CSR Cases from Korea INHA Univ. Jong-Dae, Kim Sustainability Management Research Institute 2012. 04....

CSR Cases from Korea

INHA Univ. Jong-Dae, KimSustainability Management Research Institute

2012. 04. 13

1

Table of Contents

CSR Activities of Korean Corporations1

Drivers of CSR2

Cases from Korea3

Future Direction4

2

Average Social Contribution Expenditures (in Mil. KRW)

Source: The Federation of Korean Industries, 2011

CSR Activities of Korean Corporations

3


Social Contribution Expenditure per Sales(%)


2005(197)

2004(201)

2006(194)

2007(205)

2008(208)

2009(219)

2010(218)

4

Social Contribution Expenditure per Before-tax Income(%)



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Sector Expenditure Percentage

Social Welfare 384,237 51.1

Education, Research 35,899 4.8

Arts and Athletics 99,567 13.3

International Aid Works 37,810 5.0

Environmental Protection 12,836 1.7

Rural Support 33,818 4.5

Emergency and Disaster Relief 6,589 0.9

Health Care 92,238 12.3

Others 48,345 6.4

Total 751,339 100

Expenditures of social Contribution Program by Sector(2010)(in Mil. KRW, %)

* Based on 164 respondents.



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Sector 2004 2005 2006 2007 2008 2009 2010

Social Welfare 40.3 38.4 35.3 25.3 45.2 46.6 51.1

Health Care 4.2 5.8 0.3 0.3 0.4 0.4 12.3

Education and Research 6.8 7.2 9.9 10.1 10.5 9.4 4.8

Arts and Athletics 11.3 9.8 8.3 9.7 12.8 4.5 13.3

Environmental Protection 5.6 7.9 1.8 3.1 1.2 0.6 1.7

Emergency and Disaster Relief 0.8 0.2 0.2 0.3 0.1 1.0 0.9

International Aid Works 0.1 0.1 4.4 4.6 5.7 2.6 5.0

Rural Supports - - 3.9 3.0 2.3 3.5 4.5

Others 31.0 30.5 35.8 43.6 21.7 31.4 6.4

Trends of Social Contribution Expenditures by Sector(%)

1) Figures represent expenditures of each sector over total expenditures 2) Number of respondents ranges from 164 in 2010 to 206 in 2005.



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Average Donations (in Mil. KRW)

2006(200)

2005(205)

2007(203)

2008(188)

2009(209)

2010(187)

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Sector Total Expenditure Average

Social Welfare 440,132 2,668

Education and Research 240,467 1,457

Arts and Athletics 122,983 745

Health Care 4,148 25

Others 192,246 1,165

Environmental Protection 18,158 110

Emergency and Disaster Relief 5,592 34

International Aid Works 92,764 562

Rural Supports 15,110 92

Total 1,131,600 6,858

Donations by Sector(2010) (IN Mil. KRW)

1) Based on 165 corporations 2) Other activities include campaign support, community fund, SMEs support, etc.


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Internal Obstructions to Social Contribution Activities(%)


10

External Obstructions to Social Contribution Activities(%)


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Motivations for Global CSR(%)

reputationLocalisationStrategy

SocialResponsibility

TransnationalShaking

Others


12

Evaluation of Global CSR(%)

PositiveVery positive

Top early toassess

Insignificant


13

Drivers of CSR

Compliance

Public Relations(Public Pressure)

Philanthropy

Competitiveness(Strategic)

Social Value

Creation

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Drivers to promote CSR

Drivers Focus of CSR Examples

ComplianceCompliance

with laws and regulations

Avoid penalty and protect reputation

Public Relations

Reaction to external pressure

Effective use of resources to manage public

demand

- Nike’s Sweat Shop- Starbucks Fair trade

PhilanthropySharing

economic value created

Enhance and maintain good

reputation

- Amore Pacific’s Pink Ribbon campaign

- Avon Products’ Fighting Breast Cancer

Competitiveness

Value Creation throughout Value Chain

Enhance strategic

comparative advantage

- Yuhan Kimberly’s Tree Planting Campaign

- Body Shop’s anti-animal testing

Social Value Creation

Meet Social needs and

Advance Social change

Social value creation

- Nestle’s Nespresso

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Cases from Korea :Compliance

KT&G Provide Cash Incentive for not displaying competitors products

Fair Trade Commission fined KT&G less than 100 Mil. KRW

Collusion - An Oil Company: 5 Unit(254,800 Mil.KRW)

- Life Insurance Company(117,800Mil.KRW)

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Cases from Korea : Labor law

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KIA Motor - Violation of the Working Hours, Intern Working under 18 age, Non payment

of the Intern(300 Mil) and so on.

- Penalty: 400Mil.KRW

Yoosung Enterprise Co., Ltd - 70 Case

- Penalty: 1,000 Mil.KRW

Cases from Korea : Environmental regulation

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‣ ROHS(2007) - Product: Notebook Component - Pb detection(Japan) Whole Quantity take Back - About 500 Mil.KRW

Cases from Korea :Public Relations(Public Pressure)

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Samsung Charity Foundation(2006) - 800,000 Mil.KRW donation

Hyundai Motors Scholarship Foundation(2012) - 500,000 Mil.KRW donation

Cases from Korea: Philanthropy

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Amore-Pacific

1. “Make-Up Your Life”

2. “Pink Ribbon Campaign”

Cases from Korea :Competitiveness

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Posco _ FINEX

Yuhan-Kimberly

Strategic Decision on CSR1. Where to give

focus on environmental conditions that will most

enhance your productivity

Factor condition

Demand condition

Context for strategy and rivalry

Related and supporting industries

2. How to give

Select the best grantees

Signal other Finders

Advance best practice

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Cases

Global Firms

Factor Condition

Exxon MobileImprove roads in countries where it operates

DreamWorksTrain high school and college students

DemandCondition

Apple Donates computers to school

Context for Strategy and Rivalry

General Electric

Provide financial support to TransparencyInternational

Related and Supporting Industries

AmericanExpress

Travel & Tourism Academy

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Creating Social Value-Hyundai motors

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POSCO

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LG Electronics

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Future Direction

Future Direction

Shift of Focus from profit-sharing to value creation

throughout value chain

Economic Value creation via social value creation

Social & market changes Triggered by CSR

Integration of Social & Environmental

Responsibility into Integrated Reports

27

CSR Cases from Korea INHA Univ. Jong-Dae, Kim Sustainability Management Research Institute 2012. 04....

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