SK becomes first group to disclose monetized social value

SK Group, South Korea’s third-largest conglomerate, created 18.4 trillion won ($14.5 billion) in social value in 2021, up 60% from the year previous, by creating jobs, paying taxes and following ESG guidelines, the group said on Monday.

SK has been monetizing the social good it delivers through business activities since 2018 and disclosed its 2021 numbers for the first time among South Korean companies. 

The social value is measured mainly in four categories: indirect contribution to the economy through job creation and dividend and tax payments; impact on the economy in relation to carbon emissions and pollutants; social contribution through products, services and win-win partnerships with contracting companies; and governance.

The group said the monetization of its intangible value reflects SK Group Chairman Chey Tae-won’s message: “If we can’t measure their benefits, we can’t manage them, either.”

For example, Chey has called for a precise calculation of the financial benefits of the group's ESG-related activities, as it does for sales and operating profits.

By category, indirect contributions it made to the economy took the bulk of the 2021 number at 19.3 trillion won, followed by 10.1 trillion won from wages and welfare benefits, which include dividend and tax payments.

In terms of environment-related efforts, however, SK made negative social contributions of 2.9 trillion won in 2021 due to an increase in both facility investment and factory operating rates.

“Considering our growing output … it would be difficult for us to reduce carbon emissions over the next two to three years,” an SK Group official said.

To make its social value estimates objective and transparent, SK referred to the world’s top four accounting companies and the Organisation for Economic Co-operation and Development.

Each of SK Group units, including SK Telecom Co., SK Hynix Inc. and SK Innovation Co., will release their separate estimates on social value creation and their measurement methods later this month.

Write to Jeong-Min Nam at peux@hankyung.com
Yeonhee Kim edited this article