South Korean firms linked to nature loss spanning over five Seouls, study says

As global disclosure standards expand beyond carbon accounting, new research highlights the need for South Korean companies to assess biodiversity impacts, strengthen nature-related reporting and develop strategies to reduce and restore ecosystem loss.

South Korea’s largest Korea Exchange-listed companies have been associated with the loss of natural areas covering more than five times the size of Seoul over the past four decades, according to new research that underscores increasing pressure on businesses to disclose biodiversity impacts alongside carbon emissions.

The study, published by the Seoul-based non-profit Korea SHE Foundation, examined domestic business sites operated by 29 of the 30 largest KOSPI-listed companies by market capitalisation between 1980 and 2020. Samsung Electronics preferred shares were excluded from the analysis.

KOSPI, or the Korea Composite Stock Price Index, tracks all common stocks traded on the Stock Market Division of the Korea Exchange.

The research found that 327,837 hectares of natural land disappeared within company premises and surrounding areas defined as their zone of influence, an area equivalent to about 5.4 times the size of Seoul.

The findings come as regulators and investors around the world increasingly require companies to report not only greenhouse gas emissions but also their effects on ecosystems and biodiversity through frameworks such as the Taskforce on Nature-related Financial Disclosures (TNFD).

According to the foundation, the study is among the first to measure long-term nature loss linked to major South Korean companies using the TNFD’s LEAP methodology.

TNFD’s LEAP methodology enables companies and financial institutions to identify where their operations and value chains interact with nature, assess related impacts and dependencies, and translate those findings into nature-related risks, opportunities and disclosures.

“Nature-related disclosure is becoming an international standard, and South Korean companies also need to systematically identify and respond to nature loss and biodiversity impacts,” the research team said.

The issue has gained prominence in international policy discussions since countries adopted the Kunming-Montreal Global Biodiversity Framework in 2022, setting a target to halt and reverse nature loss by 2030 under the concept of “nature positive”. The TNFD and the International Sustainability Standards Board are also working to establish disclosure standards for nature-related risks and impacts.

Within business site boundaries, POSCO Holdings recorded the largest loss of natural area over the 40-year period at 1,408.1 hectares. It was followed by Samsung Electronics with 1,022.6 hectares, Hyundai Motor with 734.5 hectares, HD Hyundai Heavy Industries with 695.7 hectares and Kia with 525.4 hectares, the study found.

When the analysis expanded to include areas within a five-kilometre radius of business sites, LG Electronics recorded the greatest reduction in natural area at 55,304.2 hectares. Samsung Electronics followed with 46,682.5 hectares, ahead of LG Chem with 41,245.6 hectares, Hanwha Aerospace with 40,659.5 hectares and Hyundai Mobis with 40,054.2 hectares.

The researchers told local media that the results do not indicate all nature loss in surrounding areas was directly caused by individual companies, noting that urbanisation, infrastructure expansion and other forms of development also contributed.

They said, however, that the data could provide a starting point for understanding where corporate operations intersect with changes in ecosystems.

Within company premises, the study identified a steep decline in semi-natural areas such as agricultural land and bare land, followed by losses in ecologically important natural ecosystems including forests and wetlands.

Over the 40-year period, semi-natural areas inside business sites fell by 98.3 per cent from 3,156.7 hectares to 54.9 hectares, while natural ecosystems declined by 67.6 per cent from 4,504.3 hectares to 1,458.3 hectares.

Jang Jae-yeon, chairman of the Korea SHE Foundation, said the research was significant because it was the first to quantify the scale of nature loss generated by individual companies during South Korea’s industrialisation.

“We hope this can serve as a starting point for companies to objectively understand their relationship with nature and establish strategies and restoration plans to reduce nature loss,” Jang said.

The foundation said companies should move beyond measuring nature loss by developing specific strategies to avoid and minimise environmental damage, while setting restoration targets and implementation plans covering both business sites and supply chains.

It said further analysis would examine the overlap between corporate sites and ecologically sensitive areas as well as differences in nature impacts across industries.

This post is republished from Eco-Business.