"Despite Last Year's COVID-19-Driven Business Downturn... Major Companies Actively Support Vulnerable Groups"

KCCI '2020 Major Companies' COVID-19 Related Social Contribution Status Survey'...
61.8% of Responding Companies Reported Decreased Operating Profit Last Year
73.1% Responded Social Contribution Spending Similar or Increased Compared to Previous Year
KCCI "Promoting Companies' Voluntary Social Contribution Will is More Important than Profit-Sharing Systems"

[Asia Economy Reporter Ki-min Lee] Despite the red flags raised in corporate management last year due to the impact of COVID-19, it was found that support activities for vulnerable groups by major Korean companies were rather active.

The Korea Employers Federation announced on the 21st that, according to the '2020 Major Companies' COVID-19 Related Social Contribution Status Survey,' all 34 respondent companies among the top 50 companies by sales supported groups struggling due to COVID-19 last year.

All respondent companies answered that they carried out voluntary social contribution activities to overcome COVID-19, including direct support related to COVID-19 and new support activities for vulnerable groups last year. Major activities included donations for COVID-19 prevention and damage support, delivery of quarantine and relief supplies, financial support to partner companies, rent reductions, and employee volunteer activities.

An analysis of the performance of the 34 companies that responded they implemented support activities to overcome COVID-19 from the first to third quarters of last year showed that 61.8% of the companies experienced a decrease in operating profit compared to the same period the previous year, which was significantly higher than the 38.2% of companies whose operating profit improved.

This indicates that despite the deteriorated business performance due to COVID-19 and other factors last year, the respondent companies actively carried out new social contribution activities for COVID-19 prevention and overcoming the pandemic.

Additionally, 73.1% of companies reported that their total social contribution expenditure, including COVID-19 related support, was similar to or higher than the previous year, which was higher than the 26.9% of companies that decreased their social contribution spending. In particular, among companies whose operating profit decreased compared to 2019 (cumulative from the first to third quarters), 68.8% maintained or increased their social contribution expenditure compared to 2019.

Among the respondent companies, 58.6% said they would continue support activities to overcome COVID-19 this year as well. Companies that responded with undecided plans due to the lack of clear support plans accounted for 37.9%, and those with no plans were only 3.4%. Considering that the survey was conducted early in the year before annual plans were fully established, it shows that a significant number of companies intend to actively participate in COVID-19 support.

Ha Sang-woo, head of the Korea Employers Federation, stated, "Despite the deterioration in business performance last year, many companies expanded or sustained the scale of social contribution activities compared to previous years." He added, "This confirms that companies prioritize realizing social value over short-term business performance and voluntarily engage in social contribution activities." Ha also emphasized, "Rather than a profit-sharing system that may cause side effects, it is important to create an atmosphere that can promote companies' voluntary social contribution will, such as alleviating anti-corporate sentiment."

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