Lee Hyung-hee, president of SK Supex Council's social value committee, speaks during a press conference at SK Group headquarters in Seoul, Monday. Yonhap

By Park Jae-hyuk

The entire social value created last year by SK Group affiliates rose 60 percent year-on-year to 18.4 trillion won ($14.5 billion), according to the group's own formula for measuring social value which was revealed to the public for the first time, Monday.

The conglomerate said it made indirect economic contributions worth 19.34 trillion won in 2021, as it paid higher taxes and wages, thanks to the significant growth in its affiliates' earnings.

Its social performance was measured at 1.9 trillion won, due to its increased contributions to the needy.

However, its environmental performance was calculated at minus 2.89 trillion won.

"It is necessary to increase transparency by disclosing both positive measurement results and also negative aspects, and to come up with complementary measures in the process of communication with external stakeholders," SK Group Chairman Chey Tae-won said, according to the group.

"We have made efforts to reduce carbon emissions by declaring Net Zero and RE100, but there has yet to be a significant outcome, as we have expanded the capacity of our plants and increased their operating rates," said Kim Kwang-jo, vice president of SK Supex Council's social value committee.

Based on the double-bottom-line management policy that pursues both economic and social value, SK Group has disclosed the monetary value created by the social contributions of its affiliates since 2018.

The company said it took into account both positive and negative practices in product development, manufacturing, sales, labor management and its relationship with business partners when measuring the social value created by the group's affiliates.

The specific formula is available on SK Group's official website.

The group's affiliates will also unveil their respective social value on their websites and in sustainability management reports.

"We've decided to disclose it to satisfy the curiosity of stakeholders about social value creation and turn it into a monetary value, and at the same time to help them actively use social value information for investment and consumption," said Lee Hyung-hee, president of SK Supex Council's social value committee.

"We plan to further enhance the objectivity and transparency of the measurement system by disclosing the formula and the meaning of the results and listening to the opinions of our stakeholders."

SK Group plans to improve the measurement system by continuously collaborating with various international partners, such as the Value Balancing Alliance (VBA), Harvard Business School and the State-owned Assets Supervision and Administration Commission of the State Council (SASAC) of China.