Foreign-invested firms in Korea spend less money on the social contributions to the local community but spare more money on environment-friendly management, a study showed last week.

According to joint research conducted by the Korea University Institute for Business Research & Education and the Korea Economic Daily, foreign-invested firms in Korea spent only one-quarter the amount Korean firms did for corporate social responsibility operations in 2011.

The research is the first of its kind to evaluate the social contributions by foreign-invested firms in Korea. The research team combined its survey results on 23 companies from foreign countries including the United States, Canada, Germany, Britain, France and Japan, and information provided by NICE Information Service.

The research showed that, in 2011, these foreign firms’ average expenses on CSR account for about 0.77 percent of their total annual profit before tax deduction.

The research data stated that, among the surveyed foreign companies, Korea Hosiden Electronics Co. spent the largest amount in CSR, about 3 percent of its profit. Following the Japanese tech firm are Sony Korea, BNP Paribas Cardif Life Insurance and Tata-Daewoo Commercial Vehicle Co., which spent about 1.2 percent, 0.70 percent and 0.54 percent of their total profit, respectively.

Regarding social contributions to the local community, foreign firms turned out to prefer non-financial community services rather than funded ones, the university’s research center said.

Regarding the establishment of labor organizations, about 39 percent of foreign firms responded that they have labor unions. The rate is much higher than Korean companies whose average amounts to 10.1 percent.

Another stark difference between foreign and Korean firms is on employee welfare.

According to the data, foreign companies run an average of about 13.3 welfare programs for their workers, including housing loans, cash grants for lifetime family events, medical plans, and educational and leisure expenses.

Running 26 active welfare plans, Standard Charted Bank Korea led in the number of corporate welfare plans among the surveyed foreign firms.

The research also shows that foreign companies spent about 2.4 billion won, or $2.3 million, annually on average to go environment-friendly.

By industry, those in manufacturing were inclined to spend more on “green management” than non-manufacturing companies. Foreign manufacturers spent about 3.2 billion won for eco-friendly operations on average, compared to the non-manufacturers’ 1.8 billion won average annual expense, according to the report.

Tata-Daewoo had the largest green management budget of about 8 billion won, followed by Amkor Technology Korea Inc.’s 7 billion won.

Sixty-one percent of the responded foreign firms had separate units for environment-friendly business operations, the research showed.

It also revealed that curbing energy use is the most preferred method for foreign firms to implement “green management.” The driving forces for becoming more environment-friendly business were found to be their headquarters’ business orientation, the need to respond to regulations, and customers’ increasing demand for environment-friendly products.

About 30 percent of the surveyed firms helped their subcontractors promote “environment management” through technical support and training courses.

By Chung Joo-won (joowonc@heraldcorp.com)