A Samsung flag flutters in front of Samsung's Seocho-gu office in southern Seoul. (Yonhap)
Despite a series of actions and pledges to make its business more environmentally sustainable, Samsung is still facing calls for a more aggressive approach to reducing greenhouse gases from global institutional shareholders of the tech titan.
The latest to do so was APG, a Dutch pension fund that oversees nearly 630 billion euros ($716 billion). On Thursday, APG revealed that Samsung Electronics was one of the 10 South Korea-based investees to which it has sent a letter urging a greater effort to combat climate change, earlier in February.
APG called on the companies to evaluate their existing carbon reduction targets and make sure these are “sufficiently ambitious.” APG holds a 0.5 percent stake in Samsung Electronics, maker of smartphones, home appliances, and semiconductor chips.
This came against the backdrop of Samsung Electronics’ green move. All Samsung’s workplaces in the US, China, and Europe have converted 100 percent of electricity sources to renewable energy as of 2020.
Moreover, Samsung reduced nearly 700,000 tons of carbon emissions with five types of Carbon Trust-certified memory chips, created its own index to gauge the environmental impact on semiconductor chips called SEPI with Samjong KPMG, introduced a zero-paper policy for invitation letters to shareholders to save 3,000 trees.
Samsung‘s environmental goals have become more ambitious. By 2025, Samsung seeks to expand the use of recycled materials, including repurposed underwater fishing nets, to all electronic goods, according to Vice Chairman Han Jong-hee. Also, Samsung plans to make all of its TVs and phone chargers operate on near-zero standby power, aims to eliminate 200 million batteries each year with the adoption of battery-free remote control, and looks to incorporate recycled materials into packaging boxes in the next three years.
Recycled plastic used for Samsung's Galaxy S22 series (Samsung Electronics)
But these actions and pledges might fall short of global sustainability standards, as Samsung Electronics has yet to either join RE100 renewable energy initiative or announce its carbon neutral commitment, as opposed to its tech rival Apple.
The APG‘s letter sent to chips-to-gadgets giant Samsung implied that carbon emissions-to-revenue intensity came to 8.7 percent in 2020, showing a comparison with 0.3 percent of Apple, which does not manufacture chips, according to local reports.
“(Samsung) shall take bolder actions in recognition of a radical shift that is unraveling,” Park Yoo-kyung, head of Responsible Investment & Governance Asia Pacific at APG Asset Management, told The Korea Herald.
“It is welcoming news that Samsung has pursued eco-friendly business operation, and it is bound to continue. Moreover, we hope to learn about (Samsung‘s) plans to reduce carbon emissions in a way that is more radical than what it is now.”
APG is not the only institutional investor behind the capital that plays the role of a catalyst for businesses’ pursuit of carbon neutrality.
Earlier in January, BlackRock, an investment firm that owns about 5 percent of its stake in Samsung Electronics, urged its investee companies to decarbonize the economy, saying the world‘s largest asset manager would rather force the investee to decarbonize than divest from firms with carbon-intensive assets.
“Foresighted companies across a wide range of carbon-intensive sectors are transforming their businesses, and their actions are a critical part of decarbonization,” noted the letter by BlackRock CEO Larry Fink.