Landmark report on transparency released
S. Korean firms score well on consumer protection but low on human rights and the economy
Aug.20,2007
Yuhan-Kimberly ranked first in the transparency of its public reports on achievements in social and the environment sectors. The landmark report evaluating the transparency of South Korean companies gave high scores to companies for reporting on product responsibility, but lower scores for reporting on human rights and the economy.
The Hankyoreh Economic Research Institute, an affiliate of The Hankyoreh, analyzed the “sustainability reports” of 22 local companies to estimate how transparent they have been in disclosing their business achievements in diverse categories. The areas include the economy, the environment, labor, human rights, society and consumer protection.
According to the outcome, Yuhan-Kimberly scored an average 57 points on a scale of 100, ranking first among those surveyed. Korea South-East Power came in second with 55 points, followed by POSCO and Daewoo Securities with 52 points each. Samsung SDI and Korea Electric Power Corp. were next with 48 points each.
The transparency analysis is the first of its kind in South Korea and was initiated at a time when corruption at Korean conglomerates, known as chaebol, comes under fire and awareness of the need for greater transparency and increased corporate social responsibility is growing. The average score for all 22 companies surveyed stood at 39 points.
Along with the top six companies, Samsung Electronics, KT, Samsung Electro-Mechanics, Korea Water Resources Corp. and Korea Midland Power received higher-than-average scores, while SK Telecom, Korea Land Corp., LG Electronics, Lotte Shopping, Korean Air, Hyundai Motor Company, GS Caltex, Shinhan Bank, Kumho Asiana Group and Woongjin Coway were among those which received lower-than-expected scores.
Meanwhile, public companies fared better than private-owned enterprises in transparent corporate reporting. State-run companies received an average 44 points, while private ones got 37 points, the analysis showed.
By sector, Yuhan-Kimberly came in first in three categories -- labor, human rights and product liability. Korea South-East Power ranked first in the environmental area and Daewoo Securities and POSCO led the pack in community and economic sectors, respectively.
According to the analysis, South Korean companies received relatively fewer points in reporting on human rights and the economy, while they were given higher figures in product responsibility and other social categories.
The analysis of sustainability reports, the first of its kind done in South Korea, demonstrates how faithfully local enterprises are disclosing their achievements based on international standards.
The analysis reflects that Korean companies are maintaining relatively high transparency in reporting on consumer protection and related product liability areas, but fall short of global standards in unveiling information on human rights.
Yuhan-Kimberly was the most transparent company among manufacturers, trailed by POSCO and Samsung SDI, while Daewoo Securities topped the list among non-manufacturers. KT and SK Telecom ranked second and third, respectively, the analysis showed.
The Hankyoreh Economic Research Institute said that the analysis was based on recommendations by the Global Reporting Initiative and conducted in a total of 50 business-related indexes for three months since March of this year.
“It is a welcome shift for a growing number of local companies to be publishing sustainability reports in tandem with global trends,” said Lee Won-jae, head of the The Hankyoreh Economic Research Institute. “When they raise transparency on reporting information about society and the environment, it will likely help them do business in more socially responsible ways.”
By Hankyoreh
August 8, 2007
http://english.hani.co.kr/arti/english_edition/e_business/230034.html
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