Modern society’s unwavering focus on economic development has given birth to a wide array of breakthroughs. However, due to excessive competition and the expansion of industries, corporate influence on our society, culture and environment is stronger than ever before.
There is now a necessity for companies to take on impactful missions concerning social responsibility and sustainable management. SK hynix regards social causes as a core component to evaluate a corporation’s achievements. Not only pursuing economic profits, the company also creates positive social impacts by addressing major social problems that affect real communities across the world for a better and happier future.
DBL, balancing EV and SV
With that said, SK hynix has adopted a ‘Double Bottom Line’ value system that puts equal importance on economic value (EV) and social value (SV) to establish a much-needed balance and obtain a new competitive edge with corporate transparency and accountability.
Social value represents the corporate’s social activities that address major social problems brought on by often unfair social structures and systems that no individual can solve alone.
Contemplative, long-term approach for social vision
How the DBL management came into being is closely related to the comprehensive CSR activities of the SK Group, one of the largest conglomerates in South Korea that includes SK hynix as a key affiliate. These activities, going as far back as the 1970s, have encompassed the nurturing of talent, afforestation projects, and numerous volunteer programs, as well as significant contributions to the growth of social enterprises since 2010. With the ‘New SK’ project being announced in 2018, SK group initiated its DBL management system to quantify and systematize their social contributions.
The SV measurement system created by SK hynix
Social values created during corporate management activities are classified as ‘Business Performance’, ‘Social Contribution’, and ‘Economic Contribution’. Business Performance equals social performance through end products and services out of the production process. Social Contribution is the outcome driven by the corporate’s social contribution activities, such as donations, volunteer programs, and CSR. Indirect Economic Contribution relates to social performance reaped from the transit of economic resources to stakeholders via business activities, such as wages, taxes, dividends and interest.
This social value measurement is based on the three major principles shown above. The value should measure social value of all measurable corporate activities, encompassing not only product and service sales but also CSR activities. Also, management activities and realized outcomes are subject to social value measurement. Last but not least, social value should be measured in terms of monetary value with a designated set of objective standards.
For example, social value from environmental aspects in terms of the production process is calculated as the cost to recover from environmental pollution or how much water was saved, etc. The measurement of social contribution via products and services is estimated with achievements that improved over previous alternatives through social and environmental footprints.
Key performance in DBL operations
SK hynix has shifted its strategic direction for more widespread DBL operations in multiple areas. A few examples introduced here will better explain the company’s efforts toward sustainability in environmental protection and highlight its successful overseas social contribution activities.
SK Hynix developed the world’s first ‘Water-Free Scrubber’ to reduce water wastage.
One of the best examples of SK hynix’s sustainable movement is the adoption of the highly efficient ‘Water-Free Scrubber’ at process plants to better manage water resources. By circulating water via a metal block attached to the scrubber, it indirectly cools the water to significantly reduce water wastage, estimated to be around 54 billion tons per year.
SK hynix also promotes its forward-thinking eco-friendly semiconductor industry ecosystem in the hope other major industry players will follow its example, strengthening environmental support for its partners. The company announced ‘2020 Eco Vision’ initiative in 2018 to address the important environmental issues that arise from greenhouse gas emissions, industrial waste and ineffective water disposal. In addition, SK hynix brought together some 30 partner companies for the inspiring ‘Eco Alliance’, a collaborative effort to build a new and improved environmental business model.
SK hynix operates the ‘Happiness Bus’ to provide a free diagnosis service to vulnerable social groups.
SK hynix reinforces the sustainable management of foreign counterparts and fulfills the municipal needs of local communities. In China, the company operates its ‘Happiness Bus,’ a mobile clinic facility in the vicinity of the company’s process plant. It affords free diagnosis service for disadvantaged groups, including the elderly, disabled and poverty-stricken families, with its cutting-edge medical equipment and professional institutions.
Redefining the experimental approach as a performance tool for the future
DBLMS value chain presents how the capital of six categories transfer into social and economic value
According to the SK hynix Sustainability Report 2019, the company generated a social value of 9.8 trillion KRW in Business Performance, 76 billion KRW in Social Contribution, as well as 40 billion KRW in sales revenue. Business Performance was negative 457.5 billion KRW last year, mostly because BSP in the manufacturing industry tends to result in a negative performance due to the environmental pollutants and emissions generated from manufacturing processes. SK hynix is making a substantial investment to offset these negative results and fully engaging with social causes, including win-win cooperation and health programs, so that this minus social performance is counterbalanced by the company’s positive work within the global society.
In order to extend the DBL management system, SK Group looks forward to cooperating with multinational conglomerates. SK hynix measures social value based on SK Group’s overarching policy, working toward the global standardization of social value measurements as it has already done so with its domestic partners.
