AIIB SK creates ecosystem for social enterprises

SK Group Chairman Chey Tae-won, second from right, greets the heads of social enterprises during the second Social Performance Incentive Award ceremony at Yonsei University in Seoul, April 20. Korea’s third-largest conglomerate gave 4.8 billion won ($4.2 million) in incentives to 93 social enterprises. / Courtesy of SK Group

By Lee Hyo-sik

SK Group has been nurturing startups that contribute to solving diverse social issues as part of its efforts to share growth with local communities.

Under the leadership of Chairman Chey Tae-won, Korea’s third-largest business group has been supporting social enterprises that hire the disabled, carry out community improvement programs and conduct other social projects since 2015.

Chey invested 10 billion won ($8.9 million) out of his own pocket to establish a social enterprise in 2015, and SK has been providing incentives to other social enterprises through it since 2016. It measures the social value created by enterprises and matches their contributions with monetary rewards.

On April 20, the group held the second Social Performance Incentive Award ceremony at Yonsei University in Seoul, offering 4.8 billion won in incentives, dubbed social progress credits, to 93 social enterprises. It also organized a series of roundtables about the project's achievements and goals going forward, one of which was chaired by Chairman Chey.

In 2016, SK offered incentives to 44 social companies, creating a combined social value worth 10.3 billion won. This year, 93 firms are estimated to have generated 20.1 billion won of social value.

After being subject to stringent scrutiny annually, the recipients are eligible for incentives for up to three years. SK evaluates enterprises in four categories: job creation, provision of social services, environmental conservation and ecosystem protection.

The group said the 93 firms generated a combined 1,368 new jobs, valued at 8.41 billion won, in 2016, up from 6.04 billion won the previous year.

They were also estimated to have provided various medical, educational and other social services worth 7.29 billion won, up from 2.9 billion won, while their contributions to environment protection rose to 4.41 billion won from 1.33 billion won.

“We need to create an environment in which social enterprises have easier access to financial services and receive investment in a timely manner, so they can grow in a more sustainable manner,” Chey said.

“SK will continue to extend financial and other aid to social enterprises to ease their financial difficulties and create a virtuous ecosystem for entities that do social work without having to worry about money.”

The chairman stressed the importance of building a platform allowing social firms to share information concerning their businesses.

“Through this extensive platform, social firms can create a virtuous ecosystem. We will need to establish a separate investment fund to continue providing financial support for those who get off the incentive list,” he said.

Following the award ceremony, SK also held a roundtable talk with Labor Minister Lee Ki-kweon and other high-profile guests to discuss ways of raising interest in supporting social enterprises.