Ⅰ. Industry Overview (Sector Overview)

 

1) Industry definition

The robotics, smart factory, and industrial automation equipment industries are core infrastructure for manufacturing productivity , but they are also high-risk sectors that combine on-site safety, cybersecurity, supply chains, and technical ethics
. ESG is not simply about environmental friendliness and coexistence; it's recognized as an operational and financial risk management system where robotic accidents, system failures, cyberattacks, and delivery delays directly lead to customer process interruptions, damage claims, and contract terminations .

Especially from the perspective of American investors

  • “Is this automated system safe for people ?”
  • “ Can a factory come to a halt due to hacking or malfunction ?”
  • “Is the supply of this equipment exposed to geopolitical and export control risks?”
    is the starting point for ESG assessment.

https://www.ifrs.org/issued-standards/issb-standards/
https://sasb.ifrs.org/standards/materiality-finder/

 

2) Korea's global position

Korean listed companies, based on advanced manufacturing foundations such as shipbuilding, heavy industry, semiconductors, secondary batteries, and defense
, provide robotics, automation, and smart factory solutions (process, inspection, logistics, and control) to global clients. While many companies disclose safety, environment, ethics, and supply chain
information through ESG reports and websites , the key criterion for international investors is whether they manage automation risks as key performance indicators (KPIs).

https://www.mckinsey.com/capabilities/operations/our-insights/automation-and-the-future-of-work
https://www.bcg.com/publications/2023/industrial-automation-and-robotics

 

3) ESG sensitive points due to the nature of the industry

  • Industrial Safety and Robot Safety : Robotic Accidents Present Immediate Legal and Financial Risks
  • HRC (Human-Robot Collaboration) : Safety Design, Training, and Accident Response
  • Cybersecurity (OT/ICS) : Production equipment hacking → Process interruption
  • Supply Chain and Geopolitics : Dependence on Critical Components, Control Chips, and Sensors
  • Dual-use technology : potential for military, surveillance, and control applications
  • Environment (E) : Manufacturing energy and process efficiency, Scope 3

Purpose of provision
This report is a global ESG standard report for the industry to ① visualize the ESG position of the Korean robot and smart factory industry
based on the **US investor baseline (ISSB/SASB + industrial safety and OT security practices)** and ③ encourage Korean listed companies to immediately switch to ‘US level’ ESG documents .


II. Summary of the Industry-Wide ESG Structure

Environment (E)

  • Equipment manufacturing-based energy and emissions (Scope 1 and 2)
  • Indirect reduction effects due to improved customer process efficiency (Scope 3)

Society (S)

  • Industrial Safety and Robot Accident Prevention
  • HRC Safety Design and Training
  • OT·ICS Cybersecurity

Governance Structure (G)

  • Product Liability, Recall, and Defect Management
  • Dual-use and export control awareness
  • Board-level technical and safety oversight

(ISSB effectively uses SASB's approach to identify industry-based material issues)
https://www.ifrs.org/groups/international-sustainability-standards-board/

III. The US 'Baseline' – How We View ESG in Robotics and Industrial Automation

1) Industry-based standards (ISSB/SASB)

U.S. investors don't view automated ESG as an adjunct to climate disclosure .
The key question is:

  • Does automation reduce or increase industrial accidents?
  • How vulnerable are robots and control systems to cyberattacks?
  • Can product defects or malfunctions halt customer processes?

This is why SASB Industrial Machinery & Goods  and related industry topics define
product safety, quality, supply chain, and ethics as financially material issues.

https://sasb.ifrs.org/standards/materiality-finder/

 

2) Industrial safety and responsible automation

  • In the US and EU markets, **machine and robot safety (ISO/IEC series)** is practically a condition for market entry.
  • In the event of an accident, it is directly linked to legal liability, insurance, and contract risks.

https://www.osha.gov/laws-regs
https://www.iso.org/committee/54138.html

 

3) OT·ICS Cybersecurity

  • Smart factories are  centered on OT (Operational Technology), not IT.
  • US practice requires NIST-based OT security
  • Ransomware and control breaches lead to immediate production disruptions.

https://www.nist.gov/cyberframework
https://www.cisa.gov/ics

Ⅳ. Current Status of Korea's Robot and Smart Factory Industries Compared to the U.S.

division

US baseline

A common condition in Korean industry

Gap basis

Industrial safetyRobot Accident/Defect KPIsSafety policy-centeredLack of connection between accidents and costs
HRCCollaborative Safety Design and TrainingPartial mentionLack of HRC KPIs
OT SecurityNIST-based response and trainingIT security focusedOT response gap
Product LiabilityRecalls, defects, and financial impactQuality DeclarationLack of incident-centered disclosure
Scope 3Customer process reduction effectLimitedWeak value chain description

(Based on: ISSB, SASB, OSHA, NIST, CISA)

V. Why a 'Gap' Occurs in Korea's System and Public Disclosure Structure
  1. Security and cybersecurity are perceived solely as "technical issues"
    and are not structured as ESG risks.
  2. Lack of experience in disclosing OT security
    → Disclosure focused on IT security
  3. Pre-mandatory disclosure phase
    → Reluctance to disclose accident/defect KPIs

https://www.ifrs.org/projects/work-plan/

Ⅵ. Cases of representative Korean listed companies

1) HD Korea Shipbuilding & Offshore Engineering

2) Samsung Heavy Industries

3) Doosan Fuel Cell

4) LIG Nex1

5) Korea Carbon

6) Juseong Engineering

VII. Why Korean Companies Should Adopt US-Level ESG Practices
  1. Automation = ESG = Customer Process Risk Management
  2. Accidents and hacking immediately lead to damages and loss of orders.
  3. U.S. and EU customer due diligence standards are strengthened to focus on KPIs.
  4. ISSB/SASB Industry-Based Disclosure: A Global Common Language

Fixed section dedicated to robots and smart factories (recommended)

  1. Robot & Machinery Safety Ledger
  2. Human–Robot Collaboration (HRC) Safety
  3. OT/ICS Cybersecurity KPIs (NIST)
  4. Product Reliability & Recall Fact Sheet
  5. Supply Chain & Dual-use Risk Map
  6. Climate Baseline (ISSB harmonized)
Ⅷ. Summary of Foreign Investor Perspectives

Foreign investors evaluate this industry as follows:

  • “Won’t this robot hurt people?”
  • “Can this factory be stopped by hacking?”
  • “Will this equipment defect stop customer production?”

Therefore, when a Korean company's ESG
documents describe accidents, security, and defects in terms of KPIs and financial impact,
it is recognized as "investable and tradable" by US standards.

Ⅸ. Notice

This document is a reference document that structured industry-level ESG information based on publicly available corporate disclosures, website data, and credible disclosure standards (e.g., ISSB/CSRD).
It is not intended for investment decisions, buy/sell recommendations, or valuations of specific companies. The final decision and responsibility for any use of this material lies with the user.

Ⅹ. Analyzable results
  • (A) 2-page Sector Scorecard for Foreign Investors
  • (B) Writing Kit for Listed Company Practitioners (KPI Template)
  • (C) Evidence Pack (a set of links to evidence, standards, and regulations)