LG Innotek said it has agreed to support some 200 partner firms’ efforts to improve their environmental, social and corporate governance.

The electronic component maker signed a deal with the Korea Commission for Corporate Partnership to jointly develop ESG indexes for its partner companies, provide education, assessments and consulting services.

The commission has signed similar agreements with 11 companies in chemicals and retail among others, and the one with LG Innotek was the first in the electronics industry.

Partner firms with good results in the ESG assessment will get certification which will allow them to get preferential interest rates for loans at Shinhan Bank and the Industrial Bank of Korea.

“We decided to help small and medium-sized companies that are aware of the importance of ESG but have difficulties in setting up an ESG management system due to a lack of budget and manpower,” said Lee Yong-ki, head of LG Innotek’s procurement division.

LG Innotek has also more than tripled its support for partner companies building smart factories this year. The electronic parts maker provides up to 50 percent of the expenses for partner firms’ factory automation.

The company also provides its partners with consulting to help them improve productivity, product quality and expand overseas; runs a fund to offer loans at lower-than-market rates; and offers online educational courses.

By Kim So-hyun (sophie@heraldcorp.com)