In preparation for the implementation of the European Union (EU) supply chain due diligence guidelines, integrated support for environmental, social, and governance (ESG) of small and medium-sized enterprises cooperating within the supply chain

The Ministry of SMEs and Startups (Minister Oh Young-joo, hereinafter referred to as the MSS)  announced that it will recruit companies to participate in the “Supply Chain Environment , Society , and Governance (ESG)  Innovation Project” from Tuesday, February 25 to Tuesday, March 25.

  The EU  Supply Chain Due Diligence Directive is a system that requires companies above a certain size (export volume of approximately KRW 2.1 trillion in 2027) to conduct due diligence on the environmental and social impacts in their supply chains. The scope of companies subject to the obligation  will be  gradually  expanded from  2027. Target companies must identify and take measures to address negative environmental and social impacts throughout their supply chains and disclose the results of their implementation of the Supply Chain Due Diligence Directive. If the obligation is violated, the list of violators will be disclosed and a fine (up to 5% of sales) will be imposed.

 This project is the first of its kind this year , and is designed  to effectively  support  SMEs  collaborating within the supply chain   in response to the implementation of the European Union (EU) Supply Chain Due Diligence Directive . The project is an integrated announcement of the “Establishment of a Base for Climate Disclosure and Supply Chain Due Diligence Response”  project and  the “Public-Private Joint Strategic Environment, Social, and Governance (ESG) Support” project . 

  First,  “Establishing a Base for Climate Disclosure and Supply Chain Due Diligence” is a diagnosis and consulting project (KRW 3 billion by 25 years) utilizing   the ESG platform . The selected primary contractor’s cooperative SMEs can diagnose their vulnerable areas based on the ESG evaluation indicators presented by the primary contractor through the ESG platform and check their ESG level within the supply chain. In addition, ESG management evaluation experts will visit the company directly to provide in-depth diagnosis such as education, consultation (consulting), and certification acquisition.

Next,  the “Public-Private Joint Strategic Environment , Society , and Governance (ESG)  Support” is a voluntary project support project (KRW 2 billion by 25 years) in which large corporations and SMEs jointly perform ESG activities. Large corporations that have contributed to the Mutual Cooperation Fund can voluntarily recruit cooperative SMEs and apply for projects, and various types of support are possible, such as EU supply chain audits, greenhouse gas verification, ESG information disclosure, and eco-friendly process consulting, depending on the ESG needs of each company.

  Starting with the announcement of the two integrated projects, we plan to hold briefing sessions for large companies, including those subject to the EU supply chain due diligence guidelines, and conduct additional screenings for small and medium-sized enterprises selected for projects to introduce carbon reduction facilities and provide policy fund loans.

  Detailed information on the recruitment notice for the Supply Chain Environment, Social, and Governance (ESG) Innovation Project can be found on the website of the Ministry of SMEs and Startups (www.mss.go.kr), the Integrated Platform for Environment, Social, and Governance (ESG) (www.kdoctor.kosmes.or.kr/esgplatform), and the website of the Commission for Shared Growth (www.esg.winwingrowth.or.kr).