Last Year’s Corporate Social Contribution Spending Hits a Record High of 3.5367 Trillion Won Despite Management Uncertainties

Korean Economic Association Announces '2023 Social Value Report of Major Companies'

Last year, corporate social contribution expenditures reached an all-time high. Despite increased management uncertainties due to the prolonged COVID-19 pandemic, companies expanded their social contribution activities by enhancing overseas support and technology-based contribution projects. The Korea Economic Association presented last year's social contribution trend as 'GRIT' based on these results.

On the 20th, the Korea Economic Association conducted a survey targeting 299 companies among the top 500 companies by sales last year, including those that responded to the survey and those that published sustainability management reports, and announced the '2023 Major Companies' Social Value Report.'

[Image provided by Hankyung Association]

In this survey, the total social contribution expenditure last year was recorded at 3.5367 trillion KRW, showing a 20.9% increase compared to the previous year. The average expenditure per company was 15.3 billion KRW, up 14.6%. This is the highest since the social contribution survey began in 1993.

63.5% of companies increased their social contribution expenditures last year, among which 39.8% of all analyzed companies increased their spending by more than 25%. The reasons for the increase included 'temporary cost increases due to urgent relief, national events, and other issues of the year (23.3%)', 'increased investment and new launches of representative social contribution programs (21.7%)', and 'increased social support demands due to the COVID-19 pandemic (17.5%)'.

By expenditure category, 'support for vulnerable groups (25.5%)', 'education, schools, and academia (16.3%)', 'culture and arts and sports (13.6%)', and 'regional economic revitalization (13.2%)' were major areas. Except for support for vulnerable groups, social contribution expenditures increased in all sectors, with particularly significant increases in overseas support, regional economic revitalization, environmental conservation, and education, schools, and academia. The Korea Economic Association analyzed that "this was due to the resumption of social contribution projects that had been subdued during the prolonged COVID-19 pandemic."

The Korea Economic Association presented last year's corporate social contribution trend as 'GRIT' based on this survey. GRIT combines the keywords of active overseas support (Global), reopening of large-scale projects such as festivals (Reopen), and technology-based contribution projects (IT) from last year, symbolizing the perseverance and efforts of domestic companies that continued social contribution activities amid high management uncertainties caused by the prolonged COVID-19 pandemic.

[Image provided by Hankyung Association]

Analyzing social contribution projects newly started between 2021 and 2022, programs targeting 'children and adolescents' accounted for 29.1%, the highest proportion. Following were 'environment (27.9%)' and 'community development (21.5%)'. Notably, environmental projects increased more than threefold compared to 2021 (8.6%), and community-targeted projects nearly doubled compared to 2021 (10.7%).

Along with the recent strengthening of domestic and international ESG management trends, corporate ESG activities have also accelerated. In fact, 73.7% of surveyed companies (105 companies) reported establishing dedicated ESG departments. Among the analyzed companies, 210 adopted 'double materiality assessment' (a method that determines key issues by bidirectionally analyzing the impact of external environmental and social factors on corporate finances and the impact of corporate management activities on the external environment).

In the process of disclosing ESG management activities, 92.8% of the analyzed companies complied with the Global Reporting Initiative (GRI) index. Companies cited challenges related to the global push for mandatory ESG disclosures, including 'ambiguous disclosure concepts and lack of clear standards (36.1%)', 'difficulty in securing required data (29.2%)', and 'tight disclosure schedules (13.4%)'.

Lee Sang-yoon, head of the CSR division at the Korea Economic Association, said, "2022 was a year of significant management uncertainties due to US-China conflicts, supply chain issues, and the Russia-Ukraine war, but it was also a year when corporate social contribution activities were active, such as disaster relief from concentrated heavy rains." He added, "It is especially meaningful that this year marks the 30th anniversary of the Korea Economic Association publishing the 'Major Companies' Social Value Report,' allowing us to highlight excellent corporate social contribution achievements and activities."

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