Global institutions call for Samsung to embrace environmental vision

The Korea Times

The Korea Times

Business

Wed, November 29, 2023 | 05:16

Tech

Global institutions call for Samsung to embrace environmental vision

Posted : 2021-10-06 16:33

Updated : 2021-10-07 09:09

Samsung Electronics Vice President Lee Jae-yong enters the Seoul Central District Court in southern Seoul, Sept. 2. Korea Times photo by Lee Han-ho

Top conglomerate yet to join RE100 initiative

By Kim Bo-eun

Samsung is facing growing calls from global institutional investors to make a greater environmental commitment through its businesses. Samsung is the only one out of the country's four major groups that has not joined Renewable Energy 100 (RE100), a global initiative seeking to source 100 percent of electricity consumption from renewable sources. Samsung stated at the National Assembly audit last year that it intends on making this commitment, but still has yet to.

Samsung's affiliates have individually been taking steps to phase out environmentally harmful businesses and investments, but their efforts are falling largely short of what is expected of Korea's largest conglomerate.

The group had been saying up until recently that coming up with a long-term environmental vision had been impossible given that its chief had been in prison.

But with the release of Vice Chairman Lee Jae-yong on parole in August, and Samsung unveiling major investment plans, global institutional investors are urging the tech giant that now is the time to make a group-wide environmental commitment.

A Samsung flag is seen at the tech giant's headquarters in southern Seoul / Yonhap

"Having such an influential role in the Korean economy, we believe that Samsung Group can and should play an essential role in helping accelerate a green transition of the Korean energy supply," Nordea Asset Management Head of Responsible Investments Eric Pedersen said. The Copenhagen-based global investment firm has $294 billion in assets under management.

"We would like to see specific climate targets from Samsung Group on becoming net-zero. We feel that comprehensive environmental and especially climate-related commitments are overdue and would expect to see at least some high-level commitments in the very near future. "

Global investment firms have said that Samsung's environmental commitments would also benefit shareholders and create a more attractive foreign investment environment here.

"If Samsung Electronics takes the next positive step and powers all of its global operations on clean energy, especially solar and wind, from South Korea to Vietnam, the company will align with shareholders' expectations and benefit financially," KLP's Head of Responsible Investments Kiran Aziz said. KLP is Norway's largest pension fund with $95 billion in assets under management.

"Given that Samsung is such a symbol of Korea's corporate sector, 100 percent renewables policies are likely to improve its own shareholder reputation and accelerate national shifts from coal to clean energy, creating a more attractive foreign investment environment. Lee Jae-yong has a unique opportunity to ensure that this commitment for 100 percent renewables globally is made."

The asset managing institutions underscored the urgency of Samsung's environmental commitment.

"The global climate crisis is very concrete and so are the expectations towards global consumer brands like Samsung. It's time for Samsung to deliver consistent and ambitious climate action, and there is absolutely no time to waste," AkademikerPension CEO Jens Munch Holst said. The public pension is one of Denmark's largest, with $20 billion in assets under management.

At the National Assembly audit of the environment ministry, Monday, Rep. An Ho-young of the liberal ruling Democratic Party of Korea stated that Samsung's rate of greenhouse gas cuts was the lowest in the chip, display and electronics industries, citing data from the ministry.

Samsung's greenhouse gas reduction rate came to 73 percent as of last year. LG Electronics led the industry with a 97 percent reduction rate, followed by Samsung Display with 95.4 percent, SK hynix with 91.8 percent and LG Display with 75 percent.

"Related plans will be unveiled when the time comes," a Samsung representative said.

bkim@koreatimes.co.kr