Samsung C&T Corporation Sustainability Report 2013
Samsung C&T’s
Integrated Thinking
Samsung C&T Corporation is bolstering the company’s value through relentless innovation and corporate
transformation. Led by its Engineering & Construction and Trading & Investment Groups, Samsung C&T
Corporation is striving to cement its status as a “Leading Global Company” and be recognized by its industry
peers. At the same time, Samsung C&T Corporation is reinventing itself as a competent corporate citizen , as
illustrated in the 2013 Report, by integrating multiple aspects of sustainable management: establishing an
infrastructure for sustainable management; creating economic and environmental values; and sharing common
values with society.
Samsung C&T Corporation creates
values for economic and
environmental advancement
Elements for
Integrated
Thinking
Towards a Sustainable
Company
ㆍRobust governing
structure
ㆍEthical and transparent
management
ㆍCommunication with
stakeholders
Vision &
Strategy
Construction
Trading
ㆍCultivate global no.1
ㆍContinuous innovation of its
products
ㆍExpand global markets
ㆍEvolve into a total
solution provider
business structure
ㆍD
evelop risk management ski
as a key competence
ㆍEnsure global competence
Engineering &
Construction and Trading &
Investment Businesses
ㆍManagement
environment
ㆍThreat and opportunity
Value Adding
Activities
Our
Performance
Construction
Trading
ㆍCreate eco-friendly
ㆍEnter the environmental
values
ㆍEnhance health and
safety management
ㆍCreate impact on local culture
industry
and communities
ㆍCreate economic values
ㆍCreate social and environmental values
ills
Values shared by Samsung C&T
Corporation and society
Creating
Social Value
Growth with Our Partners
ㆍEstablish framework for implementing shared growth with
partners
ㆍImplement supporting programs for suppliers and partners
ㆍEncourage transparent communication between suppliers and
partners
GWP for Sustainable Growth
ㆍTrain and nurture top global employees
ㆍReinvent organizational culture for sustainable growth
Social Capital based on C&T
ㆍImplement strategic social contribution activities
ㆍOperate in a responsible manner within local communities
es
Our Performance
ㆍCreate and allocate economic outcome
ㆍPractice anti-corruption activities and ethical management
ㆍRespect all human rights
ㆍEngage in CSR-related activities on behalf of for customers and
partners
ㆍImplement social contributions and environmental management
Contents
Overview
02
04
06
08
CEO Message
Company Profile
Governance
Materiality Test
Towards
a Sustainable Company
12
30
Constructing Our Values
Trading Our Future
Creating Social Value
46
52
62
Growth with Our Partners
GWP for Sustainable Growth
Social Capital based on C&T
Performance Review
70
73
74
78
80
81
Economic Performance and Distribution
Countering Bribery
Human and Labor Rights
Customer and Supply Chain Relations
Creating Social Capital
Environmental Management
Appendix
90
92
94
98
99
Independent Assurance Report
Independent Assurance Report of Greenhouse Gas Emissions
GRI Index
Awards Received and Association Memberships
About this Report
Samsung C&T Corporation Sustainability Report 2013
Additional Information and Related Homepage
Samsung C&T Corporation Homepagewww.samsungcnt.com
Sustainable Management
www.samsungcnt.com/KR/cnt/sm/201000/html.do
Engineering & Construction Group
Group Homepage www.secc.co.kr
Samsung Citywww.secc.co.kr/samsungcity
Green Tomorrowwww.greentomorrow.co.kr
Company Blogwww.samsungblueprint.com
Contact
Treasury & Financial Management Team, Samsung C&T Corporation
1321-20, Seocho 2-Dong, Seocho-Gu, Seoul, South Korea 137-956
Tel. +82-2-2145-2598 Email: csr.sr@samsung.com
Trading & Investment Group
Group Homepagewww.samsungcnt.com/KR/trading/
index.do
Company Blog http://blog.samsungcnt.com
Overview
Towards a Sustainable Company
Creating Social Value
Performance Review
Appendix
1
Towards a Sustainable
Company
We are creating economic, social, and environmental value in an
effort to reinvent ourselves as a competent and respected global
company that is leading the way in social responsibility.
2
Creating Social Value
We are sharing what our company has created with society
through sustainable management for the creation of a
better world.
3
Performance Review
We are providing complete transparency by offering the public
access to the results of our economic, social, and
environmental performance on sustainable management.
Sustainability Report 2013
1
CEO Message
Greetings, Stakeholders:
I would like to express my sincerest gratitude to our stakeholders for the unwavering trust and
support you have shown us over the years. The looming threat of a further decline in the global
economy is casting a long shadow over the company’s business environment, highlighting the
uncertainty we will have to endure for the near future. Samsung C&T Corporation has persevered during this tough economic climate, however, developing new markets and expanding our
value chain has forced the company to reinvent itself. As a result, Samsung C&T Corporation has
transformed itself into an enduring business with sustainable growth potential, while also
restructuring its businesses and improving operational competencies within the global market.
Through these efforts, the company was able to realize KRW25.3 trillion in sales and KRW13.7
trillion in new orders in 2012. Without the hard work and sacrifice of our people, as well as the
continued support and interest we have received from you, we would not have achieved such
remarkable results.
2
Samsung C&T Corporation
Overview
Towards a Sustainable Company
Creating Social Value
Performance Review
Appendix
Samsung C&T Corporation has established and implemented a number of diverse activities
within sustainable management in an effort to create a positive impact on the environment and
society. Supported by our environmental management system, which has been designed to
align with the global standard, we conduct an assessment on the environmental impact of our
construction projects throughout the entire lifecycle, while taking into account such factors as
efficient use of resources and energy, protection of the ecosystem, and the reduction of greenhouse gases. We also strive to create an opportunity for high value-added businesses by
developing efficient energy management techniques for buildings through a leadership role in
the K-MEG (Korea Micro Energy Grid) R&D Project. We are strengthening our preventive health,
safety, and environmental management capabilities through the development of an accident
prevention model unique to Samsung that is firmly rooted in the reverence for life, as well as the
publication of risk assessment templates. We are doing our utmost to earn the trust of our
constituents through the implementation of sustainable health, safety, and environmental
management systems that are aligned with global standards.
Samsung C&T Corporation can only be as good as its partners. That’s why we respect and treat
our suppliers like true business partners. This enables our company to promote shared growth
in management through the implementation of the Fair Trade Compliance Program, and other
support programs in technology, finance, education, and training. We also assist our partner
companies with their sustainable management processes by adopting programs such as the
Green Management Expansion Project. In addition, the company is conducting a global expert
training program in order to enhance our global competencies and the expertise of our employees. We’re also promoting the formation of a unique organizational culture by actively involving
our employees in a variety of engaging activities that are designed to stimulate and enhance the
flow of internal communications and interactions.
Samsung C&T Corporation will not rest on its laurels. We are committed to our growth as a
leading global company and are keen to accomplish an equally recognizable performance in our
Engineering & Construction and Trading & Investment businesses. In support of this, we will
continue to develop market-leading global products, expand business areas across the entire
value chain, and implement a more enhanced risk management strategy, while expanding our
management infrastructure required to support our ambitious goals. Going forward, I invite you
to keep a close eye on the activities and performance of Samsung C&T Corporation, which will
continue to strengthen our relationship with society through our sustainable management
efforts and active communication with stakeholders. We are always ready to listen to your
feedback on our performance.
Thank you.
October 2013
Samsung C&T Corporation Vice Chairman & CEO
Yeon-Joo Jung
Sustainability Report 2013
3
Company Profile
Samsung C&T Corporation in the World
Founded in 1938 as the parent company of Samsung Group, Samsung C&T Corporation has
pioneered the nation’s international sales and trading businesses since it was registered as the
first general trading company in Korea in 1975. The company merged with Samsung Construction
in December 1995, and has since been operating two distinctive businesses: the Engineering &
Construction Group and the Trading & Investment Group.
Samsung C&T Corporation is quickly becoming a global top-tier company, generating outstanding
economic value throughout the world on the basis of highly advanced technologies and skilled
experts within every business unit. In addition to economic value creation, we are taking the
initiative in sustainability management by focusing on capabilities in non-financial areas, such
as the reduction of greenhouse gas emissions and shared growth among business partners.
Sales
Number of Employees
(Unit: KRW billion)
(as of the end of December 2012)
Engineering & Construction Group
Trading & Investment Group
2010
2011
2012
7,231
7,314
8,943
10,525
14,232
16,383
Samsung C&T Corporation realized KRW25.3 trillion
in sales in 2012, which is a 17.5% increase over the
previous year’s sale of KRW21.5 trillion.
14,166
Employees
* Including 5,923 overseas employees
Samsung C&T Corporation is nurturing the world’s
greatest minds through its pioneering corporate
culture.
Global Network
Samsung C&T Corporation is strengthening its global business operations, which currently
spans across 50 countries, while continuing to expand its global footprint every year.
Construction & Engineering Group
28 Regional Headquarters, Subsidiaries, and Offices
6
International Procurement Offices
Trading & Investment Group
50Subsidiaries
52 Liaison Offices
50
Businesses in 50 countries
around the globe
4
Samsung C&T Corporation
Overview
Towards a Sustainable Company
Creating Social Value
Performance Review
Appendix
Engineering & Construction Group
We will continue to strengthen our position as a global leader in the construction
industry by building a platform for sustainable growth.
The Engineering & Construction Group employs the industry’s top minds and has achieved
unparalleled engineering excellence in every sector it operates within—building, civil, plant and
housing—proving customers with the greatest value possible.
Delivering Complete
Services Across the
Construction
Business Value
Chain
Building
Civil
Plant
Housing
High-Rise, High-Tech
Facility (IT/BT),
General Buildings
(Office,
Commercial,
Accommodation,
Educational),
Healthcare,
and Aviation
Road, Bridge,
Railway,
Subway, Port,
and Water
Resources
Thermal Power,
Nuclear Power
Plant, LNG Terminal
and Storage,
Renewable Energy,
and Environmental/
Industrial Facility
Residential
Complex,
Redevelopment,
Reconstruction,
Remodeling,
and Urban
Development
Trading & Investment Group
We will continue to grow as one of the top 10 global trading companies based on the
strength of our stable and robust business areas.
The Trading & Investment Group is optimizing its management resources by adopting a focused
business strategy: Identify key growth areas to dedicate resources to drive future growth.
We have already identified a number of diverse business opportunities within the trading and
organizing sector. These opportunities are based on the strength of our global competence and
integration capabilities, such as our proprietary business intelligence and global network.
Business Models
Focused on Trading
and Organizing
Trading
Organizing
Energy/Minerals,
Steel, Chemicals/
Industrial Materials,
and Living Industrial
Plant/Machinery
and Green Energy
Sustainability Report 2013
5
Board of Directors
Governance
Samsung C&T Corporation implements a decision-making system that ensures a transparent
and independent governance structure and incorporates a feedback process from employees and
other stakeholders. The Board of Directors (BOD) of Samsung C&T Corporation consists of three
internal and four external directors. The CEO serves concurrently as the Chairman of the Board, and
external directors are nominated by the External Director Recommendation Committee in order to
ensure their independence. To establish an efficient and effective decision-making process, we
have selected external directors who have the expertise and experiences in a wide range of areas
such as business management, economics, and accounting. Furthermore, Samsung C&T
Corporation avoids potential conflicts of interest within the BOD by restricting the nomination of a
candidate who is a major shareholder of the company or an affiliate.
Committees under the BOD
The company has set up and runs the Management Committee, Audit Committee and Outside
Director Recommendation Committee under the BOD, which contributes to enhancing the
efficiency of decision-making and ensuring the transparency and independence of the BOD.
Management Committee
The Management Committee consists of internal directors selected by the BOD and deliberates
on matters mandated by the BOD and other major management issues submitted for consideration by the Management Committee.
3
4
6
2
7
1
5
Classification
Name
Company and Position
Remark
Internal Directors
Yeon-Joo Jung 1
Vice Chairman & CEO,
Samsung C&T Corporation
· Chairman of the Board
· Chairman of Executive Committee
Shin Kim 2
President & CEO of Trading & Investment
Group, Samsung C&T Corporation
· Chairman of Outside Director Recommendation
Committee
· Member of Executive Committee
Young-Jo Sang 3
CFO & Head of Management Planning
Division, Samsung C&T Corporation
· Member of Executive Committee
Chong-Ook Rhee 4
Professor of Economics, Dean of College of
Social Sciences, Seoul Women’s University
· Chairman of Audit Committee
Hyun-Soo Lee 5
Professor, Architecture & Architectural
Engineering, Seoul National University
· Member of Outside Director Recommendation
Committee
Kyu-Jae Jeong 6
Chief Editorial Writer, The Korea Economic
Daily
· Member of Audit Committee
· Member of Outside Director Recommendation
Committee
Chang-Hyun Yun 7
President, Korea Institute of Finance
· Member of Audit Committee
External Directors
* As of August 2013
6
Samsung C&T Corporation
Overview
Towards a Sustainable Company
Creating Social Value
Performance Review
Appendix
Audit Committee
The Audit Committee consists of three external directors. They conduct audits on accounting
and business operations through regular meetings held on a quarterly basis and provisional
meetings, which contribute to enhancing the transparency of the company.
External Director Recommendation Committee
The External Director Recommendation Committee, consisting of one internal and two external
directors, nominates external director candidates at the general shareholders’ meeting.
The candidates nominated by the BOD and the External Director Recommendation Committee
are then voted for approval at the annual general shareholders’ meeting. With March 2012
marking the end of the term of the current external directors, three nominees—Hyun-Soo Lee,
Kyu-Jae Jeong and Chang-Hyun Yun—were newly appointed as external directors replacing the
incumbents.
BOD Performance
In 2012, a total of 10 BOD meetings were held, through which 24 items were deliberated.
Attendance rate of external directors jumped to 90%, which was an 83% increase from the previous year.
Compensation
Compensation for the BOD members and management are differentiated according to the
results of regular business target reviews and performance evaluations. The limit of the compensation is approved by the resolution at the general shareholders’ meeting.
Sustainability Management Committee
The focus of our sustainability management is centered on the Sustainable Management
Committee. We established the Sustainable Management Committee in 2010, which consists of
key executives from the company, and have since held meetings on a quarterly basis. Under the
leadership of the CFO, members of the Sustainable Management Committee help to integrate
and assist general management activities affecting our sustainable growth. Major issues dealt
with by the committee include compliance, fair trade, shared growth, mid- to long-term strategies, and internal control. Results of the meetings are reported through the Audit Committee.
BOD Performance
Date
Agenda
Attendance of external directors
Feb. 2, 2012
Contract to build an independent power plant (IPP) in Dongducheon and two
additional items
4/4
Feb. 24, 2012
Convening of the 61st Annual General Shareholders’ Meeting and determination of
the agenda summary
3/4
Mar. 16, 2012
Commissioning of directors, approval of committee formation in the BOD, and three
additional items
4/4
Apr. 26, 2012
Large-scale insider transaction as a result of equity sales of overseas subsidiaries
(Singapore and Japan) and three additional items
4/4
Jun. 22, 2012
Approval of large-scale insider transaction with an affiliate (goods and services) in the
3rd and 4th quarter of 2012
3/4
Jul. 19, 2012
Signing of financial contract for the independent power plant (IPP) in Dongducheon
and one additional item
3/4
Jul. 27, 2012
Payment guarantee for the parent company with regard to a public tender to
construct the Tappan Zee Bridge in the United States
3/4
Nov. 1, 2012
Approval of financial statements for the 1st through 3rd quarters in 2012 and one
additional item
4/4
Nov. 30, 2012
Enactment and amendment of internal regulations with regard to executives
4/4
Dec. 14, 2012
Payment guarantee for the parent company with regard to the PF loans offered by
Korea EximBank to Parallel Holdings in the United States and one additional item
4/4
* For more information on the meeting agenda and details of the discussed issues per each committee, please consult the DART website managed by the Financial
Supervisory Service (http://dart.fss.or.kr), which is the repository of Korea’s corporate filings.
Sustainability Report 2013
7
Materiality Assessment
Samsung C&T Corporation performed a materiality assessment in order to identify the issues of
interest among our stakeholders, as well as other key issues that will be discussed in further
detail in the Samsung C&T Corporation Sustainability Report 2013.
STEP 1: Issue Pool
Samsung C&T Corporation has identified key issues to be included in the issue pool by analyzing: the
mid- and long-term strategies of every business division; the construction and trading business
trends in Korea and overseas markets; related international standards; and media news reports.
A total of 38 key issues have been identified during this process, all with a greater emphasis on health,
safety and the environment, and our business partners as compared to 2012.
Stakeholder Survey Results (Unit: %)
Global leader status
High-class among Korean companies
Above average among Korean companies
Below average among Korean companies
Media Research
Various news reports on the company, published from January 1 through December 31, 2012, were
analyzed to identify the key business activities as seen through the eyes of the news media.
A quantitative analysis on the keywords that appeared most frequently in news reports showed
that issues surrounding successful bids on overseas projects, the development and commercialization of environment-friendly technologies, and strategic CSR activities topped the list.
Low-class among Korean companies
2.4
0.2
STEP 2: Assessment of Key Issues
10.3
19.9
Internal
Stakeholders
Four-Step Materiality Assessment Process
67.2
5.9
1.0
We performed a four-step materiality assessment based on the issues identified from the
analysis on the company’s sustainable management status. During the materiality assessment
process, we considered feedback from internal and external stakeholders, as well as the midand long-term impact on of Samsung C&T Corporation’s business.
12.7
Immediate and
short-term financial
impact
Relevance with
Samsung C&T in terms
of policy focus and
strategic tasks
Shared issues with industry
competitors, recommendations
by international standards, and
media issues
Stakeholder
survey
25.5
External
Stakeholders
54.9
Stakeholder Survey
In an attempt to identify the details of stakeholders’ expectations on the company’s management process, we performed a survey targeted at employees, business partners, customers, and
other external stakeholders. The survey result demonstrated that both internal and external
stakeholders shared a view that the company is well prepared for sustainable management,
with internal stakeholders more confident and aware of the company’s preparedness.
Stakeholder Communication Channel and Key Issues
Samsung C&T Corporation maintains diverse communication channels with stakeholders, with their feedback reflected directed into the company’s business operations. The result of the company’s communication activities with its stakeholders is published in the company’s annual
sustainability report.
8
Stakeholder
Key Issue
Communication Channel
Page
Shareholder,
Investor
Creation of economic value, identification of new
growth engines
IR conference, disclosure of investment
information, credit appraisal, homepage
70-72
Employee
Establishment of a culture of open communication,
fair performance evaluation and compensation,
enhancement of global competence
Intranet, company newsletter and magazine,
company blog, CEO message
52-61
Customer
Promotion of active communication with customers,
handling of customer complaints
Homepage, customer center, customer satisfaction
survey
79
Local
Community
Strategic CSR activities, contribution to and
investment in the local community
Employee volunteer activity, partnership with NGO
62-67, 80
Business
Partner
Establishment of fair trade process, diverse support
in finance, management, and technology
Business partners portal (www.secc-partners.
co.kr), business fair and briefing session, business
partners council
46-51, 78
Media,
Government
Compliance with relevant laws and codes,
transparency in company information, and activities
Homepage, public hearing, press releases
Samsung C&T Corporation
4, 5, 98
Overview
Towards a Sustainable Company
Creating Social Value
Performance Review
Appendix
STEP 3: Selection of Key Issues
We were able to identify and classify key issues by employing a matrix composed of internal and
external perspectives before selecting the issues to be included in the Sustainability Report.
Those issues were classified in the report based on their impact on society by Samsung C&T
Corporation, while creating economic, social, and environmental value.
Materiality Assessment Result
External Concerns
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Safety incident and
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disaster management
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Development of sustainable
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energy and natural resources
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Integrity of corporate governance
Nurturing global talent
ㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍ
ㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍ
Work-life balance
Business partners support service
ㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍ
ㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍ
ㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍ
ㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍ
Prevention environmental claims
Safety awareness education
ㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍ
ㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍ
ㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍ
Rooting out of irrational requests
Climate change initiatives
Employees’ CSR activities
ㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍ
ㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍ
Development of new growth engines
ㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍ
ㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍ
ㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍ
Consolidated risk management
Health and safety
ㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍ
management system
ㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍ
ㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍ
Expanding global markets
Innovation of organizational culture
ㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍ
ㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍ
Safety management in
ㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍ
ㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍ
overseas businesses
ㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍ
Cost innovation
Overseas CSR activities
ㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍ
ㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍ
Development, design,
ㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍ
ㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍ
deployment of
ㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍ
environmentally friendly
Fair performance evaluation
Fair trade process
Strategic CSR
ㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍ
technologies
ㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍ
and compensation
ㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍ
ㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍ
Ethical management
Efficient energy use
ㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍ
ㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍ
Contribution to and investment in local communities
R&D competence
Assurance of workplace
ㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍ
diversity and equity principle
ㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍ
Construction site environmental
Assurance of biodiversity
ㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍ
ㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍ
contamination
ㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍ
ㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍ
ㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍ
ㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍ
Analysis of corruption risks
ㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍ
Diversification of business areas
ㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍ
ㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍ
ㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍㆍ
ㆍㆍㆍㆍㆍㆍㆍㆍㆍ
Internal Priorities
Sector
Towards a
Sustainable
Company
Key Issue
Page
Expanding global markets
Key Issue
Page
18, 19
Business partners support service
47-51
Development of new growth engines
17, 20
Fair trade process
47
Development sustainable energy and
natural resources
22-24, 40, 41
Rooting out of irrational request
47
R&D competence
22, 71
Consolidated risk management
21, 36
Development, design, deployment of
environmentally friendly technologies
22-24
Construction site environmental
contamination
Health, safety, and environmental
management system
Safety incident and disaster
management
Sector
Creating Social
Value
Innovation of organizational culture
Contribution to and investment in local
communities
81-85, 87-88
26
27-29, 86
Nurturing global talent
Performance
Review
53-55, 75
56-59
62-67, 80
Ethical management
73
Analysis of corruption risks
73
Work-life balance
60, 61, 75-77
Fair performance evaluation and
compensation
Sustainability Report 2013
76
9
1
10
Constructing Our Values
Trading Our Future
13
Our Business Model
14 Key Risks and Opportunities
16 Vision and Strategy
17 Cultivating Global No.1 Products
18 Expanding Global Markets
20 Evolving into a Total Solution Provider
21 Bolstering Risk Management
22 Creating Environmentally Friendly Values
26 Reinforcing Health, Safety, and Environment
Management
31 Our Business Model
32 Key Risks and Opportunities
34 Vision and Strategy
35 Continuous Innovation in Our Business Structure
36 Development of Risk Management as Core
Competence
37 CLO that Promotes Specialization
38 Development of Global Competencies
40 Entry into Environmentally Friendly Businesses
42 Influence on Local Culture and Society
Samsung C&T Corporation
Overview
Towards a Sustainable Company
Creating Social Value
Performance Review
Sustainability Report 2013
Appendix
11
Constructing
Our Values
In 2012, the Engineering & Construction Group recorded the largest sales in
the company’s history. The Group has made has progress in the development
of new markets and new businesses and has created value for the company
and society through health, safety, and environmental management systems.
Sales (Unit: KRW billion, 2012)
Domestic
New Orders (Unit: KRW billion, 2012)
Overseas
2010
8,943
2010
2011
2012
12
Samsung C&T Corporation
13,707
5,414
1,818
5,471
1,843
5,168
2011
3,775
13,707
12,274
10,384
2012
Overview
Towards a Sustainable Company
Our Business
Model
Creating Social Value
Performance Review
Appendix
Who we are
The Engineering & Construction Group at Samsung C&T Corporation is engaging in building, civil,
plant and housing businesses. Our skilled manpower and technological prowess, as verified
throughout numerous projects implemented in each business unit, have allowed us to demonstrate our competitiveness on the global stage. Under the vision of a Global Leading Player,
we are concentrating on developing 11 global no. 1 products and planning to raise the ratio of
overseas sales to 65% by 2015. Our business portfolio will be expanded even further into
independent power plants (IPP), public private partnerships (PPP), pre-construction services,
and project management services, beyond the existing EPC (Engineering, Procurement and
Construction) services projects. This will enable us to grow into a top-tier global construction
company capable of providing comprehensive solutions throughout the value chain.
Sales by Business Area (Unit: %, 2012)
New Orders by Business Area (Unit: %, 2012)
Building
Plant
Building
Plant
Civil
Housing
Civil Housing
16
25
36
48
2012
2012
29
11
19
16
What we do
Building
Acclaimed for its unrivaled technologies, Samsung C&T has constructed some of the world’s
tallest and most intelligent high-rise buildings, including the Burj Khalifa in the United Arab
Emirates, and the Petronas Tower in Malaysia. We have also been successful in constructing
high-tech production facilities, including ones for semiconductor, LCD and biotech, plus we’re
expanding our business scope to cover other sectors, such as healthcare and airport, to become a
global leader.
Civil
Samsung C&T has secured a leadership position in civil engineering by constructing the Incheon
Grand Bridge, the fifth longest bridge in the world, as measured by bridge span. Our proven
technologies enabled us to participate in numerous global projects, including the C280 HighSpeed Rail project in Taiwan, Jurong reclamation in Singapore, the Delhi Metro in India, and the
Salam under path construction project in the United Arab Emirates. We are also striving to
become a world-class player by engaging in mining transportation infrastructure projects, as
well as projects for subways, railways, bridges, tunnels, and harbors.
Plant
Samsung C&T has proven to be a leader in global technologies by undertaking projects such as
the Qurayyah combined cycle power plant in Saudi Arabia, a nuclear power plant in the UAE, and
an LNG terminal in Singapore. Moreover, we have made progress in becoming a value creator by
expanding our business scope to cover operation and maintenance (O&M), going beyond our role
as an EPC (Engineering, Procurement, and Construction) player.
Housing
Samsung C&T successfully introduced its Raemian-branded apartments as the first branded
apartments in Korea. We are also taking the lead in shaping the housing culture by providing new
products for residential living, along with exceptional customer service. From residential to
community and commercial facilities, we are growing as a leader in providing mixed-use complexes for commercial and residential areas.
Sustainability Report 2013
13
Samsung C&T Corporation Engineering & Construction Group monitors the risks and
opportunities that accompany its business activities by analyzing changes in the marketplace.
The identified risks and opportunities are then reflected in our general business management,
through which we create growth opportunities for the company, as well as value for our diverse
group of stakeholders.
Key Risks and
Opportunities
Our Issues
Cultivating
global no.1 products
Expanding global
markets
Evolving into a
total solution provider
Our Business Context
ㆍShifting of business structure in
related industries due to
changing macro environment
(energy, mining, and others)
ㆍIncreasing need for technology
innovation for future growth in
business
Key Risks from Our
Business Context
ㆍNarrowing the gap in technology ㆍIncreasing risks in project
due to the improvement of
implementation due to entry
technological competence of
into new markets
construction service providers in ㆍProtectionism towards
China and other emerging
homegrown industries in the
countries
wake of the global economic
ㆍDeepening competition among
downturn
different industries due to
blurring boundaries
ㆍFiscal deficit in the wake of the
global financial crisis
ㆍIntensifying competition to win
over stripped down construction
projects
Opportunities from
Key Risks
ㆍOpportunity to enter into new
businesses due to the energy
business cycle
ㆍDifferentiated needs based on
market and customer type
ㆍIncrease of public-private
partnership (PPP) projects
ㆍIncrease of mega- and mixedproject package orders
Our Business Considering
Opportunities
ㆍDevelop business model tailored ㆍExpand presence in global
to customer needs and
markets through macro- and
requirements
micro-level market research
ㆍInternalize core technologies per ㆍEnsure competence for local
product group
project implementation
ㆍSearch continuously for and
through local partnerships and
develop new businesses for
resourcing
future growth
Created Values from
Our Business
ㆍAdvance brand leadership
ㆍIncrease new orders that are in ㆍCreate new orders by proactively
through product differentiation
line with enhanced reputation
proposing project ideas to
ㆍImprove profitability by avoiding
within the global market
customers
price-centric competition
ㆍEstablish stable market
ㆍDiversify income source from
portfolio through diversification
construction by capitalizing on
within local markets
profits from O&M
Reporting Page
14
17
Samsung C&T Corporation
ㆍSlowing growth of domestic
construction market
ㆍAnnual average growth rate of
9.4% forecasted until 2015 for
global construction market
ㆍIncreasing demand for urban
and energy infrastructure due
to growth in emerging
economies
ㆍIncreasing investment in
construction projects due to
demand for replacing aging
infrastructure and economic
stimulus packages
18-19
ㆍReinforcing integration and
increasing scale of construction
projects
ㆍIncreasing the need to provide a
total solution throughout the
entire value chain from project
development to O&M
ㆍEnhance project competence
throughout the entire value
chain from project development
and feasibility study to O&M and
investment
ㆍWin orders for mega- and
mixed-projects through the
integration of existing products
and competencies
20
Overview
Towards a Sustainable Company
Bolstering risk management
Creating Social Value
Creating environmentally
friendly value
Performance Review
Appendix
Reinforcing health, safety, and
environmental management
ㆍGrowing exposure to various risks (e.g., ㆍNeed for researching local environmental regulations ㆍHuman casualty and property damage due
contract risk, risk from local laws, etc.)
due to expanded share of overseas projects
to safety incidences on construction sites
as a result of winning overseas
ㆍRequest by overseas ordering organizations to
ㆍIncreasingly stringent regulatory policies on
projects and sales
submit sustainable management framework and
workplace safety and disaster prevention as
accompanying achievements
they become key administrative initiatives
ㆍNeed for responding to global initiatives such as
for governments
climate change and bio-diversity
ㆍGrowing exposure to diverse risks as a ㆍNewly enforced greenhouse gas reduction
ㆍDamage compensation and resulting
result of increasing project scale
requirements with reduction targets imposed on the
restriction on participating in new tenders in
construction industry
the event of an incident
ㆍPotential restriction in Supply Chain
Management (SCM) and cost
ㆍMore stringent regulations on the reduction of energy ㆍLost opportunity costs arising from
optimization due to protectionism by
use and environmentally friendly buildings
damaged corporate reputation and
host country to favor home-grown
ㆍObligatory requirement for certification on public PJT
interruption of business
entrepreneurs (e.g., local businesses)
green buildings and energy-efficiency ratings for
buildings
ㆍCapable of overcoming local risks
based on a rich history of winning
overseas projects and unrivaled
technologies
ㆍGreenhouse gas reduction and control at the
ㆍPrevent serious disaster through safety
construction site and additional income generated
training based on hands-on experience.
from trading greenhouse gas emission allowances
ㆍMinimize disaster handling cost through
ㆍContribution toward income creation by securing
incident prevention
differentiated competiveness including development ㆍBoost brand value and additional points in
of greenhouse gas reduction technology
winning new orders by obtaining various
ㆍExpansion of business areas by preoccupancy of
safety-related certifications
business items related with climate change, such as
construction of power plants by applying renewable
energy and carbon capture technologies and mixed
development of low carbon cities
ㆍImprove risk management processes
through risk identification,
assessment, responding, monitoring,
and reporting
ㆍOverhaul risk management
framework by consolidating
information on marketing and project
proposals
ㆍSupport and bolster environmental management of
business partners through Green-SCM
ㆍDevelop a construction site greenhouse gas
emissions prediction program and reduction
guidelines
ㆍSecure project competencies through the
development of environmentally friendly
technologies on a cost-benefit basis, as well as by
responding to regulations
ㆍImplement Health, Safety, and Environment
Management (Samsung OHSMS)
ㆍImplement permit-to-work systems and
qualification certification programs for duty
managers
ㆍBolster the HSE management organization
and develop safety equipment
ㆍRun dedicated safety audit and equipment
safety management teams
ㆍGuarantee reliable profits to
stakeholders through systematic risk
management
ㆍCreate higher income and added value through the
development of new business models
ㆍBolster corporate value through continuous CSR
activities
ㆍEnsure customer satisfaction and explore new
growth engines through environmentally friendly
technologies
ㆍRealize zero-incident construction sites by
running on-site safety incident prevention
processes
ㆍBolster corporate image and brand
recognition by creating a safe environment
on construction sites
21
22-25
26-29
Sustainability Report 2013
15
Samsung C&T Engineering & Construction Group is focused on three strategic directions in an
effort to leap forward as a leading global player: cultivating global no.1 products, expanding global
markets, and evolving into a total solution provider.
Vision and
Strategy
Leading Global
Player
Vision
New Order
New Order
Sales
Sales
33
22
Management
Goals
2015
(Unit: USD billion)
Management
Strategy
Cultivating
Global No.1
Products
60
45
2020
(Unit: USD billion)
Expanding Global
Markets
Establishing
Global Standards
16
Samsung C&T Corporation
Evolving into a
Total Solution
Provider
Overview
Towards a Sustainable Company
Cultivating
Global No.1 Products
Creating Social Value
Performance Review
Appendix
Selecting and Cultivating Global No.1 Products
Samsung C&T Corporation Engineering & Construction Group has selected 11 key products to
cultivate. We believe these will yield high added value and gain global competitiveness in the
market, which would thereby lay the groundwork for expanding new orders. Included in the 11
world-class products are new businesses, such as healthcare and mining, as well as our existing
products. The company plans to explore new growth engines for the future based on the
strength of the selected world-class products.
Diversification of Business Models
We have achieved a competitive advantage in the market by diversifying our business model per
product category to meet customer requirements identified through in-depth market and
customer research. By proposing a tailor-made business model based on customer needs we
continue to improve the opportunity to win quality project orders.
Securing Technology Competence
In a bid to sharpen our technology competence, is a key element of product competiveness, we
are planning a mid- and long-term technology development roadmap centered on the differentiated technology per product category. We have established a strategy to acquire core
technologies through strategic analysis per product category and technology sensing, while at
the same time internalizing the secured technologies by strengthening in-house R&D activities,
technology transfer, and M&A. These technologies are being applied to the winning of contracts
and pre-implementation stages, thereby boosting overall customer value in the form of cost
savings and the shortening of the construction period.
“Samsung C&T Corporation should aspire to go beyond the
historical bounds of Samsung Group, and evolve as an
enterprise that conveys its own values to customers.”
Interview
Lee Wang Sang, Analyst,
Woori Investment & Securities
The Korean construction industry is showing signs of structural stagnation, both in the civil
and housing sectors, due to changes in related policies and an aging population. The slowing
growth pattern, now evident in the industry, is forecasted to continue for an extended period
with no signs of recovery anytime soon. As a result, this will force many construction firms to
turn their eyes to overseas markets. Samsung C&T is no exception in this respect: the company has rapidly expanded its presence in the Middle East and Australia and has performed
extremely well in the areas of power plant construction and infrastructure. Samsung C&T
has focused even more on penetrating the overseas market this year and has surpassed
USD10 billion in confirmed new orders. However, ever-increasing competition from Europe
and Japan is putting downward pressure on the profitability across the industry, which will
require global companies, like Samsung C&T, to figure out how to maintain current profit
margins. In order for the company to thrive during these challenging times, it must improve
cost competitiveness through vertical integration and expand its value chain by strengthening its engineering competence. In particular, the company can expand its share in the plant
business by exploring opportunities in new energy sources, such as shale gas, and understanding its potential market demand. Creating a marketing strategy that’s customized by
region would also enable the company to become more competitive in other markets
besides the Middle East, as well as provide integrated services to meet the needs of ordering
organizations. Samsung C&T Corporation, being the parent company of Samsung Group, is
carrying a hefty symbolic significance on its shoulders. I hope the company moves beyond
this symbolic status and evolves as an enterprise that conveys its own values to its customers. Given the vigorous activities the company has been engaged with to win over new
orders, I am quite optimistic that Samsung C&T Corporation’s vision and fortitude will propel
them well into the future.
Sustainability Report 2013
17
Expanding Global Markets and Global Customers
Expanding
Global Markets
Samsung C&T Corporation Engineering & Construction Group is implementing a global market
strategy developed through in-depth market research, which delivers a robust plan across
multiple levels. The proposed strategy will then be deployed across the local markets once a
comprehensive analytical study—covering areas such as politics, economy, history, national
development roadmap, key policies, and industrial value chain—has been completed for each
country. Based on the insights gained from such study, the company will further expand into
global markets and gain new customers by implementing marketing activities that place the
customers’ needs first.
The company is also expanding its overseas network by bolstering marketing activities that are
grounded in the reality of the local markets. The company opened seven new offices—Hong
Kong, Mongolia, Australia, London, Chile, Turkey, and Canada—in 2012 alone, bringing the total
number of overseas offices to 28. And, in an attempt to enhance its competence in marketing
and project implementation, the company is developing a local business strategy based on a
thorough study of the business environment within each market. The company is pushing
ahead with the localization of resources, including sub-contractors, vendors and human capital,
while paying close attention to expanding its business partnerships with blue chip players in
each regional market.
India (South Asia RHQ)
Samsung C&T Headquarters
4
1
13
2
3
5
6
7
8
18
14
9
10
15
17
11
12
16
19
UAE (Middle East RHQ)
18
Samsung C&T Corporation
Singapore (Southeast Asia RHQ)
Overview
Towards a Sustainable Company
Creating Social Value
Performance Review
Appendix
Performance in Global Business
The company’s push for a systematic and consistent expansion into global market is finally producing
results.
Since its entry into Mongolia in 2012, the Building Division has won a series of new orders, including
the MCS head office building and the Shangri-La Hotel. The company also entered Turkey in the
same year when it was awarded the Gaziantep Hospital construction project, and also won a
high-rise construction project in Singapore, one of the company’s core markets.
The Civil Division entered Hong Kong in 2012 when it was awarded with the construction of a
subway line, gaining a major foothold in the race to win projects expected to come from the Hong
Kong infrastructure sector. In addition, the company has won two consecutive motorway
construction projects in Lusail, Qatar, and new orders for infrastructure projects are steadily
increasing as a result of Qatar’s selection as the host country for the 2022 FIFA World Cup. In
addition to the earnings related to the infrastructure projects in Qatar, the company plans to
expand its railway and metro construction business in the Middle East based on the successful
implementation of the Qatar project.
The Plant Division has successfully implemented the Qurayyah IPP construction project—the
world’s largest combined cycle gas-fired power plant in Saudi Arabia—and the EMAL combined
cycle power plant construction project in the United Arab Emirates. Supported by these impressive achievements, the company entered Malaysia for the first time in 2012 by winning the Prai
Power Plant construction project.
RHQ
Subsidiary
IPO
Office
28
6
RHQs, Subsidiaries, Offices
USA ECA
22
20
International Procurement Offices
21
24
23
1
2
3
4
5
6
7
8
9
10
11
12
UK
Algeria
Egypt
Russia
Kuwait
Qatar
Saudi Arabia
UAE
Turkey
India
Malaysia
Indonesia
13
14
15
16
17
18
19
20
21
22
23
24
Mongolia
China
Hong Kong
Singapore
Taiwan
Japan
Australia
USA ECA
USA SECAI
Canada
Chile
Brazil
Sustainability Report 2013
19
Evolving into a Total
Solution Provider
Projects by Value Chain Expansion
(More Full EPC and IPP/PPP projects)
Construction Only
40%
60%
2012
Expanding Business to Cover the Entire Value Chain
Samsung C&T Corporation Engineering & Construction Group is striving to perfect its competence in project implementation throughout every stage of a project from engineering to
procurement to construction. In addition, the company is continuing to enhance its business
capabilities across the entire value chain, from project development and feasibility studies to
O&M and investment, in order to offer a comprehensive suite of solutions to its customers. This
combined effort has contributed to the expansion of the company’s business into the independent power plant and healthcare PPP sectors.
Pursuit of Packaged Projects through the Integration of Product and
Business Competences
The company has a product portfolio consisting of 23 diverse products, through which it can
provide optimized solutions by integrating its business competences and its products. The
company is positioning itself to win mega-combined projects in the future, which includes a
mining package project that combines mining with plant, road/railway, port, and other transportation infrastructure, as well as an urban development project that includes a residential
facility, hospital, and shopping malls.
Total Solution Provider
Development
EPC
O&M
72%
F/S
Finance
Engineering Procurement Construction
28%
2010
(New Orders)
Innovation Activity
Q30! Innovation
In a company-wide effort to boost operational competence, the Engineering & Construction Group has
been pursuing Q30! Innovation, a proprietary initiative designed to achieve quantitative and qualitative improvements in operational competence to realize a quantum leap forward for the company. On
the basis of this integrated platform, the company is striving to boost its operational competences in
an attempt to accomplish its innovation goals across the value chain: optimizing its value proposition;
offering zero-error construction simulation during bidding; averaging a two-month reduction in the
construction schedule; innovating core construction technologies; and localizing resources.
Cost Innovation
The Engineering & Construction Group is innovating its cost-reduction activities that focus on the
project implementation stage. This new approach will expand its scope and focus on maximizing
profits even before a project starts by ensuring the development of a high-quality project. In support
of this, we are implementing a diverse range of cost-reduction activities, which include profit maximization efforts, such as the diversification of our business model and the identification of Value
Engineering (VE) items, as well as standardizing, sharing, and rationalizing of controllable expenses.
20
Samsung C&T Corporation
Operation & Maintenance
Overview
Towards a Sustainable Company
Bolstering Risk
Management
Creating Social Value
Performance Review
Appendix
Samsung C&T Corporation Engineering & Construction Group is managing its risks in a systematic manner throughout the company in an attempt to create value by ensuring project integrity.
The company has identified 43 key risks in five areas—strategy, environment, finance, compliance and operation—and has managed to tightly control them by studying past failures and
current business strategies.
Risk Management Process
Our risk management process is designed to identify, assess, respond to, monitor, report, and
re-identify the risks.
Improvement of the Risk Management Process
The Engineering & Construction Group is implementing an overhaul of risk management
systems and tools in order to improve the efficiency of the system. It starts with the consolidated management of information on marketing and project proposals and systematic
management of identified project opportunities. In an attempt to ensure project integrity, we are
also filtering out inappropriate projects at key stages of the decision-making process through
early verification of halt point.
Risk Management Process
Identification ㆍIdentify risk factors
ㆍRegister risks at Risk Registry
System
Assessment
ㆍAssess risk impact
ㆍDecide the order of priority of
risks
Response
ㆍSet up response directions to
risks
ㆍDesignate staff responsible
to risks and implement
improvement schemes
Monitoring & ㆍMonitoring including KRI
ㆍReport on results of
Reporting
responding to risks
ReㆍRe-identify additional risks
identification ㆍRegister new risks in the
system
In the event the company enters into a new territory or market, such as advanced countries with
tight restrictions in construction and developing countries, we perform an advanced risk analysis
through a third party. We are also being proactive about controlling risk by making it mandatory to
conduct a preliminary screening on the entire contract documents via Legal Access System (LAS).
Project Monitoring, Support, and Inspection
To protect against the possible risk factors the company may encounter during project implementation, the Engineering & Construction Group registers the entire risk management process,
from risk identification, assessment to response, in to the Risk Registry System, and monitoring.
In particular, we forecast expected costs and manage potential risks preemptively by monitoring
the construction process and costs through Earned Value Management (EVM). In an effort to
bolster competencies in overseas projects, the company’s local departments and business
divisions collaborated to support construction sites through an early establishment of an
enterprise-level MOB platform. Furthermore, we are fostering the early resolution of pending
projects through our Risk Management Committee.
Brand Power of the Engineering &
Construction Group
Samsung C&T Corporation Engineering & Construction Group
boasts industry-leading technologies, as well ashigh brand
recognition in every product group, including high-rise building,
roadway and bridge, port, power plant and housing. Our unrivaled technologies have been recognized globally with the
successful construction of Burj Khalifa in the United Arab
Emirates, plus the flawless opening of the Incheon Bridge, the
world’s fifth largest cable-stayed bridge.
Meanwhile, Raemian, the first branded apartments in Korea
that were introduced by Samsung C&T Corporation, is being
recognized as the country’s leading apartment brand by winning the prestigious National Customer Satisfaction Index
(NCSI) award for 16 consecutive years.*
* As of 2013.
Sustainability Report 2013
21
Creating Environmentally
Friendly Values
Our Business
Context
In the wake of the growing threat to our global climate, protecting the environment is quickly
becoming one of the most pressing issues of our time. Developed countries are making it mandatory
to reduce greenhouse gases while pushing ahead with green industry development policy as a new
growth engine. The strategy to cope with climate change has the potential to become a new competitive edge for companies, while the acquisition of eco-friendly technology will largely decide the
survival and growth of companies.
Our Key Risks and
Opportunities
International pacts to reduce energy use and ensure sustainable development, in combination with
the increasingly stringent environmental regulations enforced by individual countries, is having a
substantial impact on the construction industry as well. The government recently enacted the Law
on Supporting Green Building Construction and made it mandatory for public construction projects
to obtain a green building and building energy efficiency rating certifications. Changes in the natural
environment and the stringent environmental regulations due to climate change are also significantly impacting the business strategy of companies. Failure to respond preemptively to such
changes would lead to the deterioration of any competitive edge. It is, however, a great opportunity
to enhance the corporate value of companies responding to the changing situation proactively.
Creating Value
Samsung C&T Corporation is striving to satisfy its customers through the development of proprietary green technology, and to achieve the goal to identify and secure new growth engines. Technology
that helps improve energy efficiency, in particular, does not simply stop at responding to related
regulations. We must continue to further strengthen the market competences of our companies by
providing customers with the means to save on energy expenditures.
Bolstering R&D Infrastructure
R&D Investment
Percentage of Sales in C&E Group (Unit: %)
R&D Investment (Unit: KRW billion)
1.20
87
2010
1.37
2011
100
1.29
2012
115
Consistent Reinforcement of R&D Infrastructure
The Engineering & Construction Group is securing new technologies that would improve its technology competence by continuing to invest in R&D. The Group’s Construction Technology Center,
the cornerstone of our technological competitiveness, recently established the Green Energy
Team in an effort to embrace green technology as a main growth engine, through which we will
lead the development of related technologies. The company is also expanding its investment in
training the construction staff specialized in environmentally friendly technologies. Towards this
goal, lecturers certified by the USGBC are running in-house education programs to train and
nurture LEED GA/AP, who are environmentally friendly construction specialists. A total of 68
professionals, including four employees, were newly certified as the company’s LEED GA/AP
specialists in 2012. Armed with a diverse level of expertise ranging from marketing through
engineering, they are ready to provide the highest level of service necessary to fulfill the lofty
requirements of environmentally friendly standards worldwide.
Green Infrastructure Technology in Harmony with Nature
Use of Eco-friendly Building Materials
Samsung C&T Corporation strives to consume fewer natural resources, reduce greenhouse gas
emissions, and minimize the creation of harmful substances by using recycled or eco-friendly
materials. The company developed an environmentally friendly construction method by
employing Green Ball (GB) Slab that is made from an eco-friendly biomass plastic. The GB Slab
construction method was utilized during the second phase of the rehabilitation project in
Yonggang in 2012. With GB made of biomass plastic inserted between the top and bottom
reinforcement of a slab, the weight of the concrete has been reduced by 30%, and the structure,
vibration, and sound and heat insulation performance of a building has also been improved. The
lowered consumption of concrete and the use of eco-friendly plastic materials contributed to the
reduction of CO2 emissions and the amount of waste by 15%. The outstanding property of the
new technology in maximizing economy, structural rigidity, and eco-friendliness was recognized
in 2013 by being nominated and selected as a new construction technology by the Ministry of
Land, Infrastructure, and Transport.
22
Samsung C&T Corporation
Overview
Towards a Sustainable Company
1
Creating Social Value
Performance Review
Appendix
Eco-friendly Wastewater Treatment Technology
The reality of global climate change has revived social and economic awareness for the urgent
need to resolve water shortages and secure eco-friendly water resources. In order to gain an
advantage in the rapidly growing hydro business, the Engineering & Construction Group is creating an environmental infrastructure for wastewater treatment technologies. In particular, we are
developing an approach to wastewater treatment and water purification technology that
eliminates minute amounts of contaminants and improves the taste and smell of water as a
result of a combination of multiple technologies: separation of the film membrane; activated
carbon absorber; and advanced oxidization. In order to treat contaminated wastewater by
using biochemical methods, a massive amount of air must be injected into the wastewater,
which results in a high consumption of energy. The company has developed a wastewater
treatment technology with outstanding performance in conserving energy consumption
through a combined use of a membrane bioreactor (MBR) and anaerobic digestion process. The
technology is currently in the process of patent application.
Soil Remediation
Faced with the rapid growth of the contaminated soil remediation market, the company has
studied the ways to clean up pollution and remediate contaminated soil. We have developed
innovative remediation technologies for sites contaminated with heavy metals and petroleum
by employing a dispersing agent and magnetic separation technology, which separates soil and
heavy metal particles. This technology works by using a soil dispersant followed with selective
elimination of heavy metals by attracting them with a magnetic separator. Based upon such
technologies, we can reduce the investment in our decontamination facility by 20%, as compared
to the existing acid pickling method, while at the same time minimizing the use of toxic acid.
Home Performance Research Center
2
Improving Quality of Life with Technology
Technology to Minimize Building Noise
The company is developing and expanding the application of its technologies that would prevent
disputes over floor noise to promote a pleasant residential environment. The company uses
high-performance, shock-absorbing floor materials extensively throughout each unit to reduce
floor noise and has pioneered the use of low-noise plumbing and an improved installation
method to further reduce the noise transmitted along pipes. In 2012, the company opened the
Home Performance Research Center, the largest and most advanced research institute on home
performance in Korea, in an attempt to resolve sound issues related with the home, and to
develop related technologies to prevent them. The Home Performance Research Center is
striving to develop new construction technologies and material that can be utilized at commercial construction sites within two to three years. In particular, the Center is concentrating its
efforts on developing technologies that will enhance the safety and comfort of homes, which
include noise insulation, water-proofing, prevention of dew condensation, heat insulation, and
information technology.
Interview
“Samsung C&T Corporation should hold a leadership
position in spreading the new paradigm that considers
environmentally friendly design and construction
process.”
Diverse efforts have been made recently in the construction industry to design green
buildings with zero carbon emissions and consume no energy. Known “good-hearted”
buildings, this new generation of building design focuses more on improving the construction
process rather than on the building itself. I believe Samsung C&T Corporation’s pioneering
efforts should be accompanied with the following activities in order for the company to be
able to maintain sustainable growth. First, the company should develop a new business
model that focuses on quality rather than quantity. Second, the company will need to train
construction professionals capable of adapting to a business shifting from hardware to
software. Whereas the past paradigm in the construction industry was all about bricks, the
new paradigm is about how to properly stack them. I hope Samsung C&T Corporation
reinforces its leadership position within the industry by creating value in its intellectual
properties and by implementing process innovation.
Prof. Lee Seung Bok, Architectural Engineering,
Yonsei University
Sustainability Report 2013
23
Technology to Evaluate and Improve Building Occupancy
The Engineering & Construction Group strives to create a pleasant and comfortable living and
working environment for its customers. To realize this goal, the company is developing technologies that allow the provisioning of an optimized indoor environment by analyzing the
external environment of buildings, and by identifying the proper conditions for a comfortable
living environment for the occupants. In addition, the company is applying the results of a
number of in-depth studies, as well as technologies related to light, noise, and heat and air circulation for construction sites throughout the world. All the while, the company continues to
improve the satisfaction level of occupants and related technologies by performing Post
Occupancy Evaluation (POE) upon the completion of a construction project.
Net Zero Energy Building Prototype
New and
renewable
energy zone
Office
Solar energy
generation
Integral
building-type
solar energy
generation
Wind energy
generation
Environmentally Friendly Technology Minimizing Energy Consumption
Zero Energy Building Technology
The Engineering & Construction Group considers a variety of measures to reduce energy
consumption of a building and realizes the Net Zero Energy Building (NZEB) strategy through
proactive investment in environmentally friendly technologies. As part of this continued effort,
the company completed the construction of Green Tomorrow in 2009, the country’s first green
building equipped with self-sufficient energy support system. In 2012, we developed our own
optimized NZEB model through an energy performance assessment and by developing
technologies that created an energy-efficient exterior and mechanical and electrical systems,
in addition to utilizing renewable energy. As the technology is designed to adapt to climates not
only in Korea but that of other countries with various weather conditions, it will be applied to
a countless number of global projects, including the construction of the MCS head office building
in Mongolia.
K-MEG, Korean Smart Grid Project for
Energy Optimization
The Engineering & Construction Group is participating in the Korea Micro Energy Grid (K-MEG)* project
as a principal leading organization. As part of the project, the company rebuilt the Guro Digital Complex
as an energy-efficient test site, and is currently implementing another practical energy optimization
project in the Sihwa Industrial Complex. Details of the K-MEG test project in the Guro Digital Complex
include: a smart meter that allows tenant companies to monitor their electricity usage; mobile-based
smart energy management service; a cell unit building energy management system (Cell-BEMS); and
an emergency power generator that can be fed into the grid during peak hours. The new system allows
utility service providers to manage peak power usage of individual buildings by monitoring electricity
consumption of tenant companies in the complex, thereby helping the tenant companies to reduce their
electricity bills. During peak hours, the emergency power generator in each building is used to generate
power, which, combined with the electricity supplied from the main grid, will lower the overall use of
electricity supplied by power companies, thereby lowering the total amount of electricity consumed by
KRW25 million per year.**
Case Study
15%
Percentage of cost savings
through K-MEG
Current Application of Technology
ㆍCommissioning of test (diagnosis and simulation) and optimized design
ㆍUp to 2,500 Advanced Metering Infrastructure (AMI) installed to date
ㆍDevelopment of User Feedback Application and service operation (1,100 units in 11 buildings)
ㆍEstablishment of Building Energy Management System (BEMS)
ㆍEstablishment of an emergency power generator operation system (peak usage management, voluntary participation in demand response test)
ㆍMarket-linked billing system simulation
* K-MEG aims to develop new total energy solutions by constructing a Micro Energy System through which it will integrate various energy sources with cuttingedge IT for saving energy, responding to energy production, supply, and consumption. The solutions and technologies developed through K-MEG will allow us to
construct zero-energy buildings and self-sufficient cities. Samsung C&T Corporation is participating in the K-MEG project as a principal leading organization.
**Based on an assumption that a 450KW emergency power generator has generated electricity for up to 20 hours per year on the automatic parallel operation system.
In 2013, the company signed a business agreement with Sihwa Energy Grid Project and Sihwa Industrial Complex Corporation in order to advance the
project from a test commissioned by the government to a practical energy optimization with commercial potential.
As such, the incinerator operator will be able to exploit another income source from the sale of waste heat, whereas steam customers would be able to
save energy costs by up to 20% annually, as compared to LNG boilers currently in use, thereby accomplishing mutual energy optimization both in the
supply and demand side.
24
Samsung C&T Corporation
Overview
Towards a Sustainable Company
Creating Social Value
Performance Review
Appendix
Special Issue:
Responding to Climate Change
Mid- to Long-term Strategy and Roadmap on Greenhouse Gas Management
The Engineering & Construction Group has established a mid- and long-term greenhouse gas management strategy and roadmap based on
the demands of key stakeholders, including governments and enterprise credit evaluation agencies, in an attempt to manage greenhouse gas
emissions systematically. The company is proactively implementing more realistic measures tailored for the unique situation of the
construction industry on the basis of this roadmap.
1st Step (~2013. 12)
Refurbishing management framework
1.Develop estimation manual
2.Develop prediction program
3.Develop reductions guidelines
Build company management
standards designed in compliance
with government guidelines
2nd Step (~2014. 12)
Greenhouse
Gas
Management
Strategy
Predict on-site greenhouse gas
emissions for advance response
Meet the
Requirements of
a Reduction Goal
Management
System
Strengthening internal infrastructure
1.Enhance capabilities of a responsible manager
2.Develop integrated management system
3.Implement internal goal management system
3rd Step (~2015. 12)
Provide means to reduce greenhouse
gas emissions to meet reduction target
Advanced Integrated Management System to Control
Greenhouse Gas Emissions
Establishment of Standard Guidelines to Estimate Internal
Greenhouse Gas Emissions
The company has developed in-house emission estimation guidelines to provide a baseline for employees involved in the companywide greenhouse gas management initiative. Key responsible
managers and their respective roles have been clearly defined, while
procedures and standard forms with regard to the establishment of
greenhouse gas inventory and response to reduction goal management system will be provided as well.
Development of Program for Predicting Greenhouse Gas
Emissions at Sites
The company has developed a greenhouse gas emissions prediction
program through which the estimated amount of greenhouse gas
emissions at sites can be checked simply by entering status data. The
program allows us to anticipate if greenhouse gas emissions at each
construction site exceeds the given limit, thereby laying the groundwork for responding to our emissions goal management system.
Advancing management system
1.Achieve goal proposed by the government reduction goal
management system
2.Develop additional reduction method
3.Implement internal emission rights trading system
Signing of the MOU (Memorandum Of Understanding)
for Greenhouse Gas Emissions/Energy Consumption
Goal Management Pilot Project for the Construction
Industry
The Engineering & Construction Group participated in the signing of
the MOU for Greenhouse Gas Emissions/Energy Consumption Goal
Management Pilot Project on July 19, 2013, which was hosted by the
Ministry of Land, Infrastructure, and Transport and the Korea
Infrastructure Safety and Technology Corporation, plus eight other
construction companies in Korea.
The company plans to apply its greenhouse gas emissions prediction
program and emissions reduction guidelines, the first of its kind, and
participate in the pilot project.
The company will contribute to achieving the emissions reduction
goal imposed on the industry through this program, while actively
cooperating with the government in order to lay the groundwork for
the stable implementation of the Greenhouse Gas Emissions/
Energy Consumption Goal Management.
Development of Guidelines for Greenhouse Gas Emissions
Reduction During Construction
The company is helping to realize its greenhouse gas emissions
reduction goal at construction sites by developing emissions reduction methods that are immediately applicable. The emissions
reduction methods listed in the guidelines are designed so that site
managers can easily check results.
Sustainability Report 2013
25
Reinforcing Health, Safety, and
Environment Management
Our Business
Context
Health, Safety, and Environment (HSE) Management is emerging as one of most crucial management issues throughout the world. Safety management in the construction business, in particular, is
paramount and easily surpasses any issue regarding sound management. To address this global
trend, the government has also singled out workplace safety as one of the key administrative agenda
topics, pushing forward with increasingly stringent regulations on safety and disaster prevention.
Our Key Risks and
Opportunities
As safety incidents are being repeated due to lack of proper safety precautions and vigilance at
construction sites, resulting in the loss of human lives and property, the importance of workplace
safety cannot be stressed enough. Proactive implementation of HSE Management will help the
company prevent safety incidents and minimize costs in disaster handling while also eliminating
associated safety risks. Should such a glaring issue be neglected, the occurrence of safety incidents
will continue to reoccur, damaging our brand image and jeopardizing our business as a result of
financial compensation for the damage and restriction to participation in any new tender.
Creating Value
The Engineering & Construction Group is strengthening its safety management by forming a
dedicated safety management organization and developing safety equipment. The company is
eliminating various risks to minimize the rate of incidents by establishing the Zero Serious Disaster
system, which implements various activities to prevent safety incidents, including incident prevention modeling and risk assessment.
Strengthening HSE Management Infrastructure
Safety Management System
(Samsung OHSMS)
PLAN
Establishing consistent safety and health
policies and action plans
(corporate, business unit, worksites, and
partners)
DO
Thoroughly complying with working standards
and processes
(all employees, partners, and site workers)
CHECK
Executing audits and patrols for safety practices
ACTION
Continuously improving processes and working
environments
26
Samsung C&T Corporation
Systematic Management of HSE System
The Engineering & Construction Group manages construction sites by implementing health and
safety standards in a systematic way based on KOSHA 18001 and OHSAS 18001 certifications.
The company also prevents safety-related incidents through advance management of high-risk
works and risk assessment.
Strengthening Safety Management Organization
The Engineering & Construction Group is strengthening its safety management throughout its
construction sites in Korea and abroad by installing new equipment and safety audit measures
under the company-wide Q-HES management office, a CEO staff organization. The company has
also installed a safety management division in offices in the Middle East and South East Asia to
address the increase of new orders in overseas markets. In addition, the company is strengthening the infrastructure for global safety management by hiring safety management professionals
with matching capabilities as required by the global market. We are also building a database on
HSE law and system per country starting from the selection of an HSE manager to the management of the professional talent pool.
Hiring and Fostering High-Quality Professionals
By building highly professional and sophisticated management capabilities, we are performing
practical safety incident prevention activities centered on construction sites, making them a
Overview
Towards a Sustainable Company
Creating Social Value
Performance Review
Appendix
safer place to work. We have increased the number of health and safety experts on construction
sites, and more on-site safety managers are being deployed back into the general work force as
the company is keenly aware of the importance of HSE management on sites.
Safety Incident Prevention Activities
Enhancing Employees’ Health and Safety Awareness
We overhauled and expanded the scope of rewards and compensation for the excellence in HSE
management in an attempt to encourage employees’ participation in HSE activities.
Simultaneously, we are also running training programs on health and safety matters on a
regular basis to prevent incidents and raise the safety and health consciousness of workers at
construction sites. We developed a wide range of visually focused educational tools, including
training videos, and established our safety incident experience program to increase worker
understanding, rather than educating them solely on safety theory. As a result, workers on every
site of the Samsung C&T Corporation Engineering & Construction Group will receive the same
level of safety and health training and secure a high level of safety and health consciousness
through our high-quality training programs.
Management of On-site Incident Prevention Model
We introduced the Permit-to-Work system and qualification acquisition system for responsible
managers to eliminate potential incidents at construction sites in advance. Permit-to-Work is a
system that requires workers to be granted permission prior to beginning any task. With this
system, workers will minimize potential risks by analyzing and identifying the risk associated
with each procedure before they begin. For tasks with high risk potential, we dispatch qualified
task managers in order to minimize incidents and break the cycle that may transfer risk to the
next stage. We also strive to improve overall work processes in which every potential risk is
assessed with risk assessment templates.
In particular, we are requiring site managers to share risk factors with other staff via the Site Tool
Box Meeting (Dynamic Risk Assessment), thereby promoting a safe work environment.
Advance Management of Key Hazardous Work and Risk Assessment
We are preventing serious disasters by managing key hazardous work, and performing risk
assessments during project implementation. We implement safety measures by conducting
risk assessments on key hazardous work selected through historical analysis on past incidents.
10 Safety Precautions for Preventing Safety
Incidents on Sites
Case Study
In an effort to prevent various safety incidents on the constructions sites, the Engineering &
Construction Group proposed the 10 Safety Precautions for Preventing Safety Incidents in Sites,
where we specified key safety measures that site staff is required to comply with. The 10 Safety
Precautions, which were selected through a historical analysis on the safety incidents that occurred
over the past three years, consist of five dos and don’ts.
All staff members are reminded of the 10 Safety Precautions every morning before arriving at their
respective construction sites, and an extraordinary level of concentrated education is focused on
those workers who are put on the site for the first time. In addition, the company holds special rallies
and events attended by head office executives and business partners in order to minimize the rate of
recurring safety incidents and encourage compliance of safety precautions.
Five Dos
Five Don’ts
ㆍAttend the morning safety session
ㆍUse designated passageways
ㆍUse a safety belt for high elevations
ㆍUse specified work platforms
ㆍClear and organize the work site at the
start and end of every day
ㆍDon’t remove or disarm safety facilities or safety
devices
ㆍDon’t enter restricted areas
ㆍDon’t board lifting devices
ㆍDon’t perform work on the upper and lower
platforms simultaneously
ㆍDon’t use unauthorized fire device/equipment
Sustainability Report 2013
27
Promoting Active Communication
Samsung C&T Corporation oversees the running of the Employee-Management Consultative
Board and Industrial Health and Safety Committee, both of which address the key issues on
health and safety, as well as ways for improvement. In addition, each construction site runs its
own Industrial Health and Safety Committee consisting of 11 members—five representing
management and the representing labor, excluding the chairperson. The committee dealt with a
host of issues in 2012 including the prevention of industrial disaster, the execution of an evacuation plan in the event of a disaster, and the amendment of a risk assessment procedure. It also
performed a joint walk-through industrial safety inspection on construction sites, with a team
composed of safety professionals representing management and labor. The company has also
encouraged participation of business partners in the Industrial Health and Safety Committee,
thereby promoting proactive communication for safer construction sites.
ㆍCampaign for Strengthening Site Safety
We ran the Talk, Play, Check campaign for better communication, action and oversight in
2012, followed by the Individual Safety Mission Statement in 2013, which was designed to
promote safety awareness of all employees and encourage them to put them to put theory
into practice.
Strengthening Construction Equipment Safety Management
Any slight misuse of construction equipment on site or an error in manipulating them could
quickly lead to a safety incident. As many projects on sites usually involve the use of heavy
equipment, the site safety management scheme should always include a section on equipment
safety management. Samsung C&T Corporation performs on-site functional inspections and
maintenance support for newly deployed equipment by assigning an equipment master for each
site. The head-office organization ensures the quality of the company’s equipment safety management by establishing and modifying equipment usage guidelines and inspects the process
management status, performs audits, and develops educational programs and materials.
ㆍStrengthening Support System
* Safety Management Model & Manuals
Through support from the head office, the company is improving its construction efficiency by
ensuring the reliability of the equipment used on construction sites by examining seven key
hazardous equipment indicators. In an effort to eliminate the possibility of accidents or physical harm caused by construction equipment, the company developed Pre Call, a safety device
consisting of a sensor, transmitter, and alarm which is now used on all construction sites.
ㆍImproving Educational System
In a bid to minimize the rate of incident involving construction equipment, the company began
educating 1,500 employees every year starting in February of 2012 on equipment safety. The
program includes an educational session based on equipment per theme, an incident recreation video, and an assembly instruction video, which are then distributed to all sites to
prevent incidents involving construction equipment. The company performs on-site tours of
the sites to perform safety education, especially on some vulnerable equipment including
batching plant, pneumatic pressure pump, gondola, and offshore equipment.
28
Samsung C&T Corporation
Overview
Towards a Sustainable Company
Creating Social Value
Performance Review
Appendix
Special Issue:
Safety Management in Global Sites
54
Months
Zero Accident/Zero Disaster
6
Experience Zones
Safety Management Certificate Award Ceremony (Marina MCE Site)
Safety Training Center (Qatar Site)
Awarding of Safety Management Official Certificate at
the Marina MCE Site in Singapore
Opening of Safety Training Center at the Qatar Site
The Engineering & Construction Group achieved zero disasters during 10 million man-hours at the Marina Coastal Expressway (MCE)
483 Site in Singapore, and was awarded an official certificate from
the Land Transportation Agency (LTA). This was the first such record
ever realized by any company over a series of coastal expressway
projects commissioned by the LTA, and was achieved by maintaining
zero incidents and zero disasters for up to four years and six months
since the opening of the site in November 2008.
The Marina MCE 483 Site is an underground construction project
consisting of a 950m long underground expressway and one ventilation building on reclaimed land, which required an array of
sophisticated construction techniques and project management
capabilities, including soft ground treatment. However, we were
able to achieve the highest level of performance due to our ability to
develop advanced safety directives whenever required, and instructing site workers to check their respective work points, which were
presented as a statistical data table.
What’s more, the excellence of our safety management capabilities
has been recognized elsewhere: the company won the grand prize at
the ASAC 2011 Award, hosted by the LTA, for its excellence in safety
management performance at the DTL C908 Site, a section of the
subway construction project in Singapore.
The Engineering & Construction Group opened the Safety Training
Center at the Qatar construction site, where site workers can experience diverse types of simulated incidents to prevent them in the
future.
The center consists of six experience zones where trainees can
experience a variety of safety incidents that can happen at a global
roadway construction site. The company has offered education
sessions to over 800 local construction staff assigned in the CP5B
Site, and is extending the program to new workers as well.
Safety Incident Experience Zone
Free fall while wearing
safety belt
Crash experience
while wearing a safety
helmet
The use of fire
extinguishers and
fire evacuation drills
Safety experience on
work platforms,
ladders, or improvised
passages
Safety experience while
lifting and on mobile
scaffolding
Electricity safety
experience
Sustainability Report 2013
29
Trading
Our Future
Samsung C&T Corporation Trading & Investment Group is strengthening its
global business competence by restructuring businesses based on its trading
and organizing business model. The environmentally friendly values created
from our business operations are being transferred to our stakeholders.
Sales (Unit: KRW billion, 2012)
Domestic
Overseas
16,383
2010
2011
2012
2,636
3,224
7,889
Share of Overseas Business (Unit: %, 2012)
Domestic
Overseas
75.0
77.3
25.0
22.7
2010
2011
11,008
75.7
3,985
12,398
24.3
2012
30
Samsung C&T Corporation
Overview
Towards a Sustainable Company
Our Business
Model
Creating Social Value
Performance Review
Appendix
Who we are
Founded in 1938 as the parent company of Samsung Group, Samsung C&T Corporation has
pioneered the nation’s international sales and trading businesses since it was registered as the
first general trading company in Korea in 1975. The Trading & Investment Group is creating
synergy by combining its conventional trading business model with its core competencies: vast
global network, business information, unparalleled marketing power, and sound financing
capabilities. Based on its redefined competencies in trading and organizing, the Group is poised
to capitalize on a diverse number of business opportunities.
The Trading & Investment Group intends to create value in the global market by focusing its
operational resources on trading and organizing businesses. Towards this end, we are responding to the evolving management environment ridden with increasing uncertainty by installing a
more sophisticated risk management system that is capable of specializing to distinct business
areas, and strengthening its global operation platform. In addition, we are advancing our
business expertise by fostering trading and organizing capabilities, while at the same time
strengthening our core competencies by securing and training our top employees who are
capable of leading our businesses proactively. The combination of these efforts will allow us to
achieve stable growth and propel us to become one of the top 10 global trading companies.
Sales in Trading & Investment Group (Unit: %, 2012)
Industrial Material Trading
Natural Resource Trading
23
3
Plant Organizing
2012
74
What we do
Trading: Chemicals & Industrial Materials, Steel, Energy & Minerals, and Living Industrial
The Trading & Investment Group is engaged in diverse businesses, including chemicals, steel,
natural resources, and living industrial materials. We are striving to develop a number of new
promising materials and sales channels to trade core industrial materials, such as steel and
chemicals, and promote trading in living industrial materials. We are also focusing on establishing a stable supply base by expanding our sales network and entering into off-take agreements
to secure such materials early on. To increase our global trading competitiveness, we are
expanding our business portfolio to include storage, transport, and treatment sectors.
With regard to our natural resources trading projects, the Trading & Investment Group has
endeavored to secure and supply natural resources, which are the foundation for the nation’s
industrial development. In particular, coal and copper trading was identified as an emerging
business of the Trading & Investment Group, in which we have heavily invested our managerial
resources.
Organizing: Plant & Machinery and Green Energy
As for our organizing business, we have teamed up with partners from around the world to
expand our reach into the plant business, which includes power stations, plants, ships, and
Economic Development Cooperation Fund (EDCF) projects, as well as renewable energy and
photovoltaic parts. In addition to consolidating the foundation to develop profitable ships and
successfully execute EDCF projects, we will continue to expand our business portfolio, which
includes the thermal power plant sector where we possess a competitive edge.
In the field of green energy, we have built a complete value chain that spans from engaging in the
development of a wind-solar power generation complex to sourcing and trading related parts
and materials to cement our leadership position in the promising renewable energy business.
Sustainability Report 2013
31
Samsung C&T Corporation Trading & Investment Group continually assesses the risks and
opportunities that accompany its business activities by closely monitoring the ever-changing
global market landscape. These risks and opportunities are then accounted for in our general
business management and business restructuring, through which we create growth opportunities for the company and value for our stakeholders.
Key Risks and
Opportunities
Our Issues
Continuous innovation in
our business structure
Development of risk
management as a core
competence
Our Business Context
ㆍRapidly changing business
environment impacting our
trading business, including
external economic situation
ㆍIncreasing volatility due to
ㆍShifting economic center of financialization of commodity
gravity from advanced to emerging
market
market, as a result of the U.S. ㆍExpanding scope of risks,
fiscal cliff and growing European
such as local law issues, due
fiscal crisis
to the globalization of
business areas
Key Risks from Our
Business Context
ㆍGrowing risk of contraction in
trading volume and profits, due
to the global economic
downturn and increasing
protectionism in global trading
ㆍEconomic downturn in big
markets and the increasing
uncertainty in other markets
ㆍDifficulty in establishing
hedging strategy due to
increased volatility and
potential limitation in
business expansion, arising
from protection of local
businesses
ㆍContinuing imbalance between
supply and demand may apply
downward pressure on global
commodities market and
exacerbate price-cut competition
Opportunities from
Key Risks
ㆍFocus on expanding business
opportunities and analyzing
risks and potential responses
across active business projects,
especially in areas where the
company has a strong presence
ㆍCapability of analyzing local
risks due to a rich history in
trading and the overall
business experience of
Samsung C&T Corporation
ㆍFocus on identifying needs in new
markets and trading accounts to
utilize those opportunities for
trading and supplier diversification
Our Business Considering
Opportunities
ㆍDevelop business competencies ㆍManage investment risks by ㆍFocus on cost reduction and
through strengthening
assessing the top eight risks
diversification of business districts
capabilities
in business implementation
by developing new suppliers,
ㆍEstablish the foundation for
ㆍMinimize loss and maximize
buyers, and markets
business structure innovation
profits by accumulating data ㆍBuild up long-term sales
by drawing up a competency
on local risks and aggregating
relationship with end customers
enhancement plan
product volatility into a
and blue chip suppliers
database
ㆍMaximize business synergy with
ㆍEstablish an integrated global risk
the expansion of our value chain
management system based on
business expertise
Creating Value from
Our Business
ㆍCreate added value by securing
reliable supply network and
buyers
ㆍLay the groundwork for future
sales expansion
Reporting Page
32
35
Samsung C&T Corporation
Development of global
competencies
ㆍConsistently deliver profits to ㆍGrow as a global trading company
our stakeholders through
by enhancing competency across
systematic risk management
supply and sales side
ㆍPromote a positive image of
the company in the local
community by managing social
and environmental risks
36
38-39
Overview
Towards a Sustainable Company
Entry into environmentally
friendly businesses
Creating Social Value
CLO that promotes specialization
Performance Review
Appendix
Influence on local culture and society
ㆍIncreasing short-term uncertainties in the ㆍGrowing need for talent management as a result ㆍMost businesses are realizing overseas
renewable energy policies of key countries
of expansion into global businesses
opportunities due to the expansion of global
due to global financial crisis
ㆍGrowing need to accumulate knowledge and
networks
ㆍRenewable energy forecasted to become a
information based on industry, technology, and
ㆍUnderstanding the nuances of every market
USD180 billion industry by 2020
management in order to advance our business
the company operates within is key in
expertise and achieve our company goal
creating a growing stream of new business
value
ㆍDeepening imbalance between supply and ㆍLack of business professionals capable of
demand due to decreasing demand for
integrating elements and related expertise
green businesses, expanding supply, and ㆍKnowledge and information of individual
growing uncertainty
employees is not disseminated throughout the
ㆍWidespread deterioration of profitability of
company
solar and wind power companies
ㆍImportance of local expertise as
government policy, technology, and
economic feasibility differ by region
ㆍSocially acceptable practices differ greatly by
country with growing interest by NGOs in
each country on the management of local
subsidiaries
ㆍReduce operational costs and improve the ㆍExpand the development potential of individuals ㆍComply with local and international laws, as
profitability as a developer due to the
through comprehensive personal competence
well as regulations
falling price of EPC
enhancement program
ㆍBoost our corporate image through CSR
ㆍOperate businesses through our “Select
ㆍKnowledge sharing and dissemination across
activities and cultural exchange programs
and Focus” strategy
the company through voluntary learning
within local markets
ㆍPursue an asset-light business model in
ㆍCreate better business opportunities by
the short-term to minimize investments
improving relationships with the local
government and community
ㆍPlace a priority on completing the project
in Ontario, Canada
ㆍStabilize our photovoltaic projects early
in Europe
ㆍBoost sales of modules targeting new
markets
ㆍStrengthen CLO support structure by providing
high-quality knowledge data and learning tools
ㆍEncourage advanced studies through CLO by
providing experts and learning material
ㆍProvide opportunities to benchmark companies
in related businesses, and participate in related
seminars
ㆍShare CLO model cases
ㆍPrepare and implement observance of local
laws and codes
ㆍReinforce education to enhance
understanding of local cultures, including
assignments overseas and a regional
specialist program
ㆍUse local talents through a localization
strategy and expand trading volume by
tightening business relationships
ㆍBoost image as a creator of global value by
producing clean energy and reducing
greenhouse gases on a long-term basis
ㆍSupply the energy required to improve the
quality of life for local community
members
ㆍDevelop individual and company-wide expertise
ㆍPromote communication via offline and online
channels to improve synergy
ㆍBuild knowledge assets by sharing experiences
and expertise
ㆍEnhance capabilities to implement strategies
ㆍCreate jobs through direct employment
ㆍContribute to local economies by purchasing
a variety of local goods, and by paying taxes
ㆍContribute to the growth of local economies
by helping to construct public facilities and
infrastructure, including power plants and
hospitals
40-41
37
42-43
Sustainability Report 2013
33
Vision and
Strategy
Samsung C&T Corporation Trading & Investment Group strives to strengthen its global trading
expertise by adopting a strategy of “Select and Focus” in a bid to achieve its goal of becoming a
Top 10 Global Trading Company. The company intends to develop businesses that would ensure
stable growth in the future based on its core business competencies. We are reenergizing
ourselves to deliver the highest level of value to all of our stakeholders, including customers,
employees, local communities, and more.
Top10
Management
Goal
Global Trading Company
(3rd in Chemicals, 5th in Steel,
10th in Coal and Copper)
Pre-tax Profit
700
20%
ROE
2020
(Unit: KRW billion)
Management
Direction
2015: “Select and Focus” while
Strengthening Business
Expertise in Trading
2020: Pursue Stable Growth
Based on Our
Core Competencies
The Trading & Investment Group is determined to strengthen its expertise in four key areas to
bolster its global competencies in the trading and organizing business, as well as to establish a
success model through our “Select and Focus” strategy.
Strengthening Four Core Competencies
Establish integrated
global risk management
system
34
Samsung C&T Corporation
Enhance business
capability by
strengthening
business functions
Secure and
develop core
talents
Establish global
operation system
Overview
Towards a Sustainable Company
Continuous Innovation
in Our Business
Structure
Creating Social Value
Performance Review
Appendix
Business Restructuring
By constantly innovating its business structure, the Trading & Investment Group is able to
quickly respond to changes in the business environment, as well as establish a platform that will
enable stable growth well into the future. The existing business model that was integrated
across the different business groups was restructured and consolidated into the trading and
organizing business. In the revamped business structure, we are prioritizing the distribution of
resources across a number of identified businesses in each key area for a more efficient
utilization of management resources based on the principle of “Select and Focus.”
The supporting platform for the aforementioned innovation in business structure include four
core competencies; 1) establishing an integrated global risk management system; 2) enhancing
business capabilities by strengthening business functions; 3) securing and developing core
talents; and 4) establishing a global operation system, through which we were able to lay the
groundwork for innovating our business structure. The company will push forward with a sound
and stable growth in the future by strengthening its competence in trading, the company’s core
business.
Business Structure Reorganization in the Trading & Investment Group
Organizing
Energy/
Environment
Plant
Resource
3 Key
Business
Clusters
Industrial
Materials
Interview
Dr. Kim Jong Hun,
Samsung Economic Research Institute
Our Business
Model
Trading
Industrial
Materials/Natural
Resource
“The Trading & Investment Group is being reborn as a
dedicated trading company with the adoption of its ‘Select
and Focus’ strategy.”
The Trading & Investment Group has been seeking to change its business structure by
adopting a trading business model that is based on its “Select and Focus” strategy. The
company revamped its business structure in 2013 from its previous model, that was based
on a system within the various business divisions, to one that focuses on the trading and
organizing business. The company is strengthening its core businesses by adopting a more
flexible resource distribution model orchestrated by the integrated control organization,
thereby rejecting the old model with an unclear priority in resource distribution. Moreover
the company is perfecting its business expertise in trading and organizing based on the
asset-light principle: a new management directive built upon key human resources and an
expertise in business implementation. As such, I believe the company will not only be able to
grow in a sustainable manner, but also create a synergy at the Samsung Group level
through its inherent trading functions such as business planning, intelligence gathering and
talent scouting, and organizing. If the company can manage risks based on the inherent
trust in the organization from ground up, I am convinced it will be able to sustain stable
growth in profits due to a stable profit base for the future.
Sustainability Report 2013
35
Development of
Risk Management
as a Core Competence
Strengthening Risk Management System
The Trading & Investment Group expanded the infrastructure that manages risk by building a
risk management system, Enterprise Risk Management System (ERMS), and reestablishing
related regulations from 2007, with a focus on five key areas: Rules & Processes; People &
Organization; Systems; Monitoring; and Risk Culture. My Risk Care Week, a program established
in 2007, empowers employees to monitor and respond to the company’s risk, while a separate
education program on risk management is offered to company executives. Since 2011, the CEO
has conducted risk management education courses in person to help raise its awareness among
all employees. In the future, we plan to integrate and upgrade our risk management system to
reflect the professional characteristics of specific businesses, and by doing so, make our risk
management system one of the core capabilities of the Trading & Investment Group.
Investment Risk Management
The Trading & Investment Group monitors and manages risk in a comprehensive and effective
manner by focusing on eight major risk factors when evaluating new investment items. The
company is formulating an investment strategy and investment limit on a mid- and long-term
basis. Based on our “Select and Focus” strategy, we maintain appropriate investment limits and
portfolios to secure sound financial stability. We are adjusting investment limits on five key
businesses—coal, copper, power generation/plant, grain, and fertilizer—within company’s
internal reserves while making investments based on our financial stability and our asset-light
strategy. Furthermore, we have our own in-house process for a more effective approach toward
investment risk management: deliberation; implementation (investment process management);
and follow-up (evaluation).
ㆍDeliberation: overall agreement with company strategy, feasibility and risk analysis; use of
deliberation check-list which was designed based on past experiences
ㆍImplementation: implementation of requirements for investment approval; investment
schedule management
ㆍFollow-up: evaluation of investment performance and identification of outstanding issues;
preparation of appropriate measures; execute EXIT (asset recycle) strategy
Eight Risk Factors to be Considered for New Investments
36
Business
Failure to meet project goal due to inappropriate business strategy, business structure or investment decision making
Market
Market price volatility of commodities, such as metals and petrochemicals, as well as exchange rates and derivative
products
Partner
Risk factors related to contract and transaction structure with suppliers, customers or business partners, vendors; may
include default on contract agreement or risk of accidental debt due to external factors such as bankruptcy of
customers, drop in credit rating due to deteriorating financial status, or price hike of raw materials
Operation
Risk factors related to the lack of effectiveness or failure to manage the internal process, manpower and system with
regard to internal functions, including sales, procurement, inventory, logistics, manufacturing, management, and
project sales
Industry
Risks from the changing structural environment of the industry due to a shift in the industry lifecycle, value chain,
competitors, and substitution; direct risk due to the failure to manage corporate and brand image among customers
and the mismanagement of the local community
Compliance
Risks from the failure to comply with laws and regulations on trading, tax, and accounting wherever the company
operates in, as well as internal regulations on sales, fraud, or irregularity
Country
Indirect or direct risks that arise from uncertainty and change in the political environment (e.g., policies and regulations),
macroeconomic policies, or economic situation (e.g., inflation and depression) in the country in which the company
operates
Event
Risk of accidents involving property or human lives due to natural disasters such as earthquakes and tsunamis, as well
as explosions, fire, or environmental contamination, in addition to risks from global environmental changes including
financial crisis or climate change
Samsung C&T Corporation
Overview
Towards a Sustainable Company
CLO that Promotes
Specialization
Creating Social Value
Performance Review
Appendix
Creative Learning Organization (CLO)
A successful trading business requires a number of indispensable qualities: inexorable expansion
of its value chain and exploration into new businesses; access to in-depth knowledge of
unexplored areas; and a vision into the future of the industry. To meet these challenges, the
Trading & Investment Group formed the Creative Learning Organization (CLO) as part of its
management innovation activities. The CLO is a unique learning organization where employees
gain the necessary knowledge and information on industries, technology, and management in a
systematic approach and can be transformed into intellectual assets. The CLO also helps to
enhance job skills and facilitates communication among all employees, thereby improving the
synergy within every business operation.
Four Directions for CLO Operation
Deepening
professionalism
Promoting
communication
Systematic
implementation of the
CLO in order to nurture
the top employees by
business area
Active communication
via online and office
channels, while
creating synergy
Enhancing strategy
implementation
capabilities
Turning knowledge into
intellectual assets
Expand production of fact
books and white papers
that facilitate the sharing
of experiences and
expertise of project
implementation
Maintain close ties
between strategic tasks
and CLO activities to
realize mid- and longterm vision
Strengthening CLO Activities
CLO System at a Glance
ㆍConduct regular CLO sessions
ㆍS elect CLO coordinators by business
division
ㆍPresent CLO “best practices”
ㆍPublish model cases on a regular basis
ㆍReflect CLO results in executive
performance evaluation
The Trading & Investment Group is strengthening CLO activities to realize its goal: deepening
professionalism and promoting communication to secure core competitiveness. During this
process, we are implementing learning sessions, offline meetings, as well as systematizing and
organizing select subject matters and proposing practical applications of study results. We are
also evaluating CLO performance through frequent check points and completion reporting.
In addition, we are bolstering our CLO support system by providing premium knowledge and
learning tools, as well as one-on-one support to key CLO groups. The support system provides
subject matter experts and teaching materials, which enable in-depth learning through CLO
sessions.
The Trading & Investment Group shares the outcomes of CLO
activities company-wide, while actively applying its research findings to the practical management of the company. In 2012, CLO
activity survey, item-technology-market analysis topped the list,
followed by studies on the value chain and business models, and
benchmarking models. In all, a total of 25 CLO papers were published, including a study on EPC price by power generation facility
type and O&M. A CLO study on modeling, such as the development
of price prediction by analyzing factors influencing thread price, is
helping the company reduce risks and cut costs. In addition, a total
of 11 white papers were published, which included success stories
such as palm farming and Norte II, along with an ongoing project in
Ontario, Canada.
Topics on: deepening professionalism, strategy implementation
CLO Indicators in 2012
30%
Item-technologymarket analysis (25)
19%
Studies on V/C & BM
Studies on
benchmarking models
Study on modeling
14%
10%
Demand, price,
finance prediction model
27%
Others
Success
Case (6)
Failure
Case (3)
Ongoing
Case (2)
11 whitepapers
Sustainability Report 2013
37
Development of Global
Competencies
Strengthening Our Global Network
The Trading & Investment Group is actively implementing diverse business operations in the
areas of trading and organizing with 102 overseas offices spanning 48 countries.
In a bid to explore and secure sustainable growth engines for the future, the company is striving
to capitalize upon business opportunities in emerging markets, as well as expanding its current
sales network in existing markets. Towards this end, we are reorganizing our global network by
expanding the responsibility of local management by hiring top global talents, while also deploying our top-performing employees throughout our offices within the emerging markets.
Furthermore, we are strengthening the quality of our human resources and boosting morale by
widening education opportunities for the global workforce and bolstering our welfare support
system to resident employees in remote areas.
Global Project Organizer
The Trading & Investment Group is perfecting a success model for its thermal power plant
project based on the profits generated by the ships and Economic Development Cooperation
Fund (EDCF) projects. The Balkhash Coal-fired Thermal Power Plant in Kazakhstan, which began
construction in 2012, is the first independent power plant (IPP) in the country. The project is
significant in that the Korean consortium composed of Samsung C&T Corporation and KEPCO
is leading the project through a combination of comprehensive capabilities from investing,
financing, constructing to O&M. Furthermore, the Korean consortium will build the plant as a
large-scale, high-tech, high-pressure power plant with the application of super-critical pressure
technology. It will be responsible for the ownership and operation of the plant for twenty years
until it hands over the plant to the Kazakhstan government in a Build-Own-Operate-Transfer
(BOOT) scheme.
The Trading & Investment Group has also been participating in an LNG development project in
Oman and Qatar. The company expanded its involvement in the LNG business recently by
participating in the construction and operation of an LNG receiving terminal in Manzanillo,
Mexico, thereby completing its LNG value chain from development to delivery and distribution.
This comprehensive value chain provides us with a valuable opportunity to accumulate incremental business expertise and experience. We will operate and manage the project for up to
twenty years from the start of the full-scale commercial operation in May 2012.
Headquarters
RHQ
Overseas Office
New Delhi Subsidiary
Samsung C&T Headquarters
Tokyo Subsidiary
China RHQ
EuropeㆍAfrica & Middle East RHQ
38
Samsung C&T Corporation
Southeast Asia & Oceania RHQ
Overview
Towards a Sustainable Company
Creating Social Value
Performance Review
Appendix
Overseas Natural Resource Business
The Trading & Investment Group is pushing to establish a coal and copper trading system in the
global natural resource business area, while stabilizing profitable opportunities of existing businesses within oil, gas, and mining on and offshore of the United States.
We made great strides to improve our management performance through our natural resource
business, such as the value enhancement of assets and the establishment of a global network
with our blue chip business partners. The achievement is significant in that we are helping to
boost Korea’s development of resources in an increasingly competitive marketplace.
Establishment of a Simultaneous Global Communication System
The Trading & Investment Group is also implementing diverse communication activities in an
effort to connect 102 overseas offices spread across 48 countries, enabling us to share the
company’s management policies and corporate culture. Key announcements, management
policies, and company news are shared via SINGLE, Samsung Group’s intranet, while our
Corporate Communication team produces and distributes news on the company and other
feature stories via internal broadcasting. In addition, we are also pushing forward with other
diverse global communication activities through CommZone, an integrated internal media
platform, in which CEO messages, management policies, and other useful information on
company life are shared immediately.
Americas RHQ
48
102
Countries
Overseas Offices
Europe
London
Paris
Milan
Madrid
Prague
Warsaw
Budapest
Sofia
Bucharest
Istanbul
Moscow
Kiev
Krasnoyarsk
Almaty
POSS/SLPC
OTELINOX
KSI
Middle East & Africa
Dubai
Tehran
Mumbai
Riyadh
Alger
Accra
Luanda
Nairobi
Johannesburg
Asia Pacific
Singapore
Manila
Ho Chi Min
Hanoi
Bangkok
Kuala Lumpur
Yangon
Sydney
S.C.T.V
S&G BIOFUEL
MSSC SDN
S-PRINT
Osaka
Takasaki
Matsumoto
MYODO METAL
Beijing
Qingdao
Shenzhen
Tianjin
Guangzhou
Hong Kong
Taipei
ERDSAM
NINGXIA KNOC
POSS-SZPC
SSPH
GXS
Americas
Los Angeles
Houston
Mexico City
Sao Paulo
Panama
Bogota
Lima
Santiago
SRE
SONG
MDI
QSSC
KMS KST
Sustainability Report 2013
39
Entry into Environmentally
Friendly Businesses
Our Business
Context
Our Key Risks &
Opportunities
Creating Value
In the wake of the global financial crisis, the short-term uncertainties of renewable energy policies of
leading countries are increasing. Despite such growing uncertainties, the global renewable energy
sector is forecasted to become an USD180 billion industry by 2020.
Whereas market uncertainty is growing and demand is decreasing due to an economic contraction,
the supply-demand imbalance continues to worsen as a result of excessive investments made during a booming economy. Solar and wind power companies around the world are struggling to remain
in business due to the deterioration of overall profitability.
However, the Trading & Investment Group is expecting that developers of renewable energy projects
will experience a drop in project costs and an increase in profitability due to the decreasing price of
EPC contracts. In the wake of such an event, we are operating our renewable energy business based
on our “Select and Focus” strategy, while also strengthening our basic capabilities.
Green energy projects enable us to create economic value, while also boosting our reputation as an
environmentally conscious company that helps to improve the local communities in which we operate in. We are able to do this by first promoting an image of a company that creates global value
through the production of clean energy and reduction of carbon emission rights in the near- and
long-term. We are also helping to supply the energy required to improve the quality of life of the local
community.
Development of Renewable Energy
Ontario Project
Power generation capacity in each phase
Total capacity: 1,369MW
520MW
+
549MW
+
300MW
Environmental issues such as climate change, volatility of international oil prices, and the
development of renewable energy to minimize the depletion of natural resources are quickly
becoming a major global issue. Solar and wind power, in particular, are recognized as the two
most promising sources of green energy. The Trading & Investment Group is pursuing its renewable energy initiative within the highly promising solar and wind power business, solidifying the
company’s leadership position in the industry.
We are currently implementing a project in which the company is constructing and operating the
world’s largest solar and wind power cluster with total power capacity of 1,369MW in Ontario,
Canada. The USD5 billion project will be completed over the course of three phases.
Phase 1
40
Phase 2
Phase 3
Samsung C&T Corporation
The first phase of Ontario project is to construct a cluster with a power generation capacity of
520MW in Haldimand and the Chatam-Kent area, where the ground-breaking ceremony was
held in 2013. The second phase of the project involves the construction of a cluster with a power
generation capacity of 549MW in Kingston, east of Toronto and north of Bruce. The company
plans to complete this largest cluster of wind and solar power in North America by working
closely with the Government of Ontario and its partners.
Overview
Towards a Sustainable Company
Creating Social Value
Performance Review
Appendix
Samsung C&T Corporation already completed the construction of Soluchae Jindo in 2008, a 3MW
solar power plant, and successfully started the commercial operation of the plant, thereby deepening its expertise within this sector. The company has also accumulated other experiences
along the solar energy value chain, including the sourcing and trading of polysilicon, saw wire,
and photovoltaic modules.
Palm Oil Project
1
2
The interest in bio-energy continues to increase as it is has been identified as an effective means
to reduce the emission of greenhouse gases and as an alternative resource as oil prices continue
to rise. The two key sources of bio-energy are: 1) bio-diesel, which is made by synthesizing oils
extracted from animals or plants; and 2) bio-ethanol, which is made from sugar cane and corn.
Since 2008, the Trading & Investment Group has been running a large palm plantation farm in
Sumatra, Indonesia. Some 100,000 tons of palm oil produced every year from the 24,000 hectare
farm is being exported to Southeast Asia and other markets. In addition, the company is boosting
productivity of existing farms by continuously improving their operational efficiency. The produced palm oil is being shipped to leading palm oil refiners that produce bio-fuels. The company
is also positioning itself to enter the palm oil trading business to complement its palm oil plantation business. The company will gradually expand the scope of its palm oil business over time by
establishing a global sales network and logistic infrastructure required for palm oil trading.
Business Owner: Government of Ontario, Canada
Capacity: 1,369MW (Wind: 1,069MW, Solar: 300MW)
Site: Ontario, Canada
1,369MW
Wind and Solar Power Cluster Project in Ontario
Samsung C&T Corporation started the construction of a 270MW wind power plant in April 30, 2013. As part of the first phase of the Ontario
renewable energy project, the plant is being built in the Chatham-Kent area. Scheduled to be completed by 2014, the plant will supply clean
energy to over 100,000 homes across Ontario, thereby eliminating 840,000 tons of CO2 gas emission annually. The Ontario project began in
2010 with the signing of the Green Energy Investment Agreement (GEIA) with the Government of Ontario. Currently, the construction of the
520MW solar and wind power cluster in Chatham-Kent and Haldimand is under way. The company is also scheduled to begin the construction
of a 250MW wind and solar power cluster in Haldimand.
Sustainability Report 2013
41
Influence on Local Culture
and Society
Our Business
Context
The businesses of the Trading & Investment Group can be characterized through the solutions they
provide to address the needs of diverse areas in terms of culture, religion, and living conditions. To
support this, our businesses have been implemented in over 100 offices around the world. We strive
to understand and identify the key characteristics of each region to create new business opportunities within every country.
Our Key Risks &
Opportunities
Understanding the nuances of a society can vary greatly from country to country. A business may
fail if it applies the same marketing practices that it does in its own country without a firm understanding of the local area. Furthermore, NGOs within each country are doing their part by helping
to raise awareness of key global issues such as child labor. Samsung C&T Corporation is creating a
variety of business opportunities around the world by monitoring potential risks that are related to
compliance with international standards and local laws, as well as improving its relationship with
local governments and communities.
Creating Value
Samsung C&T Corporation is increasing the positive impact on local communities by creating
jobs through the direct employment of local talent, and stimulating the economy through the
local sourcing of goods and payment of taxes. In addition, we are also contributing to local growth by
helping to build public facilities, such as power plants and hospitals, as well as infrastructure. The
company is expanding its scope of value creation by resolving energy shortages through its
renewable energy project, while at the same time cutting down CO2 gas emissions to increase
environmental protection.
Complying with Local Regulations
The Trading & Investment Group is expanding its business presence into diverse overseas markets, each with a distinct culture, religion, and living environment. The company is establishing
it business strategy by closely monitoring the local environment, while complying with local
laws and regulations. We are currently applying the Indonesian government’s Forest
Moratorium (a CO2 mitigation policy) to the palm farm project in Sumatra. In 2014, we plan to
introduce the ISPO (Indonesian Sustainable Palm Oil) law, a certification designed jointly by the
Indonesian government and environmental protection organizations in response to the social
demand for protecting palm oil. We are going through a process to obtain an ISPO certificate,
through which we will fulfill our responsibility for transparent management, environmental
protection, and preservation of bio diversity.
We also respect the rights of the local people we hire by complying with the required labor
regulations, including the conventions concerning the Freedom of Association and Protection
of Right to Organize (ILO87), the Application of the Principles of the Right to Organize and to
Collective Bargaining (ILO98), and the Prohibition and Immediate Action for the Elimination of
the Worst of Form of Child and Forced Labor (ILO182). In addition, we are implementing an
ethical management educational program targeting the local staff.
Service activities in India
42
Samsung C&T Corporation
Overview
Towards a Sustainable Company
Creating Social Value
Performance Review
Appendix
Improving the Understanding of Local Culture
Education Program on Local Norms
and Culture
Criteria
Employees
at Head
Office
in Korea
Program
Regional
specialist,
SPD, etc.
Overseas
training for
new recruits
Local
Employees
Detail
· Dispatch employees
abroad to learn the
local culture, languages,
standards, and markets
· Provide education
on local culture to
employees in Korea
through special lectures
1
· Interact with local
residents (e.g., university
visits, volunteer
activities, etc.)
· Visits to advanced
companies and business
sites
2
Education
· Educate local employees
on ethical
on compliance
management regulations
The Trading & Investment Group is engaged in education and human and cultural exchange
programs in order to better understand cultures, local standards, religions, and living environment, of overseas markets, in which the company has a presence. We are also conducting a
regional specialist program and Short-term Dispatch Program (SDP) to explore local cultures,
languages, local standards and markets, and provide education to employees in Korea through
special lectures on local cultures. The Trading & Investment Groups’ blog, World as Seen through
the Eyes of Trading Specialists, shares stories on the culture, local standards, and life style of
various countries including India, China, and Africa with employees. In addition, the company is
promoting the awareness of Samsung C&T Corporation and Korea among local people through
human and cultural exchanges, thereby improving the images of the company and Korea and
contributing to our sales activities. In 2012, the company conducted a number of joint CSR activities with Videocon in India in an effort to strengthen the partnership, as well as educate and
implement the company’s philosophy of sharing.
Creation of Indirect Economic Effect
The overseas management of the Trading & Investment Group is closely tied to the local economy. As our businesses, including machinery and plant, require a massive number of new recruits,
we can create jobs while conducting our business, and contribute to stimulating the local economy through the sourcing of local goods. We have also contributed to the development of the local
community through the transfer of our proprietary business expertise. As of 2012, the Trading &
Investment Group has a total of 314 local employees within its overseas offices. We will continue
to resolve cultural differences through local employment and, in doing so, contribute to the
development of the local community.
The Trading & Investment Group also contributed to the development of local economies by
participating in the construction of public facilities and infrastructure. We helped to resolve
energy issues and contribute to economic development by helping to build the LNG receiving
terminal in Manzanillo, Mexico, and the power plant project in Balkhash, Kazakhstan.
Furthermore, our participation in the construction of solar and wind power clusters in Ontario,
Canada is helping the community to tackle its energy resource issue and protect the environment by reducing CO2 emissions at the same time.
Interview
“Build your global leadership on the basis of a deep
understanding of the local community.”
The Samsung C&T team, whom I have engaged with over the past 4.5 years, are some of the
hardest working and professional people I have ever met, and I am very impressed with the
Renewable Energy Project that they developed here in Ontario, Canada.
Finding niche markets and providing the best solutions by utilizing their global network is a
cornerstone of global trading companies. Thus, it is important to understand the local
environment’s distinct qualities in order to create new and fitting business values. The
fastest and surest way to achieve this is by partnering with local companies. Understanding
the government and the political climate is what locals have insight into. Having the local
culture embedded within your team should expedite the assimilation of its culture and
values. Moreover, Samsung C&T is invested in local charities, promoting volunteerism
among Samsung C&T employees, and sponsoring local events.
Mr. Milfred Hammerbacher, CEO, S2E Technologies
Samsung C&T has a great opportunity to make a difference in renewable energy globally. And
as Samsung C&T continues to hone its skills and expertise, such as shifting more authority to
the local teams to accelerate the decision-making process, Samsung C&T’s presence will only
get stronger and I hope to continue collaborating with them on future projects.
Sustainability Report 2013
43
l
a
i
c
o
S lue
a
V
g
n
i
t
a
e
r
C
2
44
Growth with Our Partners
GWP for Sustainable Growth
Social Capital based on C&T
47Establishing Shared Growth
Framework Compliance with Fair Trade
Requirements
48 Selection, Management, and Evaluation
of Business Partners
Support Program for Business Partners
49Promoting Communication with
Business Partners
53 Fostering E&C Professionals with a
Global Mindset
54 Nurturing T&I Professionals to Lead
Businesses
56 Innovating Organizational Culture
58 New Culture Wave
63 CSR Strategy
CSR Characteristics
64
Key CSR Activities
Samsung C&T Corporation
Overview
Towards a Sustainable Company
Creating Social Value
Performance Review
Sustainability Report 2013
Appendix
45
Growth with
Our Partners
Samsung C&T Corporation is strengthening its global
competitiveness together with its business partners.
Key Risks and Opportunities
In line with the increasing social dialogue on economic equality and the growing social
request for shared growth, the government continues to revamp the laws on fair trade and
subcontracting. As a result, a variety of risks and opportunities are being posed for the
management team. Should the company take a leadership role in implementing shared
growth activities, it would be able to improve its social image and avoid various social risks.
However, if it refuses to deal with those issues head-on, it would expose itself to a variety of
unwanted risks such as social condemnation or downgrading of its corporate reputation.
Faced with such an environment, the company is conducting a variety of activities for shared
growth with SMEs. In the area of human rights, environment, and labor, the company is
controlling the risk factors it has identified along the value chain.
Purchase of Goods and Equipment (2012)
1,719
KRW billion
Samsung C&T Corporation is pushing forward with sustainable growth with business
partners in a bid to minimize business risks associated with the growing social demand for
shared growth. As part of our approach, we will:
ㆍContribute to the creation of economic value of our business partners through the
establishment of fair trade relationships with them
ㆍPromote the green management of our business partners and share related technologies
through green management expansion projects and briefing sessions on participation in
overseas projects by business partners
Subcontract Amount (2012)
2,324
Our Approach
KRW billion
Our Activities
ㆍEstablish shared growth implementation systems
ㆍComply with fair trade practices
ㆍManage programs for mutually beneficial development
ㆍPromote communication with business partners
46
Samsung C&T Corporation
Overview
Towards a Sustainable Company
Establishing Shared
Growth Framework
Creating Social Value
Performance Review
Appendix
Agreement on Shared Growth with Business Partners
Samsung C&T Corporation is building a management structure that respects business partners
as true companions in our work, under the idea that Samsung C&T Corporation can only be as
good as its partners. Since 2011, more agreements on mutual cooperation and fair trade have
been made. Through them, we have promised various support aimed at helping our partners
reinforce financial soundness, improve payment conditions, and accelerate technology development, including training programs for enhancing their professional capabilities. As a result of
such combined efforts, the company scored a “good” rating in the shared growth index in 2012
from the National Commission for Corporate Partnership. As of 2012, the company maintains
relationships with a total of 1,987 business partners, which have been recognized in the company’s comprehensive annual assessment for their competence with regard to their construction
implementation capabilities, safety precaution, environment, and ethical management.
Dedicated Department for Shared Growth
To provide assistance to our business partners efficiently, we designated a department
(Subcontracting Relationship Management Part of Subcontracting Team at the Global
Procurement Center) dedicated to shared growth. Through the dedicated department, we listen
to the opinions of our business partners and enact and manage ethics regulations aimed at preventing corruption and illegal dealings between our employees and our partners.
Five Action Plans to Enhance Global Competitiveness for Shared Growth of Our Business
Partners
Financial Assistance
Training Programs
Establishing Fair Trade Culture
Make all payments in cash and reduce
the payment term within 10 days
Provide partners with technology support,
quality innovation, and employee training
Eradicate inappropriate acts: giving or accepting
entertainment, gifts, or any other undue benefit or
influence
Introducing Standard Subcontract Forms
Proactive Adjustment of Unit Price
Using a standard subcontractor contract, to create a written
contract and apply reasonable unit prices
Endeavor to adopt a system for adjusting unit prices
reflecting price fluctuations of raw materials
Compliance with Fair
Trade Requirements
The Trading & Investment Group is complying with the fair trade compliance program, as
recommended by the Fair Trade Commission, in an effort to pursue balanced development, while
maintaining a mutually complementing relationship with business partners to establish fair
subcontracting practices. The company participated in the government’s corporate partnership
program voluntarily by establishing and maintaining its own fair trade compliance program. We
are also educating our employees on the details of the program and monitoring their compliance
with the program, with our overall compliance level evaluated by the Korea Fair Trade Mediation
Agency on a regular basis.
Interview
Lee Kyu Seok, CEO, Kerheung Industry Co., Ltd.
“I applaud the relentless efforts by Samsung C&T Corporation
to achieve win-win partnerships and shared growth.”
Samsung C&T Corporation operates a variety of programs and institutions for shared growth
with business partners, with financial assistance and technology support being most
prominent of all. For instance, the company shortened payment lead times and expanded
the percentage of cash payments, and is running a technology development contest for
technology support. By improving cash flow, our company was able to lower management
and operations risks markedly. Thanks to the company’s systematic education program and
systematic process management, we were able to sharpen our business management and
construction implementation capabilities. I would like to give a big “thank you” to Samsung
C&T Corporation for its relentless efforts to bolster corporate partnerships and shared
growth in these exceptionally difficult times for the construction industry. Meanwhile the
company has ingrained ethical management at the heart of its corporate culture. The company complies with the laws of Korea and other countries, upholds fair trade requirements
with business partners, and protects the human rights of every employee. Kerheung
Industry has also join the movement, establishing its own code of ethics as it works to maintain its firm resolve for ethical management. Working closely with Samsung C&T Corporation,
we will keep striving to comply with ethical standards and spread the value of ethical management.
Sustainability Report 2013
47
Selection,
Management, and
Evaluation of
Business Partners
Company Requirement Background
Samsung C&T Corporation maintains partnerships with business partners based on mutual
trust through strategic management. To ensure the transparency and fairness of the selection
process , thereby promoting trust through the selection process, we have established the
Business Partners Selection and Management Guidelines for choosing and evaluating business
partners and transacting business with them. These guidelines are available at our partner’s
portal (http://www.secc-partners.co.kr). Partners with outstanding performance records are
provided with various perks and benefits, including expanded opportunities for signing contracts,
exemption or reduction of performance bonds, and funding assistance.
Evaluation of Our Partners’ Sustainability Management Activities
We conduct assessments on the construction capabilities of our partners in order to enhance
their sustainable management capabilities. We select our best partners by comprehensively
evaluating their sustainability management performance, including quality, environment, and
safety, as well as financial stability. The evaluation is performed on companies that have construction records twice from the same year. The records are transparently delivered to related
departments so the information can be used as an important indicator as they interact with
business partners. In particular, partners with high grades are exempt from performance bonds,
in addition to receiving awards. This incentive system encourages partners to accelerate sustainability management activities.
Support Program for
Business Partners
Shared Growth Programs
The Engineering & Construction Group is implementing the principle of shared growth with partners by operating various programs for helping them enhance their competitiveness. Those
include funding assistance for financial soundness, technology and management support, as
well as a diverse range of training programs targeting our partners’ employees.
Financial Assistance
ㆍDirect assistance: Operating funds, funds for
adopting facility equipment for partners, and
funds for developing new technology
ㆍIndirect assistance: Loans from financial
institutions, such as a family loan
ㆍMixed assistance: Shared growth fund
Assistance for Technical Advancement
ㆍHost joint technology development project
contests and support patent filing
ㆍE xplore technology development projects
ㆍOpening of the company’s patent and utility
model inventory
ㆍProvide temporary deposit of technology to
protect core technology of business partners
Training Program for Partners
ㆍStrengthening independent work capabilities for
on-site managers
ㆍBusiness management, construction quality
enhancement, and general education for the next CEO
ㆍRunning lectures on work-related Internet topics
for employees
ㆍConsulting service to improve the business
management environment
Other Assistance
ㆍBidding: Increase opportunities for participating
in bids by managing partners by region.
Maintain the rate of electronic bidding at 100%.
Operate low-price monitor system
ㆍShared growth performance assessment
system: Include and evaluate shared growth
performances by setting task goals for
executives of the procurement department
Funding Assistance for Financial Soundness
The company has revamped its payment conditions for partner companies to warrant sound
cash flow of those partners. We make all payments in cash and have reduced the payment term
to within 10 days of receipt of the invoice. We ensure that our partner companies can secure the
funds they need without difficulty by offering them with a range of assistance, including direct,
indirect, and mixed assistance.
Training Program for Partners
The company is strengthening the competitiveness of its partner companies by hosting briefing
sessions on participating in overseas projects. We are also providing education and training programs for our partners’ employees. We recognize how important the role of an on-site manager
is to our partner companies. That’s why we have established the Samsung Master Program to
secure and promote top-performing employees.
48
Samsung C&T Corporation
Overview
Towards a Sustainable Company
Purchase of Green Products in 2012
76
KRW billion
Samsung C&T Corporation defines green products as
those with the following certifications: environmentfriendly product mark; GR mark; carbon reduction
certification; energy efficiency ratings; low
hazardous ingredients certification; low waste
certification; and other green certifications in
overseas countries.
Creating Social Value
Performance Review
Appendix
Expanding Assistance for Technology Development
Samsung C&T Corporation is pushing forward with a project to assist with technology development at our partner companies. We support the development of the specialized technologies
and key manufacturing processes required by our business partners through joint technology
development programs and contests. By sharing its inventory of patents and utility models with
partner companies, Samsung C&T Corporation is helping them to improve their technology and
cost competitiveness through the assistance of patent filing for jointly developed technologies.
ㆍManaging Communication Channel to Advance Technological Competitiveness
We are is seeking to establish a shared growth model that meets global standards by forming
a win-win structure with partner companies to advance our technological competitiveness.
Based on this year’s performance, we have developed a roadmap that will enable us to realize
technological developments in 2014. To achieve this, we have selected a handful of best practices from each subcommittee and have shared them with the committee members. Our
vision for the technology forum is that of a platform for knowledge sharing and the presentation of results with an aim to advance our technological competitiveness.
ㆍHosting of Joint Technology Development Project Contest
We are hosting a joint technology development project contest for our partner companies in
an effort to promote shared growth on a mid- to long-term basis. Our purpose is to share the
burden of technology development cost, thereby strengthening the competitiveness of partner companies, while creating a synergy of economy and quality enhancements at the construction sites.
Promoting
Communication with
Business Partners
Partners’ Day
Samsung C&T Corporation hosts Partners’ Day every year in Korea and in other regional business centers. At Partners’ Day, we share our performance from the past year and renew our
determination for shared growth and even greater development well into the future. At the
event, we communicate our business policies and details on the subcontracting process
throughout the entire business process, while providing insight on quality, safety, and compliance management. In addition, we reaffirm our dedication to business partners by motivating
them with awards and other forms of compensation. We will continue to develop Partners’ Day
as a key platform on which we can promote and encourage a mutual understanding and trust.
Partner Consultation Committee
We formed the Partner Consultation Committee to solidify bilateral trust with our partners. The
Partner Consultation Committee consists of 36 subcommittees, with each subcommittee composed of 36 assistant administrators and six representative secretaries. The committee serves
as a communication channel between Samsung C&T Corporation and its partners, as well as
offering leadership for enhancing technical competencies.
Supporting partners to grow as
global companies
Case Study
We hosted a briefing session for partner companies to assist them with their entry into
overseas markets, thereby ensuring their future growth potential. In the meeting, details of
overseas market development were shared with the CEOs and representatives of our partner companies, including preliminary preparation, market entry process, and overseas
business development cases.
In addition, our Global Procurement Center hosted an investment road show by inviting 60
top partner companies to Bangkok, Thailand. To identify outstanding global partners, news
on the winning of key global projects, our Supplier Relationship Management (SRM)
System, as well as other related information was shared with them.
Bangkok briefing session on overseas market development.
Sustainability Report 2013
49
Special Issue:
Win-Win Green Partnership:
Green-SCM for the Engineering & Construction Group Partners
The Engineering & Construction Group is participating in the Ministry of Environment’s Green-SCM project, which was implemented from 2010 to 2013. Through this project, we established a sustainable win-win green management process which
provides a range of support to our business partners who are less prepared for environmental regulations and, as a result,
weak in business competitiveness. The program includes providing education, supporting partners as they work to acquire
environmental certificates, and helping partners to improve their own process innovation for responding to environmental
regulations.
Summary of Green-SCM for the
Engineering & Construction Group
Partners
Establishing
Samsung C&T
Corporation’s
Green-SCM
Improve environmental friendliness throughout the E&C process and establish a
sustainable win-win green partnership
Improve the Green Management
Infrastructure of Business Partners
Assess the state of green
management of partner
companies
Identify partner
companies’ key next steps
and improve upon them
Train environmental
management specialists of
partner companies in key task
areas
Improve the green
management assessment
system of partner
companies
Support advancement of green management competence for partner companies
Key Content
The ten partner companies participating in the Green-SCM project vary in their competencies and strategies for coping with new environmental
regulations and improving business competence by business area. Accordingly, we are supporting them to bolster their mid- and long-term
business competitiveness for green management through a diverse range of programs based on the characteristics of each partner company,
the preparedness of each company, and the likelihood of environmental regulation.
Green-SCM Programs by Partner Company
50
Partner
Business Area
Donghae
Engineering
Manufacturing and
installation of ventilators
Dongbang
Novoferm
Manufacturing and
installation of fire doors
Cheonwoo
Construction
Construction of wet finish
Saturn Bath
Manufacturing and
installation of bath tubs
Green company certification
Sungdo
Construction
Maltani
Manufacturing and
installation of electric
products
Carbon emission certificate
Wonyoung
Construction
Samsung C&T Corporation
Green-SCM Program
ISO 14001 certification
Partner
Business Area
Green-SCM Program
Eugene
Corporation
Production of readymixed concrete
Publication of green
management report
Wonbang Tech
Manufacturing and
installation of clean
room
Building greenhouse gas
inventory
Gyeonggi Paint
Painting
Establishment of green
construction process:
Demolition
ㆍEco-friendly painting
management manual
Construction of rebar ㆍA sbestos dismantling
management manual
concrete
ㆍAluminum forms management
manual
Overview
Towards a Sustainable Company
Creating Social Value
Key Outcome
Performance Review
Eco-friendly painting process
manual (Gyeonggi Paint)
Eco-friendly dismantling of
asbestos manual (Sungdo
Construction)
Green management report
(Eugene Corporation)
Carbon emission certificate
(Maltani)
ㆍTraining of green management experts: 10 partner companies
- A total of 26 experts trained at nine education sessions since 2011
Appendix
ㆍEnvironment management certification
- ISO 14001 certification: Cheonwoo Construction, plus two partners
- Carbon emission certificate: Maltani’s two products
ㆍEstablishment of green construction process
- Establishment of green dismantling of asbestos, an eco-friendly paint-
ing process, and a work manual (Sungdo Construction, Gyeonggi Paint)
- Construction of greenhouse gas inventory (Wonbang Tech)
ㆍPublication a of green management report: Eugene Corporation
Future Plan
The purpose of Green-SCM is to achieve shared growth through forming
green partnerships. The company will lead the development to standardize a
win-win model through forming green partnerships that meet the requirements of the construction industry. As such the company plans to reflect
green management competence of partners when they register as our suppliers so that the outcome of the Green-SCM project will bolster their business competence in their future business.
Interview
Lee Sang Yeol, General Manager, Wonbang Tech
“I hope Samsung C&T Corporation continues to
demonstrate its leadership in shared growth with
partners.”
Samsung C&T Corporation is offering a diverse range of programs to promote its philosophy of shared growth with business partners. SMEs such as our company have
been able to improve their business expertise thanks to the diverse educational programs and joint technology development provided by Samsung C&T Corporation.
Years-long business partnerships and transaction records with Samsung C&T
Corporation were a boon for us as well when we laid groundwork for conducting business overseas. We are participating in the Ministry of Environment’s Green-SCM project in accordance with the green management initiative driven by Samsung C&T
Corporation. Furthermore, we have established a system for greenhouse gas management, in response to our customers’ needs due to the wake of increasingly stringent environmental regulations imposed by the international community, such as
greenhouse gas emission goal systems and emission rights trading systems. I hope
Samsung C&T Corporation continues to demonstrate its leadership in the development of diverse programs that would contribute to the growth of SMEs and enhance
their management competence.
Sustainability Report 2013
51
GWP for sustainable
growth
Samsung C&T Corporation is strengthening its global competence by improving its employees’
capabilities and continuously innovating organizational culture.
Key Risks and Opportunities
Employee Capability Development Process
Recruiting
Training
Evaluation and
compensation
Our Approach
Support
Selected as the Best Company to Work For
by Korea Management Association in 2013
No.1
Best Companies to Work For in Korea (K-GWPI)
52
With worsening business conditions in the wake of the global economic downturn, companies
are striving to promote sustainable talent development and creative organizational culture in
a bid to implement sustainable management. They are seeking to transform their employees
into capable and sustainable talent, while taking into consideration of how to build and
incorporate this culture within an organization. In addition, a lack of support for business
capability development, coupled with a rigid organizational culture, could expose companies
to potential risks such as brain drain and key technology leaks. Meanwhile, proactive
development of employee competency and the promotion of an employee-focused corporate
culture can contribute to enhancing each business competency, which eventually provides
momentum for sustainable growth.
Samsung C&T Corporation
Samsung C&T Corporation focuses on building a corporate culture where all employees are
given the opportunity to fulfill their utmost potential. We believe that individual growth of our
employees can directly translate into sustainable growth of the company.
ㆍWe enhance the value of each individual and the company by improving our employees’ competency
ㆍWe pursue sustainable growth through inovation of organizational culture
ㆍWe enhance mutual trust between management and employees through active communication
Our Activities
ㆍWe nurture globally competitive professionals
ㆍWe innovate organizational culture
ㆍWe promote family-friendly management
Overview
Towards a Sustainable Company
Fostering E&C
Professionals with a
Global Mindset
Creating Social Value
Performance Review
Appendix
The Engineering & Construction Group at Samsung C&T Corporation conducts diverse in-house
and commissioned educational programs for employees.
Global Competence
We are vetting our employees’ global competence to ensure the success and stability of our
global businesses. A diverse array of online and offline programs, such as an intensive language
camp, are offered to employees to sharpen their language skills before they are sent to join an
overseas office or work as overseas sales manager. In 2010, we started the Global Marketing
Leader program, which sends employees on a short-term basis to countries the company has
recently entered, to conduct a comprehensive survey on the country in order to provide preliminary support for new projects.
Specialty Competence
Turn Every Employee into a Project Manager
To reestablish the concept of project managers (PM) as leaders with integrated competence
required in today’s market, and secure such talents as early as possible, we formed the PM
Academy. The academy offers educational programs that train employees at every level, starting
with junior staff members, to become a successful project manager. Our goal is to train them as
project managers who are capable of meeting project goals through phased planning, execution,
organization, and operation from start to finish of each project, based on the competence
required across the entire value chain. We will become a global industry leader by training a rich pool
of highly skilled project managers, who will be essential to executing our future global projects.
Global Marketing Leader
Number of countries where employees were
dispatched for global education and training
2010
2011
2012
9
10
10
Engineering & Construction-Intensive MBA
We offer an Engineering & Construction-intensive MBA program designed to grow and nurture
the next generation of global leaders armed with industry expertise and leadership. Through the
program, employees can hone their analytical capabilities and management leadership by
studying the latest management theories and practices, as well as the latest management
trends. Developed jointly with the Seoul National University Graduate School of Management,
the program is tailor-made for E&C specialists. It consists of a number of basic courses such as
management strategy and marketing, as well as hands-on project management and action
learning courses closely linked with actual projects.
Core Competence
Core Talent Training Program
Our top-performing employees, who are selected through a screening process, are sent to MBA
programs offered by prestigious schools in Korea and other countries. The program consists of
regional, expert training courses customized for the company’s global business needs and it is
designed to educate future leaders and candidates. Since 1990, the company has been running a
joint internship program with industry-leading companies. Through these programs, employees
hone their knowledge by learning advanced skills in construction and engineering per core product, as well as improving their expertise in design, engineering, and sales development.
Industry-Leading Educational Programs to Train
Engineering & Construction Specialists
Case Study
Samsung C&T Corporation conducts a host of educational programs to nurture engineering and construction specialists in four key areas:
Project Management; Technical Expertise; Marketing; and Functional Expertise.
Project
Manager
We establish a path in which
employees can follow to grow
into a highly skilled PM
Technical
Expert
We train employees to become
experts on the base
technologies and CT 149
Marketing
Expert
Functional
Expert
We help to secure the expertise
required for every region as the
company continues to expand
its global reach
We enhance skill sets in areas
such as planning, finance, and
human resource management
Sustainability Report 2013
53
Leadership Program for Female Construction Leaders
The Samsung C&T Corporation is improving the career opportunities for women in a bid to
improve the company’s long-term competitiveness. Towards this end, special programs are now
in place that strengthen the work capabilities of our female employees and nurture them for
leadership positions. The Junior Program, which is offered to women who are either assistant
managers or associates with at least three years seniority, is designed to strengthen the
required leadership skills. The Senior Program is also held regularly for all women in middle management throughout the company and is designed to help them grow into becoming executives.
Common Competence
Introductory Course on the Engineering & Construction Group
The company is conducting an introductory course on the construction business for new
employees in order to provide them with the opportunities to learn the core values required of
Samsung and to deepen their understanding of the Engineering & Construction Group.
By the end of the course, employees will understand the Group’s vision, strategy, and management environment and will assimilate with the corporate culture of Samsung C&T Corporation.
Employees will also deepen their knowledge of the company’s institutions and systems—there
by integrating themselves with a shared corporate DNA.
Nurturing T&I
Professionals to Lead
Businesses
The Trading & Investment Group also operates a wide range of educational programs for instilling the business expertise and global mindset required for future growth. The company provides
an extensive range of training programs customized to the rank and function of individual
employees that aim to improve their expertise and cultivate the next generation of specialists.
Foundation Competence
SELF
SELF signifies the system of competencies shared across the Trading & Investment Group which
were identified through consulting activities and surveys. The SELF curriculum consists of
Strategy (strategy management), Execution (business processes in trading and investment), and
Legal and Financial modules. Mirroring the Trading & Investment Group’s two main business
functions of trading and organizing, SELF consists of two course tracks: the SELF trading course
and the SELF organizing course.
Interview
“I am getting hands-on experience in the unique culture of
Samsung and learning how innovation strategies are
being formulated and applied business practices.”
Samsung C&T Corporation operates the Global Assignee (GA) and Global Trainee (GT)
programs, which are short- and long-term dispatch programs. I joined the company as a
member of the Bangkok subsidiary but was dispatched to the Seoul head office on two-year
tenure as a GA, where I have received hands-on experience for the past 10 months on
Samsung’s unique culture and how innovation strategies are being formulated and applied
to business practices.
What impressed me most was the practical training session offered by each business division to help employees from international offices, such as myself, understand the diverse
business models employed within the company. There has been a remarkable advancement
in the education programs for global talents as seen by the growing number of GAs and GTs.
Chaimongkol Worapinpong, Senior Manager,
Samsung C&T Corporation Bangkok Subsidiary
54
Samsung C&T Corporation
The company’s in-house educational program for employees working in overseas offices is
well organized; however, it will be necessary to place greater emphasis on training programs
customized for each overseas office in developing business expertise.
Overview
Towards a Sustainable Company
Creating Social Value
1
Performance Review
Appendix
2
1. Graduation ceremony of Global Manager course
2. GSP class
Global Competence
Global Mobility Program
Samsung C&T Corporation operates Global Mobility programs consisting of the Global Assignee
(GA) program, a two-year reverse-rotational dispatch program, and the Global Trainee (GT) program, a three to six-month dispatch program, through which selected employees who are being
nurtured as team managers and branch heads are dispatched from their original workplaces to
the Seoul headquarters or other global offices to receive exposure to a variety of educational
opportunities, tasks, and experiences.
Acclimation Program with Local Laws and Culture
The company offers in-depth acclimation programs, which includes educational workshops, so
employees have an understanding about the local culture prior to entering a new target market. A
command of foreign languages is a vital skill for Samsung C&T Corporation employees who engage
in business outside of Korea. To this end, a wide range of foreign language courses are provided for
them. All employees can participate in more than one of four in-house foreign language programs
to acquire a high degree of proficiency. All employees who want to study a foreign language are also
welcome to enroll in a language course in an outside institution, with partial support available.
Specialty Competence
Enhancing Competitiveness through the CLO
Samsung C&T Corporation formed the Creative Learning Organization (CLO) as part of its management innovation activities to achieve the company’s vision. The CLO is a unique learning
organization that takes a systematic approach to help transform employees into intellectual
assets by providing them with the necessary knowledge and information regarding industries,
technologies, and management processes. The CLO also deepens expertise and facilitates communication among all employees, thereby creating a synergy effect across business operations.
CLO Process
Introduction
of CLO Theme
Annual
CLO
Process
Annual
Activities
Completion of
Activities
Selection of CLO Theme
ㆍAnalysis of capabilities and function
ㆍConfirm areas to be bolstered
Planning
ㆍIdentify current capability level and set-up goals
ㆍAssemble CLO members
ㆍFinalize methodology and CLO action plan
Upload & Share CLO Files
Offline Meeting
ㆍUpload output performance per stage and ㆍPromote active participation
study files
through periodic offline meetings
ㆍSystematic management of uploaded files
with CLO members
Performance Review
ㆍMid-term review
ㆍFinal review
Completion of CLO Activities
ㆍAnnual activity reports
ㆍPreparation of final results
Awards to Best-of-Breed
CLO Cases
CLO Performance Review
In order to improve the professional expertise required for implementing businesses practices,
the programs follow a specific process; (1) identify a study theme that is closely associated with
current businesses and develop an annual plan with participating members; (2) conduct a periodic review of the project’s process based the annual plan, and prepare the study that reflects
the year-long final results and (3) evaluate CLO results after the conclusion of annual activities
and best-of-breed cases are shared.
Sustainability Report 2013
55
Innovating
Organizational
Culture
The company needs to grow beyond the limitations of conventional construction businesses
that rely on winning new projects. Instead, we must create business value through proactive
exploration of new opportunities. Towards this end, the Engineering & Construction Group at
Samsung C&T Corporation is instilling innovative thinking as part of our organizational culture.
Creating this new culture is one of many ways we are changing old habits and transforming as a
company from the inside out.
Establishing an innovation system for organizational culture
Core Value Proposition
The company has developed three core values — Think, Open, and Global — that will help establish a new organizational culture to focus our employees’ energy on maximizing our business
competitiveness.
Think
Think
Support employees as they grow to become world-class business professionals
by encouraging them to shed their passive attitudes, concentrate on the task at
hand, and relentlessly study the market, customers, and technology.
Open
Open
Break free from the authoritarian culture that restricts the communication
between different functions and departments, and embrace a culture that
facilitates free-flowing communications to improve collaboration.
Global
Global
Promote a collaborative organizational culture in which global professionals
and business partners work closely together to foster a global mindset and
understanding of ethnic culture.
Organizational Culture Brand Launch
To reinforce our three core values — Think, Open, and Global — we created TOnG. It represents
our new organizational culture that places our business at the center and conveys our ambition
to embrace an open culture.
TOnG conveys our ambition to embrace an
open culture through professionalism and
communication, and thereby rise as a top
global company. Created by combining the
first letters of our core values, TOnG’s slogan
— “Let’s TOnG, Get the World” — was
selected through an internal contest. It also
conveys our vision to march forward together
toward a single destination.
Activities to Form Organizational Culture
Think
The learning culture at Samsung C&T Corporation focuses on self-directed learning in which
each individual employee grows as a business professional, while the organization creates
a synergistic environment through the sharing of knowledge and information, as well as collaboration. We have created multiple sets of guidelines to address the needs of the individual
or group in order to foster our self-directed learning culture. Our new IT system designed specifically for study groups will help employees monitor learning progress and share achieved results
with others.
ㆍActivities to Foster a Self-Directed Learning Culture
Samsung C&T Corporation is helping to drive employee participation and their enthusiasm for
learning by creating an “on-demand” learning environment with performance-based incentives. The company also promotes a corporate culture centered on learning by encouraging
employees to maintain their studies through internal news program and the intranet.
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Samsung C&T Corporation
Overview
Towards a Sustainable Company
Creating Social Value
Performance Review
Appendix
Open
The company utilizes a variety of communication activities in order to realize our One Body organizational culture, sharing information transparently and fostering active communication. The
company’s top strategic meeting, formerly open exclusively to the company’s management and
key department heads, is now broadcast live internally for all employees. CEO messages and
minutes of key meetings are posted on the intranet for employees to access. The company also
provides employees with a two-way online channel that enables work-related communications
and fosters personal connections to be formed.
Key Communication Programs by Position
N-Leadership Forum
W-Leadership Forum
(New Generation)
(Women)
ㆍFor junior managers in the
third year of employment (about 300)
ㆍFull day program (September)
ㆍSpecial lectures on the
company vision by members
of management
ㆍConversations with senior
managers (tips and
encouragement)
ㆍWorkshops to form CDP
ㆍPGM to foster teamwork
Work-Smart Campaign Post
ㆍFor female managers (about 70)
ㆍFull day program (October)
ㆍSpecial lectures by female
guest speakers on the
importance of women in
leadership positions
ㆍPanel discussions (sharing of
experiences by senior female
managers)
ㆍNetworking among senior and
junior female managers
Leadership Seminar
ㆍFor department heads with
assignment
ㆍQuarterly open seminar
ㆍDiagnosis of leadership and
feedback
ㆍCommunication tips on
understanding younger
employees
ㆍCompassionate and
connected leadership
ㆍManagement of female
employees
Global
Building a productive, yet enjoyable, work environment is critical to the performance of the
company. As a result, we have developed a wide range of activities that encourage collaboration
so our top global talents can realize their full potential in a fun environment. We have a process
and the infrastructure that provides systematic support to foreign workers for a seamless
transition into our unique corporate culture. In addition, our Work-Smart campaign promotes a
productive and respectful work environment that focuses on quality and performance. Our goal
is to develop an environment that exceeds the global standard as it applies to the “software” of
business management.
ㆍWork-Smart Campaign Encourages Quality and Performance
Since 2011, the Work-Smart campaign has fostered an efficient and productive work environment to empower our employees to realize their full potential while increasing our
competitiveness in every market we serve. To support this endeavor, we have developed and
implemented a series of programs that encompass key topic areas such as time management,
work style, and space management. The framework of this program was based the WorkSmart module originally proposed by the Samsung Economic Research Institute.
Sustainability Report 2013
57
New Culture Wave
With the continued global recession casting a gloom over the world economy the Trading &
Investment Group is implementing new innovative practices in order to create sustainable
growth by restructuring its business model. In particular, the company is implementing new
ideas in organizational culture to combat the global recession in the short term, laying the
groundwork for improved business performance for the future.
New Cultural Wave Action Plan
New Cultural Wave is an internal campaign aimed at creating our a corporate culture by uniting
together our employees, and thereby facilitating the ease of communication and the exchange of
knowledge and ideas. We are implementing the campaign based on a systematic action plan
created in accordance with the spirit of New Cultural Wave 2013.
Share the Sense of Crisis
Promote Unity
ㆍDiscussion forum chaired by
CEO
ㆍLeadership workshop
ㆍReminders of value system
ㆍManagement debriefing
session
ㆍEducation on fraud prevention
ㆍWorkshop for promoting unity
within business divisions
ㆍWorkshop for promoting unity
among junior managers
ㆍCommunication NCD
ㆍRun Together
ㆍFamily day event
I
We
“Run Together” Picnic for a Moment of
Communication and Mutual Healing
Foster a Winning Spirit
ㆍWinning the Spirit Award
ㆍSharing of business
experiences through special
lectures
ㆍSpecial lecture on the
pioneering spirit
ㆍJob efficiency improvement
campaign
The
Company
Case Study
The Trading & Investment Group held a special event to encourage communication and sharing, which was aligned with the key trend of 2013: Healing.
The event was all the more meaningful as employees of our partner companies were also invited to join our employees.
900
A total of
Members of Samsung C&T Corporation went for a
picnic in the spring of May 2013.
“In order to move the ‘Run Together’ rail bikes, we all had to pedal together.
While we couldn’t go very fast, we worked as a team to keep the bike
moving forward. The slow speed allowed to really take in the scenery —
something you couldn’t achieve in a fast-moving car. The cool breeze from
the Han River and the beauty of nature instilled a sense of freedom that
we could never experience in our cubicles.”
58
Samsung C&T Corporation
employees attended the
Run Together picnic event.
“On Nami Island, transported back in time while riding tricycles like kids.
Reminiscing about our childhood, something we wouldn’t normally do in
the office, allowed us to bond as a team and form an unbreakable trust
with each other.”
Overview
Towards a Sustainable Company
Creating Social Value
Performance Review
Appendix
Share the Sense of Crisis
Leadership Workshop
A leader should not only be responsible for the performance of his or her team, he or she should
also be able to motivate team members. The company hosts leadership enhancement workshops in April and October, targeted at assigned department heads. The goal of the workshops is
to improve the organizational management skills of leaders and to foster communication
among team members. Team leaders and members can close gaps between older and younger
generations, and thereby promote solidarity among them.
Value System Reminders
Communication is critical to fostering a desirable organizational culture. The CEO’s ideas should
be conveyed to new employees in order to realize the goals each organization strives to achieve.
Toward this end, the company encourages employees to internalize management principles by
reminding them of the company value system.
Promote Unity
Workshop for Promoting Unity among Junior Managers
In an effort to strengthen followership, which is as important as leadership, the company is
hosting workshops to foster unity among junior managers. In the workshop, junior managers
are reviving their initial passion and eagerness when they first joined the company, while
strengthening camaraderie and employee loyalty. They are being reminded of the Group’s vision
and values through education on organizational management, including the followership program, and are encouraged to put these principles into practice in various business situations.
Communication NCD
We established New Culture Day (NCD) to improve the conventional after-work get-together
culture. Through NCD, employees are encouraged to engage in sports and cultural activities for
more active communication between senior- and junior-level employees and among peers,
rather than indulging in endless rounds of drinking. With NCD, the company is fostering a team
culture firmly based on mutual trust. Beginning in 2013, we hosted Cross NCD with other teams
as part of the Communication NCD campaign.
Foster a Winning Spirit
Sharing of Business Experiences through Special Lectures
While the relentless pursuit of information technology can help drive the company forward, it’s
difficult to then use that technology to truly capture the essence of an idea or a concept. To that
end, we encourage employees to share their success stories through special lectures that we’ve
established to facilitate this. Our special lecture series is designed to promote the pioneering
spirit through the success stories and instill the confidence and support necessary to further
pursue other achievements.
Job Efficiency Improvement Campaign
As a company, we must constantly urge our employees to never become complacent. The
Trading & Investment Group is committed to fostering a work environment that values efficiency
and productivity.
Samsung C&T Corporation Selected as the Best
Company to Work For in Korea
Case Study
Samsung C&T Corporation was ranked 14th in the service sector as the Best Company to Work For in Korea, an annual survey conducted by the Korea
Management Association. The company was ranked first in the trading and construction sector in a separate survey by industry. In the K-GWPI (Korea Great
Work Place Index) survey, which questioned industry professionals and personnel managers, the company scored high points in key criteria including
company vision and talent management systems, corporate culture, engagement of company members, and overall happiness of employees.
This is the result of our People First Management being praised unanimously across various industries. We develop the potential of our employees and
offer opportunities which enables self-realization through our vision, implementing a well-organized talent management system, and fostering a
creative and open organizational culture.
Sustainability Report 2013
59
Special Issue:
Family-Friendly Management for Work-Life Balance
People are our greatest asset. The company puts unwavering efforts into ensuring that our employees, as well as
their families, enjoy a full life. Not only are we strengthening unity among family members through our familyfriendly management, we are also fostering our employees’ loyalty to the company and their self-esteem.
Family-Friendly Management
Samsung C&T Corporation promotes a work environment in which our employees can perform their daily tasks, while enhancing their professional development and improving their quality of life. The company conducts a variety of activities and programs for employees and their
families through our family-friendly management in which we strive to ensure a harmony between the office and home. The company designated Wednesday as “Love Family Day” to help employees get recharge and spend their time on self-development. Employees and family
members are all invited to a special event where they can enjoy a variety of cultural activities. In addition, we host other events targeted at
families, while also offering gifts and incentives to employees on their birthdays, wedding anniversaries, and for the birth of a child.
Diverse Family-Oriented Programs
Viewing of Cultural Performance
The Trading & Investment Group hosted a variety of events in May 2013 in which employee family members could enjoy a cultural performance
and a visit to the head office. Our employees and family members even enjoyed the musical Les Misérables together to make this special event
all the more memorable.
Family Invitation
Every year, Samsung C&T Corporation invites employees and their family members to the head office to enjoy a photo shoot session, along with
cultural performances. The Engineering & Construction Group also hosted a family visit to the head office and a family picnic event.
Psychological Evaluation and Counseling for Family
The Trading & Investment Group offers psychological evaluations for families, a program that promotes well-being at home and the healthy
growth of children by supporting the employees’ family relationships and analyzing their children objectively. The evaluation consists of psychological assessment of couples, including marriage satisfaction tests, Rorschach tests, IQ and concentration exams, and parent-child relationship
tests for employees’ children. The Engineering & Construction Group also offers family counseling programs to strengthen the emotional bonds
and intimacy among family members. Family members are encouraged to visit the office of our dedicated psychotherapist, located at the
company head office, for various tests including stress tests, Rorschach tests, as well as individual counseling sessions. The psychotherapists
also runs on-site clinics for the employees at work sites.
Maternity Protection
Case Study
Samsung C&T Corporation offers several maternity protection programs in an effort to respond to the low birthrate in Korea, which is increasingly
becoming a serious social issue, as well as to support healthy childbirth and child rearing among employees.
Revamp of Maternity Protection System
Samsung C&T Corporation limits the number of night shifts and weekend duties for pregnant employees and provides leave for maternity
monitoring. The company is also implementing other institutional
support to protect the health of pregnant employees by offering parental leave before and after childbirth and in case of miscarriage. Pregnant
employees are given a badge to demonstrate that the employee is
a beneficiary of maternity protection. At the same time, maternity
protection guidebooks are distributed to all of her team members,
ensuring that no pregnant employee has her rights compromised or
feels she is unable to perform to her full potential.
60
Samsung C&T Corporation
Mothers’ Room
Samsung C&T Corporation installed a mothers’ room on the seventh
floor of the company headquarters to provide pregnant employees
with a comfortable environment during work hours. Any pregnant
employee may use the facility upon request, and for mothers who wish
to breast-feed their babies, we installed a lactation area in the mothers’ room. We spare no resource when it comes to protecting pregnant
employees, including prohibiting overtime work for pregnant employees and guaranteeing medical care for newborns.
Overview
Towards a Sustainable Company
Creating Social Value
Performance Review
Appendix
1
2
1, 2. F
amilies having fun at the Family
Invitation Event
Interview
“Samsung C&T Corporation is building an inviting work
environment through open communication.”
As a chairperson of the Employee Representative Council, I’m involved in a diverse
range of activities. In 2012, the council expanded the scale of our employee participation events under the slogan, “Warm Workplace and Open Heart,” thereby contributing
to the establishment of a more engaging communication channel. Employees are
invited to various events, including weekend gardening, head office family day, and an
autumn picnic, all of which are designed to bolster employee satisfaction. The family
invitation event is mainly offered to on-site employees and their families, as they are
likely to be overlooked by the company. We also offer other more unusual and fun
activities such as caricature drawings and body painting, which allows employees to
interact with one another in a more engaging manner. With these programs, we are
helping the company instill an open communication culture among employees. To
ensure sustainable growth of Samsung C&T Corporation, we need to build our own
organizational culture and supplement it with diverse support activities. Through such
combined efforts, individual employees can form a sense of ownership in the company,
while the company views each employee even more as a valuable asset.
Jeon Byeong Wook, Assistant Manager,
Samsung C&T Corporation Employee Representative
Council (Labor-Management Council)
Sustainability Report 2013
61
Social Capital
based on C&T
Samsung C&T Corporation believes in the harmonious balance between the new markets we enter
and the CSR strategies we deploy to achieve sustainable growth of the company. Based on this belief,
we are implementing CSR activities that reflect the attributes of the respective business units of the
head office and overseas offices.
Key Risks and Opportunities
CSR Network
The trend for CSR activities has evolved from simple donations to a deeper engagement with
society, which is represented as Creating Shared Value (CSV). Under this scheme, companies
are advised to solve social issues and create shared value for the local community through
their own management activities. As such, companies can paint a favorable image and boost
their competitiveness through more active participation in CSR activities, as well as foster
employee loyalty. However, CSR activities solely aimed at garnering favorable publicity would
only trigger a backlash that would negatively impact a company’s image.
Local Community
Samsung C&T
Employees
NGO
Business Partners
CSR Budget (Unit: KRW billion, 2012)
5.7
Our Approach
Our approach to CSR is in itself a process through which we create superior social values. We
actively capitalize on the opportunities our businesses can offer when conducting CSR activities, while also emerging as a global corporate citizen through active participation in CSR
activities in overseas markets.
ㆍWe actively tap into our core competencies including technology, our workforce, and
management resources that were identified from our business strategy and project
characteristics when performing CSR activities
ㆍWe bolster employee loyalty, commitment, and camaraderie by offering a diverse set of
opportunities to participate in CSR activities
Our Activities
Number of Participants (Unit: Employees, 2012)
38,581
62
Samsung C&T Corporation
ㆍImplementation of representative CSR activities of Samsung C&T
ㆍConduct volunteer activities for employees
ㆍImplement CSR activities in the global market
Overview
Towards a Sustainable Company
CSR Strategy
Creating Social Value
Performance Review
Appendix
Samsung C&T Corporation is committed to establishing and practicing strategies for social contribution based on our slogan: “The company that delivers happiness today and tomorrow.” We
selected three key areas—environment, residence, and education— through which the company
will conduct its sustainable CSR activities.
Samsung C&T Corporation’s Strategy for Social Contribution
Vision
Building a better tomorrow
What
Creation of world-class environment, residence, and education
Environment ㆍTree planting
ㆍCleaning the environment
of the local community
CSR Characteristics
Residence
ㆍHabitat
ㆍImprovement of
housing conditions
Education
ㆍEstablishment of educational
programs
ㆍEducational volunteer programs
with college students
CSR Banking on Business Characteristics
In line with characteristics of our E&C and T&I businesses, Samsung C&T Corporation conducts
social contribution activities, which are tailored to meet the needs of each division and office
location worldwide, by first clarifying the role of each party. The Engineering & Construction
Group, for instance, selects CSR activities for which it can utilize its expertise to create a pleasant
residential environment and a rich pool of construction professionals. The Trading & Investment
Group, on the other hand, is seeking to implement CSR activities through which it can communicate with local communities by tapping into its vast global network.
Global CSR Activities
Samsung C&T Corporation has expanded its scope of social contribution globally, and is searching for the appropriate CSR activities based on the characteristics of individual country. We are,
in particular, improving the condition of residential housing and building schools in developing
countries that are also our key strategic markets, such as India, Indonesia, and Vietnam. We
are also bolstering our network with local communities through the implementation of CSR
activities tailored to local needs.
Win-Win Partnerships with Local Communities
We are promoting a win-win partnership with local communities by designing and implementing efficient social contribution programs that are closely linked with local needs. Towards this
end, we have defined one CSR activity per site and are strengthening our partnership with local
governments and school boards.
Interview
Lee Sang Bong, Director, Green Umbrella ChildFund
“I hope Samsung C&T Corporation will be a leader in
spreading the culture of sharing.”
Since 2010, the Engineering & Construction Group has maintained a partnership with the
Green Umbrella ChildFund to implement diverse CSR programs. The company has supported
children and teenagers since 2013 via Dream Tomorrow, a project closely linked with local
communities. In the youth center the company built in Youngdeungpo, local middle school
students are offered career mentoring services and foreign language classes, as well as a
diverse range of events for cultural experiences. Even though many companies are implementing CSR activities now, not much support has been directed toward children or teenagers,
leaving many of them unsupported by welfare. The company’s unique and specialized
approach is a good model to follow for other companies. On the other hand, the company
and all of its employees need to maintain a culture of sharing to ensure sustainable growth
by overcoming company-led CSR activities. Accordingly, consistent education and related
actions on this issue is required so that the company and its employees can form a shared
understanding and agreement on the future direction of CSR activities. I hope Samsung C&T
Corporation maintains its leadership position in spreading the culture of sharing and its
approach to a win-win partnership with the rest of the society and beyond the boundaries of
the company.
Sustainability Report 2013
63
Key CSR Activities
To satisfy the demand for green management by our various stakeholders through our CSR
initiative, Green Tomorrow, we are conducting a range of activities to protect the environment.
Sponsoring the Seoul Green Film Festival
The Engineering & Construction Group sponsored the 9th Seoul Green Film Festival hosted by
the Korea Green Foundation, thereby solidifying its image as a green company. The festival aims
to promote the harmonious coexistence between the environment and humans through film,
and has introduced over 100 films on the environment every year since its inception in 2004.
Green
Tomorrow
Dream
Tomorrow
Green Tomorrow
Happy
Tomorrow
The Love Mugunghwa Campaign
Since 1990, the Trading & Investment Group has been conducting a promotional campaign to
educate people about the national flower of Korea, the Mugunghwa. The Love Mugunghwa
campaign includes a planting ceremony, literature events, a symposium on the flower, and
exhibitions. In 2012, new employees visited KOC’s Jincheon Athlete Center to plant approximately 1,000 Mugunghwa trees and to hand out Mugunghwa photo frames to support athletes
participating in the 2012 London Olympic Games and remind them of the unique spirit that this
special tree embodies.
Happy Tomorrow
The company has always implemented CSR activities that are centered on residential welfare in
an effort to improve the living environment of disadvantage people and stabilize their residential
conditions.
A Home Built with Heart, Habitat
The Engineering & Construction Group has leveraged its construction expertise to participate in
the Habitat movement. Through this movement, we provide people who live in poor surroundings with new living spaces and give hope so that they can stand on their own feet one day. Since
its inception in 2000, this movement has constructed 32 homes in Gwangyang, and as of 2013, a
total of 287 houses have been offered to low-income non-homeowners. A total of KRW4.5 billion
has been invested and 5,095 volunteers have participated in this movement from 2000 to 2012.
In 2012, we completed the construction of the Village of Hope, a large-scale Habitat project
aimed at constructing 112 homes from 2004 to 2012, and is run jointly by Samsung C&T
Corporation and Habitat for Humanity.
Selected as the Most Respected
Company in Korea
In 2013, Samsung C&T Corporation was selected by the Korea Management
Association Consulting (KMAC) as the Most Respected Company for the 9th year
in a row. Following the previous year, the company also topped the list in the
trading and construction industry segment for two consecutive years.
The Most Respected Company in Korea Award selects companies that are
respected by a wide range of stakeholders based on their relentless drive for
innovation. Going forward, the company will continue to enhance its corporate
value and reputation, and strive to provide differentiated services through innovations.
The Trading & Investment Group was also recognized as one of the top 50 Most
Respected Companies of 2013 in the general trading and distribution service
segment by Fortune Korea.
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Samsung C&T Corporation
Case Study
Overview
Towards a Sustainable Company
Creating Social Value
Performance Review
Appendix
Participation in Local Community Development
The Engineering & Construction Group has been implementing projects to improve the living
environments of local communities, such as restoring wells and building schools in Indonesia. In
Meulaboh, we rebuilt 20 wells through the Water for Life program, which is designed to provide
safe drinking water to the community. As a result, the rate of households with access to a local
drinking water facility and the rate of sanitary training attendance surpassed 90%, and provided
clean drinking water to more than 3,000 local citizens.
Assisting Children of Multicultural Families
Since 2006, the Trading & Investment Group has been providing support for children of multicultural families. In cooperation with Pearl S. Buck International Korea, the only organization in
Korea dedicated to helping multicultural children, we are operating a wide range of programs,
including scholarships through which we provide monthly stipends to 80 children, and donated
notebook computers to the Pearl S. Buck Study Room. In 2012, we started a campaign to provide
books printed in the language of their origin to multicultural families in an effort to provide them
with equal educational opportunities. Such efforts are not restricted to Korean sites. We’ve
joined forces with our overseas business partners to build libraries in the local towns and refurbish schools and playgrounds.
Dream Tomorrow
We are engaged in a series of events and activities in a bid to revive the dreams and ambitions of
our children and teenagers who will lead tomorrow’s society.
Construction of Dream Tomorrow
The Engineering & Construction Group is involved in a charity project to build and run youth
centers for children and teenagers, thereby narrowing social gaps between classes in an
increasingly polarized world. We opened the first Dream Tomorrow Center in Korea, where local
children and teenagers are offered tutorial sessions and diverse cultural experiences. In
Indonesia, we started construction of an elementary school in Lembang that will accommodate
200 local students.
Construction of a Community Youth Center
We are building a community youth center for middle school students who have limited access
to private lessons, but require study rooms for their grade level. In the youth center, students will
have access to learning assistance and youth mentoring.
Interview
Jang Seong Yoon, Senior Manager, UNICEF Korea
“I hope Samsung C&T Corporation continues to push
forward with its diverse and unique CSR activities that live
up to its reputation.”
Samsung C&T Corporation is raising funds through a matching system in which the company donates money that matches the amount employees donated to charitable organizations. Currently, a total of 120 employees are donating money to various philanthropic
organizations through the matching funds system. Through the Run Together event, which
was held in May 2013, the company delivered funds that were raised by employees in the
form of coins to UNICEF, and accomplished various other missions including the taking of
photographs. The company’s donation program continues to prosper in this tough economic
climate thanks to the voluntary support of its employees — making the program all the
more valuable and significant. Despite these acts of donation and proliferation of the culture
of sharing, the company still needs to engage on a higher level with its CSR activities to boost
its global reputation. The reputation and symbolic significance of its brand in the industry is
nothing short of awe-inspiring. Given the impact the company has on the entire industry,
Samsung C&T Corporation needs to aim higher in order to establish its strategy, uniqueness,
and diversity with its CSR activities.
Sustainability Report 2013
65
Special Issue:
Activity as a Global
Corporate Citizen
Samsung C&T Corporation is engaged in a variety of corporate citizenship activities that live up to its social expectations as it continues to grow as a global company. The company unveiled its vision as a 2020 Leading Global Player in a bid to become a world-class
global company through relentless innovations. We are growing as a global corporate citizen by creating value on a long-term basis,
thereby making the company and local community healthier at the same time.
Volunteers in the Overseas Habitat Program
(The Engineering & Construction Group)
Dream
Tomorrow
The Engineering & Construction Group is expanding the scope of its CSR activities to impact a global audience. With the continued expansion of
our global business, we are implementing a wide range of CSR activities in the areas we have a presence in around the world.
One of these activities is the construction of an elementary school in Dadapan, a small town located in Lembang, Indonesia. Currently, 101
children are studying in the only school in the town. The 30-year old school building is now crumbling, with exposed rebar coming from the
foundation, and is in dire need of a renovation.
The Engineering & Construction Group started the construction of a new school building that can accommodate up to 200 children in the region.
The new building will be installed with toilets, water tanks and drinking fountains, and equipped with school supplies and training materials for
the teachers. To complete this project, approximately 4,500 employees donated up to KRW70 million with an additional funding of KRW100
million provided by the company. The construction started in October 2012 and is scheduled to be completed by November 2013. Towards the
end of the construction, our employees will visit the town to help with the finishing touches, while also interacting with the local children through
cultural events.
66
Samsung C&T Corporation
Overview
Towards a Sustainable Company
Share
Together,
Happy
Together
Creating Social Value
Performance Review
Appendix
Through the years, the Trading & Investment Group has engaged in a number of
collaborative voluntary activities aimed at fulfilling our responsibility as a global
corporate citizen. In Delhi, India, we have worked in partnership with Videocon, our
strategic partner in India, in order to strengthen our relationship.
Since 2011, employees who volunteered for the charity program visited a local
center for disabled children and performed a number of activities including the
creation of a mural painting, decoration of the center’s interior, and the production
of training aides. They also hosted a Taekwondo and K-Pop event to help introduce
Korean culture to the local children. Through such efforts, we are fostering a positive
image of Korea and the company, while also striving to spread the culture of sharing by
encouraging voluntary participation in the CSR activities by our business partners.
In 2013, the company expanded the scope of participation even further by inviting
families of employees, local staff in the New Delhi subsidiary, and other global
employees, thereby fostering our culture of sharing throughout the country.
CSR Activities in India
(The Trading & Investment Group)
Sustainability Report 2013
67
3
70
73
74
78
80
81
68
Economic Performance & Distribution
Countering Bribery
Human and Labor Rights
Customer and Supply Chain Relations
Created Social Capital
Environmental Management
Samsung C&T Corporation
Overview
Towards a Sustainable Company
Creating Social Value
Performance Review
Sustainability Report 2013
Appendix
69
Economic Performance &
Distribution
Major Achievements in 2012
Samsung C&T Corporation realized KRW25.3 trillion in sales in 2012, a
17.5% increase over the previous year of KRW21.5 trillion. The increase
is attributable to the smooth progress in overseas projects of the
Engineering & Construction Group, as well as sales increase in the
Trading & Investment Group, due mainly to robust trading of its overseas subsidiaries.
New Orders in 2012 (Unit: KRW billion)
The company has realized KRW13.7 trillion in new orders in 2012 despite
the economic downturn, which is an 11.7% increase over the previous
year of KRW12.3 trillion. Despite the minimal increase in new orders in
the domestic market, the company was still able to secure the largest
number of new orders since its inception due to an increase of over
KRW1 trillion in overseas orders as a result of vigorous efforts to develop overseas markets.
The company has also realized KRW490.3 billion in operating profit and
KRW465.3 billion in net profit during the period, due mainly to the
smooth progress in overseas construction projects despite the steady
increase in investment costs.
Overseas Orders
Domestic Orders
New Orders
4,428
Consolidated Financial Statement (Unit: KRW billion)
5,220
Net Income during the Term
Sales Revenue
2012
455
409
351
12,274
6,236
7,472
13,707
2012
465
Summary of Financial Performance in 2012 (Unit: KRW billion)
The financial performance of Samsung C&T Corporation can be summed
up as follows:
21,546
2011
490
25,326
Breakdown of Sales by Region in 2012
The company saw a decline in sales in Europe and the Americas as a
result of the economic downturn in the United States and the persistent financial crisis in Europe, but recorded a dramatic increase in sales in
Asia due to the growth of emerging markets.
Region
2010
2011
2012
Korea
66.5%
65.5%
59.0%
Asia
20.9%
25.6%
32.4%
Europe
6.5%
4.8%
3.1%
Americas
6.0%
4.0%
5.6%
70
7,054
17,756
2010
3.1%
10,384
2011
Operating Income
497
5,956
2010
32.4%
59.0%
Samsung C&T Corporation
5.6%
2010
2011
2012
17,756
21,546
25,326
Gross
margin on
sales
1,561
1,702
2,009
Operating
income
455
351
490
Earnings
before tax
679
610
556
Corporate
tax
182
201
90
Net income
during the
term
497
409
465
17,501
20,922
25,964
2,601
4,231
4,905
Revenue
Income
statement
Balance
sheet
Total assets
Total debts
The company’s total assets amount to KRW26 trillion with KRW4.9
trillion in total debt as of 2012. The total assets increased due to the
purchase of land for construction and the increase in market value of
assets available-for-sale that are subject to market price evaluation,
while total debt increased due to corporate bond issuance.
Overview
Towards a Sustainable Company
Creating Social Value
Performance Review
Appendix
Distribution of Economic Performance
Samsung C&T Corporation is evenly redistributing the value created
through business activities across internal and external stakeholders.
A total of KRW5 trillion in value was distributed to various stakeholders
in 2012, including partners, suppliers, employees, government, and the
local community.
Distribution of Economic Performance (Unit: KRW billion)
Key Stakeholder
Description
Criteria
2010
2011
2012
Partners and
suppliers
Cost paid to material suppliers
Cost of materials
1,669
1,639
1,718
Cost paid to subcontracting partners
Cost of subcontracting
2,405
2,002
2,324
Employees
Total salary paid to employees
Cost of labor and welfare
392
492
598
Government
Total tax
Corporate and other taxes, and cost of bill
payment
206
252
137
Local community
Voluntary contribution and financial
investment to the local community
Donations, plus the cost of volunteer
activities
6
7
6
Dividends to all shareholders
Dividends
76
76
76
Interest to lending institutions
Cost of interest
115
144
149
4,869
4,612
5,008
Capital expense
Total
R&D Investment
Samsung C&T Corporation has concentrated its R&D investment to
improve its technology enhancements. A total of KRW115.1 billion was
invested in 2012, mostly to advance the technology competency of the
Engineering & Construction Group. Such R&D investments will contribute directly to the development of key business areas, including ultra
high-rise buildings, high-tech production plants, roadways and bridges,
ports, power plants, and housing. This, in turn, will generate unparalleled technology and added value for our customers. The company has
successfully secured a total of 31 new patents in 2012, while at the
same time securing KRW203 million in technology licensing fees.
R&D Investment (Unit: KRW billion)
87
2010
100
2011
115
2012
New Patents (Unit: Case)
2010
22
54
2011
2012
31
Sustainability Report 2013
71
Major Achievements for the Engineering & Construction
Group
The Engineering & Construction Group experienced a series of economic hardships in 2012, but still realized KRW8.9 trillion in sales,
with KRW1.1 trillion in gross margin on sales and KRW427.2 billion in
operating income.
Consolidated Financial Statement (Unit: KRW billion)
Sales Revenue
320
Operating Income
Order Backlog (Unit: KRW billion)
Total
Domestic Orders
2011
2012
26,750
31,581
35,165
Overseas Orders
28.37%
46.39%
Gross Margin on Sales
Housing Orders
24.82%
24.87%
39.45%
43.12%
2010
825
2010
2010
2012
2011
7,231
268
904
2011
2012
25.24%
7,314
427
1,114
8,943
35.73%
32.01%
Major Achievements for the Trading & Investment Group
Breakdown of Sales by Business
The Engineering & Construction Group’s sales revenue by business
consists mainly of buildings, plants, civil, and housing in order of volume. The Engineering & Construction Group has steadily expanded the
share of its overseas business in an effort to realize its vision to become
a Leading Global Player. Due to continued efforts, the Group’s overseas
sales amounted to nearly 42% of the entire sales generated in 2012.
The Trading & Investment Group weathered through a series of hardships, including the financial instability in Europe, economic contraction
in emerging markets, both in domestic consumption and international
trade, as well as the looming fear of an economic recession. Still the
Group went ahead and overcame the ordeal realizing KRW16 trillion in
sales in 2012. The Group also realized KRW894.6 billion in gross margins
on sales, which is a 12.1% increase year-on-year and KRW63.1 billion in
operating income, a 24.4% decrease over the previous year.
Breakdown of Sales by Business and Domestic/Overseas Sales
Consolidated Financial Statement (Unit: KRW billion)
(Unit: KRW billion)
Sales Revenue
Criteria
2010
2011
2012
Building
2,688
3,101
3,209
Civil
1,559
1,743
1,673
Plant
1,034
1,276
2,575
Housing
1,950
1,194
1,486
Domestic
5,413
5,471
5,168
Overseas
1,818
1,843
3,775
Breakdown of Performance by Business (New Orders)
The Engineering & Construction Group realized KRW13.7 trillion in new
orders in 2012, the largest ever in the company’s history, with the
building business comprising the largest share with KRW6.6 trillion in
new orders.
Criteria
2010
2011
2012
Building
3,425
3,470
6,616
680
1,875
2,146
Plant
3,556
4,534
1,473
Housing
2,723
2,396
3,472
72
Samsung C&T Corporation
Operating Income
Gross Margin on Sales
736
2010
10,525
84
798
2011
2012
14,232
63
895
16,383
Breakdown of Performance by Business (Sales)
The Trading & Investment Group consists mainly of its trading (industrial materials, natural resources) and organizing (plant) businesses.
Among them, trading of industrial materials comprises over 70% of the
entire sales in the segment. The overseas sales totaled 76% of the
Group’s entire sales in 2012.
Breakdown of Sales by Business and Domestic/Overseas Sales
(Unit: KRW billion)
Breakdown of New Orders by Business (Unit: KRW billion)
Civil
135
Criteria
2010
2011
2012
Industrial materials trading
8,511
10,520
12,172
Natural resource trading
1,539
3,042
3,778
475
670
433
Domestic
2,636
3,224
3,985
Overseas
7,889
11,008
12,398
Plant organizing
Overview
Towards a Sustainable Company
Creating Social Value
Performance Review
Appendix
Countering Bribery
Ethical Management
Strengthened Ethical Management System
Samsung C&T Corporation has designated the Audit Team, which is an
independent department reporting directly to the CEO, as the organization responsible for implementing ethical management. The Audit
Team is committed to leading directors and employees to practice
ethical management through frequent audits, as well as protecting
business operations, both domestic and foreign, against insolvency
through management diagnosis. Having established guidelines for a
clean organizational culture, the team takes strict action on irregularities to prevent corruption and strengthen the mindset of all directors
and employees toward ethical management.
Ethical Management Training
Samsung C&T Corporation provides training for all directors and
employees to form a consensus on the necessity of ethical management. This program, which is a part of all training courses including
orientation for new and experienced recruits, focuses on case studies
showing the correct standards to prevent corruption. Also, the scope of
training has been extended to include employees dispatched overseas,
local employees in overseas subsidiaries, and employees of business
partners. This helps to spread our spirit of ethical management. The
number of hours our employees have participated in ethical management education is 31,423 in 2012.
Content of Ethics and Anti-corruption Training
Major Training Courses
2011
Provided online compliance training
Provided offline training for new and experienced recruits
2012
Created and included content on “clean organizational culture”
in Samsung DNA Online Training
Created and included offline training for promoted employees and
site visits
2013
Provided all directors and employees (including those overseas)
with online training
Provided offline training for employees dispatched overseas,
employees at subsidiaries and branches, and employees of suppliers
and partners
Compliance
Strong Compliance Organization
The Engineering & Construction Group and the Trading & Investment
Group each have their own organization responsible for implementing
compliance. The Engineering & Construction Group has the Compliance
Committee, the Compliance Steering Committee, and the Compliance
Office. In 2012, it appointed 28 compliance officers (CO) and 64 compliance managers (CM) representing each business unit and corporate
staff function, and serving as a driving force for practical management
of compliance activities.
The Trading & Investment Group operates: the Compliance Committee,
a supreme decision-making body for compliance led by the CEO, the
Compliance Office serving as a working office; and Compliance
Sub-Committee consisting of 40 COs and CMs who lead compliance
activities within the assigned departments of the Support Division
business units and overseas regional headquarters (RHQs).
New COs and CMs Appointed
2011
2012 New COs and CMs Appointed
Engineering &
Construction
28
28
6 COs for each business unit and
22 COs for Corporate Staff
Trading &
Investment
17
20
One for each domestic business
unit/team, RHQs and department
of Support Division
Engineering &
Construction
80
64
6 CMs for each business unit,
22 CMs for Corporate Staff,
and 36 CMs for the individual
departments
Trading &
Investment
17
20
One for each domestic business
unit/team, RHQs and department
of Support Division
CO
CM
Actions for Compliance
The Engineering & Construction Group reinforces its compliance capabilities by implementing compliance training programs. Eight risk areas
unique to the construction industry have been identified: fair trade,
corruption prevention, information protection, co-prosperity, Q-HSE,
overseas agents, integrity, and organizational culture. Online compliance training in these areas is provided continuously for all directors
and employees, in addition to offline compliance training customized
for employees and the job position. Furthermore, to strengthen compliance management and capabilities, the business group runs the “Let’s
Achieve Compliance Together” campaign with all of its directors and
employees once a quarter.
In the meantime, to make compliance part of daily life, the Trading &
Investment Group selected 15 areas of core attention, such as subcontracting, foreign exchange transactions, strategic materials handling,
and privacy protection, and has provided in-depth offline training to
every officer, manager, and employee working in Korea tailored to their
positions and job duties. These areas of core attention are thoroughly
checked for compliance during My Risk Care Week, which is Trading &
Investment Group’s unique risk management program that intensively
monitors risk and offers training programs to employees on a biannual
basis.
Status of Ethical Management and Compliance Training
Unit
Trainees
Number of people
2010
2011
2012
11,324
10,821
14,061
Breaches of Laws Related to Ethical Management and Compliance
Samsung C&T Corporation is dedicated to carrying out transparent and
fair management activities. Nevertheless, there are ongoing investigations and lawsuits as of 2013 over an incident that happened in 2009
before the compliance system was introduced and enforced in earnest.
Sustainability Report 2013
73
Human and Labor Rights
Talent Management Principles
Samsung C&T Corporation does not discriminate when it comes to
nationality, gender, faith or social status, and stipulates that all employees are entitled to equal treatment. We comply with the Labor Standards
Act and the ILO Regulations and strictly prohibit child and forced labor
in accordance with relevant laws and regulations.
As of the end of 2012, there were no reported cases of forced or any
other labor prohibition policy violations in our Korean and overseas
business sites. We do not recruit or employ anyone who is younger than
the legal working age. Also, equal opportunity and diversity in the workplace are clearly stated in our recruiting standards and criteria.
Workforce (Unit: Number of Employees)
2010
2011
2012
10,707
12,596
14,166
Overseas employees
4,609
5,230
5,923
Employees in Korea
6,098
7,366
8,243
2010
2011
2012 *
Regular
5,068
6,112
6,688
Temporary
1,030
1,254
1,555
Women
577
772
876
Disabled
114
118
135
Patriots and veterans
114
131
133
20s and 30s
3,461
4,224
4,461
40s and older
2,637
3,142
3,782
151
167
214
Total
Workforce by Categories (Unit: Number of Employees in Korea)
Employment
Social minorities
Age
Rank
Executives
*T he figures shown above are based on the actual employment figures as of the end of 2012, and therefore, different from the employment figures stated in the Annual
Report, which were converted according to the average employment concept.
Executives and Employees by Region and Local Employment
Samsung C&T Corporation aims to secure people equipped with professionalism and a global perspective who can work creatively with future
growth engines and produce tangible business results on the global
stage. Therefore, there is no discrimination against nationality in our
recruitment process, and talent and potential to contribute to the organization are preferentially considered in hiring new employees. There are a
total of 1,406 local employees in both E&C and T&I Groups as of 2012.
Executives and Employees by Region (Unit: number of People, as of the End of December)
2010
2011
2012
4,609
5,230
5,923
Middle East
-
552
873
Asia and Oceania
-
3,207
3,530
Americas
-
348
441
Others
-
1,123
1,079
698
930
1,406
Middle East
-
213
483
Asia and Oceania
-
519
713
Americas
-
101
166
Others
-
97
44
Total local workforce
Local employees*
* The local employment of the T&I Group decreased in 2012 because it restructured its operations and workforce focused on the trading business.
74
Samsung C&T Corporation
Overview
Towards a Sustainable Company
Creating Social Value
Current State of Female Employees
Samsung C&T Corporation does not use gender to discriminate in terms
of wages, training, promotion, retirement, and layoffs. To increase utilization of the female workforce, we have developed a plan for employing
female workers every year based on the affirmative action introduced
by the government. The ratio of women to the total recruits in 2012 was
26.3%, and the number of female managers is 152.
Ratios of Female Recruits and Female Managers
Percentage of female
recruits
Number of female
managers
2010
2011
2012
20.4
27.4
26.3
61
105
152
Status of Education and Training
Amid intensifying global competition, it is absolutely imperative to
strengthen our ability to integrate diverse functions and organizations
and to hire talent with world-class expertise to capture new business
opportunities and turn them into tangible results. We aim to secure
global human resources to lead our future businesses by nurturing
internal talent and recruiting talent at home and abroad.
Performance Review
Appendix
Support for Female Employees
Samsung C&T Corporation conducts a diverse range of programs to
ensure that female executives and employees will not have to interrupt
their careers because of pregnancy or childbirth. These programs
include: working remotely or telecommuting options and role model
programs, where top-performing female executives/employees are
selected to motivate the female workforce to perform to their full
potential.
Uses of Maternity and Parental Leave
Number of maternity/
parental leave participants
Percentage of women who return
after leave
Percentage of continued employment for 12 months or longer after
return (retention rate)
2010
2011
2012
14
40
41
83.5
98.1
95.1
83.5
100
93.3
Sexual Harassment Prevention Education: Participants and
Training Hours
2010
2011
2012
Participants
11,324
10,821
8,613
Training hours
61,616
49,936
17,740 *
* Training hours decreased due to the improved quality of offline classroom
training education.
Education and Training Expenses and Training Hours per Person
2010
2011
2012
KRW million
1.6
2.1
1.6
Hour
114
114
134
Unit
2010
2011
2012
9.5
15.3
13.6
Unit
Education and training expenses per person
Training hours per person
Total Education and Training Expenses
Total
KRW billion
Sustainability Report 2013
75
Fair Performance Evaluation
Our employee compensation strategy is to continue to maintain the
highest compensation level in the industry. Annual salaries for individuals are differentiated according to grades determined by evaluation
results. Also, we have in place a performance-based bonus system in
which a portion of our business profits are shared in accordance with
business performance and contributions. This system helps motivate
directors and employees by providing adequate compensation based
on performance.
Welfare Status
grams to help our them stabilize their livelihood and improve their
quality of life. The legal welfare systems provided by Korean laws are
implemented, which includes four major insurance types (national pension, health insurance, employment insurance, and worker compensation), in addition to a selective welfare system.
Welfare Expenses (Unit: KRW million)
Performance Evaluation Status (Unit: %)
94.8
2010
2010
92.1
2011
2011
95.1
2012
46,494
2012
66,286
85,250
Welfare Programs (2012)
Criteria
Programs in Detail
Support for leisure activities
ㆍMemberships to resorts, fitness centers, and sports centers
ㆍAccess to water parks, as well as intra-company clubs, and financial assistance for operations
Assistance for childbirth and
maternity protection
ㆍCongratulatory money for childbirth and pregnancy, and gifts for childbirth
ㆍLounges for pregnant women and breast-pumping areas
ㆍRest areas for female workers
Support for housing/livelihood
stability
ㆍInternal labor welfare funds
ㆍCredit union (offering low-interest loans)
Assistance for medical care and health ㆍAssistance for regular and in-depth medical checkups; in-house medical center
ㆍAssistance for medical bills (support executives/employees, their spouses and their children to receive
medical indemnity insurance coverage from external insurers)
Educational support
ㆍDiverse educational support programs including online/external programs, as well as support for exter-
nal language programs
Legal welfare benefits
ㆍAccess to up to four different types of social insurance
Selective welfare benefits
ㆍGift points worth KRW600,000 a year (the company operates an online shopping mall where the points
can be redeemed)
Others
76
ㆍThe company pays a portion of personal pension premiums
ㆍCongratulatory or condolence money or flowers, as well as days off for family events
Samsung C&T Corporation
Overview
Towards a Sustainable Company
Creating Social Value
Retirement Management
Samsung C&T Corporation offers a retirement pension program to help
executives and employees prepare a stable source of income after
retirement. In addition, we continue to make corporate-level efforts to
find ways of aggressively utilizing services of employees with core skills
even after their retirement age. It should be noted that three affiliates
Performance Review
Appendix
engaged in the construction business within Samsung Group operate a
Career Development Center (CDC), which provides retired employees
with consulting services for reemployment and life planning seminars
for incumbent employees.
Retirement Pension Status (as of the End of December)
Unit
Start date
DB*
DC**
Total
Sep. 28, 2007
Nov. 28, 2008
-
Total amount
KRW billion
251.7
0.6
252.3
Policyholders
Person
4,655
52
4,707
* A defined benefit (DB) pension plan is a type of pension plan in which benefits upon retirement are predetermined by a formula based on the employee’s tenure of service
and average earnings.
** A defined contribution (DC) plan is a type of retirement plan in which the employer pays a contribution every year equivalent to 1/12 or more of the employee’s annual
salary, while the employee determines how the payments will be invested.
Our biggest asset is our employees. We have kept turnover to a minimum through competitive talent management practices, spanning from employee
evaluations to compensation to welfare benefits. Turnover rates of Samsung C&T Corporation was 0.7% in 2012.
Turnover Rates (Unit: %)
2010
2011
2012
0.7
0.6
0.7
Labor-Management Relations
Samsung C&T Corporation guarantees freedom of association and collective bargaining rights in accordance with the compliance management principles. The Labor-Management Council is in place to promote
welfare for employees and pursue sound growth and development for
the company through mutual participation and cooperation between
labor and management. The council consists of the same number of
representatives from both labor and management, and the labor representatives are elected by votes from all the employees. Labor representatives attend regular director and management strategy meetings in
which they participate in management activities. In addition, any
changes to the overall business and resource management plans of the
company are required to be reported to the council.
Labor-Management Council Details (2012)
Agenda
Productivity improvement and payment based on results; recruitment/placement and education/training; prevention of labor
disputes; handling of workers’ grievances, safety, health and other workplace environment improvement activities; improvement of HR and labor management policies and systems; relocation of resources due to management or technical circumstances; general principles of employment adjustment such as re-training and re-employment; improvement of wage payment methods, systems and structures; introduction of new equipment or technology or improvement of a work process;
enactment or improvement of work regulations; promotion of workers’ welfare; etc.
Matters of
decision-making
Development of basic education/training and competency development plans for workers; installation and management of
welfare facilities; matters that fail to be resolved by the Grievances Committee; creation of various joint labor-management
committees; etc.
Matters to be
reported
Matters related to the company’s management policy and status; matters related to management performance and other
matters about which the labor raises a fair request for reporting or explanation.
Sustainability Report 2013
77
Customer and Supply
Chain Relations
Business Partners
Samsung C&T Corporation has been realizing shared growth by collaborating with a diverse range of business partners. As of 2012, there were 1,987
partners registered with Samsung C&T Corporation, and 708 of them were new.
Number of Key and New Business Partners
Key Partners
New Business Partners
1,712
2010
1,836
2011
370
2011
1,987
2012
441
2010
708
2012
Transactions with Business Partners
Samsung C&T Corporation distributes economic results generated from its business activities through transactions with its business partners. In
2012, the company made purchases worth KRW4 trillion, with purchases of goods and equipment from business partners accounting for 42% of the
total amount.
Actual Payments to Material Suppliers and Outsourcing Partners
Total purchasing amount
Unit
2010
2011
2012
KRW billion
4,073
3,641
4,042
Percentage of goods and equipment purchased
%
41
45
42
Percentage of subcontracts
%
59
55
58
To be specific, goods and equipment purchased from business partners amount to KRW1.7 trillion, 9.6% of which were made locally. Subcontracts
total KRW2.3 trillion in value.
Goods and Equipment Purchases (Unit: KRW billion, Local Purchase Rate)
2010
2011
2012
Subcontracts (Unit: KRW billion)
1,669 (11.5%)
2,405
2010
1,640 (10.5%)
2,002
2011
1,719 (9.6%)
2,324
2012
* T he data for 2010 and 2011 differ from the data in the 2012 Annual Report because
those purchases were PO-based, while those in this report are GR-based.
Financial Assistance for Business Partners
Samsung C&T Corporation provides its business partners with a variety of financial support, including direct support, management support, indirect
support, and mixed support.
Financial Assistance for Business Partners (Unit: KRW billion)
Mixed support – Set up a win-win fund
Indirect support – Family loan
1.4
10.0
Management support – Emergency fund
2012
Direct support – New technology R&D fund
50.0
78
Samsung C&T Corporation
29.0
Overview
Towards a Sustainable Company
Creating Social Value
Diverse Efforts for Customer Satisfaction
The Engineering & Construction Group has established specific criteria
tailored to the building, civil, plant, and housing sectors in response to
customer complaints about services and products. To resolve customer
complaints promptly and effectively, we have systematized our
response process and offer follow-up services by maintaining a database to track similar complaints and consistently complement the work
processes of the Customer Satisfaction department.
Customer Satisfaction Scores
Samsung C&T Corporation has ranked at the top of the National
Customer Satisfaction Index (NCSI), the most prestigious customer
index in Korea, for its differentiated services. This is the result of our
constant efforts to satisfy customers through not only the hardware
side of customer satisfaction activities, such as quality and landscaping,
but also the software side, such as prompt and emotional satisfaction
after moving into a new apartment complex, which is the aim of true
customer satisfaction activities.
Point-of-Contact Channels
Performance Review
Appendix
NCSI Survey Results (2012)
No.1
Ranked in the NCSI for 15
consecutive years
Compliance with Customer Protection Laws
Samsung C&T Corporation complies with all customer-related laws. We
observe every relevant law in a variety of areas, from privacy protection
to marketing laws requiring the provision of accurate information, and
enforce internal policies pursuant to the laws. Samsung C&T Corporation
recorded zero violations of relevant laws in 2012.
Case Study
Samsung C&T Corporation checks the levels of product satisfaction by listening to its customers and striving to meet customer expectations through
high-quality products. The Housing Division of the Engineering & Construction Group carries out a variety of activities to provide information to consumers through various POC channels such as the Raemian galleries, customer contact center, our Website homepage, Hestia lounges (customer contact
centers within apartment complexes) and Raemianity (online community). In addition, we provide product information, investigate customer needs for
services, conduct product surveys, and analyze prior consumer evaluations of a product.
A variety of culture classes and exhibitions are available at the Raemian galleries.
Sustainability Report 2013
79
Created Social Capital
CSR Investments
In 2012, Samsung C&T Corporation executed KRW5.7 billion worth of CSR activities.
CSR Expenditures (Unit: KRW billion)
2010
2011
2012
Government organizations
0.04
0.01
0.20
Educational institutions
0.97
1.05
0.90
Social welfare organizations
2.18
1.82
2.97
Others
3.25
3.78
1.58
Total
6.44
6.66
5.65
Of the total amount of CSR expenditures in 2012, KRW5.5 billion was spent on social contribution activities in Korea, while the remaining KRW200
million was spent on overseas activities. As our overseas operations continue to grow, we will carry out overseas CSR activities more actively.
CSR Expenditures in Korea and Overseas (Unit: KRW billion)
2010
2011
2012
Korea
6.38
6.43
5.45
Overseas
0.06
0.23
0.20
CSR Activities
Samsung C&T Corporation encourages directors and employees to volunteer. In 2012, a total of 38,581 employees participated in volunteer work. An
increasing number of employees spend an increasing number of hours volunteering every year.
Unit
2010
2011
2012
Participants
Number of people
30,769
34,853
38,581
Participating hours
Number of hours
44,519
45,268
47,731
Habitat* Activities
Working with Habitat Korea, the Engineering & Construction Group has been able to engage in a Habitat for Humanity project. Since 2000, a total of
287 houses have been built for low-income non-homeowners by the end of 2012. In addition to providing financial assistance every year, directors
and employees have participated in building houses under the guidance of professionals and have volunteered to serve the communities under the
leadership of the Samsung Labor-Management Council.
2010
2011
2012
Region
Korea
Cheonan
Cheonan
Cheonan
Number of houses built (Households)
Korea
12
12
16
* Our Habitat for Humanity project in Korea was completed in January 2013, with the construction of 112 houses (Village for Hope) in Cheonan City.
80
Samsung C&T Corporation
Overview
Towards a Sustainable Company
Creating Social Value
Performance Review
Appendix
Environmental
Management
Environmental Management Vision and Strategy
To achieve its vision of becoming a global partner who creates greater value for people, the environment, and the future, the Engineering &
Construction Group selected and prioritized nine strategic initiatives based on a well-structured environmental management system (ISO14001).
Through the implementation of these initiatives, we have been pursuing environmental management aggressively.
Creating Greater Value
for People, the
Environment, and Future
Global Partners
Active
participation by
directors/
employees
Management’s
commitment
Corporate
value
maximized
Create a social
enterprise
Respond to regulations
ㆍOrganize the environmental
ㆍEnter into the eco-friendly
management system
ㆍInvigorate the environmental
management committee
ㆍEnhance responses to
environmental laws and
regulations
product and service markets
ㆍEstablish the Green Purchasing
initiative
ㆍStrengthen responsiveness to
climate change
Environmental Protection Investments and
Expenditures
The Engineering & Construction Group continues to execute and
manage its site environmental management budgets in order to
achieve its environmental management targets. Every year, we spend
about 0.1% of our total sales revenue on site environmental management expenses. In 2012, the total expenditure for this purpose was
KRW21.2 billion. Executions of site environmental management
investment budgets are tracked electronically on a monthly basis. The
expenditures are maintained in detail to enable the company to analyze
the specific effects of the expenditures.
Fulfill social
responsibilities
ㆍStrengthen the foundation for
environmental management
ㆍDifferentiate on-site
environmental management
practices
ㆍCreate the image of an
environmentally friendly company
Total Environmental Protection Investments and
Expenditures (Unit: KRW billion)
Environmental management
expense total
2010
2011
2012
15.2
16.1
21.2
Scope of data collection: E&C Group’s Korean and overseas project sites, and T&I
Group’s key overseas business sites
Sustainability Report 2013
81
Greenhouse Gas Emission Control
performance management system that includes a greenhouse gas
inventory management function ality.
In 2012, the total amount of greenhouse gas (GHG) emissions generated
by Samsung C&T Corporation was 489,358 tons. The increase in emissions as compared with 2011 can be attributed to, in the case of E&C
Group, the increase of customer orders for large projects, as well as existing sites whose major processes began this year. Also, the scope of data
gathering from overseas sites was expanded. As for the T&I Group, the
increase can be attributed to its gradual expansion of the scope for GHG
emission data collection in order to respond actively to climate change.
The Engineering & Construction Group maintains a list of energyconsuming facilities at sites and its headquarters, as well as energy
consumption data by division and usage data by energy source using
the G-ERP Environmental Management System, an environmental
A government announcement in 2012 confirmed the emission reduction target for the construction industry as 7.1% from the BAU baseline
by 2020. To achieve this target, we internally set our initial target of
reducing GHG emissions by 4% of levels from 2009 level (to 195,175
tCO₂eq) by 2015 and have been making continuous reduction efforts
every year. As external stakeholders’ demand for control over Scope 3
emissions has been rising recently, we are strengthening control over
GHG emissions by suppliers in our supply chain, as well as indirect
emissions from business trips and commutes by our directors and
employees. Furthermore, we are strengthening our GHG emission
reduction activities from the initial stage of breaking ground at a new
site not only in Korea but also overseas, starting with Singapore.
Greenhouse Gas Emissions
Unit
Scope 1
Scope 2
tCO₂eq
Scope 3
Total GHG Emissions
GHG emission intensity*
2010 **
2011 **
2012
88,527
82,446
108,076
69,837
72,612
205,298
189,970
177,081
175,984
348,334
332,139
489,358
1.96
1.54
1.93
tCO₂eq/KRW100 million
* GHG emission intensity = Total annual GHG emissions/sales revenue
**The 2010 and 2011 GHG emissions differ from those reported in the Independent Assurance Report on GHG Emissions in previous years because the data gathered after
the scope in which data was collected included 2010 and 2011.
Greenhouse Gas Emissions from Korean and
Overseas Operations (2012)
Emissions
Greenhouse Gas Emissions by Business Groups (2012)
Unit
Korean
Overseas
tCO₂eq
249,258
240,100
50.9
49.1
%
Unit
Emissions
tCO₂eq
%
E&C Group
T&I Group
292,620
196,738
59.8
40.2
Scope of data gathering: E&C Group’s construction sites in Korea and overseas,
and T&I Group’s key overseas sites
Energy Consumption Reduction
Samsung C&T Corporation consumed 6,684,028 GJ of energy in 2012.
The reason for the increase, as compared to 2011 for the E&C Group,
was due to recent price fluctuations that dramatically increased
consumption at Korean sites that used city gas (with relatively stable
prices) and that the scope of data collection from overseas sites was
extended. In the case of the T&I Group, the increase can be attributed to
the gradual expansion of energy consumption data gathering to
respond actively to climate change.
We have made energy consumption reduction efforts part of our daily
life, maintaining a proper and comfortable indoor temperature across
all of our buildings, as well as conserving electricity by minimizing the
use of lights whenever necessary. Considering the nature of the
construction business, which requires employees to frequently work
outside of their workplaces, we have been replacing standard cars with
more eco-friendly hybrids for employee business trips.
82
Samsung C&T Corporation
From June to September 2012, Headquarters conducted an Energy
Conservation Campaign for the Summer of 2012, requiring air conditioning for a meeting room to be booked in advance, carrying out
energy-saving activities and distributing energy conservation guidelines to directors and employees. This campaign brought about a
reduction of 6.2% in electricity usage compared with an average year.
To reduce energy consumption during the construction process, we
asked individual project teams to voluntarily reduce their energy
consumption and allowed them to set their own targets for their
construction sites. In addition to such energy reduction efforts, “fuelefficient driving” training is provided for construction machinery and
equipment with the highest proportions of GHG emissions.
Besides these efforts, we strive to induce energy usage reductions
during construction by implementing proven energy-saving construction and equipment operating methods based on the requirements for
each individual project.
Overview
Towards a Sustainable Company
Creating Social Value
Performance Review
Appendix
Energy Consumption
Unit
2010
2011
2012
LPG
1,021,902
927,841
27,054
Diesel
2,654,591
2,403,782
2,586,309
113,322
95,099
1,164,881
59,865
79,017
80,127
0
0
11,870
920,982
915,990
2,535,374
Aviation fuel
64,087
113,057
160,442
Gasoline
58,850
80,321
117,971
4,893,599
4,615,106
6,684,028
27.56
21.42
26.39
City gas
Kerosene
Heavy oil
GJ
Electricity
Total
Energy intensity*
GJ/KRW100 million
Energy intensity = Total annual energy consumption/sales revenue
Scope of data collection: E&C Group’s Korean and overseas project sites, and T&I Group’s key overseas business sites
Green Building Certification
Case Study
Korean Green Building Certifications
Category
2010
2011
2012
Preliminary certification
17
9
14
Certification
17
6
5
Total
34
15
19
We contribute to mitigating global warming by encouraging our major
projects, domestic and abroad, to achieve green building certification based
on our leading eco-friendly, high-efficiency, and low-energy technologies.
This in turn provides customers with low-cost, highly efficient buildings. As of
the end of 2012, we had 68 LEED APs (Leadership in Energy and Environmental
Design Accredited Professionals), and we were recognized for our green
building technology through a variety of building projects we completed.
* T he official name of the certification awarded to environmentally
friendly buildings in Korea was changed to Green Building Certification in
March 2013.
Overseas Green Building Certifications (as of the end of December 2012)
Certification Name
LEED
Green Mark
Project Name
Country
Certification Criteria
Certification Grade
Green Tomorrow
Korea
NC v.2.2
Platinum
Samsung C&T Corporation HQ Office Building
Korea
EBOM 2009
Gold
Connexion
Singapore
GM(ENRB) v.3
Platinum
* In an effort to achieve green building certifications such as LEED, Green Mark and Green Ship initiatives are in place for 10 projects including Rasuna Tower in
Indonesia, Tadawul Tower in Saudi Arabia, and Tanjong Pagar in Singapore.
Sustainability Report 2013
83
Resource Consumption Management
Samsung C&T Corporation tracks and manages resource consumption
on a monthly basis using its G-ERP Environmental Management
System. To cut down on resource usage, we have increased the use of
recycled materials, such as recycled molds and managing the use of
recycled aggregate, which is similarly to reused concrete.
Resource Usage
Recycled aggregate is a resource intended to replace natural aggregate.
To encourage the use of recycled aggregate, we continuously provide training to ensure a robust supply and on-site use of high-quality recycled
aggregate. It should be noted that we not only perform thorough quality
control activities, but also seek out best practices in the use of recycled
aggregate and actively share those best practices across our sites. As a
result, 32,000 tons of recycled aggregate were used as a replacement in
2012, accounting for 7.3% of the total aggregate consumption.
Unit
2010
2011
2012
Steel bar
Ton
226,229
164,745
185,493
Ready-mixed concrete
m³
1,639,875
1,658,657
1,643,220
Recycled aggregate
m³
16,479
51,609
32,040
Scope of data collection: E&C Group’s Korean and overseas project sites, and T&I
Group’s key overseas business sites
Water Consumption Management
For efficient use of water resources, Samsung C&T Corporation classifies
water resources into following: tap water; stream water; and ground
and recycled water, and manages water usage thoroughly using its
G-ERP Environmental Management System. The increase in water use
compared with 2011 for the E&C Group is due to the increase in the
proportion of civil engineering sites, which tend to use more water and
the number of sites at home and abroad. As for the T&I Group, the scope
of data gathering was extended to manage water usage at major
overseas sites more efficiently.
Water Usage
Unit
Tap water
Stream water
Ground water
Ton
Recycled water
Total usage
Water intensity*
Ton/KRW10 million
2010
2011
2012
7,471,587
4,864,327
7,657,346
369,621
273,872
3,660,077
2,294,477
741,649
278,905
93,567
116,538
211,619
10,229,252
5,996,386
11,807,947
5.8
2.8
4.7
* Water intensity = Total annual water consumption/sales revenue
Scope of data collection: E&C Group’s Korean and overseas project sites, and T&I
Group’s key overseas business sites
At our R5 sites, we established an on-site water recycling process based
on a water treatment system that uses the coagulation-precipitation
method. This not only improved the quality of discharged water but
also reduced our waterworks supply by 31% compared with previous
projects, enhancing our water resource usage efficiency. At our DSR
sites, we increased water recycling rates and optimized waste water
management by improving the pump car wash process and the
discharged water management process.
84
Samsung C&T Corporation
Furthermore, we applied an agitator-based turbid water reduction
system to Sections 1 and 2 at the Honam High-Speed Railway Project
Site. Using this system, we lowered turbidity from 1,000 NTU for inflowing water to less than 50 NTU for outflowing water, preventing water
pollution from water discharged from the site.
Overview
Towards a Sustainable Company
Creating Social Value
Waste Management
Samsung C&T Corporation develops and implements systematic
strategies to reduce and reuse waste across the entire project process,
from planning and designing to construction to maintenance and
dismantling. During the planning and design stages, we apply building
information modeling (BIM) designs and precast concrete (PC) methods,
which reduce concrete waste by about 25%. During the construction
stage, we aggressively implement waste reduction efforts by replacing
wooden molds, which generate mold waste, with aluminum molds that
Performance Review
Appendix
have a use frequency about seven times higher. We also enforce internal
guidelines that require highly recyclable wastes, such as wood waste
and plasterboards, to be sorted out thoroughly and picked up by the
manufacturers so that they can be recycled as raw materials. Also,
waste generated is updated in real time to register for electronic delivery
and receipt sheets within the G-ERP Systems, as well as in the waste
management system (known as Allbaro) of the Korea Environment
Corporation. Waste generation data accumulated in the system is
analyzed, and the results are used to develop and enforce waste
reduction and recycling policies.
Waste Reduction and Recycling Strategy
Planning/
Design
Reuse
Maintenance/
Dismantling
4R
Recycle
Refuse
Reduce
Construction
Waste Generation by Type (Unit: %)
9
Concrete waste
1
1
70
9
Asphalt concrete waste
Wood waste
Synthetic resin waste
Mixed construction waste
10
Three-year
average between
2010 and 2012
Other waste
Reuse of Recycled Aggregate
Construction waste generated
Construction waste recycling rate*
Unit
2010
2011
2012
Ton
700,258
849,243
871,390
85
92
98
%
* Waste Recycling Rate: Adheres to the Ministry of Environment’s waste recycling statistical standard
Scope of data collection: E&C Group’s Korean and overseas project sites, and T&I Group’s key overseas business sites
Sustainability Report 2013
85
Safety and Health Management
The Engineering & Construction Group operates its health and safety
system in a well-structured manner and manages safety-related
accidents based on its KOSHA 18001 and OHSAS 18001 certifications.
We maintain a safety control system that meets global standards by
strengthening on-site safety management and improving the work
environment to prevent accidents. We also take practical and siteoriented preventive measures by securing and nurturing safety and
health specialists. Our converted industrial accident rate for 2012 is
0.77%, and there are a total of 591 safety engineers at home and
abroad.
Safety and Health Achievements
Overseas Lost Time Injury Rate (LTIR)
Industry fatality rate per 10,000 workers in Korea*
Unit
2010
2011
2012
Person
0.04
0.01
0.02
%
1.5
2.1
0.8
* T he rate of employee fatalities in a year per 10,000 workers
Safety Engineers in 2012
HQ
Safety engineers in Korea
341
Safety engineers outside of Korea
250
Health Management for Employees
Recognizing the need for improving the health of our executives/
employees and their families, we introduced a variety of health care
programs and systems. To enhance the health management levels of
our executives and employees, as well as their family members, we
improved our health management support programs. As mental health
is emerging as an important health care issue to be managed along
with physical health, we offer a counseling service called Heart Garden.
It is a professional counseling center where professional counselors
help to resolve work stress, interpersonal issues and subsequent psychological difficulties, such as depression and anxiety.
Assistance for Health Checkups
Health checkup assistants
Health checkup financial assistance
Unit
2010
2011
2012
Person
3,928
3,975
5,743
KRW million
2,330
2,768
5,662
Health Management Programs
Description
Description
Support for
medical bills
Beneficiaries: Employees, their spouses, and children
Benefits: Indemnity health insurance coverage
Complete
checkup
Beneficiaries: 30 years and older
Timing: Once every two years for employees aged 30-39
years; once every year for those aged 40 years or older
(once every other year for their spouses)
Benefits: Blood test, arteriosclerosis, endoscopy, CT,
MRI, echocardiography
General
checkup
86
Beneficiaries: Less than 30 years of age
Timing: Once every a year
Benefits: Comprehensive medical checkup, including
legally required test items plus cancer screening (liver
and colorectal), hepatitis A, and thyroid abnormalities
Samsung C&T Corporation
Group term
insurance
Beneficiaries: Executives and employees
Benefits: Death benefit (KRW150 million), cancer
diagnosis, and others (KRW10-20 million)
Cardiac
surgery
expenses
Beneficiaries: Children of executives and employees
Benefits: Support 70% of the patient’s out-of-pocket
payment for a cardiac surgery
Mutual aid
fund
Beneficiaries: Employees
Benefits: Interest-free loan within the limit of KRW20
million in the cases of financial difficulties caused by
an accident, disease, or disaster imposed on a family
member
Overview
Towards a Sustainable Company
Creating Social Value
Environmentally Friendly Site Management
In addition to waste, water resource, energy, and greenhouse gas management, the Engineering & Construction Group carries out a variety of
activities to manage environmental impact, including control over dust,
noise, vibrations, and asbestos. To minimize the environmental impact
of construction on surrounding areas, we have internal standards in
place that are stricter than legal requirements. By enforcing these standards, we strive to minimize environment-related complaints that are
likely to arise from areas around a construction site.
We utilize an environmental management plan at the site level in
accordance with the corporate environmental management policy. To
achieve environmental targets set in the plan, we faithfully carry out
environmental management activities that fit the characteristics of
each site, as well as track and manage actual results. Also, we monitor
and assess the environmental management status at each site and
business unit through site evaluations and internal audits in the first
and second halves of the year. The results are recorded and managed
under the Environment menu of the G-ERP Systems.
In the course of construction, the scattering of dust may arise from site
preparation work, open-air material storage, and the use of construction equipment. We develop and execute dust control measures
for each site, such as the use of water sprinkling equipment for which
scaffolds are reused. We also deploy small vacuum cleaning trucks
exclusively for underground parking lots, as well as installing mist
sprinklers and dust nets at the top of soundproof walls and system
scaffold dust nets for framework erection purposes.
Asbestos, a harmful material that’s sometimes found during the course
of dismantling a building and removing materials, requires thorough
control as it affects the health of workers and the environment around
the site. Recognizing the harmful effect of asbestos, we strengthened
our internal procedures to manage asbestos. We ensure that asbestos
dismantling and removal work proceeds systematically by establishing
a process for managing asbestos-related work. We implemented the
Voluntary Asbestos Management Agreement signed by the Ministry of
Environment. Furthermore, we have certified a total of 13 asbestos
dismantling specialists, as of the end of 2012, through an EPArecognized professional training program for asbestos management
that is refreshed every year. Through these and many other efforts, we
are constantly striving to better manage asbestos.
Performance Review
Appendix
removal and waste treatment expenses after the completion of construction. It also helped to improve the environment of the site as it cut
down on concrete waste or asphalt concrete, as well as the scattering
dust and other air pollutants.
At the World Cup Bridge site, the Civil Division released cement-contaminated water, which was generated when concrete was deposited
underwater after it was treated with filtering equipment, onto a barge
according to the stream-water release standards. In the past, such
water would have been discharged at the site without any type of
treatment. But today, we pursue an eco-friendly approach that makes
working alongside streams or rivers possible.
Step 1. Deposit concrete into an open
caisson.
Step 2. Contaminated water generated.
Step 3. Treat contaminated water.
Step 4. Release the treated water.
In response to the rising demand for green building certification, especially among our overseas projects, we have developed our own
Construction Management Guide for Overseas Green Building
Certification. The guide suggests ways of preventing environmental
pollution likely to occur during the construction of a building, including
how to prevent environmental pollution and manage construction
waste and indoor air quality. Not only does the guide provide a detailed
list of requirements for preventing environmental pollution, but it also
provides best management practices (BMPs), detailed action plans,
guidelines, and work processes to ensure that environmental pollution
will be responsibly reduced at construction sites.
At the construction site in the Segok District, the Housing Division
replaced concrete or asphalt concrete, the material commonly used for
temporary parking lots, with eco-friendly soil that contains a bio-degradable hardener. This generated a cost-savings effect by reducing
Breaches of Environmental Laws and Regulations (Unit: Case)
Violation of laws
2010
2011
2012
5
6
5
Scope of data collection: E&C Group’s Korean project sites (violation of laws refers
to penalty charge cases or ones that are more serious in nature.)
Sustainability Report 2013
87
Biodiversity Protection
Samsung C&T Corporation conducts environmental impact assessments on areas around a construction site and actively incorporates ecosystem preservation designs to protect biodiversity during the course of construction. We also investigate each site for any protected areas
or endangered animals and plants around the site. Based on the results, we modify the designs and construction methods to protect the ecosystem
around the site.
Distribution of Endangered Species under Protection
Region
Protected Species
Designated Class
Region
Protected Species
Designated Class
1. Ansan-si,
Gyeonggi-do
Swinhoe’s Egret
Class 1 endangered species of
wild fauna and flora
11. Samcheok-si,
Gangwon-do
Himalayan goral
Class 1 endangered species of
wild fauna and flora
Eurasian oystercatcher, Eurasian eagle
owl
Class 2 endangered species of
wild fauna and flora
Water hemlock, Aconitum koreanum
R.Raymund, Aster altaicus var.
uchiyamae Kitam, Iris ruthenica Ker Gawl
Class 2 endangered species of
wild fauna and flora
Korean golden frog
Class 2 endangered species of
wild fauna and flora
12. Gangneung-si,
Gangwon-do
Class 1 endangered species of
wild fauna and flora
13. Andong-si,
Gyeongsangbuk-do
Otter
Otter
Class 1 endangered species of
wild fauna and flora
Polygonatum stenophyllum max,
Gobiobotia macrocephala
Class 2 endangered species of
wild fauna and flora
Goshawk, Chinese Sparrowhawk
Class 2 endangered species of
wild fauna and flora
Class 1 endangered species of
wild fauna and flora
Kestrel
Black-faced spoonbill
Wild animals in which poaching
is prohibited
Otter
Class 1 endangered species of
wild fauna and flora
Long-billed plover
Class 2 endangered species of
wild fauna and flora
Eurasian buzzard
Wild animals in which poaching
is prohibited
Otter
Class 1 endangered species of
wild fauna and flora
Leopard cat
Class 2 endangered species of
wild fauna and flora
Otter, Gobiobotia nakdongensis
Class 1 endangered species of
wild fauna and flora
Leopard cat, black-headed stork, Far
Eastern brook lamprey
Class 2 endangered species of
wild fauna and flora
Kestrel, Korean buzzard
Wild animals in which poaching
is prohibited
Otter, hawk
Class 1 endangered species of
wild fauna and flora
Leopard cat, whooper swan, little red
dragonfly, Eurasian hobby
Class 2 endangered species of
wild fauna and flora
Eurasian buzzard, kestrel
Wild animals in which poaching
is prohibited
Euryale ferox
Class 2 endangered species of
wild fauna and flora
2. Pyeongtaek-si,
Gyeonggi-do
3. Yeoju-gun,
Gyeonggi-do
4. Yeonsu-gu, Incheon Eurasian oystercatcher, Saunders’s Gull
Class 2 endangered species of
wild fauna and flora
Eurasian buzzard
Wild animals in which poaching
is prohibited
Kestrel, Eurasian buzzard
Wild animals in which poaching
is prohibited
Chinese Sparrowhawk
Class 2 endangered species of
wild fauna and flora
6. Jeongeup-si,
Jeollabuk-do
Kestrel
Wild animals in which poaching
is prohibited
7. Muju-gun,
Jeollabuk-do
Cypripedium japonicum
Class 1 endangered species of
wild fauna and flora
5. Osan-si,
Gyeonggi-do
8. Seoguipo-si,
Jeju-do
9. Inje-gun,
Gangwon-do
10. Hongcheon-gun,
Gangwon-do
14. Chilgok-gun,
Gyeongsangbuk-do
15. Cheongsong-gun,
Gyeongsangbuk-do
16. Andong-si,
Gyeongsangbuk-do
17. Yeongju-si,
Gyeongsangbuk-do
Soft coral habitat, Antipathes lata, orange cup
coral, Plexauroides reticulata, Plexauroide
complexa, Dendronephthya suensoni,
Class 2 endangered species of
Dendronephthya mollis, Dendronephthya
wild fauna and flora
putteri, Dendronephthya castanea,
Euplexaura crassa, Verrucella stellata,
Antipathes white coral
Otter
Class 1 endangered species of
wild fauna and flora
Korean ratsnake, leopard cat
Class 2 endangered species of
wild fauna and flora
Otter
Class 1 endangered species of
wild fauna and flora
18. Gimhae-si,
Gyeongsangnam-do
19. Saha-gu, Busan
Distribution of Endangered Species within Areas Affected by Projects
1
2
3
4
5
Sihwa MTV Project Section 4
Jinwi River Maintenance Project
Han River Restoration Project
Incheon New Port Container
Terminal Project Section 2
Suseo-Pyeongtaek Section 5
10
1
4
2
9
12
3
11
5
17
16
13
6Honam High-Speed Railway Project Section 4-1
7 Muju Taekwondo Park Project
15
14
6
7
18
8
Jeju Naval Base Project Section 1-8
Samsung C&T Corporation
13 Gyori-Susang Road Project
14 Gyori-Susang Road Project
15Sangju-Yeongdeok Road
Project Section 13
16Andong-Imha Dam Transition
Canal Project
17Yeongju Multipurpose Dam
Project
18Busan Beltway Project Section
3
19Nakdong River Drainage Gate
Project
8
88
19
9East Hongcheon-Yangyang Road
Project Section 13
10East Hongcheon-Yangyang Road
Project Section 7
11 Taebaek-Miro Road Project
12Wonju-Gangneung High-Speed
Railway Project Section 11-1
Overview
Towards a Sustainable Company
Creating Social Value
4
90
Independent Assurance Report
92Independent Assurance Report of Greenhouse Gas Emissions
94
GRI Index
98
Awards Received & Association Membership
99
About this Report
Performance Review
Appendix
x
i
nd
e
p
Ap
Sustainability Report 2013
89
Independent
Assurance Report
To the management of Samsung C&T
At Samsung C&T’s request, we have reviewed the information presented in the 2013 sustainability report (the “Report”). The management of Samsung C&T is responsible for preparing the
report. Our responsibility is to carry out a limited assurance engagement on the report and to
provide opinions on it based on our review.
Procedures performed
I nternational Standard on Assurance Engagement:
Assurance Engagements other than Audits or
Reviews of Historical Financial Information from
the International Federation of the Accountants
2
A A1000AS(2008)-The second edition of the AA1000
Assurance Standard from the Institute of Social
and Ethical Accountability
1
We conducted our engagement in accordance with ISAE 30001 and the requirements of a Type 2
assurance engagement as defined by AA1000AS(2008)2.
We performed the following procedures to form our conclusion on the report:
ㆍEvaluated Samsung C&T’s processes for stakeholder engagement.
ㆍReviewed Samsung C&T’s processes for determining material issues of stakeholder groups.
ㆍSearched for media coverage of Samsung C&T’s sustainability issues during the applicable
reporting period.
ㆍReviewed recently reported sustainability issues of the Samsung C&T’s global competitors.
ㆍInterviewed a selection of people in charge to understand the current status of sustainability
performance and the reporting process during the reporting period.
ㆍReviewed selected data regarding Samsung C&T’s sustainability performance, supporting
evidence for assertions, and information from corporate-wide systems.
ㆍReviewed Samsung C&T’s process for collecting and consolidating sustainability performance
data.
ㆍReviewed whether financial performance data has been extracted properly from the Samsung
C&T’s audited financial statements.
Level of assurance
We underwent a limited assurance engagement in accordance with ISAE 3000. The nature,
timing, and extent of the procedures for gathering sufficient, appropriate evidence are deliberately limited relative to a reasonable assurance engagement. Consequently, the limited
assurance of ISAE 3000 is in accordance with the moderate level as defined by AA1000(2008).
The limitations of our review
We excluded GHG (Greenhouse Gas) emissions in our limited assurance engagement. And, we
did not review environmental and social performance data prior to 2011. However, we reviewed
financial performance data based on Samsung C&T’s 2012 audited financial statements.
Our conclusions
The result of our review is outlined below.
Inclusivity
Has Samsung C&T been engaging with stakeholders across the business to develop and
implement its approach to sustainability?
ㆍWe are not aware of any key stakeholder groups that have been excluded from the stakeholder
engagement process outlined in the report.
ㆍWe are not aware of any matters that would lead us to conclude that Samsung C&T has not
applied the inclusivity principle in developing its approach to sustainability.
90
Samsung C&T Corporation
Overview
Towards a Sustainable Company
Creating Social Value
Performance Review
Appendix
Materiality
Has Samsung C&T provided a balanced representation of material issues concerning its sustainability performance?
ㆍWe are not aware of any material aspects concerning Samsung C&T’s sustainability performance which have been excluded from the report.
ㆍNothing has come to our attention that causes us to believe that Samsung C&T’s management has not applied its processes for determining material issues to be included in the
report.
Responsiveness
Has Samsung C&T responded to the stakeholder concerns?
ㆍW
e are not aware of any matters that would lead us to conclude that Samsung C&T has not
applied the responsiveness principle in considering the matters to be reported.
Completeness and accuracy of performance information
How complete and accurate is the economic, social, and environmental performance data in the
report?
ㆍWe are not aware of any that have been excluded from the economic, social, and environmental
performance data.
ㆍNothing has come to our attention that causes us to believe that the data relating to the above
topics has not been collated properly from Samsung C&T’s reporting processes.
How plausible are the statements and claims within the report?
ㆍWe are not aware of any misstatements of information or explanation used to support
statements and claims on Samsung C&T’s sustainability activities presented in the report.
Observations and areas for improvement
Without prejudice against our conclusions presented above, we believe the following matters
require attention in order to improve Samsung C&T’s sustainability reporting.
ㆍT o maintain its capability as a sustainability leading company, Samsung C&T needs to
strengthen integration of sustainability into corporate strategy; set specific sustainability
targets; and manage/report their level of achievement in comparison to the original target.
ㆍTo improve its comparability of performance data in the report, Samsung C&T needs to maintain consistency of business unit that collects and manages the data.
ㆍAs Samsung C&T’s international business is expanding, an establishment of a system to
manage economic, environmental, and social data from overseas operation is necessary.
Independence
We comply with the Ethical Standard issued by IFAC (International Federation of Accountants).
Our assurance team
The assurance engagement was performed by the engagement team with a long history of
experience and expertise in sustainability.
October 2013
Seung Wha Gweon
Country Managing Partner EY Han Young Seoul, Korea
Sustainability Report 2013
91
Independent
Assurance Report of
Greenhouse Gas
Emissions
To the management of Samsung C&T Corporation
We have carried out a limited assurance engagement in order to provide an opinion on the
subject matter detailed below, and as presented in Samsung C&T Corporation’s (the “Company”)
2013 Sustainability Report (the “Report”). In our opinion, the Company’s greenhouse gas
emissions as presented in the Report, are presented, in all material respects, in accordance with
the criteria detailed below.
Subject Matter
The subject matter for the Sustainability Report 2013 comprises total greenhouse gas emissions
(including Scope 1, Scope 2 and Scope 3) from Korean and international facilities and sites under
the Company’s operational control for the year ended December 31, 2012.
Criteria
ㆍWRI/WBCSD “GHG Protocol“ (2004)
ㆍISO 14064-1 “Part 1: Specification with guidance at the organization level for quantification
and reporting of greenhouse gas emissions and removals“
The Responsibility of Management
The Company’s management is responsible for the preparation and fair presentation of the
subject matter. This responsibility includes: establishing and maintaining internal controls
relevant to the preparation and presentation of the subject matter that is free from material
misstatement, whether due to fraud or error; selecting and applying appropriate accounting
policies; and making estimates that are reasonable under the circumstances.
Assurance Practitioner’s Responsibility
Our responsibility is to express a conclusion on the subject matter based on our limited assurance engagement. We conducted our limited assurance engagement in accordance with the
International Standard on Assurance Engagements 3000 (Revised), Assurance Engagements
Other than Audits or Reviews of Historical Financial Information (“ISAE 3000”) accredited by the
International Auditing and Assurance Standard Board. This Auditing Standard requires that we
comply with relevant ethical requirements and plan and perform the assurance engagement in
order to state whether, on the basis of the procedures described, anything has come to our
attention that causes us to believe that the subject matter is not presented fairly, in all material
respects.
Our procedures included but were not limited to the following:
ㆍGaining an understanding of the greenhouse gas reporting processes supporting the business
activities
ㆍConducting interviews and collation of evidence to understand the processes and controls
supporting the data
ㆍC
hecking that methodologies have been correctly applied as per the requirements in the ISO
14064-1 “Part 1: Specification with guidance at the organization level for quantification and
reporting of greenhouse gas emissions and removals“
ㆍTesting the calculations performed by the Company
ㆍUndertaking analytical review procedures to support the reasonableness of the data
ㆍIdentifying and testing assumptions supporting the calculations
ㆍTesting on a sample basis to underlying source information to ensure completeness and
accuracy of data
ㆍR
eviewing data flow and transcript management as well as reporting system within the GHG
data system
ㆍReviewing the appropriateness of the presentation of information
92
Samsung C&T Corporation
Overview
Towards a Sustainable Company
Creating Social Value
Performance Review
Appendix
Our procedures did not include checking the metering configuration within the Company’s
system at the Company’s facilities or checking of calculations or assumption used with the GHG
data system. Our procedures were designed to obtain a limited level of assurance on which to
base our conclusions. The procedures performed depend on the auditor’s judgment including the
risk of material misstatement of the subject matter, whether due to fraud or error. While we
considered the effectiveness of management’s internal controls when determining the nature
and extent of our procedures, our limited assurance engagement was not designed to provide
assurance on internal controls. We believe that the evidence we have obtained is sufficient to
provide a basis for our conclusion.
Use of Our Report
This report has been prepared for the purpose set out above and for distribution to the management and directors of the Company. We disclaim any assumption of responsibility for any
reliance on this assurance report or on the subject matter to which it relates, to any person other
than management and directors of the Company, or for any purpose other than for which it was
prepared.
Independence, Competence, and Experience
1
The International Ethics Standards Board for
Accountants (“IESBA”), an independent standard
setting body within the International Federation of
Accountants (IFAC)
In conducting our assurance engagement we have met the independence requirements of
Code of Ethics for Professional Accountants prepared by IESBA1, IFAC. We have the required
competencies and experience to conduct this assurance engagement.
Limited Assurance Conclusion
Based on our limited assurance procedures, nothing has come to our attention that causes us to
believe that the Company’s total greenhouse gas emissions from the Korean and International
facilities and sites under the Company’s operational control for the year ended December 31,
2012, as presented in its report 2013, is not presented fairly in all material respects in accordance
with the criteria detailed above. This also includes domestic greenhouse gas emissions, which
we reviewed based on the information in the third party assurance report of greenhouse gas
emissions that the company has received from an independent institution in May 2013.
Scope Section (Unit: tCO 2e)
FY2012
Scope 1 (Direct GHG Emissions)
108,076
Scope 2 (Indirect GHG Emissions)
205,298
Scope 3 (Other Indirect GHG Emissions)
175,984
Total GHG Emissions
489,358
October 2013
Seung Wha Gweon
Country Managing Partner EY Han Young Seoul, Korea
Sustainability Report 2013
93
GRI Index
Profile Disclosures
GRI Indicator
Index
Strategy and
Analysis
1.1
Statement from the most senior decision-maker of the organization
1.2
Description of key impacts, risks, and opportunities
2.1
Name of organization
2.2
Primary brands, products, and/or services
2.3
Organizational
Profile
Report Parameters
Description
Page
Status
2, 3

14, 15, 32, 33

4, 5

13, 31

Operational structure of the organization, including main divisions, operating companies, subsidiaries, and joint ventures
4, 5

2.4
Location of the organization’s headquarters
4, 5

2.5
Number of countries where the organization operates, and names of countries with either major operations or that are specifically relevant to the
sustainability issues covered in the report
4, 5

2.6
Nature of ownership and legal form
Website

2.7
Markets served (including geographic breakdown, sectors served, and types of customers/beneficiaries)
4, 5

2.8
Scale of the reporting organization
4, 5

2.9
Significant changes during the reporting period regarding size, structure, or ownership
13, 31

2.10
Awards received during the reporting period
98

3.1
Reporting period (e.g., fiscal/calendar year) for information provided
99

3.2
Date of most recent previous report (if any)
99

3.3
Reporting cycle (annual, biennial, etc.)
99

3.4
Point of contact for questions regarding the report or its contents
1

3.5
Process for defining report content
8, 9

3.6
Boundary of the report (e.g., countries, divisions, subsidiaries, leased facilities, joint ventures, suppliers). See GRI Boundary Protocol for further
guidance
99

3.7
State any specific limitations on the scope or boundary of report
99

3.8
Basis for reporting on joint ventures, subsidiaries, leased facilities, outsourced operations, and other entities that can significantly affect
comparability from period to period and/or between organizations
99

3.9
Data measurement techniques and the bases of calculations, including assumptions and techniques underlying estimations applied to the
compilation of the Indicators and other information in the report. Explain any decisions not to apply, or to substantially diverge from, the GRI
Indicator Protocols
8, 9

3.10
Explanation of the effect of any re-statements of information provided in earlier reports, and the reasons for such re-statement
(e.g., mergers/acquisitions, change of base years/periods, nature of business, measurement methods)
99

3.11
Significant changes from previous reporting periods in the scope, boundary, or measurement
methods applied in the report
99

GRI Content Index
3.12
Table identifying the location of the Standard Disclosures in the report
94-97

Assurance
3.13
Policy and current practices with regard to seeking external assurances for the report
90, 91

4.1
Governance structure of the organization, including committees under the highest governance body responsible for specific tasks, such as setting
strategy or organizational oversight
6, 7

4.2
Indicate whether the Chair of the highest governance body is also an executive officer
6, 7

4.3
For organizations that have a unitary board structure, state the number and gender of members of the highest governance body that are
independent and/or non-executive members
6, 7

4.4
Mechanisms for shareholders and employees to provide recommendations or direction to the highest governance body
6, 7

4.5
Linkage between compensation for members of the highest governance body, senior managers, and executives (including departure
arrangements), and the organization’s performance (including social and environmental performance)
6, 7

4.6
Processes in place for highest governance body to ensure conflicts of interest are avoided
6, 7

4.7
Process for determining the composition, qualifications, and expertise of the members of the highest governance body and its committees,
including any consideration of gender and other indicators of diversity
6, 7

4.8
Internally developed statements of mission or values, codes of conduct, and principles relevant to economic, environmental, and social
performance and the status of their implementation
16, 34

4.9
Procedures of the highest governance body for overseeing the organization’s identification and management of economic, environmental, and
social performance, including relevant risks and opportunities, and adherence or compliance with internationally agreed standards, codes of
conduct, and principles
6, 7

4.10
Processes for evaluating the highest governance body’s own performance, particularly with respect to economic, environmental, and social
performance
6, 7

4.11
Explanation of whether and how the precautionary approach or principle is addressed by the organization
21, 36

4.12
Externally developed economic, environmental, and social charters, principles, or other initiatives to which the organization subscribes or endorses
98

4.13
Membership in associations and/or national/international advocacy organizations
98

4.14
List of stakeholder groups engaged by the organization
8, 9

4.15
Bases for identification and selection of stakeholders with whom to engage
8, 9

4.16
Approaches to stakeholder engagement, including frequency of engagement by type and by stakeholder group
8, 9

4.17
Key topics and concerns raised through stakeholder engagement, and responses to them
8, 9

Governance
Commitments to
External Initiatives
Stockholder
Engagement
94
Samsung C&T Corporation
Overview
Towards a Sustainable Company
GRI Index
GRI Index
Economic
Performance
Indicator
Market
Presence
Indirect
Economic
Impact
Materials
Biodiversity
Performance
Indicator
Emissions,
Effluents, and
Waste
Appendix
Page
Status
EC1
Direct economic value generated and distributed, including
revenues, operating cost, employee compensation,
Major financial performance and economic results distribution
donations and other community investments, retained
earnings, and payments to capital providers and
governments
70-72

EC2
Financial implications and other risks and opportunities for
organization’s activities due to climate change
Risks and opportunities for eco-friendly value creation, including
climate changes
15, 25

EC3
Coverage of organization’s defined benefit plan obligations
Management of employee welfare and retirement pension plan
76-77

EC4
Significant financial assistance received from governments
There has been no case in 2012
-

EC5
Range of ratios of standard entry level wage by gender
compared to local minimum wage at significant locations of
operation
The wage ratio of new employees compared to the legal minimum
wage is 390%
-

EC6
Policy, practices, and proportion of spending on locally-based
suppliers at significant locations of operation
Purchasing record of products from local suppliers
46, 78

EC7
Procedures for local hiring and proportion of senior
management hired from the local community at significant
locations of operation
Regional employees and local hiring
43, 74

EC8
Development and impact of infrastructure investments and
services provided primarily for public benefit through
commercial, in-kind, or pro bono engagement
Local community activities, including environmental, residential, and
educational support
62-67

EC9
Understanding and describing significant indirect economic
impacts, including the extent of impact
Value created from our business and sharing economic performance
to our business partners, employees, and local communities
14, 15, 32, 33,
46, 52, 62, 71

EN1
Materials used by weight or volume
Amount of resources used
84

EN2
Percentage of materials used that are recycled
input materials
Amount of recycled aggregate used
84

EN3
Direct energy consumption by primary energy source
Amount of direct energy used
82, 83

EN4
Indirect energy consumption by primary energy source
Amount of indirect energy used
82, 83

EN5
Energy saved due to conservation and efficiency
improvements
K-MEG business performance
24

EN6
Initiatives to provide energy-efficient or renewable energy
based products and services, and reductions in energy
requirements as a result of these initiatives
Amount of eco-friendly construction material used
22, 24

EN7
Initiatives to reduce indirect energy consumption and
reductions achieved
Zero-energy building technology and K-MEG business
24

EN8
Total water withdrawal by source
Amount of water used
84

EN9
Water sources significantly affected by
withdrawal of water
Civil and plant construction sites mainly use water taken from nearby
stream and the wastewater is thoroughly managed by the operation of
wastewater discharge facilities and specific inspections
-

EN10
Percentage and total volume of water
recycled and reused
Amount of recycled water used
84

EN11
Location and size of land owned, leased, managed in, or
adjacent to, protected areas and areas of high biodiversity
value outside protected areas
88

EN12
Description of significant impacts of activities, products, and
services on biodiversity in protected areas and areas of high
biodiversity value outside protected areas
88

EN13
Habitats protected or restored
88

EN14
Strategies, current actions, and future plans for managing
impacts on biodiversity
88

EN15
Number of IUCN Red List species and national conservation
list species with habitats in areas affected by operations, by
level of extinction risk
88

EN16
Total direct and indirect greenhouse gas emissions by
weight
Greenhouse gas emission status
82

EN17
Other relevant indirect greenhouse gas emissions by
weight
Greenhouse gas emission status
82

EN18
Initiatives to reduce greenhouse gas emissions and
reductions achieved
Use of eco-friendly construction materials and establishing the
system for greenhouse gas emission management
22, 25, 82

EN19
Emissions of ozone-depleting substances by weight
-

EN20
NO, SO, and other significant air emissions by type and
weight
Samsung C&T Corporation does not use ozone layer-depleting
substances, while the company fo cuses on managing data related to
energy use and greenhouse gas emissions to meet low carbon and
green growth policies set by the government. In addition, we use
refrigerators, deep-freezers, and air-conditioning equipment
without ODPs
-

EN21
Total water discharge by quality and destination
84

EN22
Total weight of waste by type and disposal method
Amount of waste disposed
85
◐
EN23
Total number and volume of significant spills
There has been no hazardous substance leakage during the
reporting period
85

EN24
Weight of transported, imported, exported, or treated waste
There has been no hazardous substance leakage during the
deemed hazardous under the terms of the Basel
reporting period
Convention Annex I, II, III, and VIII, and percentage of
transported waste shipped internationally
85

EN25
Identity, size, protected status, and biodiversity value of
water bodies and related habitats significantly affected by
the reporting organization’s discharges of water and runoff
88

Energy
Water
Performance Review
Performance Indicators (Economic & Environmental)
Indicator
Economic
Performance
Creating Social Value
Description
Application and Remarks
Sustainability Report 2013
95
GRI Index
GRI Index
Performance Indicators (Environmental & Social)
Indicator
Performance
Indicator
Products and
Services
Compliance
Environmental
Performance
Transport
Indicator
Overall
Employment
Labor/
Management
Relations
Occupational
Health and
Safety
Labor
Practices and
Decent Work
Performance
Indicators
Training and
Education
Diversity
and Equal
Opportunity
Local
Communities
Society
Performance
Indicators
Corruption
Description
Application and Remarks
Page
Status
EN26
Initiatives to mitigate environmental impacts of products
and services, and extent of impact mitigation
Technologies for using eco-friendly construction materials, water
treatment, and soil restoration
22-24

EN27
Percentage of products sold and their packaging materials
that are reclaimed by category
Not important to business or not applicable
-
N/A
EN28
Monetary value of significant fines and total number of
non-monetary sanctions for non-compliance with
environmental laws and regulations
Numbers of environmental law and regulation violations
87

EN29
Significant environmental impact of transporting products
and other goods and materials used for the organization’s
operations, and transporting members of the workforce
82

EN30
Total environmental protection expenditures and
investments by type
Investment on environmental protection
81

LA1
Total workforce by employment type, employment
contract, and region, broken down by gender
Employment status
74

LA2
Total number and rate of new employee hires and employee
Employee turnover status
turnover by age group, gender, and region
77

LA3
Benefits provided to full-time employees that are not provided
Employee benefits package for 2012
to temporary or part-time employees, by major operations
76

LA4
Percentage of employees covered by collective bargaining
agreements
There is no labor union at Samsung C&T Corporation, while requirements
of all employees are collected through the Labor-Management Council
77

LA5
Minimum notice period(s) regarding significant operational
changes, including whether it is specified in collective
agreements
Changes in overall management and employment plans are reported to
the Labor-Management Council
-

LA6
Percentage of total workforce represented in formal joint
The committee is consisted of equal numbers of representatives of the
management-worker health and safety committees that help
company and employees
monitor and advise on occupational health and safety programs
-

LA7
Rates of injury, occupational diseases, lost days, and
absenteeism, and number of work-related fatalities by region
and by gender
Performance on safety and health management
86

LA8
Education, training, counseling, prevention, and risk-control
programs in place to assist workforce members, their families,
or community members regarding serious diseases
Activities to prevent safety incident
27, 28, 86

LA9
Health and safety topics covered in formal agreements with
trade unions
To prevent industrial accidents, Samsung C&T Corporation operates the
Industrial Safety & Health Committee consisting of co-representatives
of the labor and the management. This committee deliberates and
makes decisions on significant items for employees’ safety such as
safety and health training, inspection and improvement of working
environments, health management, and disaster control, and measure
establishment every quarter
28

LA10
Average hours of training per year per employee by gender, and
Training status
by employee category
75

LA11
Programs for skills management and lifelong learning that
support the continued employability of employees and assist
them in managing career endings
Since 2011, three subsidiaries engaging in the construction business
within Samsung Group have been operating the CDC (Career
Development Center) that is committed to helping reemployment of
retired employees
77

LA12
Percentage of employees receiving regular performance and
career development reviews, by gender
Performance review status
76

LA13
Composition of governance bodies and breakdown of
employees per employee category according to gender, age
group, minority group membership, and other indicators of
diversity
Status of board of directors and executives
6, 74, 75

LA14
Ratio of basic salary and remuneration of women to men by
employee category, by significant locations of operation
There is no difference in basic salary rate between male and female
workers at Samsung C&T Corporation.
-

LA15
Return to work and retention rates after parental leave, by
gender
Maternity/parental leave status
75

SO1
Percentage of operations with implemented local community
engagement, impact assessments, and development
programs
E&C Group: Manages 43 key risks in five categories, such as strategy,
environment, finance, law, and management
T&I Group: Manages economic and social risks through eight key
business risk management categories
21, 36

SO9
Operations with significant potential or actual negative
impacts on local communities
Manages eco-friendly work sites and biodiversity throughout the entire
workplaces
87, 88

SO10
Prevention and mitigation measures implemented in
operations with significant potential or actual negative
impacts on local communities
Manages eco-friendly work sites and biodiversity throughout the entire
workplaces
87, 88

SO2
Percentage and total number of business units analyzed for Educate all of employees, including overseas offices, regarding ethical
risks related to corruption
and anti-corruption polices
73
◑
SO3
Percentage of employees trained in organization’s anticorruption policies and procedures
Education status on ethical management and compliance
73

SO4
Actions taken in response to incidents of corruption
Law violations regarding ethical management and compliance
73

SO5
Public policy positions and participation in public policy
development and lobbying
A participating advisor on the government’s policy for the Minister of
Environment’s “Green Management Expansion Project” since 2010
50, 51

Samsung C&T Corporation remains politically neutral, and does not join
or support specific partie s
-

Law violations regarding ethical management and compliance
73

-

-

Public Policy
Human Rights
Performance
Indicators
96
SO6
Total value of financial and in-kind contributions to political
parties, politicians, and related institutions by country
Anticompetitive
Behavior
SO7
Total number of legal actions for anti-competitive behavior,
anti-trust, and monopoly practices and their outcomes
Compliance
SO8
Investment
and
Procurement
Practices
HR1
Monetary value of significant fines and total number of
non-monetary sanctions for non-compliance with laws and A case study in the violation of the Foreign Exchange Law
regulations
Samsung C&T Corporation comprehensively reviews the possibility of
Percentage and total number of significant investment
human right abuse in the process of checking risks when it makes
agreements and contracts that include clauses
investment agreements. Human right is preserved by continuous
incorporating human rights concerns, or that have
educations and monitoring after making contracts, while there is
undergone human rights screening
no investment agreements including explicit human right articles
Samsung C&T Corporation
Overview
Towards a Sustainable Company
GRI Index
GRI Index
Description
Application and Remarks
HR2
Percentage of significant suppliers, contractors and other
business partners that have undergone human rights
screening, and actions taken
When inspecting and selecting business partners, Samsung C&T
Corporation comprehensively reviews their credit, quality, and the
possibility of human right abuse. The Company monitors selected
partners not to violate human right and provides educations
HR3
Total hours of employee training on policies and procedures
Samsung C&T Corporation regularly conducts educational programs to
concerning aspects of human rights that are relevant to
prevent sexual harassment in the workplace for all employees
operations, including the percentage of employees trained
Nondiscrimination
HR4
Total number of incidents of discrimination and corrective
actions taken
Freedom of
Association
and Collective
Bargaining
HR5
Child Labor
HR6
Forced and
Compulsory
Labor
HR7
Security
Practices
HR8
HR9
Indigenous
Rights
HR10
HR11
PR1
Customer Health
and Safety
PR2
Product
and Service
Labeling
Product
Responsibility
Performance
Indicators
We prohibit discrimination based on nationality, gender, religion, and
social position in cases of employment, training, and performance
evaluations
Operations and significant suppliers identified in which the
We remedy grievances of employees and deliberate on trainings and
right to exercise freedom of association and collective
bargaining may be violated or at significant risk, and actions their welfare through the labor-management council
taken to support these rights
Samsung C&T Corporation prohibits child labor at all work sites in
accordance with Korea’s labor-related laws and the local regulations of
Operations and significant suppliers identified as having
the countries where the company operates
significant risk for incidents of child labor, and measures
There have been no violations of child labor at home and abroad as of the
taken to contribute to the effective abolition of child labor
end of 2012. And we do not employ new workers under legal minimum age
Samsung C&T Corporation prohibits forced labor at all work sites in
Operations and significant suppliers identified as having
accordance with Korea’s labor-related laws and the local regulations of
significant risk for incidents of forced or compulsory labor,
the countries where the company operates
and measures to contribute to the elimination of all forms
There have been no violations of forced labor at home and abroad as of
of forced or compulsory labor
the end of 2012
To avoid violation of human rights, we provide all security personnel with
Percentage of security personnel trained in the
organization’s policies or procedures concerning aspects of sexual harassment prevention training once a year and personal
information leakage prevention training once a month
human rights that are relevant to operations
Page
Status
48

75

74

77

42, 43, 74

42, 43, 74

-

There has been no violation of rights of indigenous people during the
reporting period
-

Percentage and total number of operations that have been
subject to human rights reviews and/or impact
assessments
Samsung C&T Corporation inspects and manages violation of human
rights and corruptions at all work sites, and provides trainings for ethical
responsibility to partners’ employees as well as all of the company’s
employees
48, 73

Operates communication channels for each stakeholder to learn about
complaints on community resident’s rights
8

Implement activities to reduce environmental effect throughout the
entire business cycle
87

No incidents of non-compliance with regulations concerning health and
safety impact in residences and buildings
-

Number of grievances related to human rights filed,
addressed, and resolved through formal
grievance mechanisms
Life cycle stages in which health and safety impacts of
products and services are assessed for improvement, and
percentage of significant products and services categories
subject to such procedures
Total number of incidents of non-compliance with
regulations and voluntary codes concerning health and
safety impacts of products and services during their life
cycle, by type of outcomes
PR3
Type of product and service information required by
procedures, and percentage of significant products and
services subject to such information requirements
Current status of certification for eco-friendly buildings at home and
abroad
83

PR4
Total number of incidents of non-compliance with
regulations and voluntary codes concerning product and
service information and labeling, by type of outcomes.
Samsung C&T Corporation does not advertise extensively or
untruthfully. There has been no penalty or restriction by complaints
concerning product information
-

PR5
Practices related to customer satisfaction, including results Ranked No. 1 in the National Customer Satisfaction Index for fifteen
of surveys measuring customer satisfaction
years in a row
PR6
Programs for adherence to laws, standards, and voluntary
codes related to marketing communications, including
advertising, promotions, and sponsorships
PR7
Total number of incidents of non-compliance with
regulations and voluntary codes concerning marketing
communications, including advertising, promotions, and
sponsorship by outcome type
There has been no violation of regulations and standards related to
marketing communication activities
Customer
Privacy
PR8
Total number of substantiated complaints regarding
breaches of customer privacy and loss of customer data
Compliance
PR9
To improve awareness on personal information protection and prevent
abuse or leakage of personal information, Samsung C&T Corporation
conducts training courses twice a year for key staff members of each
department. There have been no complaints or loss of data related to
personal information protection.
Monetary value of significant fines for non-compliance with There have been no penalties by the violation of regulations related to
safety of products and services, product information disclosure, and
laws and regulations concerning provision and use of
marketing activities
products and services
79

-

-

-

-

Intensification of energy consumption by buildings
Energy consumption intensity at headquarters and company-owned
buildings
83

CRE2
Intensification of water use by buildings
Water consumption intensity at headquarters and company-owned
buildings
84

CRE3
Intensification of greenhouse gas emissions by buildings
Greenhouse gas emission intensity at headquarters and companyowned buildings
82

CRE4
Intensification of greenhouse gas emissions by construction or
reconstruction
-

CRE5
Status of contamination area, restoration area, and potential
contamination area at construction sites
There have been no contaminated and restored areas related to
construction sites during the reporting period
CRE6
Percentage of the organization that has obtained a globally
certified HSE management system
Acquired the certificates from KOSHA18001 and OHSAS18001 (http://
www.secc.co.kr/html/manage/quality_manage04_02.asp)
CRE7
Number of voluntary and involuntary emigrants due to
business
CRE8
Obtainments of certifications and labelings for
sustainability related to construction, operation,
reconstruction, and new construction
CRE1
Customer
Health and
Safety, Energy
and Water
Appendix
Total number of incidents of violations involving rights of
indigenous people and actions taken
We comply with the act on fair indication and advertisement and the
inspection guidance on fair indication and advertisement for housing in
our marketing communication activities. Additionally, we establish and
practice self-regulating standards for publications of advertisements
and catalogues
Marketing
Communications
Sector
Supplement
Performance
Indicators
Performance Review
Performance Indicators (Social)
Indicator
Investment
and
Procurement
Practices
Human Rights
Performance
Indicators
Creating Social Value
Current status of certification for eco-friendly buildings at home and
abroad
-

26
Website

-

83

Sustainability Report 2013
97
Awards and
Association
Membership Status
Date
Awards
Awarded by
Jan.11
Supreme Award winner, in Customer Satisfaction
Management Awards, six years in a row
The Korea Economic Daily, Korea
Sustainability Management Evaluation
Feb.21
The Most Admired Company in Korea, eight years
in a row
Korea Management Association
Consulting
Feb.27
Ranked No. 1 in the National Brand
Competitiveness Index (NBCI), nine years in a row
Korea Productivity Center
Mar. 12
Two 2012 Red Dot Design product awards
The Design Zentrum Nordrhein
Westfalen, Germany
Mar.13
Ranked No. 1 in the Korea Brand Power Index
(K-BPI), eleven years in a row
Korea Management Association
Consulting
Apr. 30
Safety Excellence - Land Transport Development
category winner, 2012 Excellence Awards
Land Transport Authority of Singapore
May 24
Green & Gracious Builder Awards (GGBA), GGBA Star
Grade category
Building and Construction Authority of
Singapore
Jun. 19
Ranked No.1 in the National Customer Satisfaction
Index (NCSI), Apartment Construction, fifteen years
in a row
Korea Productivity Center
Jun.30
Award winner at the 2012 IDEA
Industrial Designers Society of America
Aug. 20
Ranked No. 1 in Korea Great Work Place Index
(K-GWPI)
Korea Management Association
Consulting
Sep. 12
Awarded with a Presidential Citation for the prevention of industrial accidents
Ministry of Security and Public
Administration
Sep. 18
Awarded with the Certificate of Excellence and
Certificate of Merit at the 2012 Annual Safety Award
Convention (ASAC)
Land Transport Authority of Singapore
Sep. 27
Innovator of the Year award at the TSI Awards
Technical Sales International (TSI)
Oct. 29
Ranked No.1 in the Industrial Materials Sector of
the Carbon Disclosure Project (CDP)
CDP Korea
Nov. 08
Ranked No.1 in the 2012 Green Ranking in the
Construction category
Ministry of Knowledge Economy,
Joonang Daily
Nov. 28
Won second prize in the BIM Construction Awards
Building SMART Korea
Dec. 04
Awarded with the grand prize from the Ministry of
Land, Transport and Maritime Affairs at the 2012
Construction Cooperation Promotion Awards
Cnews Korea
Dec. 05
Awarded a citation from the Ministry of Knowledge
Economy on the 49th Trade Day
Korea International Trade Association
Dec. 13
Product design award winner at the iF Design
Award
International Forum Design Germany
Association Membership
98
Samsung C&T Corporation
Construction Association
of Korea
Korea Electric
Association
Korea Employer’s
Federation
The Korea Gas Union
Korea Federation of
Construction Contractors
Korea Atomic Industrial
Forum
Korea Business
Council for Sustainable
Development (KBCSD)
Korea-Japan
Cooperation Foundation
for Industry and
Technology
Korea Housing
Association
Korea Home Network
Industries Association
The Korea International
Trade Association
Energy & Mineral
Resources Development
Association of Korea
International Contractors
Association of Korea
Korea Ubiquitous City
Association
Korea Management
Association
Korea-Japan Economic
Association
Korea Road &
Transportation
Association
The Federation of
Korean Industries
The Korea Chamber of
Commerce & Industry
Overview
About this
Report
Towards a Sustainable Company
Creating Social Value
Performance Review
Appendix
Overview
Samsung C&T Sustainability Report 2013 was written to highlight its economic, social, and
environmental achievements and value, and address the concerns and requirements of our
stakeholders. Moving forward, we will publish this report to transparently disclose our results, as
well as to communicate with stakeholders.
Reporting Period and Scope
In the past, Samsung C&T Corporation released its sustainability report biennially. However,
we plan to release the report annually, starting this year. This report highlights our accomplishments from January 1, 2012 to December 31, 2012, and also contains the qualitative
achievement from the previous three years, January 1, 2010 to December 31, 2012, for more
effective trend analysis. In addition, we have included key activities and accomplishments that
went beyond 2012.
Reporting Scope
As this report includes the business activities of our worksites overseas, excluding investment
and affiliated companies, so some figures of data may differ from those in the 2012 Sustainability
Report. Quantitative data from overseas worksites include all overseas sites that were in operation as of December 2012 by the Engineering & Construction Group, and the total number of
overseas offices directly owned and operated by the Trading & Investment Group. The standard
of financial reporting, such as financial statements, income statements, cash flow, etc., has been
modified to meet the Korean International Financial Reporting Standards’ K-IFRS as of 2011. The
report contains Samsung C&T Corporation and the affiliate companies’ financial results.
Reporting Principle
The report has been documented based on the GRI Sustainability Reporting Guideline G3.1 and
the supplemental performance indicator of the construction and real estate industries, which
may be found on pages 94-97 of the GRI Index.
Assurance
To ensure the objectivity and transparency of this report, we commissioned an outside party,
with no vested interest in the company, to verify the accounts herein Independent Assurance
Statements, found on pages 90-91.
GRI G3.1 Application Level
The Samsung C&T Sustainability Report 2013 was prepared based on the GRI G3.1 guideline, and
satisfied the qualitative and quantitative requirements of Level “A” of the G3.1 guideline. This
report was also verified as Level “A+” through a 3rd party assurance agency, Ernst & Young.
Sustainability Report 2013
Samsung C&T Corporation Sustainability Report 2013
Samsung C&T Corporation, 1321-20, Seocho 2-Dong, Seocho-Gu, Seoul, South Korea 137-956
Tel. +82-2-2145-2598 Fax. +82-2023-2598 http://www.samsungcnt.co.kr
This report was printed on environment-friendly paper using soy ink.