The past supply chain construction patterns, which pursued the efficiency of the supply chain by establishing overseas production bases that can reduce costs and benefit from logistics, are gradually changing in consideration of the stability, elasticity, flexibility, and reliability of the supply chain. Recently, ESG management of sustainable supply chains is drawing attention as new risks such as geopolitical conflicts, pandemics, and climate change have emerged.

The importance of discussing ESG for supply chains and global trends was understood by identifying international norms, institutions, and initiatives that emphasize and regulate ESG for supply chains. The OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights are the most basic criteria for supply chain due diligence, and have since become the beginning of guidelines and initiatives for each country or industry. The EU, the United Kingdom, the United States, France, the Netherlands, and Germany have proposed and are implementing legislation to conduct due diligence on supply chains. The electronics, mineral and automotive industries have established initiatives to strengthen cooperation to expand sustainable supply chains.

This study selected secondary battery, semiconductor, and plastic industries vulnerable to supply chain ESG risks and analyzed the supply chain stage and import/export relationship of domestic companies, confirming the comparative advantage of domestic companies in these industrial supply chain stages. Through related associations and corporate interviews, surveys, and literature surveys, the status of ESG risks in the supply chain faced by large domestic companies and small and medium-sized enterprises was identified. By analyzing

ESG risks in the supply chain of secondary battery, semiconductor, and plastic industries in detail and mapping the environmental, social, and geoeconomic risks that occur in each industry’s supply chain stage, a framework that provides a quick, at-a-glance view of ESG risk status was proposed.

Among the supply chain stages of the secondary battery industry, which is divided into mineral mining, smelting, refining, material manufacturing, and cell manufacturing, Korean companies are especially competitive in manufacturing secondary batteries for small and energy storage systems (ESS). The domestic supply chain of secondary battery is highly dependent on China. In particular, the supply chain of the domestic secondary battery industry is vulnerable to the recent U.S.-China competition (i.e., U.S. Inflation Reduction Act) as China is the largest export destination for Korean secondary batteries, while China is the dominant country of origin of core materials such as cathode materials, anode materials, and electrolytes. Environmental and social risks in the secondary battery supply chain mainly occur during the mineral mining, smelting, and refining stages, so the response at this stage is key to ESG management throughout the supply chain. Various minerals, such as lithium, cobalt, nickel, graphite, etc., are involved, and different countermeasures should be sought for each type of risk for each ore species.

The semiconductor supply chain is largely composed of design, front-end, back-end, and materials, parts, and equipment required throughout these processes. Among them, domestic companies show technology and market advantages, in the front-end stage. China also accounts for a significant portion of the world semiconductor supply chain. But Korea is less dependent on china for the semiconductor supply chain compared with the secondary battery supply chain, and it has trade relations with various countries such as Japan and Taiwan. In the process of wafer fabrication which includes a number of detailed processes, a large amount of ultra-purity water and acidic substances, are used raising environmental and health risks. The indirect emission of greenhouse gases from the mass use of electricity and direct emission from the use of process gases are significant in the semiconductor supply chain. Moreover, It is difficult to respond to supply chain ESG risks because numerous suppliers participate in the semiconductor supply chains.  of detailed processes, a large amount of ultra-purity water and acidic substances, are used raising environmental and health risks. The indirect emission of greenhouse gases from the mass use of electricity and direct emission from the use of process gases are significant in the semiconductor supply chain. Moreover, It is difficult to respond to supply chain ESG risks because numerous suppliers participate in the semiconductor supply chains.