Recently, major domestic game companies have been publishing sustainability reports. Currently, publishing sustainability reports is not mandatory, but it appears to be a move in preparation for future mandatory ESG (Environmental, Social, and Governance) disclosures. Game companies that do not meet the asset criterion of 2 trillion won are also proactively disclosing, utilizing this as a means to align with global ESG standards and boost their stock prices.
According to the game industry on the 2nd, NCSOFT, Netmarble, KRAFTON, Pearl Abyss, Kakao Games, Com2uS, Wemade, and NHN have published their sustainability reports this year. The publication of sustainability reports in the game industry started with NCSOFT in 2021 when it first made its report public. In 2022, Netmarble and Pearl Abyss published theirs, followed by Wemade, Kakao Games, and NHN in 2023. This year, KRAFTON and Com2uS joined the movement to publish sustainability reports.
NCSOFT's sustainability report titled 'ESG Playbook 2024' includes key achievements and strategies for sustainable growth, such as ▲enhancing gameplay, ▲strengthening technology, and ▲global expansion. The company has obtained the global personal information protection certification, CBPR, becoming the first in the domestic game industry to enhance service stability.
Netmarble's sustainability report addressed key tasks such as ▲enhancing user satisfaction, ▲strengthening technological innovation and research and development, ▲securing and nurturing talent, and ▲information security and personal information protection. It shared the current status of each item, long-term goals, and specific achievements.
Kakao Games issued its sustainability report based on international disclosure standards, focusing intensively on information security and personal information protection activities. Additionally, it presented four major issues: ▲advancing enterprise risk management, ▲ethical management and fair trade, ▲enhancing user rights and digital responsibility, and ▲managing climate change and carbon emissions.
Wemade's sustainability report this year highlighted five issues: ▲enhancing information security, ▲work-life balance, ▲talent management, ▲digital asset management, and ▲climate change response. Notably, given the recent security incidents related to the blockchain project 'WEMIX,' the company distributed an 'Information Protection Declaration.'
KRAFTON, which published its sustainability report for the first time this year, outlined six key issues: ▲talent acquisition and nurturing, ▲sustainable innovation and technology, ▲information security and personal information protection, ▲sound governance, ▲compliance and ethical management, and ▲climate change response. KRAFTON introduced the current status of its ongoing transition to an 'AI Native Company' through the 'KRAFTON AI Special' category.
Com2uS introduced its report titled 'Com2uS Plus' for the first time this year, presenting strategies regarding six major issues: ▲information security and personal information protection, ▲human resource management, ▲customer communication and enhancement, ▲employee welfare and improvement of working conditions, ▲establishing ethical management systems, and ▲climate crisis response activities.
The reason domestic game companies have recently begun publishing sustainability reports is to prepare for the mandatory disclosure of ESG. Although the timeline for mandatory ESG disclosure is currently delayed, the Financial Services Commission has been discussing the obligation for ESG disclosure for listed companies on the securities market with assets of over 2 trillion won. Moreover, President Lee Jae-myung previously proposed mandatory ESG disclosure and legislation of evaluation indicators as part of his campaign. Therefore, the industry seeks to proactively publish sustainability reports in response to the growing importance of ESG values in society.
Industry experts note that the move by game companies that do not meet the '2 trillion won' asset criterion, which would classify them as subjects of mandatory ESG disclosure, to publish sustainability reports is not merely a precautionary measure. As of the end of last year, only NCSOFT, KRAFTON, and Nexon had assets exceeding 2 trillion won. This suggests an interpretation aimed at aligning with global ESG standards. As ESG becomes a major management indicator globally, domestic game companies targeting the global market aim to adapt to this trend.
Game companies are actively pursuing such disclosures to meet the demands of investors and ESG evaluators. In the past, simply creating good games would naturally boost stock prices, but now, companies find themselves in a situation where they need to explain their responsibilities and risk management capabilities to shareholders and investors through sustainability reports. The increase in the influence of non-financial factors, such as labor conditions, personal information protection, and environmental issues on stock prices, indicates that ESG reports help enhance stock prices. Global investment institutions such as BlackRock and Norway's Government Pension Fund Global (GPFG) consider the disclosure of ESG information a key criterion for investment decisions, which poses a risk of exclusion from global investment targets if such reports are absent.
An industry official said, 'As the value of ESG increases both domestically and internationally, it is expected that game companies will voluntarily publish sustainability reports in the future.'