The Korea Herald

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Most listed firms ignore social responsibility

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Published : Aug. 3, 2011 - 19:01

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The majority of South Korea’s listed companies are not fulfilling their social responsibilities and that can put a crimp in their sustainable growth in the future, a report said Wednesday.

The report based on a study of 668 listed companies showed 575 firms, or 86 percent of the total, scored “weak” or “very weak”

grades on the so-called environmental, social and corporate governance (ESC) rating scheme, the Corporate Governance Service (CGS) said.

The rating scheme is designed to measure the sustainability and ethical consequences of investments and business activities that can affect corporate growth and exert wider social impact down the line.

The privately-run organization said those that received a weak grade needed to do more to improve the environment, be more socially responsible and reform their corporate governance structures. Those companies that received very weak grades must take immediate steps to change the way they do business.

It added that South Korean firms were particularly weak in meeting their social and environmental responsibilities. Social responsibilities include such areas as employment conditions, labor-management relations and fair trade with contractors, with environmental obligations touching on eco-friendly management decisions and views held by top executives about the importance of conservation.

The service provider also said that while 77.1 percent of listed firms were found to be inadequate in the corporate governance field, corresponding numbers rose to 83.5 percent for social responsibilities and 87.4 percent in the area of environment.

The CGS, meanwhile, said only four listed firms, including SK Telecom and POSCO, received “very good” ESG numbers, with 40 getting “good” and 48 receiving “average” ratings.

The recent move by the Samsung Group, the country’s largest privately-owned conglomerate, to leave the maintenance, repair and operations business, is a move in the right direction, the CGS said. 

(Yonhap News)