with its actual operations and whether there is any false or exaggerated content.

④ Establishment of a risk management system

A violation of ESG regulation may also affect a company's reputation and its attraction of investment.

Accordingly, it is necessary to establish a management system that can identify and respond to risks internally in advance.

To organize this, responding to ESG regulation is not about individually arranging specific items but about structuring the response in the order of confirming the scope of application → inspecting internal standards → organizing the disclosure system → establishing a risk management system.

If a company organizes its own standards through the legal advice of Daeryun, a law firm ranked ninth in Korea based on the '25 value-added tax filings with the National Tax Service, it can lay a foundation to be able to respond to subsequent regulatory changes as well.