April 7, 2025 4 min to read

(ENG) Corporate Analysis, ESG Week2

Written by CA-ESG Team

📌 Week 2 Summary: ESG Sectoral Differences

✅ Week 2 First Paper

Written by: Dawon Park, Jinwook Song

• Paper Title: A Study on the Corporate ESG Impacts on the Company’s Internal Management Performance and ESG Management Types by Industry
• Author(s) / Source: Young-Ju Cho, Jun-Sung Park, Joon-Woo Yoo, Chang-Geun Lee, Hee-Jun Park / Journal of the Korean Institute of Industrial Engineers
• Main Topic:
  Analyzing the impact of ESG factors on internal management performance and classifying ESG types by industry.
• Keywords: ESG, Internal Management Performance, Exploratory Factor Analysis, Confirmatory Factor Analysis, Structural Equation Modeling, K-means Clustering
• Research Questions:
  • How do ESG factors influence corporate internal management performance?
  • How can companies be classified based on ESG management characteristics?
• Summary (within 5 lines):
  The study applies EFA, CFA, SEM, and K-means clustering to analyze the impact of ESG factors on corporate internal management performance. It identifies 12 key ESG factors, with governance and social aspects significantly influencing employee and client loyalty, while environmental factors show weaker or mixed effects. Additionally, the research classifies industries based on ESG characteristics, providing insights into sector-specific ESG management strategies.
• Conclusion:
  ESG factors influence internal management differently; social and governance factors are more impactful than environmental ones. ESG-based industry classification helps companies develop tailored strategies.
• Contribution:
  • Provides empirical analysis of ESG’s impact on corporate performance
  • Suggests ESG-based industry categorization for optimized management strategies
  • Offers a framework for businesses to enhance ESG-driven decision-making

🧠 Week 2 First Paper - Another Perspective

Written by: Dawon Park, Jinwook Song

• Paper Title: A Study on the Corporate ESG Impacts on the Company’s Internal Management Performance and ESG Management Types by Industry
• Author(s) / Source: Young-Ju Cho, Jun-Sung Park, Joon-Woo Yoo, Chang-Geun Lee, Hee-Jun Park / Journal of the Korean Institute of Industrial Engineers
• Main Topic:
  Examining how ESG practices influence internal management performance across various industries and proposing industry-specific ESG management frameworks.
• Keywords: Corporate Sustainability, Stakeholder Satisfaction, ESG Metrics, Industry-Specific ESG Strategies, Corporate Performance
• Research Questions:
  • What is the relationship between ESG practices and internal management performance across industries?
  • How do ESG factors affect customer loyalty, employee satisfaction, and shareholder contentment?
  • What industry-specific strategies can optimize ESG performance?
• Summary (within 5 lines):
  The study uses statistical modeling and clustering techniques to explore ESG’s impact on internal performance. It shows that social and governance factors positively influence satisfaction, while environmental factors show mixed effects. The paper also highlights industry-specific ESG challenges, emphasizing tailored strategies.
• Conclusion:
  ESG impacts vary across industries. Social and governance practices enhance stakeholder satisfaction, while environmental initiatives may present challenges. Customized strategies are necessary.
• Contribution:
  • Demonstrates differential effects of ESG components
  • Highlights sector-specific challenges
  • Recommends adaptive ESG integration strategies

📊 Week 2 Second Paper

Written by: Jungseok Ann, Seyoon Jung

• Paper Title: A Study on Sector-Specific Strategies for Sustainable Management: Focusing on ESG Reports and News Articles
• Author(s) / Source: Wonhee Kim, Youngok Kwon / Sookmyung Women’s University, Interdisciplinary Big Data Analysis / Business Administration
• Main Topic:
  Exploring how ESG strategies are implemented differently across sectors using ESG reports and news articles; uses text mining and topic modeling to identify key themes.
• Keywords: Sector-specific ESG, Sustainable Management, ESG Reports, Text Mining, Topic Modeling
• Research Questions:
  • What are the key ESG strategies and issues by industry?
  • How do ESG reports and news articles differ in content?
  • What strategic insights can be drawn for sector-specific ESG development?
• Summary (within 5 lines):
  The paper compares ESG activities across the financial, manufacturing, and IT industries. It reveals differences between internal (reports) and external (news) perspectives. Text mining and LDA topic modeling are used to identify strategic focuses.
• Conclusion:
  ESG strategies differ due to each sector’s unique challenges. There is often a gap between ESG reports and media narratives, impacting public trust. Industry-specific frameworks are essential.
• Contribution:
  • Moves beyond one-size-fits-all ESG frameworks
  • Compares corporate disclosures with public perception
  • Uses data-driven methods to extract actionable ESG insights

📌 MSCI ESG Rating System Clarification

We focused on MSCI due to its strong influence in the global investment community. Initially, we misunderstood the difference between the Percentile Rating (e.g., AAA) and the Issue Score (used for classifying firms as Leader, Average, or Laggard). Upon review, we corrected this and redesigned our visual model of MSCI’s ESG methodology to reflect the actual evaluation process.

🔜 Next Step

Next week, we will apply the corrected MSCI framework to real company data and analyze ESG ratings across selected firms.