South Korea received a top rating in an environment, social and governance assessment conducted by US credit rating agency Moody’s Investors Service, according to the Ministry of Economy and Finance on Tuesday.
Moody’s has recently announced a list of 144 countries assessing their capabilities in handling ESG issues, with five classifications, including “positive” at the top and “very highly negative” at the bottom.
Korea was one of 11 nations who rated “positive,” including Germany and Switzerland.
In the environment and social segments, the nation was given “neutral-to-low,” which is the second-highest rating, while it earned the top score in the social sector.
The environment category, for instance, evaluates how a nation responds to climate change and makes efforts to reduce carbon emissions and waste.
In the social segment, Korea scored high on education, public health care and safety, and accessibility to public services, but the issue of an aging population was a drawback for the nation.
Implementation of government policies in a transparent and effective manner gained top scores.
“As the ESG issues are likely to become crucial criteria in evaluating a nation’s credit rating, the Korean government will try to put a focus on making improvements in those sectors,” the ministry said.
Meanwhile, Moody’s said there is a strong correlation between the ESG scores and a nation’s credit score, but they do not fully match at the moment.
By Kim Young-won (firstname.lastname@example.org