[Energytopia] Samsung Electronics is D+, but TSMC is C, What Made the Difference?

Greenpeace Scores Tech Companies
Samsung's Climate Change 'Commitments' and 'Advocacy'
Low Score Due to No Mid-term Emission Targets
Government Energy Policy Support Needed

"Left OB (out of bounds) is not allowed, but right OB is not allowed either."

At a recent seminar on climate change, an audience burst into laughter at the humor of a university professor who was presenting. He aptly compared the chaotic energy policies swinging between extremes following a change in government. In golf, OB means the ball has gone out of bounds, resulting in a penalty and having to play again?a fatal mistake for a golfer.

On the 21st, Greenpeace, an international environmental protection organization, scored 11 global tech companies on their efforts to reduce carbon emissions in response to the climate crisis in its report titled "2023 Changes in the Supply Chain." Samsung Electronics received a D+ for the second consecutive year, while Taiwan's TSMC improved from a C- the previous year to a C.

Scores for tech companies such as Intel (C+), SK Hynix (C), LG Display (C-), and China's BOE (F) were generally not high. Greenpeace noted "some progress by companies," citing TSMC as a representative example. From Samsung Electronics' perspective, which is often compared to TSMC in the foundry (semiconductor contract manufacturing) business, this was likely not very pleasant.

Looking at the detailed scorecard, Samsung Electronics might feel unfairly treated. Contrary to Greenpeace's explanation, there are several areas where Samsung Electronics is performing better than TSMC.

Samsung Electronics' renewable energy power ratio is 31%, three times that of TSMC's 10.4%. The increase in renewable energy power ratio from 2021 to 2022 was 11 percentage points, overwhelmingly surpassing TSMC's 1.2 percentage points. Regarding emissions from their own business sites between 2020 and 2022, Samsung Electronics saw only a 1.6% increase, whereas TSMC's emissions rose by 22.6%.

TSMC received good scores for its 'commitments' (Samsung Electronics F - TSMC +) and 'advocacy activities' (Samsung Electronics D+, TSMC B+) related to climate change rather than for these tangible actions. Samsung Electronics was criticized for "not presenting medium-term emission reduction targets and not disclosing specific policies being pursued."

In 2020, TSMC signed a 20-year contract with Denmark's state-owned company Ørsted to purchase 1 gigawatt (GW) of offshore wind power. In April, it also agreed to purchase 2 billion kilowatt-hours (kWh) of renewable energy from Taiwanese solar company ARK Power.

TSMC's efforts are not solely due to pressure from international environmental organizations like Greenpeace. Major clients such as Apple and Microsoft (MS) are demanding increased use of renewable energy in semiconductor production.

Domestic companies have responded to such demands by expanding purchases of Renewable Energy Certificates (REC). However, the international community is calling for more proactive actions from companies. This cannot be achieved by individual companies alone.

Companies plan their power supply and demand over periods ranging from 10 years to several decades. What they need most in this process is predictability. If government energy policies change frequently, companies will be unable to make any decisions amid uncertainty. On the 20th, the Democratic Party of Korea cut the entire budget of about 180 billion won for nuclear power next year at a standing committee meeting. How can companies make any external 'commitments' or 'advocacy activities' in such a country?