Kim Dong-kwan Accelerates ESG Management... Hanwha Changes from Defense Strategy to Customer Gifts

Strengthening Eco-Friendly Corporate Image, Selling Cluster Munitions... Part of ESG Management
Hanwha Solutions Enhances ESG to Boost Overseas Business Competitiveness

[Asia Economy Reporter Hwang Yoon-joo] As Hanwha Group strengthens its ESG (Environmental, Social, and Governance) management, changes are also occurring in its defense business strategy.

According to industry sources on the 13th, Hanwha Defense, a defense affiliate of Hanwha Group, produced all of its gift kits this year using eco-friendly products. The gift kits are gift boxes created to express gratitude to business clients. In 2017, they first produced a "disaster kit" reflecting the management strategy of "Defense industry also protects human safety."

This year, they made a "COVID-19 kit." Both the contents and packaging were composed entirely of eco-friendly products. Reusable masks, eco-friendly cosmetics, and eco-friendly hand sanitizers were placed in an eco bag, which was then packaged in a biodegradable shopping bag. This was to minimize the use of disposable products.

This reflects the will of Kim Dong-kwan, President of Hanwha Solutions, who emphasizes ESG management. President Kim is ultimately focusing all efforts on eco-friendly and renewable energy businesses ranging from solar power to hydrogen. Under the vision of being an "eco-friendly and renewable energy company providing solutions based on energy and material technologies," they are strengthening market share and brand image in overseas markets, but it is known that the cluster munition business has had direct and indirect impacts. Hanwha Solutions attempted to pursue business with Dutch financial firms in 2018 but halted the efforts.

Accordingly, the group’s defense business strategy is also shifting to reflect ESG values. A recent example is the sale of the cluster munition business. Cluster munitions are weapons in which small bomblets are scattered from a large shell, causing harm even to civilians around the target. Because of this, they are condemned by the international community as inhumane. Initially, Hanwha Corporation planned to spin off the cluster munition business into a subsidiary, but it is reported that the decision to sell was made due to disadvantages in overseas sales.

A defense industry official said, "Until now, since North Korea possessed cluster munitions, our military also produced the same weapons as part of defense strategy," adding, "The defense industry is also strengthening ESG management focused on safety as the trend shifts from past weapons of mass destruction to AI weapon systems."

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