Foreign firms in Korea donate just 0.1 pct. of sales to charity

Major foreign companies operating in Korea seem indifferent when it comes to corporate social responsibility, inviting criticism of hiding and doing little for Korean society.

Korean conglomerates, on the other hand, have responded to calls for economic democratization and the alleviation of social polarization by actively contributing to charity projects.

The Dong-A Ilbo and CXO Research, which conducts analyses of companies, studied the charity donation statistics of 50 major foreign companies in Korea whose annual sales exceed 25 billion won (22.9 million U.S. dollars) based on 2010 and 2011 audit reports submitted to the Financial Supervisory Service.

The results released Thursday showed that the foreign companies donated an average of 1.4 percent of operating profits last year, or 0.1 percent of sales, which is equal to half of that of the 200 largest Korean companies last year, based on a report by the Federation of Korean Industries.

This was the first study done on the donation activities of major foreign companies based on audit reports, though charity activities of several individual companies had been reported.

The average sales figure of the foreign companies included in the survey was 74.36 billion won (681.4 million dollars), while the average operating profit was 41.4 billion won (38 million dollars). Foreign companies that own large-scale production facilities in Korea and are thus categorized as domestic entities, such as GM Korea or Renault Samsung Motors, were excluded from the analysis.

The average donation last year by a foreign company was 462.30 million won (423,000 dollars). The pharmaceutical industry was the biggest donor with an average donation of 3.6 percent of operating profits, followed by finance with 0.8 percent, distribution 0.6 percent, designer brands 0.5 percent, electronics 0.4 percent, and carmakers 0.3 percent.

Home Plus was the biggest single donor among the foreign companies with 63.19 billion won (58 million dollars) and Ermenegildo Zegna Korea the smallest with 2.6 million won (2,400 dollars). A small increase was seen in the donation amount last year by foreign designer brand and car companies, but these two sectors have been criticized for being among the stingiest.

CXO Research`s chief analyst Oh Il-seon said, "Foreign companies that are known to emphasize social contributions overseas were found to have been half-hearted in such activities in Korea...It’s time for consumers to urge such foreign companies to participate in social contribution activities."

mint4a@donga.com wiseweb@donga.com