In the morning of May 9, Beijing time, it was reported that Samsung Electronics is facing increasing pressure because it has not done much to reduce fossil fuel emissions. In terms of environmental protection commitments, this Korean enterprise is far behind its competitors apple and Taiwan, China chip manufacturer TSMC**
Analysts and investors have warned that Samsung's reluctance to match its competitors' environmental commitments poses a "systemic risk" to its future as customers and the government have higher and higher requirements for a low-carbon supply chain.
And Apple Unlike SK Hynix, which is also a Korean chip manufacturer, Samsung has not publicly promised to achieve 100% renewable power use worldwide.
As the world's largest smartphone and memory chip manufacturer, Samsung's business in South Korea and Vietnam accounts for more than 80% of the company's total power consumption, which is mainly obtained from coal and natural gas.
Park Yoo Kyung, Asia Pacific responsible investment and governance director of APG, a Dutch asset management company, said: "In terms of renewable energy, apple is taking on the responsibility of the global society, but we don't see Samsung doing similar things. Samsung seems to think: 'we are a manufacturing enterprise, we are only responsible for selling things, and then our responsibility is over.' however, this is a 20th century business model and a 20th century management philosophy."
Critics argue that Samsung has been reluctant to plan a path to reduce carbon because it relies on cheap electricity from South Korea's national energy monopoly. According to the data of the International Energy Agency, in 2020, the proportion of renewable energy in South Korea ranked second from the bottom in the G20, only higher than that in Saudi Arabia.
Kim Young woo, an analyst at SK securities in Seoul, said: "if Samsung fails to meet ESG standards, in the long run, Samsung may not even become an option for overseas customers. Environmental problems will soon appear in the form of non-tariff barriers, which will become a systematic risk for the company."
According to a person familiar with Samsung's strategy, the company has decided in principle to sign the re100 initiative this year, a global plan to encourage the company to commit to using 100% renewable electricity in its global business.
The source said that Samsung has not decided when it will announce the plan. In addition, it is unclear whether Samsung will make a "scope 3" commitment like apple to make its entire supply chain driven by renewable energy.
"Samsung Electronics has achieved 100% renewable energy use in all our businesses in the United States, Europe and China. We are exploring ways to achieve 100% renewable energy in other regions, including where ensuring renewable energy can be challenging," Samsung said in a statement
In 2020, the total greenhouse gas emission equivalent of Samsung Electronics and its supply chain was 29532 tons, roughly equivalent to the emissions of Norway as a whole.
A survey conducted by energy think tank ember found that solar and wind energy accounted for only 4.7% of South Korea's power generation in 2021, less than half of the global average.
Ember analyst uni Lee quoted Samsung's 2020 consumption data as saying: "even if all solar and wind power in Korea is only supplied to Samsung Electronics, it still cannot cover the company's global consumption."
Daul Jang of Greenpeace's East Asia Division said Samsung was reluctant to get rid of fossil fuels because it could buy electricity from KEPCO, South Korea's state-owned energy monopoly, at a cheap industrial price. "South Korea's industrial electricity prices are too low and its emissions trading scheme is too weak," he said He pointed out that although South Korea's per capita gross national income is more than three times higher than that of China, South Korean industrial companies pay less electricity than their Chinese counterparts.
Eric Christian Pedersen, head of responsible investment at Nordic asset management in Copenhagen, said the company had told shareholders that they were "still formulating policies on this issue", but the renewable energy produced in South Korea was not enough to meet Samsung's needs.
Critics say that given Samsung's own market power and historical influence on South Korean policymakers, they have a great responsibility to actively commit to ensuring the safety of renewable energy.
"In the United States, because companies have promised to buy renewable energy, producers have the right incentives to borrow and invest, and they believe they will attract consumers. But Samsung has not made the same commitment, and they are hindering this process in South Korea," Zhang said
However, Samsung is unwilling to express its position clearly, which makes investors doubt whether the commitment will be implemented with sufficient strength.
Kiran Aziz, head of responsible investment at klp asset management, a Samsung shareholder in Oslo, said: "it's hard to say what Samsung is going to do because they don't communicate any form of climate and clean energy plans in the short or long term. Even if they make new commitments, shareholders will very carefully examine whether the company is serious enough about these plans given the long silence so far."