ESG Topic Analysis

The coverage of ESG topics in the Korean capital market extracted from the analyst research reports

• The cover image shows four ESG topics out of all thirty-six: each E, S, G three main areas and ESG investment topic.

• Given the explosive growth in ESG investing and reporting, analysts cover the ESG issues naturally.

• ESG tended to be lumped together, but the cover image and the below images of all topics show that each ESG issue has its own representation.

• The natural next step is to dig into their trends and relative importance, among other issues.

• The changes in proportions of ESG topics and their relative composition would tell more stories.

  • w.r.t. risk-return profiles

  • w.r.t. effect on the valuation of a firm

36 Topics from the analyst reports

Comparing the ESG Topic Trends

• Overall, the ESG topics take around 2 percent of the weight on average.

• Among E, S, and G, the Social area occupies the largest proportion.

• This is an effect that S includes the Corporate Social Responsibility (CSR) issues.

• Though the Environmental topic takes the smallest share, its variability is the biggest.

• Recently, the proportion of the Environmental topic has been increasing.

• Comparing the topic weights by the sectors shows sizable variations among them.

This analysis is done using the ekorpkit package with the ekorpkit-config.