Georg Kell, executive director of the U.N. Global Compact, stresses the importance of corporate social responsibility (CSR) as a business strategy for companies looking to be accepted in different global markets in an interview with The Korea Times, Friday.
/ Korea Times Photo
by Shim Hyun-chul |
By Kim Tong-hyung
Staff Reporter
Although the term corporate social responsibility (CSR) has entered the Korean business executives' vernacular in recent years, it's also true that most local companies regard CSR activities merely as cosmetic treatment to beautify corporate reputations.
However, Georg Kell, executive director of the U.N. Global Compact, stresses that CSR is more than just a glorified public relations (PR) tool ― it's a crucial business strategy that enables companies to astutely manage risks and opportunities, and integrate further into the global market, he said.
The increasing attention to corporate responsibility is a product of globalization, Kell says, with CSR becoming critical for companies attempting to enter new markets and gain acceptability there, winning licenses and building up brands.
"The smarter companies already know this," said Kell, who was in Seoul to participate in the U.N. Global Compact China-Japan-Korea Roundtable Conference held at the Grand Hyatt Hotel in Seoul, Friday.
"Every company is a product of its own society, as companies don't act in isolation, but are controlled by a set of local rules and practices codified and non-codified. Over the past 30 years of globalization, more companies have started to learn that the global market place is an amalgamation of many of these national and local features.
"In today's world, to be successful on the world stage means not only being competitive with your product or services, but also capable of managing non-financial issues, as you have to operate in different landscapes. Going global means going local in many other places."
The Global Compact is the U.N. initiative launched in 2000 to encourage companies worldwide to adopt sustainable and socially responsible policies. The member companies agree to adopt 10 core principles on human rights, labor, environmental and anti-corruption standards, and are required to report annually on their progresses.
About 6,700 companies from 130 countries are now joined together under the Global Compact, which includes 156 South Korean firms and organizations led by SK Telecom, SK Energy, KT, STX and Hyundai Motor.
The goal is to increase the membership to 20,000 companies by 2020, Kell said. Although the global compact is a voluntary initiative, Kell says the standards for monitoring and evaluating companies are becoming stricter, with more than 1,000 companies delisted since 2005 for their failure to "communicate."
The economic downturn of the past year provided a real test for commitment to corporate responsibility, but Kell claims that the past months have only encouraged his beliefs that more companies around the world have begun to accept CSR as a serious part of their business strategies.
Although the recession forced many companies around the world to cut back on their CSR budgets, the Global Compact also experienced an increase in membership.
And despite the tightened purse strings, environmental issues garnered renewed focus from many of the companies, as "greener" solutions in energy, supply chains and communications often meant cheaper cost.
"The economic downturn seems to have reminded companies of the basic understanding about how to build a sound organization, reinforcing their commitment to long-term value creation, instead of just chasing short-term gains," Kell said.
The recent Seoul conference gathered the representatives from Global Compact companies from Korea, China and Japan to discuss regional collaboration. The representatives also decided to make the China-Japan-Korea roundtable conference into an annual event, with the three countries alternating as hosts.
Kell said the Asian Global Compact companies would benefit from having a regional platform.
"The meeting is a big experiment for us, that is the first time that the Global Compact co-hosts a regional event of this nature. The background is simple ― the global economic growth center has migrated to Asia," said Kell.
"While all three countries have their own history and own background, the companies from all three countries have the same aspirations of wanting to become global players, and the Global Compact certainly provides a value platform they can understand."
thkim@koreatimes.co.kr
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