Outline of the evaluation of ‘East Asia 30’

Hankyoreh Economic Research Institute(HERI, the Hankyorech Media Group, Director Ms. LEE Hyunsook) has been evaluating the achievements of the Corporate Social Responsibility(CSR) performance in Korea, China and Japan with ‘Asia CSR Experts committee’.

HERI and Asia CSR Expert Committee announced ‘Korea CSR 30’, ‘China CSR 30’, ‘Japan CSR 30’, and ‘2013 East Asia 30’, the top 30 CSR performers of each country and the Asia, on October 29th , 2013.

The result of ‘2013 East Asia 30’

8 Korean, 5 Chinese, 17 Japanese corporations were selected for ‘2013 East Asia 30’. The number of Korean corporations rose from 5 last year to 8 this year.

The Selected Korean corporations are as follows: Amorepacific Corporation, LG Chem, LG Electronics, POSCO, Pulmuone Holdings, Samsung Electronics, Samsung SDI, SK Hynix (alphabetically).

The Japanese corporations include Hitachi, Konica Minolta, Tosiba and et cetera. The Chinese ones include BOE Technology Group, Shanghai Fosun Pharma, Shanxi Taigang Stainless Steel and et cetera (Cf. Attachement1).

Mr. PARK Kichan, the chairman of Korean CSR Committee, commented “There are some meaningful advances in CSR in the context of economic prosperity of the East Asia region”. Mr. GUO Peiyuan, the chairman of China CSR Committee said “The ‘2013 East Asia 30’ aims to highlight leading listed companies in China, Japan and Korea. I am hoping companies take the index as a benchmark and improve their own CSR performances. More importantly, I also hope the index can be used in capital markets in order to link CSR performance to financial incentive.”

Meanwhile, Ms. KAWAGUCHI Marico who is the chairman of Japan CSR Committee pointed out “There are sector imbalance of environment, society and governance(ESG). For example, financials are very low graded compared with other sectors in Japan”. Regarding this issue, Ms. LEE the director of HERI said “making the CSR structure and awareness more robust is needed so as to build for well-balanced and sustainable development of corporations.”

The companies in ‘2013 East Asia 30’ and ‘2013 Korea CSR 30’ will attend at the award ceremony on the 31st October 2013. The ceremony will be proceeded as the pre-meal event on the second day of ‘The 4th Asia Future Forum’. Also important participants, Mr. SHIN Jaeyoon the chairman of Financial Services Commission, Mr. CHOI Gwang the CEO of National Pension Service, Mr. YANG Sangwoo the president of the Hankyoreh media group will deliver congratulatory addresses.

Evaluation process of ‘East Asia 30’

‘East Asia 30’ evaluates corporations with 20 indicators which covers the 3 areas of environment, society and governance.

This year especially, the CSR experts of Korea, China and Japan formed ‘Asia CSR Experts Committee’ modulating the weight of 20 indicators over the 3 months period. Whereas the standard weights had been laid upon the management structure and system, the modulated weights are more tilted towards the actual achievement and how harmoniously system works.

The change is for keeping up with the changes of society and corporations, and proposing a detailed road map of CSR by the ‘East Asia 30’ committee.

Negative Screening

30 selected candidates of each country for ‘East Asia 30’ had gone through the negative screening carried out by each country CSR expert committee. The main issues of negative screening for the Korean companies were related with the corruptions within nuclear power plants and ‘4 – River restoration’. And for China, there were the environmental problems.

28 selected corporations was selected for ‘2013 Korea CSR 30’ through negative screening.

Companies assessed

In 2013, the objects of evaluation were including companies that are listed on the Korean, Chinese and Japanese main stock index. KOSPI 200 for Korea, Shanghai and Shenzen SRI Index for China, and TOPIX were used for selection of the companies to be evaluated.

Concretely, 247 Korean companies, 777 Chinese companies, 1,875 companies were the objects of evaluation. The evaluation proceeded with the ESG information provided by Bloomberg.

1. '2013 East Asia 30' object of evaluation

Details of ‘2013 East Asia 30’

There are some differences in each country’s of ESG average by own societal, cultural and institutional context level of CSR.

Japan has the highest point of 63.05 in the environmental area. This result means Japanese corporations have built substantially the environmental structure since the 1980s. Korea came second gaining 57.72 points and China at 39.90 points emphasizing the need for reconstructing the awareness and system of environment management by Chinese corporations.

In the social area, Japan got 64.39 points and Korea with 64.37 points showing the close average mark. Korea’s high point has come from the fact that there has been a development in the welfare for employees, communication among stakeholder, philanthropy to the community. China got 46.39 running behind Japan and Korea by roughly 20 points. This is because they are lowly rated in the detailed index of health and safety, Human right criteria.

In the governance area, Japan got 55.35 points, Korea with 52.89 and China with 51.66 points showing the similar average mark. This result that is not as easily susceptible to the change as the environmental and social area along with the traditional business culture of Korea and Japan. China’s case, compared to two other areas, shows many women are entering the workforce and actively disclosure female workers and managers, thus gaining a high point.