Samsung Electronics to announce plans to join RE100 Initiative

Samsung Electronics Co., the world’s largest smartphone and memory chipmaker, will soon join The Climate Group’s RE100 Initiative as the company ratchets up its environmental, social and governance (ESG) management standards.

In the coming weeks, the South Korean tech giant will announce its renewed ESG strategy, including the RE100 projects, people familiar with the matter said on Sunday.

The company’s move follows the Korean government’s decision on Friday to grant Samsung heir Lee Jae-yong a presidential pardon in view of the conglomerate’s significant role in the national economy.

The Samsung vice chairman, whose English name is Jay Y. Lee, was paroled one year ago after serving 18 months in prison on bribery charges. But he was banned from working, meaning he couldn't take the helm of his conglomerate.

With Lee reinstated, analysts said Samsung will push ahead with several big moves, including heavy investments in key markets around the globe.

Samsung’s plan to join the RE100 Initiative is one of them.

Compared with other large Korean companies, Samsung has been late to join the global eco-friendly initiative.

Fourteen Korean companies, including Hyundai Motor Co. and LG Energy Solution Ltd., have already committed to the RE100 Initiative.

ENERGY-GUZZLING CHIP PLANTS

Samsung Electronics had expressed its intention to join the initiative to President Yoon Suk-yeol’s transition committee in April, but has been reluctant to embrace the shift toward a carbon-neutral business as its chipmaking plants use a considerable amount of power.

Amid a top leadership vacuum, Samsung Group was also unable to make major corporate decisions including on investments, which require Lee’s signature.

Chipmaking is one of the industry sectors that consumes a lot of electricity.

Samsung said its chip production facilities use 70% of its total power consumption. And this electricity usage is expected to grow as the company rapidly adopts more advanced chip processing technology.

Construction of its Pyeongtaek 3 (P3) chip factory, slated to become the world’s largest semiconductor manufacturing facility, is scheduled to be completed by the end of this year.

Another plant, P4, at its Pyeongtaek complex, is also set to be up and running later next year.

“Most of Samsung’s chip factories are in Korea. If renewable energy isn't readily available in the country, the company may not be able to secure enough electricity,” said an industry official.

CARBON-FREE PLEDGES

The RE100, or Renewable Electricity 100 initiative, was launched by The Climate Group, a British non-profit organization,  in 2014, and today has some 360 member companies around the world, including Google, Apple, Ikea and General Motors.

The campaign, which targets companies that use more than 100 GWh of power per year, prods them to transition to relying 100% on renewable energy by as early as 2025.

Korea’s other big conglomerates, such as LG, SK and Hanwha, have also announced carbon-free pledges to comply with the government’s initiative to introduce ESG standards and achieve carbon neutrality by 2050.

Analysts say that joining the RE100 initiative will help improve a company’s export competitiveness, given the tightening of global environmental regulations.

Write to Sungsu Bae at baebae@hankyung.com
In-Soo Nam edited this article.