24th Anniversary of SK Founder Chey Jong-hyun... Spotlight on 'Generational ESG Management'

Leading ESG Management Prioritizing Environment and Society 50 Years Ago
Improving Funeral Culture Including Donation of Cremation Facilities

Chairman Choi Jong-hyun, who took office as the chairman of the Federation of Korean Industries on February 12, 1993. After stabilizing the company, Chairman Choi served as the chairman of the Federation of Korean Industries and was reappointed three times.

[Asia Economy Reporter Oh Hyung-gil] SK Group released a video capturing the history of SK ESG (Environment, Social, Governance) management on the 26th, marking the 24th anniversary of the late Choi Jong-hyun, the former chairman of SK. Chairman Choi’s management philosophy has been passed down to Chairman Choi Tae-won, establishing ESG management as a legacy spanning 50 years.

According to SK Group, Chairman Choi Jong-hyun joined SK in 1962 as vice president of Seonkyung Textile, completing vertical integration from petroleum to textiles and pioneering the world’s first commercialization of CDMA technology, laying the foundation for South Korea’s growth.

Chairman Choi Jong-hyun is recognized for opening the door to ESG management with his belief that “corporate profits belong to society from the start and must be returned to society,” focusing on afforestation and talent development. His son, Chairman Choi, has inherited this legacy, advancing ESG management to a higher level through carbon reduction management, business model innovation, and board-centered governance.

In particular, Chairman Choi Jong-hyun early on recognized the importance of forests and talent, dedicating efforts to forestation and nurturing human resources. Concerned about the increasing barren mountains nationwide due to indiscriminate logging, he established Seohae Development Co., Ltd. (now SK Forestry) in 1972 and purchased lands such as Gwangdeoksan in Cheonan, Indeungsan in Chungju, and Sihangsan in Yeongdong, initiating Korea’s first corporate afforestation project.

To dispel misunderstandings that purchasing forest land was a real estate investment, he bought wasteland in remote provinces far from the metropolitan area and planted high-quality broadleaf trees such as birch to promote forest greening. Thanks to these efforts, the forest created by the former chairman is 40 times the size of Namsan in Seoul.

Before and after images of reforestation project on Indeungsan Mountain

Furthermore, believing that excellent talent development was necessary to strengthen the competitiveness of a resource-scarce country, profits from afforestation were used for scholarship programs. He also donated 55.4 million won of personal funds to establish the Korea Higher Education Foundation in November 1974. Despite severe economic crises such as the IMF and the global financial crisis, the foundation’s scholarship program continued and has grown into a “cradle of talent,” producing over 4,000 scholarship recipients and more than 820 PhDs to date.

The Scholarship Quiz, which woke up Sunday mornings in the 1970s, is also a representative talent development program of SK. When the quiz faced cancellation in 1973 due to lack of advertisers, Chairman Choi stepped in as the sole advertiser, saying, “If it is a beneficial program for youth, I will support it unconditionally even if only one person watches,” and has sponsored it for about 50 years through over 2,300 broadcasts.

Continuing the will of Chairman Choi Jong-hyun, Chairman Choi is also driving management innovation by making ESG the group’s core growth engine.

Additionally, SK introduced Korea’s first systematic management system to advance governance. In 1979, SK established the SK Management System (SKMS), which uniformly defined management philosophy, goals, and methodologies to be consistently applied in operations.

SKMS has been revised 14 times until February 2020 to respond to management environments and social demands. Chairman Choi transformed governance into a corporate structure that coexists with society by incorporating stakeholder and employee happiness and pursuit of social value into corporate management goals.

Chairman Emeritus Chey Jong-hyun of SK is giving a special lecture on SKMS during the new employee training course in January 1982.

Another achievement left by Chairman Choi Jong-hyun is the improvement of funeral culture. He was concerned that the efficiency of the narrow national territory was reduced by graves and advocated for improving funeral culture through cremation. When the former chairman passed away in August 1998, he left a will saying, “When I die, cremate me and build excellent cremation facilities to donate to society. SK should take the lead in improving funeral culture.” In January 2010, SK invested 50 billion won to establish and donate the funeral facility “Eunhasu Park” in Sejong City, Yeongi-gun, Chungnam.

An SK official said, “The former chairman believed that corporate profits belong to society from the start, nurturing forests and talent to become core infrastructure for society and the nation,” adding, “We will inherit the former chairman’s management philosophy and further advance ESG management to enhance the happiness of stakeholders.”

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