In-depth analysis of 456 sustainability reports published by top 100 domestic companies

Provide attractive incentives such as tax reductions to companies that faithfully fulfill their social responsibilities

Prof. Jeong Woo KOO, Professor of Sociology at Sungkyunkwan University (President: Kyu Sang CHUNG), gave a keynote presentation about “cooperation between the government and businesses to strengthen corporate social responsibility” at a policy forum held at the National Assembly Hall on Nov. 2. At this policy forum hosted by the Korea Association for Anti-Corruption Policy Studies (Chairman: Prof. Yong Chul KIM, Pusan National University) and National Assembly member Young Sun PARK, Prof. Jeong Woo KOO presented the results of an in-depth analysis of 456 sustainability reports published by the top 100 domestic companies in Korea.

Prof. KOO asserted that major corporations focused on domestic social contribution activities are expanding their social contribution projects around the world. For example, Samsung Electronics is implementing a “Solar Internet School” project in Africa to supply electricity in classrooms using solar panels, and Hyundai Motor Company is establishing automobile maintenance specialist training centers in Ghana and Indonesia.

From 2003 to 2014, 69 major corporations conducted a total of 2,020 overseas social contribution projects. In particular, export manufacturing companies such as Hyundai Motor Company, LG Electronics, POSCO, and Samsung Electronics stood out as active participants. Participation of domestic industries such as the financial industry was relatively low. By country, about 20% of all applicable projects were focused on China, followed by less-developed countries in Southeast Asia such as Vietnam, India, the Philippines, Indonesia, Thailand, and Cambodia. There has also been no shortage of overseas social contribution activities targeting advanced countries such as the United States, Japan, and Germany. Prof. KOO said that there is a strong purpose of maintaining the company’s image and reputation in developed countries.

In the business sector, education projects held the highest weight (28%), followed by community development (17%), health and medical care (16%), and poverty relief and welfare (13%). Projects related to the environment and climate change comprised 9%, while industry, energy, and ICT projects held 7%.

There have also been active overseas social contribution activities in the sports industry and culture of supporting national soccer teams. By project type, donation projects held the highest rate at 41%, followed by visiting service and volunteer dispatch projects (18%), construction projects (13%), and campaigns and events (10%).

There have also been active overseas social contribution activities in the sports industry and culture of supporting national soccer teams. By project type, donation projects held the highest rate at 41%, followed by visiting service and volunteer dispatch projects (18%), construction projects (13%), and campaigns and events (10%).

It is encouraging that domestic major corporations in Korea are actively engaged in social contribution activities targeting developing countries. However, many projects are distant from the corporation’s own area, and the percentage of projects targeting poor countries and marginalized groups is also low. Prof. KOO pointed out that there is an excessive focus on Asian countries, and the proportion of projects targeting developed countries is high, so these points should be improved.

Prof. KOO said that it is important for the government to provide proper regulations as well as incentives. Corporations should be required to report details related to their social responsibilities when submitting their business reports. Strengthening the principles of social responsibility investment such as the national pension could also become a policy tool. Prof. KOO suggested that companies that faithfully fulfill their social responsibilities should be offered positive incentives such as tax reductions.

At this policy forum, Sye Kyun CHUNG, Speaker of the National Assembly; Un Jung PAK, Chairperson of the Anti-Corruption and Civil Rights Commission; Gang Gyu NOH, Vice President of the Korean Bar Association; and Jung Hee LEE, President of the Korea Association of Small Business Studies, all took part in the discussion. Prof. KOO’s research is scheduled to be published this month in Volume 51, No. 4 of the Korean Journal of Sociology.