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<HANKYOREH>
2003.06.18

The First International SRI Conference
Corporate Sustainable Development the Nucleus

On June 17th, the first International Socially Responsible Investment (SRI) Conference was held under the auspices of Hankyoreh Newspaper and co-managed by Hankyoreh E&C and Eco-Frontier. As if to reflect the high level of attention regarding the International SRI Conference, approximately 250 leaders of major corporations, finance groups, academic circles, and civic organizations attended the conference and enthusiastically discussed socially responsible investment, reforms of corporate governance, and the development of corporate sustainability.

Kim Jin-Pyo, the Deputy Prime Minister and Minister of Finance and Economy revealed in his keynote address, "The government will actively support efforts such as the development of social responsibility indexes, so that socially responsible corporations and investors that contribute to changes in the present conformation of organizations by investing in the market will be vigorous." Deputy Prime Minister Kim said, "At the start of this new adminstration, we should take the opportunity to recognize that our society is advancing as an open and participatory one. Our corporations should also take social responsibility into account and develop through making social contributions."
He went on, "The government needs to foster the right conditions so that corporations can put social responsibility into practice." He also announced, "In order to secure corporate transparency and a healthy market the government will continue to promote the increase of corporate accounting transparency and improvement of corporate governance."

The participants of the International SRI Conference emphasized that sustainable development is the core of corporate social responsibility with one voice. The United Nations Environment Programme's Advisor, Philip Moss pointed out, "Last year the Enron accounting fraud, Martha Stewart Living Omnimedia's insider trading scandal, and other incidents shocked the financial market." In the advanced countries, there is much debate about whether to include a qualitative evaluation factor in the Basel Agreement or whether to call for a division of power through a board of directors. These discussions are due to the scandals, Moss relates.

At the conference, the fact was made known that investors and civic groups in the United States and Europe are currently demanding corporate social responsibility and sustainable development. The presenters pointed out that one of the most important issues among the investors was the corporate governance system. Tessa Tennant, the Executive Chair of the Association for Sustainable & Responsible Investment in Asia (AsrIA), related, "Large-scale funds consider good corporate governance the most important factor to consider for long-term investments."

Kim Joo-Young, the head of the Center for Good Corporate Governance, said, "The improvement of corporate governance and socially responsible investment have  much in common. Corporate management transparency, the protection of various interest groups like shareholders and the local community, and the prevention of corruption are some common issues."

"Whereas the purpose for the improvement of corporate governance is investors' profit maximization, the purpose for socially responsible investment is increasing corporate social responsibility." He continued on, "Although the two camps could conflict, they could also work together to bring about the ultimate goal: creating a corporate culture that takes responsibility for its shareholders and society."
Members of financal and civic organizations were not the only ones who attended the conference this day. A considerable number of personnel from corporations such as Samsung, Hyundai, SK, and Posco were also present. One executive remarked, "Domestic corporations were keenly feeling the need for ethical, social, and environmental management, though it is not due to any domestic forces, but rather the pressures from overseas partners."

"It will not be easy to expand socially responsible investment solely through investors' initiatives because there is a limit to the fund market's infrastructure. It will be most effective for the government to induce socially responsible investment by means of the national pension." said a fund manager.

By Ahn Jae-Seung  <HANKYOREH>     jsahn@hani.co.kr and
Lee Kyoung-Sook  <Economy21>       nirvana@economy21.co.kr