AmorePacific stingy on corporate giving

AmorePacific CEO Suh Kyung-bae

By Lee Hyo-sik

AmorePacific is in the hot seat for being stingy in making social contributions, raising questions about whether it is willing to fulfill its responsibility as a corporate citizen.

The sales of Korea’s largest cosmetics maker jumped over 20 percent in 2015 from a year earlier, with operating profits soaring nearly 40 percent. However, the firm’s spending on corporate social responsibility (CSR) programs declined by more than 20 percent.

According to an electronic disclosure system operated by the Financial Supervisory Service, Tuesday, AmorePacific Group spent 13.8 billion won ($12 million) to finance its various CSR programs in 2015, down 22 percent from 17.7 billion won a year earlier.

The group’s flagship unit AmorePacific also reduced its CSR spending by 35 percent to 11.1 billion won from 17.2 billion won during the one-year period.

The combined 24.9 billion won donation was even less than the 25.7 billion won dividends that company CEO Suh Kyung-bae received from AmorePacific Group and its units.

In 2015, AmorePacific had 5.6 trillion won in sales, up 20.1 percent from 2014, with its operating profit soaring 38.6 percent to 914 billion won. AmorePacific also saws its revenue increase 23 percent to 4.7 trillion won on the back of robust sales of its cosmetics brands at home and abroad. Its operating profit surged 37 percent to 773 billion won.

“Normally, when a company earns more money, it spends more to help improve local communities. It seems so odd that AmorePacific didn’t do so last year,” an official at one of the country’s major business associations said. “I do not know what’s really going on inside the cosmetics firm. It may be that the company has grown too fast that it has no resources to mobilize to expand its social contribution programs even though it wants to.”

No matter what the reason may be, AmorePacific should pay more attention to supporting the socially marginalized, the official said.

AmorePacific officials said its 2014 CSR spending was abnormally high, but did not say why it had to spend more than usual.

“We have continued to increase our social contributions over the years. In 2014, we had to increase our CSR budget sharply,” a company spokeswoman said. “So, what we spent in 2015 didn’t seem like much, but we successfully carried out what we planned to do last year. We will certainly expand our CSR programs this year from 2015.”

Some of the firm’s community improvement programs include supporting women with breast cancer and caring for low-income households in areas where its plants operate.

LG Household and Health Care, the nation’s second-largest cosmetics firm, spent 26.2 billion won last year to finance various CSR activities, up 175 percent from 9.5 billion won in 2014.