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Learning from Japan by Avoiding its Mistakes! Assessing the ‘S’ in ESG and its Impact on Financial Performance in Large South Korean Corporations

Author

Listed:
  • Matanle, Peter

    (University of Sheffield)

  • Li, Yang
  • Fakharuzi, Zhamayne
  • Shin, Yejin
  • Bradley, Jonathan
  • McCafferty, Jim

Abstract

We research how Diversity, Equity, and Inclusion (DEI) policies within the ‘S’ pillar of the ESG framework affect the financial performance of South Korean corporations. Analyzing data from sustainability reports of the 55 largest Korea Exchange listed companies, we examined 15 employment-related indicators alongside revenue, EBITDA, and share price over five years using multiple regression models. We find that equity critically bridges diversity and inclusion, enabling stronger financial outcomes. Referring to Japan’s experience we highlight the risks of expanding diversity without deepening inclusion, and underline the strategic importance of comprehensive DEI approaches for enhancing firm performance under demographic decline and labour force contraction.

Suggested Citation

  • Matanle, Peter & Li, Yang & Fakharuzi, Zhamayne & Shin, Yejin & Bradley, Jonathan & McCafferty, Jim, 2025. "Learning from Japan by Avoiding its Mistakes! Assessing the ‘S’ in ESG and its Impact on Financial Performance in Large South Korean Corporations," OSF Preprints jk9hp_v1, Center for Open Science.
    • Handle: RePEc:osf:osfxxx:jk9hp_v1
    DOI: 10.31219/osf.io/jk9hp_v1
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