K-pop Big 4 companies set out to improve eco-friendliness, social responsibility, and governance.
“We all have a responsibility to protect the future, so let’s build a better tomorrow together through learning and knowledge,” said BLACKPINK on September 19 (local time), at the United Nations General Assembly meeting hall in New York, USA.
On this day, at the UN’s ‘Sustainable Development Goals (SDG) Moment’ session, they announced the seriousness of the climate crisis.
The SDG ambassadors of the United Nations, who set 17 state goals and 169 detailed goals by 2030, such as ‘responding to climate change’, for sustainable development around the world, said on this day, “To protect our lives, including beautiful nature and energy, we have to work together. We can do much more than we do today to reduce our carbon footprint and reduce our energy consumption. Even small aspects of life such as eating habits, choosing local agricultural products, can make a difference.”
Along with the Sustainable Development Goals, BLACKPINK has been acting as an ambassador for the United Nations COP26 (Conference of the Parties to Climate Change). In December 2020, a video related to climate change was presented at the Climate Summit with the British Embassy in Korea.
SM Entertainment in December 2022
SM Entertainment, a representative agency that has led K-pop, has decided to end the production contract with Like Planning, the personal company of founder and general producer Lee Soo Man, on December 31st. Like Planning is a company opened in 1997 by executive producer Lee Soo Man, and has been in charge of SM Entertainment’s record consulting and production outsourcing. After establishing SM Entertainment in 1989, Lee Soo Man produced many stars such as BoA, groups H.O.T and S.E.S, TVXQ, Super Junior, SHINee, EXO, and aespa, and has been called an “icon” of K-pop. Although he stepped down as a registered director of SM Entertainment in 2010, he has still exerted considerable influence on the K-pop market as well as the company.
However, the private company Like Planning faced a problem raised by some shareholders that it was receiving a considerable license amount from SM Entertainment. It is known that Like Planning received 24 billion won last year alone. The industry believes that about 18 billion won was paid this year as well. SM Entertainment has a considerable scale as it recorded sales of 238.1 billion won and operating profit of 29.8 billion won in the third quarter of this year.
Eventually, Align Partners Asset Management, which owns a 1.1% stake in SM Entertainment, demanded that contractual problems related to Like Planning be improved. Regarding this, Lee Soo Man said, “As the majority shareholder, it is our duty to humbly accept the opinions of minority shareholders to step down from the current situation, where the production system established over the past 25 years has been well-operated. We are confident that great junior producers will manage it well without much difficulty.”
K-pop towards eco-friendliness, social responsibility, and governance improvement
These two landscapes seem to ask about the new roles of K-pop leaders who have built a global fandom. As they are gaining worldwide popularity based on music and exerting influence on the global scale, it is a request of the times that actions and decisions that match it are needed.
Recently, K-pop’s “main characters” have begun to respond to this. It is a move to create intangible good values and fulfill social responsibilities, rather than just creating economic and commercial profits. ESG management of representative K-pop agencies is at the center.
ESG management refers to corporate responsibility for sustainable development. The concept is that in order for companies to develop continuously, key elements “Environment”, “Social” and “Governance” should be strengthened. It is to increase companies’ value by focusing more on the value of environment and social responsibility. Through this, not only companies but investors and consumers also gain long-term profits.
JYP·SM·YG·HYBE…, as a global standard of K-pop
“Change for the planet, change for society and change for the people living in it!”
Singer – music producer J. Y. Park, the “head” of JYP Entertainment, said this while introducing a report on the company’s ESG management in August. JYP Entertainment is the first Korean entertainment agency to publish an ESG report.
SM Entertainment released the “2021 SM Entertainment Sustainability Management Report”. SM Entertainment also became the first Korean entertainment agency to join the U.N. Global Compact (UNGC), a sustainability management initiative, last June.
BLACKPINK’s agency YG Entertainment recently established an ESG committee to practice ESG management. BTS’ agency HYBE formed an ESG committee within the board of directors in July this year.
ESG has now emerged as a new yet essential management principle for large agencies leading K-pop. It is also a declaration that they will move towards sustainable development along with K-pop’s global fandom by fulfilling social responsibilities and improving management structure without harming the environment.