[Viewpoint] Social Responsibility Activities of Startups

Domestic startups have recently been strengthening their social responsibility activities. Corporate Social Responsibility (CSR) refers to a company's efforts to collaboratively address and solve overall issues within the society it belongs to, maintaining good relationships and continuous interactions with directly and indirectly related stakeholders.

ESG (Environmental, Social, Governance) represents corporate social responsibility from the perspective of investors. According to traditional views, a company's sole social responsibility was to “pursue the maximization of shareholder profits according to traditional economic theory and company law.” However, today, companies are gradually shifting their focus from shareholder-centered economic profits to society at large.

In August 2019, at the ‘Business Roundtable (BRT)’, a gathering of CEOs from major U.S. companies, 181 CEOs including those from Apple and Amazon issued a statement emphasizing social responsibility by prioritizing the prosperity of all stakeholders?customers, employees, society, and communities?over maximizing shareholder profits in corporate decision-making.

They stated, “The way for companies to succeed in the long term is to invest in workers and communities,” and emphasized that “a strong social safety net must be established to complement the flaws of capitalism.”

In South Korea, since the mid-1980s, companies have shown interest in social responsibility and began engaging in socially contributive activities. Later, at the G20 Economic Summit held in November 2010, discussions on ‘Corporate Social Responsibility’ took place, and the International Organization for Standardization (ISO) established ‘ISO26000’ regarding CSR, recommending guidelines for sustainable corporate management.

According to the ‘2019 Major Companies’ Social Value Report’ released by the Federation of Korean Industries, out of 220 large companies ranked by sales, 206 companies (94%) engaged in social contribution activities, excluding 14 companies. The total social contribution expenditure in 2018 was approximately 2.6061 trillion KRW, with an average amount of about 12.7 billion KRW.

Additionally, according to the ‘2019 Venture Business Detailed Survey’ conducted by the Ministry of SMEs and Startups, 38% of 1,324 companies in the startup phase of growth engaged in social contributions through types such as material donations and gifts (4.7%), talent donations (8.5%), shared value creation (7.5%), community service activities (7.5%), and sponsorship activities (10.1%).

Recently, Kim Bong-jin, chairman of ‘Baedal Minjok’, the largest delivery service startup in Korea, and Kim Beom-su, CEO of Kakao, announced that they would donate half of their wealth to society. It is encouraging to see the entrepreneurial paradigm in our society changing. It fills me with pride that domestic startups are beginning to actively engage in social responsibility activities. The future of the Republic of Korea is bright. / Kim Kyunghwan, Dean of the Graduate School of Global Entrepreneurship, Sungkyunkwan University