Kolon Benit to build SAP-based ESG management system, targeting supply chain compliance market

Kolon Benit is moving to build an integrated environmental, social and governance management system using SAP solutions, aiming to capture market share ahead of mandatory ESG disclosure requirements for domestic companies.

The company announced Thursday that it will expand its business of building integrated ESG management systems by combining SAP's Sustainability solution with its own in-house ESG supply chain due-diligence solution.

SAP Sustainability is a solution that consolidates a company's ESG-related data, supporting carbon emissions calculation, sustainability reporting and regulatory compliance. ESG supply chain due diligence refers to the process by which companies identify and assess ESG-related risks — including environmental, human rights and labor issues — among their partner companies, and take steps to prevent or address those risks.

The strategy responds to growing demand from companies seeking to adopt integrated data management systems as ESG disclosure mandates gain momentum. In July, the government began revising the Capital Markets Act to require companies above a certain size to include ESG information in their annual business reports.

Under the expected rules, Kospi-listed companies with consolidated assets of 10 trillion won ($7.3 billion) or more will be required to disclose ESG information — including that of subsidiaries — starting in 2028.

Kolon Benit will deploy two SAP Sustainability solutions — SCT and SFM — to expand its integrated ESG management system business. SCT consolidates ESG data within a company to support disclosure and regulatory compliance, while SFM uses data on raw materials and components to calculate carbon footprints at both the corporate and product level.

The company plans to leverage data capabilities built through numerous ESG source-data projects to sharpen its competitive edge. Through its in-house ESG supply chain due-diligence solution, optimized for the domestic market, Kolon Benit will support partner companies with ESG management level diagnostics, ESG rating assessments, vulnerability analysis, and the identification and execution of improvement tasks.

Kolon Benit will also integrate its ESG supply chain due-diligence solution with SAP's technology platform BTP. This will allow the entire process — from ESG source data collection and emissions calculation to disclosure reporting and supply chain management — to be handled on a single platform.

"The key to a successful ESG system is not which solution you use, but how precisely you can connect scattered data," said Chung Ju-yung, managing director at the company. "We will support our customers in effectively responding to ESG disclosure requirements, drawing on our diverse experience and technology capabilities."