KoreaToday Samsung Stresses Sustainable Management
By Kim Yoo-chul
Staff Reporter
Samsung Electronics has good reason to conduct its social charity programs ― sustainable brand recognition and its responsibilities as a corporate citizen.
Samsung has been touting the importance of good governance, social corporate responsibility and sustainable development for years, but has only paid token interest, for the most part, to the local market.
But things are rapidly changing, particularly as Samsung's bigger global footprint has served as a ``wake-up'' call for it, as communities worldwide are increasingly demanding that the Asian consumer giant take responsibility for its actions and its impact on global businesses.
Inspired by the chance to improve these perceptions, Samsung has been raising its budget for social charity programs.
Its investment ratios for charity programs on an EBIDTA (earnings before interest, depreciation, tax and amortization) basis in 2008 climbed to 3 percent from the 2.4 percent in 2007 and 2.2 percent in 2006, according to the company.
``Samsung Electronics has steadily been reaffirming our social responsibility vision and trends to integrate the societies we are present in,'' a company spokesman said.
Samsung is also paying greater attention to its home turf, running various social charity programs here. Officials say the efforts are helping it boost its corporate brand image.
``A steady corporate social responsibility commitment across the globe is one of Samsung's top corporate priorities at a time when competition is getting fiercer in most of our key markets,'' according to the official.
Since 1995, Samsung has been operating 16 voluntary charity centers ― eight in Korea and the remaining eight overseas, the company said.
European, North and South American and Chinese markets are Samsung's key spots. Recently, it has also been focusing on emerging markets such as Vietnam, India, former Soviet-bloc countries as its next targets.
Samsung is the world's biggest maker of LCD TVs and computer chips. It is also second to industry leader Nokia in the global handset industry.
`Happy Together'
With three key words ― hope, harmony and humanity ― and its goal of the country being ``Happy Together,'' Samsung has been strengthening its corporate social charity programs for the underprivileged in South Korea.
According to the company, Samsung spent 152 billion won for charity programs in 2008, locally. Officials forecast the spending will increase in 2010 amid hopeful signs of economic recovery.
Under the program's first theme, dubbed ``Hope,'' Samsung is running a number of scholarship programs for youth who have great potential but suffer from financial difficulties.
For its second theme, ``Harmony,'' it has been partnering with NGOs to extend social activities. By forming a united front, the company runs various welfare programs in rural areas and support for natural disaster prevention courses.
For ``Humanity,'' Samsung has been managing voluntary charity programs among workers and raising more money to expand these activities, officials say.
``We are also running so called `multi-cultural booths' for our workers from China, Japan, Mongolia, Cambodia, Vietnam and Indonesia to raise the recognition of other cultures,'' the company official said.
Global Citizen
In addition to local activities, Samsung's charity programs are reaching to the markets in the United States, Europe, China, Russia, South America, Middle East and Southeast Asia.
``Samsung's core philosophy is about devoting our talented people and technology to produce the best products and services to contribute to global society,'' the spokesman said.
Samsung was selected out of 500 FTSE companies to join the Carbon Disclosure Leadership Index (CDLI), ranking first in Asia and 10th out of the 50 top global companies.
The index for 2008, announced at a global forum held by the Carbon Disclosure Project (CDP), is measured by assessing the corporate policies and activities companies are engaging in to respond to climate change, the company said.
``Samsung is committed to sustainable business operations and will further embrace our corporate social responsibility to actively participate in solving the issues that face the environment,'' Lee Yoon-woo, Samsung Electronics Vice Chairman, said.
Through the plan, which calls for 5.4 trillion won ($4.3 billion), Samsung envisions to become a global leader in eco-friendly management by 2013.
Starting this year, Samsung plans to improve its energy efficiency by 40 percent for the next five years, reducing greenhouse gas emissions from product use by 84 million tons.
In the United States, Samsung has been running its ``Four Seasons of Hope'' and ``Hope for Education'' programs in the United States since 2002 and 2004, respectively.
Under the ``Four Seasons of Hope'' charity program, Samsung has so far collected a $12 million charity fund from American sports stars from golf, football, basketball and baseball since the program was launched.
In partnership with Microsoft (MS), Samsung has been giving away $7 million worth of digital devices to some 250 schools in the United States since 2004 that have won their annual competition for digital technology-related essays, officials say.
Similar campaigns are being run in Europe. Samsung officials say such programs have helped it boost the company's brand recognition globally.
Strategic Approaches
Although size matters when it comes to Samsung's charity programs for developed markets, numbers have emerged as the top priority for its charity drives in developing markets.
Along with the North American and European markets, Samsung is embracing Chinese, South American, Middle Eastern and African markets as its next strategic spots, citing increasing spending for consumer products amid hopeful recovery signs in the global economies.
In line with such internal perceptions, Samsung has been expanding its charity campaigns to those countries by spending more to help out there, according to company officials.
``We aim to create meaningful corporate social responsibility (CSR) programs that connect logically with our sponsorship and our business,'' said another company spokesman.
It is running a facility in China to train hearing dogs as part of its socially responsible management initiative there. The center is the result of some $200,000 investment.
Samsung said more hearing dogs will be ready to serve China's deaf and hearing-impaired community.
According to officials, the South Korean technology company is helping China's rural communities build smaller schools. They added that such activities will be steadily expanded over time.
China will rise as the world's single biggest consumer electronics market within a few years, passing the United States, analysts say. Samsung was an official partner for last year's Beijing Olympics and Paralympic Games in Beijing.
By forming a united front with the International Youth Foundation (IYF), Samsung is also strengthening its steady corporate social responsibility commitment in Africa.
The new collaboration is implementing multiple-phase youth employment and entrepreneurship programs with goals to increase economic activity, particularly by promoting job skills and preparing young people for successful, long-term careers, officials say.
Under the agreement, Samsung is providing financial support to and committing to work with the IYF to find ways to utilize its technology and expertise to help address the employment needs of youth in its key African countries, which include Egypt, Kenya, Nigeria and South Africa.
``The proposed projects are having a lasting impact on thousands of young people on the African continent and presenting an opportunity through which Samsung's local employees can be directly involved,'' the official added.
It has also been running a ``Samsung Digital Hope'' program in seven Southeast Asian countries including Thailand, Vietnam, the Philippines and Indonesia since 2004 to increase the technology recognition of the underprivileged in those countries.
``Social enterprise represents a corporate commitment from the highest level and a mindset that the public good, rather than investor profits, represents the priority in doing businesses,'' Lee Jong-su, a media critic of Hanyang University, said.