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ESG

Samsung Electronics embraces ESG for company assessment

Oct 13, 2020 (Gmt+09:00)

South Korean companies are becoming more proactive in prioritizing environmental, social and governance (ESG) standards. In line with the ESG wave, Samsung Electronics Co.'s device solution (DS) division plans to incorporate ESG criteria as early as next year to assess its divisions' business performance, said Jang Seong-dae, the head of Samsung’s sustainability operations on Oct. 13.

Samsung's DS division runs semiconductors and display operations, and is seen as the group’s moneymaker, posting 9.6 trillion won ($8.3 billion) in operating profit in the first half of this year alone. The division originally spearheaded sustainability campaigns focusing on eco-friendly businesses through its environment and safety center, which was expanded into the sustainability office in July 2019 to further boost its ESG involvement.

Samsung's sustainability office plans to increase its budget and staffing to expand the scope of ESG areas that they look into. The assessment categories are environment, labor and human rights, corporate social responsibility, supply chain and stakeholders.

"ESG is equally as important as new technology and revenue,” said Jang. “Even if businesses post hefty profits, they will not score high if they receive low points in the environment and human rights categories,” he added.

The company's commitment to ESG can also be measured by the thickness of its annual sustainability report. The company’s sustainability report has almost doubled from 73 pages in 2008 to 136 pages this year.

In the past, sustainability reports served as reference materials for investors and stakeholders, but as of recently, they are on par with audit reports. And the standards for sustainability reports are becoming tougher, requiring more information on areas such as corporate governance; all adding to the increased thickness of the reports.

As of 2019, there were 136 domestic companies that issued sustainability reports. This year around 150 companies are expected to issue them, riding on the ESG wave.In this year’s report, Samsung Electronics attached research findings from various academic institutions as part of its efforts to boost the report’s credibility.

Samsung Global Goals app layout (Courtesy of Samsung Newsroom)

ESG TREND GAINS STEAM IN KOREA

ESG rhetoric has become common for companies that want to highlight their responsible involvement and is increasingly evident on corporate channels, including communication platforms, sustainability reports, and even new product releases.

Even otters made headlines in April when Samsung Newsroom, the company’s official media platform, uploaded a video announcing the creatures’ return to the Osanceon River near its semiconductor plant in Gyeonggi province. The company claims its commitment to improving water quality – releasing about 40,000 tons of purified water daily into the nearby stream – prompted the otters to return home.

This was part of the ESG-focused content that has become the crux of the company’s communication channel. On Samsung Newsroom, there are 935 posts that are ESG relevant, double the amount of technology-related content. One out of four posts has been ESG-themed in recent years, according to the Korean tech heavyweight.

Media platforms are not the only channels used by Samsung to advocate ESG. In August, Samsung unveiled its flagship smartphone Galaxy Note 20 in an event during which Roh Tae-moon, the president of the mobile communications business, introduced the pre-installed Samsung Global Goals app, providing information on the United Nations’ Sustainable Development Goals.

The donation-based app is the product of Samsung Electronics’ partnership with the United Nations Development Programme, aiming to raise awareness of 17 critical sustainable development goals (SDGs) worldwide. So far, the app has raised around $1 million (1.1 billion won).

On Oct. 13, Samsung Electronics landed at No. 28 on The 100 Most Sustainably Managed Companies in the World list released by the Wall Street Journal.

Write to Su-bin Lee at lsb@hankyung.com

Danbee Lee edited this article.

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