Rio+20 Corporate Sustainablity Forum is underway in Rio de Janeiro, with a keynote speech by President Lee Myung-bak, amid the attendance of government leaders and corporate executives in June. In response to such global initiatives, companies are moving to help smaller companies engage in environmentfriendly business activities. / Korea Times file

A majority portion of this contributed article was presented at the Rio+20 Summit of the United Nations in Rio de Janerio last month. – ED.

By Chey Tae-won

The primary objective of a business leader is to make more money and successfully run a company. But in more recent years, environmental considerations are increasingly coming into play.

In the past, CSR (corporate social responsibility) was regarded with the level of enthusiasm students have for “homework” 0or as an unwanted obligation.

“Responsibility” was passive.

After reviewing CSR programs, I noticed several problems: first among them was how hard it is to find committed and talented people, because more people are concerned with money-making rather than looking at environmental implications.

CEOs and executives don’t pay enough attention, although efforts are being made to address the issue of environmental pollution which manufacturing companies are inadvertently closely associated with.

I came upon an SE (social entrepreneurship) model and impact investing as a possible solution after thinking of other ways to spend CSR money more wisely.

An SE must be handled like a business, and thus we need more experience in SE. I established “Hangbok Narae” as a pilot test and developed an MBA program for social entrepreneurship at a top university in Korea

How can everyone (SEs and corporations) benefit? Benefits to SEs are social value creation, 10 times more social value creation than through philanthropy

Social challenges

Large corporations can leverage their capabilities and help SEs. Job inclusion, such as providing second opportunities for the elderly and improving lives, rather than simply giving away money.

So what are the challenges that we face?

ㆍNot enough incentives for corporations

ㆍMust give returns

ㆍSE CEOs look for investments that will sustain their organizations

ㆍSEs have a dual task: social and economic value creation

ㆍSmall SEs can’t compete or survive against large corporations

ㆍCEOs have to decide whether or not to create more social value or make more money without any guarantee of sustainability

ㆍThere is no social value measurement scheme

ㆍMust evaluate both social value and financial returns, and create a measurement or accounting system.

ㆍIncentives and rewards, such as a transferrable tax credit

ㆍMust attract more talented people to the SE space

ㆍDream is to create a social capital market

Then, what are the commitments?

ㆍAn MBA program will be launched in Korea, which will be extended globally in the future

ㆍAn IT (information technology) platform with the UNGC to facilitate information exchange and increase innovation

SK supports SEs, and is learning by doing: learning the characteristics of everyone involved in SE. IT support is needed, because it reduces transaction fees.

Learning by doing

We must figure out how to engage and lower transaction fees. SK changed an MRO (maintenance, repair and operations) business to an SE, and created a different model that uses SEs as suppliers, advises other SEs and expands their business.

It is a nurturing model that teaches other SEs skills, such as finance, management and HR skills. We are currently trying to open space to help SEs through innovation. Like the technology boom, give them room to innovate.

There is plenty of enthusiasm and energy in business and in protecting the environment in the process, from air and water pollution to oil spills. We have to focus on providing positive energy through which we can hope to make a better world.

We need new and innovative solutions. We must reduce conflicts of interest; dream of a new world. Open your mind and come up with new, hybrid solutions.

Nowadays, the reality is that many nations are faced with economic saturation coupled with various social problems like unemployment and ever-increasing wealth disparities.

It is in these situations that I believe social enterprise can step in and solve such problems by establishing a new economic sector, channeling corporate systems and expertise into creating social value, focused on the common good.

As one of the largest conglomerates, and a leader in the energy and telecommunication industries in South Korea, SK is striving to lead proliferation of social enterprise models domestically and then expand onto the Asian and global stage.

SK has also joined in the efforts to develop the Framework for Action, sparking discussion throughout the UN on social enterprises, and even agreed to host the Social Enterprise Session at Rio+20 in Rio de Janeiro.

Spirit of community

I believe these efforts could play a meaningful role in realizing the value of the UN as a global community, because social values begin with the spirit of community, in that we should overcome difficulties together, side by side.

For this to work, we need to start by creating an eco-system for social enterprises which promotes their sustainable growth. In this regard, SK would like to propose three commitments, a “Global Action Hub,” a “Social Enterprise Forum” and a “Social Enterprise MBA.”

First, SK will establish a “Global Action Hub”, an intermediary platform spanning all components of the Social Enterprise ecosystem. The “Global Action Hub” will go beyond a mere IT platform. It will be a domain for dialogue and information exchange, where investors, specialists, and social entrepreneurs can come together to facilitate change.

UNGC (United Nations Global Compact) will be a partner for this Hub. Together with the UNGC, SK hopes the Global Action Hub can eventually develop into a major pipeline for impact investing and social capital transactions, by attracting diverse partnerships and additional commitments, particularly in the area of development with environmental protection as an important focus.

Second, SK will extend its social enterprise forum, which has been limited to the Korean market so far. We want to start by including the entire Asian region, later expanding globally, so that we can share great ideas and solutions. This will help us generate better methodologies for future social enterprises.

Lastly, SK has introduced an MBA program in Korea to nurture social entrepreneurs who will be nurtured to run businesses with the environment in mind.

The program will be run based on the UN principles for responsible management education, which will serve as guidelines for future social entrepreneurs to realize UN values in their business activities.

These days, sustainability — always with the environment in mind — is grabbing a lot of attention as an alternative to reckless growth. For social enterprises to enhance sustainability by pursuing social values and business values together will be very challenging. But it will also be highly rewarding.

CEOs and executives don’t pay enough attention, although efforts are being made to address the issue of environmental pollution which manufacturing companies are inadvertently closely associated with.

We’ve got our work cut out for us, as we need to raise interest, passion and actual support from nations, stakeholders, and economic sectors. There is a famous quote pertinent to where we find ourselves today; “Coming together is a beginning.

Keeping together is progress. Working together is success.” As we embark on this challenging yet amazing journey, we have to remember that there is only one earth and it is our responsibility to preserve the environment for next generations.

We must grow progressively to encompass issues faced by more nations across the world by proposing truly innovative ideas which can contribute to global prosperity.

Environment Info
Social responsibility

Social sustainability cannot be created simply through the physical design of the community but then neither can environmental sustainability be created by physical design alone. Physical design cannot ensure that individuals, families and communities will lead environmentally sustainable lifestyles, although it can help to make such environmentally sustainable choices more easy.

Equally, while there is much that can be done on the "design" of the soft infrastructure of the community to ensure its social sustainability, the physical design of the community can make it either easier or more difficult for communities to be socially sustainable. Thus there is a vital need to integrate the physical and social design of communities if we are to create communities that are both environmentally and socially sustainable.

In discussing sustainability both social and environmental it is important to understand that both of them require a system of economic activity that is compatible with and not destructive of either the ecological web of life or the social web of life of which we are a part, and upon which we depend for our health, well-being and quality of life.

Chey Tae-won currently serves as chairman of SK Group, which maintains core businesses in energy, telecommunications, and trading/services — industries strategically critical to Korea. Through a visionary management philosophy, which concentrates on encouraging positive system changes and an entrepreneurial spirit, Chey cultivates and leverages synergies and relationships among SK’s businesses, promoting the group’s continued growth and success in areas such as energy exploration and production, and advanced mobile communications, while also pursuing strategic expansion into key global markets. Chey holds a B.Sc. in Physics from Korea University and completed a Ph.D. program in Economics at the University of Chicago.