ESG MARKET & CASES

ESG Dedicated Organizations: Time to Establish or Disband?

The questions are changing—the buzzword for 2026 is no longer whether there is a separate ESG department, but rather the simultaneous realization of two trends: on one hand, CSO and dedicated organizations being absorbed or reorganized into other functions, and on the other, 'internalization' across the entire company. Globally, it is a 'restructuring' rather than a 'retreat.' While some worry that CSO roles are being absorbed by CFO, risk, and legal departments, hiring demand and budgets remain robust, marking a shift from non-financial areas into the mainstream of management. The core issue is integration versus dilution. The moment ESG becomes 'everyone's job,' there is a risk that it degrades into 'no one's job' without authority and budgets, and side effects like greenhushing are reported. In Korea's reality, the establishment of ESG committees among the top 500 companies surpassed the halfway mark, rising from 53.7% in 2023 to around 57% recently (with significant industry deviations). The Financial Services Commission has presented a roadmap draft initiating mandatory disclosure starting in 2028 for assets of 30 trillion won or more beginning in February 2026, shifting the weight toward 'internalization and execution.' The essence lies in the structure of authority, data, and responsibility rather than the mere presence of a department. The real question should not be 'Do we have an ESG department?' but 'Is ESG actually changing our decision-making?'