Two Groups Reborn as 'Good Companies'

SK Prioritizes Pursuing Happiness for Shareholders, Customers, and Partners in 'Social Value'
POSCO Changes 50-Year 'Steel Nation' Management Philosophy to 'Corporate Citizenship'

[Asia Economy Reporter Hwang Yoon-joo] "Don't buy this clothing." "Facing extinction."

This is not a slogan of a nonprofit organization. It is a campaign by the global outdoor brand Patagonia. Patagonia is famous for fiercely conducting environmental protection campaigns instead of marketing to sell more clothes. Supported by consumers who resonate with its management philosophy, Patagonia has risen to become the second-largest outdoor brand in the North American market.

Domestic companies have also started to address social issues. The reason is clear: consumers want 'good companies.' The most proactive group is SK Group. SK Chairman Chey Tae-won has adopted 'social value' as a management philosophy and incorporated it into the articles of incorporation. A senior SK Group official explained, "Chairman Chey emphasizes to executives that it is difficult to survive if they cling to old-fashioned business models," adding, "In the current management environment where consumers and society turn their backs on antisocial companies, social value must be the top priority according to Chairman Chey's judgment."

Chairman Chey held a 'Happiness Talk' with employees last year for the same reason. However, the 'happiness' he talks about differs from the concept we commonly know.

An SK Group official explained, "The 'happiness' emphasized by Chairman Chey means employees being economically rewarded through work and SK's business growing," adding, "Furthermore, it means that SK’s stakeholders such as shareholders, customers, and partners also gain satisfaction (dividends, ethical consumption, mutual growth, etc.) through SK’s business." Chairman Chey's statement that "the prerequisite for pursuing happiness is the happiness of stakeholders" came from this context.

POSCO also changed its management philosophy from 'Steelmaking for the Nation' to 'Corporate Citizenship' for the first time in 50 years and is considering ways to connect it with business. Corporate citizenship refers to companies that move away from the traditional profit-driven meaning of business and internalize public interest promotion and a sense of responsibility. A POSCO official said, "The management environment has changed from before," adding, "We need to focus on values where companies and stakeholders 'develop together' rather than simply presenting the role of companies in a one-way manner."

In fact, not only consumer purchasing patterns but also investment institutions' investment methods are changing. Global asset management firm BlackRock announced last month that it will divest stocks of companies that harm the environment, such as coal producers accounting for 25% of the company’s revenue, by the mid-2020s. It is becoming difficult to receive investment unless a company is 'good.'

Changes have appeared everywhere. POSCO became the first private company to introduce 'subcontractor mutual growth payment' in construction contracts. This system guarantees subcontractors’ payment collection by having the purchasing company pay the subcontracting fees directly to the secondary partners through an escrow account. POSCO Group also established a Corporate Citizenship Office. Through this, it plans to achieve concrete corporate citizenship activity results this year.

This content was produced with the assistance of AI translation services.