Can K-pop Catalyse
Sustainable Development?

Insights from Poland, Korea, and Beyond

by Tomasz Kisiel, Weronika Nalbert and Pauline Yeung

May 6, 2024

Poland and South Korea are enjoying a blooming relationship. Poland appears now as a new frontier for Korea and the popularity of Korean culture is widespread there as in many countries. Weronika Nalbert and Tomasz Kisiel, who are lawyers in Wardyński & Partners, a leading Polish law firm, worked with Pauline Yeung, who is of Korean and Chinese heritage, on this article exploring the potential for K-Pop to promote sustainability on a global scale. Weronika co-heads the ESG department at Wardyński & Partners and Tomasz who has a strong interest in Korean culture joined the firm because of its highly regarded Korean Desk. Pauline, on the other hand, based in Hong Kong, is a member of Korea, Europe & You (KEY) and brings valuable views as a polyglot with experience in finance, government, and non-profit organizations in Asia. Not only is this partnership meaningful because of the strong ties between Poland and Korea; collectively, the three authors were motivated to write this precedent-setting article to share and demonstrate insights with a cross-border perspective.

Introduction

While economic and cultural ties between Poland and the Korean Peninsula date back to the 1950s, it was the end of communism that resulted in a shift of emphasis in Polish international relations from North Korea to South Korea. In 2021, South Korea invested USD 1.9 billion in Poland, making the country by far the largest foreign investor in Poland, well ahead of the United States (USD 364 million) and Germany (USD 155 million). In 2022, trade between South Korea and Poland reached a record value of USD 10 billion and Poland was the third largest recipient of Korean exports in the European Union.

Today there are around 550 companies with Korean capital in Poland and several thousand Koreans living in the country; given their strong presence in the Wrocław area it is not without reason that one of the districts of Wrocław is called “Little Korea.” Polish airlines are also introducing regular flights to Seoul from Wrocław in addition to Warsaw. In the words of Korean President Yoon Suk Yeol, Poland is “a gateway for Korean companies to enter Europe” and “Korea’s most important cooperation partner in Central and Eastern Europe.”

As Korea brings economic projects and new technology to Poland, it also shares its heritage and culture with Polish people. For music fans, the Korean Wave, or Hallyu (한류), is a defining feature of relations between Poland and South Korea. Korean restaurants have become more and more well-received by the Polish people, as have cookbooks and social media accounts on Korean cuisine. Wiola Błazucka’s “Pierogi z Kimchi” YouTube channel, for example, has more than 281,000 subscribers. Korean studies are also breaking records of popularity at Polish universities.

In the field of sustainability, Poland and Korea enjoy robust relations and strong bilateral cooperation in industry and technology, with many Korean companies making investments in Poland’s green transition. At the same time, there is potential for the two countries to move toward a more sustainable future together through initiatives in culture and creativity. In this article, we look at this through the lens of K-pop and explore how the Korean Wave can champion environmental causes. K-pop is not only winning the hearts and minds of people in Poland and other European countries; it is also notable for its artists that engage in efforts to inspire a greener generation, and its music agencies that have rolled out largely voluntary ESG initiatives. This in turn can constitute an important form of soft power that raises awareness of the need to embrace sustainable development, especially among young people.

Investments by Korean Companies in Poland’s Green Transition

As early as in the 1990s, Koreans were making their presence felt in Poland through investments made by chaebols such as Daewoo and later LG and Samsung. Today, renewable energy is one of the main areas for business cooperation between Poland and Korea.

At the Korea-Poland Business Forum in Warsaw in 2023, the Hydrogen Poland Association and H2Korea, which promotes the Korean hydrogen industry, commenced bilateral cooperation in the development of a renewable green hydrogen ecosystem. Korean companies such as Samsung Electronics, LG Energy Solution, Hyundai Motor Group, and Hyosung Advanced Materials have also discussed cooperation in renewable energy with Poland and the other Visegrád countries Czechia, Hungary, and Slovakia.

Given Poland’s strengths in the fertilizers and petrochemical industry, there is a high demand for clean hydrogen for decarbonizing the economy. Stronger cooperation will contribute to the development of the hydrogen economy in both Poland and Korea.

In addition, according to the Polish Trade and Investment Agency, Korean companies are responsible for almost two-thirds of all foreign investments in the electric vehicles industry in Poland. As a result of investments from LG Chem, Poland has become the leader in the export of lithium-ion batteries for electric cars in the European Union.

K-pop as a Cultural Phenomenon in Poland and Globally

There is also burgeoning interest in Korean popular culture in Poland. In the Monocle Magazine Soft Power Survey 2022/2023, Korea was ranked first in Asia Pacific and fourth globally in no small part because of its pop culture. Last year, Warsaw hosted the 9th Warsaw Korean Film Festival and similar events were also held in Gdynia and Wrocław. K-pop specifically has gained traction in Poland, as seen by the KPOP Nation Festival in September 2023 at the National Stadium in Warsaw, which attracted fans from all over Europe.

Amidst the Korean Wave, “Seven,” “Dynamite,” “Kill This Love,” “God’s Menu,” “TT,” and—back in the day— “Gangnam Style” are songs that have conquered the world charts. Groups such as BTS, Blackpink, Twice, Stray Kids, Exo, Shinee, and Seventeen (which will perform in Europe's leading music festivals in 2024, namely Glastonbury in the UK and Lollapalooza in Germany) have sky-high recognition, win MTV Video Music Awards, and have their albums sold out in no time.

According to estimates, the final three concerts in BTS’s 2019 tour contributed about KRW 923 billion (USD 690 million) to the Korean economy, accounting for 0.3% of the country’s annual GDP. BTS’s first English-language song may have generated KRW 1.7 trillion (USD 1.43 billion) in economic value and created about 8,000 new jobs, according to the Korea Culture & Tourism Institute.

Given that Korea is already highly engaged in green initiatives in Poland through energy and industrial projects, the message from K-pop artists and agencies on sustainability has the potential to further raise awareness in Poland on the importance of addressing the climate crisis. This is especially true among young people who are ardent fans and supporters of K-pop stars.

K-pop Artists Inspiring a Greener Generation

To be sure, the growth of K-pop as a genre has emerged alongside a greater sense of social responsibility on the part of artists who have an enormous impact on music fans. Indeed, the K-pop group BTS opened the United Nations General Assembly with a performance in 2021. The artists, as special envoys of the then President of South Korea, played “Permission to Dance” and gave a speech on the need to fight climate change and achieve the UN’s Sustainable Development Goals (SDGs).

Another chart-topping band, Blackpink, was UN Ambassador at the COP26 climate summit in Glasgow in 2021, when they released a video urging their more than 60 million subscribers on YouTube that it was not too late to act on climate change. At the UN High-level Political Forum on Sustainable Development in 2022, the Korean girl group æspa also encouraged listeners to implement the SDGs, including protection of ecosystems. In November 2023, K-pop group Seventeen appeared at a special 13th session of the UNESCO Youth Forum in Paris, at which its members discussed, among other things, the importance of protecting the environment for future generations.

K-pop Agencies Embrace Sustainability

The K-pop industry has a global market value of about USD 10 billion and the music agencies behind the artists, such as HYBE, SM Entertainment, YG Entertainment, and JYP Entertainment, are profitable companies that also have a huge impact on music fans. In the fiscal year 2022, HYBE recorded revenues of USD 1.4 billion, followed by SM Entertainment, with revenues of USD 659 million, YG Entertainment, with revenues of USD 303 million, and JYP Entertainment, with revenues of USD 268 million.

Leading K-pop agencies seem to be aware of the impact that their activities have on the environment, publishing ESG reports that describe the actions they are taking to address climate change and champion environmental causes. For example:

HYBE established an ESG and Sustainable Management Committee and appointed the President of the Korea Green Foundation as its Director.

HYBE is also moving toward using environmentally friendly materials in its products. For example, a HYBE subsidiary released one version of BTS member. J-Hope’s album that contained a QR code providing digital access to the music instead of a physical CD.

SM Entertainment achieved an 18% reduction in electricity consumption in 2022 and unveiled measures to promote a paperless work environment. The agency has also made modifications to increase the use of eco-friendly raw materials and produce music albums with minimal waste.

YG Entertainment presented its 2040 Carbon Neutrality Roadmap, with plans to achieve the goals outlined in the RE100 renewable energy initiative by 2025 and reduce greenhouse gas emissions by 65% compared to 2022 levels.

Since 2020, JYP Entertainment has been running the Love Earth campaign, encouraging fans to use reusable cups and bags, prevent food waste, and use public transportation.

As part of the promotion of a low-emissions diet among employees, approximately 86% of the food served in JYP Entertainment’s canteen comes from organic, pesticide-free crops.

There are several reasons why K-pop agencies have begun to embrace sustainability. First, there has been an increased awareness in the global music industry on how it can go green and fight climate change. Second, as listed companies on the Korean stock market, K-pop agencies will be subject to ESG obligations and regulations in South Korea. Third, the “Brussels Effect” mandates compliance with European Union regulations even for overseas companies as long as they are operating in the EU, such that Korean entities are subject to EU reporting requirements for their ESG obligations. Fourth, K-pop fans are increasingly demanding that artists and agencies address the environmental crisis for a greener planet, becoming a force that should not be underestimated.

History of Sustainability Initiatives in the Global Music Industry

To begin with, K-pop agencies are committing to sustainability initiatives at a time when there is increased recognition in the global music industry on the importance of protecting the environment.

In as early as 2007, non-profit Julie’s Bicycle convened a music working group and published a report on the carbon footprint of the UK music industry, which was followed by a report in 2010 on the carbon impact of bands, orchestra, and theatre touring on a global scale. From 2017 to 2021, Julie’s Bicycle came up with avenues through which artists, agents, labels, venues, and promoters can collaborate to create a greener music industry.

In December 2021, global music conglomerates like Sony, Universal, and Warner endorsed the Music Climate Pact in response to the COP 26 UN Climate Change Conference. Signatories committed to measuring and diminishing greenhouse gas emissions, formulating carbon measurement approaches, and empowering artists to advocate for environmental causes.

As examples, Coldplay and Radiohead suggest how artists can take concrete actions to support sustainability. In October 2022, Coldplay pledged to cut carbon emissions in its world tour by 50% when compared to their previous tour in 2016-17. The stage was almost entirely powered by renewable energy, and fans who committed to low-carbon travel received discounts. In addition, at least one tree was planted for every ticket thatwas sold. Similarly, for their tours Radiohead prioritized eco-friendly options such as ship transport, switched to reusable water bottles instead of plastic cups, and urged fans to utilize public transportation.

ESG Rules and Regulations for Companies in South Korea

Aside from the backdrop of the global trend toward sustainability, K-pop agencies are also influenced by domestic trends where Korean companies are placing a higher priority on ESG considerations. In February 2023, the Federation of Korean Industries published a survey on ESG trends among the top 100 Korean companies by sales value. In the survey, 93% of respondents indicated that the importance of ESG in the management of their business will increase compared to the previous year. As many as 82% of companies said that environmental activities were important to them, with about 50% developing strategies to respond to climate change and about 58% setting specific targets for reducing carbon emissions.

To be sure, the path to implementing mandatory sustainability reporting in Korea has not been completely smooth. In October 2023, the Financial Services Commission (FSC) postponed the introduction of such reporting requirements until after 2026, citing similar delays in the United States and pressure from local companies.

Having said that, the Korea Exchange sets green management information such as sustainability reports as voluntary disclosure items. As companies publicly traded on the KOSDAQ Korean stock market, the top four K-pop agencies, as mentioned above, have already begun to release sustainability reports. With the FSC expected to implement rules based on the standards of the International Sustainability Standards Board (ISSB), it is fair to say that Korea is moving ahead gradually in this space.

(Indirect) ESG Reporting Obligations for Non-EU Entities

Apart from domestic rules and regulations on ESG reporting, K-pop agencies – as well as some other Korean companies – may also be subject to the “Brussels effect,” a term coined by Columbia professor Anu Bradford on how EU regulation has a global influence on trade and business, such that even companies outside the EU end up complying with EU laws. While EU law consists of many directives and regulations, one directive that is worth mentioning is the EU Corporate Sustainability Reporting Directive (CSRD) which imposes an obligation to conduct sustainability reporting on several EU entities, with the first group of companies reporting according to the new rules for the financial year starting on or after 1 January 2024.

It is worth mentioning that the entities which are based outside the EU may also be obliged to prepare sustainability reporting on the basis of the said act. This is because the CSRD imposes on certain EU subsidiaries the obligation to publish the sustainability reporting prepared by their non-EU ultimate parent entities at the group level for the year starting from 1 January 2028 (reporting in 2029).

These requirements will be applicable only to non-EU entities which are the ultimate parent entity of the group if these entities:

have a large subsidiary or a small/medium-sized public-interest subsidiary or branch in the EU, which had net turnover of more than EUR 40 million in the previous financial year, and
at the group or individual level have turnover in the EU in excess of EUR 150 million for each of the last two consecutive financial years.

If EU subsidiaries do not receive such reporting from the parent company, they will have to prepare and publish the information themselves to the extent that they have it or have obtained it, together with a statement that the ultimate third-country parent company has not provided the relevant reporting. The CSRD also imposes similar requirements on large EU-branches established by entities from a third country.

Environmental Activism among K-pop Fans

One final reason that explains why the K-pop industry is embracing sustainability is because K-pop fans are increasingly demanding that artists and agencies alike should be held accountable for their carbon footprints. Activist organizations such as “K-pop for Planet” have become a platform for like-minded K-pop fans to discuss and raise awareness on climate change. Initially set up by Indonesian student Nurul Sarifah in January 2021, the movement has energized and united mostly millennials and those from the Gen Z generation who care about the environment.

At a “Sustainable K-Entertainment” conference held at the National Assembly of Korea in December 2021, Lee Da-yeon, a representative of “K-pop for Planet” issued a statement on behalf of 10,000 K-pop fans from 83 countries, urging the Korean music industry to play a more active role in addressing the climate crisis.

Since “there will be no K-pop on a dead planet,” Lee urged the largest K-pop agencies to listen to music fans and join the green movement, not the least by organizing green tours and reducing the use of plastic in artist albums. Indeed, K-pop agencies are increasingly under pressure from music fans who have bonded together over their common concern for the environment, which is also a rare phenomenon that reflects the impact of K-pop well beyond mere idol music.

Looking Forward

In sum, while it is encouraging that the K-pop industry is moving decisively in the direction of championing sustainability, we are just at the start of efforts to find a solution that will combine K-pop’s growing popularity with a reduction in its environmental impact. For example, one worrying statistic is that the amount of plastic that Korean entertainment companies use to produce K-pop albums has increased more than fourteenfold in the past six years.

Moreover, while K-pop artists and agencies are undertaking and reporting on their sustainability initiatives, there has so far been a greater emphasis on the environment with fewer initiatives in the social and governance realms. To be sure, SM Entertainment has emphasized transparent corporate governance and significantly increased the number of women in top management, while a HYBE subsidiary and the BTS group have since 2017 supported the #ENDviolence campaign initiated by the UN Secretary-General to stop violence against children and teens. Some K-pop agencies have also committed themselves to SDGs that go beyond environmental causes. But there is still much room for the K-pop industry to exert its influence and bring about positive change in the social and governance dimensions.

Just as Korean firms and companies such as the chaebols are playing a key role in Poland’s green transition, K-pop artists who are increasingly popular in Poland have actively drawn on their influence as idols to support climate action. The K-pop agencies behind them have also embarked on a journey of integrating ESG considerations into their strategy and business operations. This has been driven by trends in the global music industry, reporting requirements both in Korea and the EU, and the increasing activism among the large and multicultural K-pop fan base. Given its huge impact especially on young music fans around the world, the alignment of the K-pop industry with ESG principles is arguably a form of soft power that is undeniably a step in the right direction.

Credits to K-pop Nation for the pictures.