Sample Report SAMSUNG ELECTRONICS. Corporate ESG Analysis Report. Jan 2016

Transcription

1 Corporate ESG Analysis Report Jan 2016 SAMSUNG ELECTRONICS Sector: (WHOS GOOD) Hardware & IT Equipment (GICS) Technology Hardware & Equipment (KIS) Manufacture of Telecommunication and c Copyright WHO S Who s GOODGood

2 Content Industry Outlook Driving forces Major Criteria Sustainability Score Sustainability Analysis Overview Key Figure Environment Social Governance Finance Reputation Risk Acknowledgements 25 c Copyright 2016 WHO S GOOD

3 1, June, 2016 About this report This Corporate ESG Analysis Report is a compilation of all the Who s Good data for an individual company in a convenient PDF format. The reports are dynamically generated i.e. automatically updated to include the latest information from the Who s Good database. Who s Good s analysis of the ESG performance of a company is based on the company s activities in the field as observed by independent third parties, and is not derived from information provided by the company itself. Our Scope Who s Good covers 53 controversial ESG criterias including water footprint and climate change, human rights and community relations, labor conditions and employee relations as well as corruption, bribery, money-laundering, fraud, tax evasion and anti-competitive practices. In particular, all principles of the UN Global Compact and International Standard on Corporate Social Responsibility (ISO 26000) are addressed. How to interpret the Who s Good Report Who s Good s analysis in this report is identified using advanced analysis algorithms Data mining, Machine learning and artificial intelligence(ai). It is then analyzed based on the Impact, frequency and severity/consequence of the performance. In order to ensure a balanced and objective analysis and weighting, raw data which is reliable and objective such as public data of governments is only entered into the data warehouse. 3

4 Industry Outlook - Hardware & IT Equipment It examines the current issues impacting the sector; provider a snapshot of activity in a number of global market, and suggests considerations for stakeholders as they look. Driving forces Major Criteria Providers of electronic equipment, instruments & components can enhance their position by enabling their customers to improve operating efficiency. A number of products from the electronic equipment industry have specific sustainability applications. Providers of control and automation solutions, for instance, can tap opportunities resulting from customers demand for improved energy and carbon efficiency. Safety and quality concerns also offer opportunities in the area of controls, sensors and testing. Due to the resource-intensive production process and the relatively high energy consumption during the use of the equipment, environmental management of the companies own operations as well as product stewardship over the life-cycle of their products are also important issues for the industry. Given the mostly oligopolistic market structures, compliance with antitrust regulations is an important factor. Furthermore, as high-tech providers, companies in this industry rely heavily on the knowledge, qualification and training of their employees for their business success. Given the long-term nature of B2B relationships, tools to monitor the quality of client management are also essential. Sustainability Score Environment Environment Policy Pollution Prevention Chemical Management Adaptation of Climate Change Resource Efficiency Social Labor Practice Human Rights Fair Operating Practices Community Development and Contribution Consumer Issues Governance Responsibility Leadership and Independency Nomination, Election and Evaluation Integrity, Ethics and Conflicts Risk Oversight Remuneration Transparency 4 c Copyright 2016 Who s Good.

5 SAMSUNG ELECTRONICS Who s Good Corporate ESG Analysis Report 1, Jan June, Country: South Korea Corporate No Market: KOSPI ( ) Hardware & IT Equipment Sustainability / ESG Key Figure / Environment / Social / Governance / Reputation Sustainability score Sectoral score E Samsung Electronics TOTAL 51.9 : 42.9 : 52.8 D R G S Environment Social Governance Reputation Risk Disclosure Company Description Profile ( ) Samsung Electronics. is mainly engaged in the production of consumer Name electronic products. It operates in three business divisions: consumer electronics division, which involves in the color televisions, monitors, Country printers, air conditioners, refrigerators, laundry machines and others; Address information technology & mobile communications division, which involves in the production of computers, handhold phones (HHPs), network systems, digital cameras and others, as well as device solutions division, which is divided into semiconductor and display business parts, providing Business No. dynamic random access memories (DRAMs), flashes, thin film transistorliquid crystal displays (TFT-LCDs) and others. The Company distributes its products within domestic market and to overseas markets. On September 2, 2014, it announced that it has acquired PrinterOn, engaged in mobile cloud printing solutions based in Ontario. Sectoral score Environment 68.8 Social 34.9 Governance 54.4 Pollution Prevention Chemical Management Adaptation of Climate Change Resource Efficiency Labor Practices Human Rights Fair Operation Practices Community Development and Contribution Customer Issues Responsibility Leadership and Independency Nomination, Election and Evaluation Integrity, Ethics and Conflicts Risk Oversight Remuneration Transparency Corporate No Industry Hardware & IT Equipment Commencement Market Employee No. Samsung Electronics South Korea 129 Samsung-ro Maetan3dong Yeongtong-gu Suwon, South Korea KOSPI 96,898 SAMSUNG Electronics Environment Policy

6 ESG Key Figure Sustainability ESG Key Figure Environment Social Governance Reputation * 1kg per 1million USD in sales 6 c Copyright 2016 Who s Good.

7 Environment Sustainability ESG Key Figure Environment Social Governance Reputation 1, June, 2016 Environment Score 68.8 : 68.8 : 48.3 Environment Analysis Environment performance is analyzed with 14 major criteria in 5 big issues. These criteria include environmental impact of business operating on the broad scope of air, water and soil. Particularly environmental risk is assessed through environmentally friendly business activity, waste reduction, disclosure of toxic chemical use, recycling plan, GHG reduction plan and sustainable resource use. Every decisionmaking and activity of businesses affects the environment such as the use of resources, sites of operations etc. Company needs integral approach giving consideration to direct and indirect ESG activities and business decision for reducing environmental impact. The environment score of Samsung Electronics is 68.8 out of 100. The score of environment sector shows that is managed better than the average of the same line of business. By issues, Pollution Prevention, Chemical Management are the well managed parts of Samsung Electronics with high score. On the other hand, Environment Policy, Adaption of Climate Change are necessary for more improvement. Environment Issues Environment Policy 68.0 Pollution Prevention 75.6 Chemical Management Adaptation of Climate Change 54.3 Resource Efficiency Environment Policy score of Samsung Electronics is 68.0 out of 100. This score is better than the average of the same line of business. Pollution Prevention score of Samsung Electronics is 75.6 out of 100. This score is better than the average of the same line of business. Chemical Management score of Samsung Electronics is out of 100. This score is better than the average of the same line of business. Adaptation of Climate Change score of Samsung Electronics is 54.3 out of 100. This score is better than the average of the same line of business. Resource Efficiency score of Samsung Electronics is 68.0 out of 100. This score is better than the average of the same line of business. Environment Key Figure 7

8 Sustainability ESG Key Figure Environment Social Governance Reputation Environment Analytics Environment Policy: 68.0 Company should respect and promote the environmental principles, particularly environmental responsibility, precautionary principal, environmental risk management and polluter pays principle. Environment policy and strategy Environmental management system 67.5 Environment Policy score of Samsung Electronics is 68.0 out of 100. This score shows that Samsung Electronics manages Environment Policy issues better than the average level of this industry. Although Environment Policy could not evaluate its level of how well organized and executed, its presence and disclosure of information publicly are mainly checked Pollution Prevention : 75.6 A company can improve its environmental performance by preventing pollutants emission to the air, wastes discharge to water and soil, waste management, used and disposal of toxic and hazardous chemical substances and other pollution from business activities. In particular, pollutants emission to the air, such as lead, mercury, volatile organic compounds (VOCs), sulphur oxides (SOx), nitrogen oxides (NOx), dioxins, particle material (PM) and Ozone-depleting substances (ODS) can cause serious problems to human, animal or plant life or health. Also, wastes discharge might pollute water and soil through direct, intentional or accidental discharges into surface water bodies including the marine environment, unintentional runoff to surface water or infiltration to ground water. These discharges may come directly from a company s facilities, or can be caused by indirectly the use of its products and services. Every business activities are connected to environmental impact and can be a major cause to the air, water and soil pollution. Air Emission Management Water Emission Management Waste Management Pollution Prevention score of Samsung Electronics is 75.6 out of 100. This score shows that Samsung Electronics manages Pollution Prevention issues better than the average level of this industry. In the recent available data, air pollutants such as NOx, PM were emitted tons, which is 3.14kg per million US dollars of sales. The amount of waste emission of this company was 466,996.8tons and 95.9% was recycled. The rate of recycled is higher level and the company made results with exemplary performance Pollutant Emission Air NOx ton SOx 0.1 ton PM 22.0 ton Water BOD 42.4 ton COD ton SS 35.3 ton Waste General waste 361,941.7 ton Designated waste 105,055.0 ton Recycling waste 95.9 % 8 c Copyright 2016 Who s Good.

9 1, June, 2016 Chemical Management : Toxic chemical substances emitted or released by companies can affect severely negative impact on ecological system and environment. Particularly, spills of chemicals, oils and fuels can have significant negative impacts on the surrounding environment, potentially affecting soil, water, air, biodiversity and human health. To prevent these tragedies, toxic chemicals have to be kept and managed in designated area and install leak-proof facilities. To prevent and respond properly to the case of hazardous chemical substances leakage, it must be ensured that the total amount of substances flow to the wastewater treatment installation and checked regularly the toxic chemicals in a storage area to block the possible flow into other associated pipelines. The number of companies is increasing to facilitate Chemical Management System (CMS). Use of New and Existing Chemicals Usage of Toxic Chemicals 59.1 Adaptation of Climate Change : 54.3 Chemical Management score of Samsung Electronics is out of 100. This score shows that Samsung Electronics manages Chemical Management better than the average level of this industry. The chemical amount of use in 2015 is not publicly disclosed, but it can be estimated by the amount conveyed that is approximately 14,044.86kg. The amount of chemical emissions is 347,258kg, which is 47% of the total amount conveyed. 258, Greenhouse Gas (GHG) emissions are a major contributor to climate change and the subject to the UN Framework Convention on Climate Change and the subsequent UN Kyoto Protocol. As a result of these international arrangements, in the countries around the world, different national and international regulations and incentive systems are limiting GHG emissions and giving rewards to reduce it. Every companies are responsible for GHG emissions either directly or indirectly and will be affected by climate change in every aspect. This means the responsibilities of companies to minimize its GHG emissions as well as adapting to climate change. Therefore it is expected to pay a lot more efforts of companies and society. Reduction of GHG Climate Change Adaptation ton Adaptation of Climate Change score of Samsung Electronics is 54.3 out of 100. This score shows that Samsung Electronics manages Adaptation of Climate Change better than the average level of this industry. Samsung Electronics seems to make a lot of effort in climate change mitigation and adaption. It is constantly improving through these efforts. Currently, this company is managing a GHG inventory, and GHG Energy Target Management company. GHG emission amount in 2014 was 6,713,506 CO2ton, which means this company emits GHG 114,873kg per million US daollars of sales. Greenhouse Gas Emissions 6,713,506 tco2eq 9

10 Sustainability ESG Key Figure Environment Social Governance Reputation Resource Efficiency Score : 68.0 Company has responsibility to utilize resources like electricity s, fuels, raw materials, water, and lands and so on efficiently on every businesses. To sustainable growth, a company should improve the using rate of reusable resources. Water Resource Efficiency 58.0 Energy Efficiency 83.3 Raw material Efficiency 72.3 Water Usage Water Reuse Water Reuse rate Energy total use ISO Resource Efficiency score of Samsung Electronics is 68.0 out of 100. This score shows that Samsung Electronics manages Resource Efficiency issues better than the average level of this industry. A Company can make decisions related to water resource protection and to supply sustainable fresh drinking water from the water source in the region the company located. This company used water 57,369,031 ton in It is 499,414.4kg per million US dollars of sales and 592,055.9kg per employee. The water reuse rate is 56.29%. This is the exemplary performance in the same industry. A company can implement to reduce the energy demand of the building, transport, manufacturing processes, equipment, electrical equipment and services company providing energy efficiency programs. Energy efficiency improvement can be done through a complementary effort to advance the sustainable use of alternative energy. This company used energy 2,408,685TOE in 2014 that is 100,866TJ. This company is introduced Energy Management System to all plants and holds ISO A company should implement raw material efficiency programs to reduce environmental impact caused by the use of raw materials for production process or finished products used in its activities or in the delivery of its services. The information of raw material use is not disclosed so that Resource Efficiency couldn t be analyzed appropriately. 57,369,031 32,295, % 2,408,685 TOE Certified ton ton 10 c Copyright 2016 Who s Good.

11 Social Sustainability ESG Key Figure Environment Social Governance Reputation 1, June, 2016 Social Score Social Analysis 34.9 : 53.0 : 35.9 Social performance is analyzed to assess the social sustainability of the company through 39 indicators focusing on 18 criteria from 5 issues. The social analysis model has been developed according to ISO basically and it is applied to the industry weights. Social sector is evaluated through indicators derived from 5 issues based on the following principles; Accountability, Transparency, Ethical Behavior, Respect for Stakeholder Interests, Respect for The Rule of Law, Respect for Human Rights. These 6 principles are the base to assess companies as the members of the society for social responsibility and sustainable management. The social score of Samsung Electronics is 34.9 out of 100. The score of social sector shows that is need to be considered for high-maintenance. By issues, Community Development and Contribution, Customer Issue are the well managed parts of Samsung Electronics with higher score. On the other hand, Labor Practices and Human Rights are needs for more improvement. Social Issues Labor Practices 28.8 Human Rights 32.8 Fair Operation Practices 28.8 Community development and contribution 45.9 Customer Issue Labor Practices score of Samsung Electronics is 28.8 out of 100. This score is need to be improved. Human Rights score of Samsung Electronics is 32.8 out of 100. This score is need to be improved. Fair Operation Practices score of Samsung Electronics is 28.8 out of 100. This score is need to be improved. Community development and contribution score of Samsung Electronics is 45.9 out of 100. This score is better than the average of the same line of business. Customer Issue score of Samsung Electronics is 43.6 out of 100. This score is need to be improved. Social Key Figure 11

12 Sustainability ESG Key Figure Environment Social Governance Reputation Social Analytics Labor Practices : 28.8 Including subcontracting work, all the policies and practices related to work performed on behalf of the company or by the company or in the company, Labor practices mean having responsibility of the company in the relations with employees hired directly or indirectly and operators in direct control. Labor practices include polices or practices affecting the recruitment and promotion of employees, disciplinary and grievance procedures, transfer and relocation of workers, the expiration of the employment, training and skills development, health, safety and industrial hygiene and working conditions such as specific working hours and remuneration. That includes also collective bargaining to address the social issues related to employment and recognition of both representative and participation of and corporate employees and users in social dialogue and tripartite consultation. Employment relationships 26.4 Equal employment of male and female 36.0 Conditions of work and social protection 35.7 Health and safety at work 57.5 Labor and management relations 5.7 Human development Labor Practices score of Samsung Electronics is 28.8 out of 100. This score shows that Samsung Electronics manages Labor Practices worse than the average level of this industry. Samsung Electronics has not disclosed about the joint labor-management meetings and union membership status of employees. The rate of non-regular workers is 1.29% and the rate of women employment is 26.2%. Whereas the average wages per male are 100,053 US dollars, the average wages per female are 69,417 US dollars annually that is 69.4% of the males. The training expenses for employees are not disclosed. The welfare expenses for employees are not disclosed. The accident rate in domestic plants is 0.086% and overseas plants is 0.064%. Samsung Electronics has the Family Friendly Corporation certification. Samsung Electronics has the OHSAS certification. Key performance Flexible Workplace Smart work & Family Friendly Culture Accident Rate 0.086% (9cases) Family Friendly Culture Family friendly certified firm OHSAS Unionization Non-disclosure Education & Training Expense Certified Non-disclosure Wages and welfare Contract Worker Rate Female Employment Rate Average Length of Service % 23.2% 10.3 years 12 c Copyright 2016 Who s Good.

13 1, June, 2016 Human Rights : 32.8 Human Rights is the fundamental rights of all human. There are two broad categories in human rights. First category is the right to life, liberty, and civil rights and political circles such as freedom of expression. Second category is labor rights, the right to food, the best health standard right, education rights, economic rights, social and cultural rights such as social security right. A company has responsibility to respect and protect human rights as including within the sphere of influence of corporate responsibility and accountability in all countries. Vulnerable groups 32.0 Code or policy of human rights 37.4 Human Rights score of Samsung Electronics is 32.8 out of 100. This score shows that Samsung Electronics manages Human Rights worse than the average level of this industry. Samsung Electronics hired 1.6% disabled workers out of total employees. Samsung Electronics has a whistle-blowing system. Samsung Electronics do not have a membership to the UN Global Compact Resolving grievances 20.0 Avoidance of complicity Fair Operation Practices : 28.8 Key performance Companies can manage sustainability by implementing fair trading transaction and ethical behavior with the associations, governments, partners, suppliers, contractors and competitors. Fair operation practices is related to ethical behavior as dealing with other partners, and it includes suppliers, contractors, customers, competitors, associations as well as government agencies. Fair competition 40.0 Anti-corruption Employment Rate of the Disabled 1.6% UN Global Compact Membership Fair Operation practices score of Samsung Electronics is 28.8 out of 100. This score shows that Samsung Electronics manages Fair Operation Practices worse than the average level of this industry. Samsung Electronics is implementing compliance training. Compliance training is a way of the law-abiding management. Samsung Electronics is running an online Shinmungo which suppliers can voice their complaints. Promoting social responsibility in the value chain

14 Sustainability ESG Key Figure Environment Social Governance Reputation Community Development and Contribution : 45.9 A Company is involved in various ways in the community and contributes to the development of the community to reflect and strengthen democratic civic values. The area and the members of the community affected by the companies can be geographic regions as well as virtual communities with common characteristics, such as community groups with an interest in a particular issue. Sustainability is an integral part of both community participation and community development, which involves recognizing the value of community work and community support to build up a relationship. It is recommended companies to recognize in the community for that stakeholders from the community have the common interests with the corporate. Social investment 50.0 Community development and contribution 41.5 Customer Issue : 43.6 A company is responsible for the customers in the entire process of providing products and services. This responsibility contains education, accurate information conveyance, fair means, transparency, information and marketing agreement that will help the process, promoting sustainable consumption, (if that is) considered the disabled and disadvantaged. The responsibility of companies involve minimizing the risks through the design, manufacturing, distribution, information delivery, support services from using products and services. Consumer service, support, and complaint and dispute resolution Fair marketing Community Development and Contribution score of Samsung Electronics is 45.9 out of 100. This score shows that Samsung Electronics manages Community Development and Contribution worse than the average level of this industry. The donation amount for community development is million US dollars and that is 0.27% of the sales this year. The main programs that Samsung Electronics is running are Digital Village, the Semiconductor Communication Committee. Customer Issue score of Samsung Electronics is 43.6 out of 100. This score shows that Samsung Electronics manages customer issue better than the average level of this industry. The expense for public relations that Samsung Electronics used is KRW 99B, that is 0.63% of the sales. * The expense for public relations is the costs for enterprises to make advertisement to an unspecified public in order to facilitate the sale or supply, and it includes indirect advertising and promotion of corporate image enhancement. The number of filed lawsuits The amount of filed lawsuits Compared with sales Lawsuits ,253,583 USD 3.83 cases % 14 c Copyright 2016 Who s Good.

15 Governance Sustainability ESG Key Figure Environment Social Governance Reputation 1, June, 2016 Governance Score 54.4 : 58.2 : 45.3 Governance Analysis Governance performance is analyzed with 26 criteria from 7 issues. Basically, this governance analysis model has been developed according to Global Governance Principles of International Corporate Governance Networks (ICGN). The governance score of Samsung Electronics is 54.4 out of 100. The score of Governance sector shows that is managed better than the average of the same line of business. By issues, Risk Oversight, Reporting and Audit are the well managed parts of Samsung Electronics with higher score. On the other hand, Leadership & Independency, Remuneration are necessary for particular management. Governance Issues Responsibility 49.0 Leadership & Independency 31.3 Nomination, election and evaluation 45.6 Integrity, Ethics and Conflicts 73.5 Risk Oversight 80.9 Remuneration Responsibility score of Samsung Electronics is 49.0 out of 100. This score is better than the average of the same line of business. Leadership & Independency score of Samsung Electronics is 31.3 out of 100. This score is need to be improved. Nomination, election and evaluation score of Samsung Electronics is 45.6 out of 100. This score is better than the average of the same line of business. Integrity, Ethics and Conflicts score of Samsung Electronics is 73.5 out of 100. This score is better than the average of the same line of business. Risk Oversight score of Samsung Electronics is 80.9 out of 100. This score is better than the average of the same line of business. Remuneration score of Samsung Electronics is 24.1 out of 100. This score is need to be improved. Reporting and audit Reporting and audit score of Samsung Electronics is 82.2 out of 100. This score is better than the average of the same line of business. Governance Key Figure 15

16 Sustainability ESG Key Figure Environment Social Governance Reputation Responsibility : 49.0 Responsibility is assessed by various issues like responsibility of BOD, sustainability management, and stakeholder s communication. Also capability management on chairman and executive directors is considered. Responsible decision -making 66.0 Sustainability management 53.8 Responsibility score of Samsung Electronics is 49.0 out of 100. This score shows that Samsung Electronics manages Responsibility issue better than the average level of this industry. The largest shareholders are Samsung Life Insurance 7.55 %, National Pension Fund Investment Office 7.00 %, Samsung C&T 4.06 %, Lee Geon-Hui 3.38 %. Both online and offline communication channels are open for the stakeholders Key performance Stakeholder s communication CSR Reporting Communication with Stakeholders Evaluation Status on Board Members 66.0 Capability management of chairman and executive director of the board 0.0 Leadership and Independency : 31.3 Leadership and Independence is mainly assessed by the fact that how the system assures BOD s independence. These are the parts of gauging its independence; whether the chairman of BOD is the CEO, committee existence for counterbalance, composition rate of non-executive directors. Composition of the Board and Committees 20.0 Non-executive directors times publishing Once a year Non-disclosure The Largest Shareholder Samsung Life National Insurance Fund Pension Samsung C&T Lee Kunhee > > > 7.55% 7.00% 4.06% 3.38% Leadership and Independence of Samsung Electronics is 31.3 out of 100. This score shows that Samsung Electronics needs better management on Leadership and Independency issues. CEO is the chairman of BOD. The ratio of independent directors is 56%. Two committees; independent director recommendation committee and internal trading committee in the BOD enhance the independence Key performance Non-executive Rate Committees % Members of the Nomination Committee for Non-executives - 3 of non-executives - 1 of internal directors Insider Trading Committee - 3 of non-executives 16 c Copyright 2016 Who s Good.

17 1, June, 2016 Nomination, Election and Evaluation : 45.6 Board member election and evaluation is assessed by the process and criteria on nomination and election. Protection for the minority shareholders, non-executive director s skills and professional experiences, diversity and performance evaluation criteria are also considered to analyze board member election and evaluation. Nomination, election process and criteria 50.0 Protection for small shareholder Nomination, Election and Evaluation score of Samsung Electronics is 45.6 out of 100. This score shows that Samsung Electronics manages Nomination, Election and Evaluation issues better than the average level of this industry. The total number of board member of Samsung Electronics is 9. The number of woman director on the board is Non-executive director s skills and professional 50.0 Diversity 53.0 Performance evaluation system 50.0 Integrity, Ethics and Conflicts : 73.5 The issue about Integrity, Ethics and Conflicts is assessed by conflict of interests, ethics compliance and internal whistle-blowing system. Conflict of interests Key performance The Number of Female Board Members 1 out of 9 Right Protection for small shareholder The concentrated vote system The writing vote system The electronic vote system 50.0 Ethics compliance Integrity, Ethics and Conflicts score of Samsung Electronics is 73.5 out of 100. This score shows that Samsung Electronics manages Integrity, Ethics and Conflicts issues better than the average level of this industry. Samsung Electronics has a hot-line for ethical management. Key performance Whistle-blowing System Particulars of Fines, Penalties and Sanctions Internal whistle-blowing system 65.9 Yes Non-disclosure 17

18 Sustainability ESG Key Figure Environment Social Governance Reputation Risk Oversight : 80.9 Risk Oversight is assessed by how a company manages the risks both in terms of organizational hardware like system, reporting line, manual and software like human resources. All of the financial risk, social risk and environmental risk are considered for risk management capability. BOD has responsibility on risk management and its methodology. Financial risk management Risk Oversight score of Samsung Electronics is 80.9 out of 100. This score shows that Samsung Electronics manages risk management issues better than the average level of this industry. Samsung has risk management committee in BOD. Social risk management Key performance Risk Management System CSR Committee in BOD* Environmental risk management 65.0 Remuneration : 24.1 CEO and executive s remuneration is considered as an important factor for recruiting superior executives and making them outstanding performance. Therefore appropriate remuneration packages and the evaluation standard disclosure are considered to assess this issue. Employee s remuneration should be assessed as well as executives remuneration to diagnose its propriety. The remuneration differentials between them is continually pointed out as the problem in developed countries. The efforts of employees as well as senior executives for yielding performance needs to be assessed fairly. CEO and executives remuneration level 0.0 Remuneration standard Non-disclosure Remuneration score of Samsung Electronics is 24.1 out of 100. This score shows that Samsung Electronics needs better management on remuneration issues. Average remuneration of CEO and executives is 65.9 times more than the average of employees. In 2015, average payment to CEO and executives is 59 million US dollars. Key performance Average Remuneration of Executives Yes 65.9 times more than employees' Members of the Compensation Committee *BOD: Board Of Directors 5,710,000 USD 3 of non-executives 18 c Copyright 2016 Who s Good.

19 1, June, 2016 Transparency : 82.2 To analyze transparency and efficiency of governance, public disclosing practices and BOD working result are considered. Transparency of governance is assessed mainly through voluntary disclosure of company information assured by independent third party audit and the public accessibility. Efficiency of governance is assessed by board meetings and BOD decision-making. Voluntary public disclosure Independent audit activity Transparency and Efficiency of Governance score of Samsung Electronics is 82.2 out of 100. This score shows that Samsung Electronics manages Transparency and Efficiency issues better than the average level of this industry. Samsung Electronics publishes various business related reports with third party assurance. BOD attendance rate is 94% in Third party assurance on reports Key performance 66.0 Attendance at board meetings Members of the Audit Committee 3 of non-executives The Number of BOD* Meetings 7 meetings Attendance Rate of Non-executive Board Members 94% *BOD: Board Of Directors 19

20 Sustainability ESG Key Figure Environment Social Governance Reputation Financial Performance Total Assets Total liabilities Total capital Current ratio , , , % , , , % , , , % , , , % Sales Operating Profit Net income EBIT , , , , , , , , , , , , , , ,175.9 Cash Dividend yield ratio Total Asset growth Equity capital growth Debt ratio Ownership Structure Ownership Structure Placeholder Return on Investment Operating profit growth National Pension Service: 7.00% Sales growth Net profit growth Samsung Life Insurance: 7.55% SAMSUNG ELECTRONIC Samsung Foundation of Culture: 0.03% Samsung Welfare Foundation: 0.06% Hong Ra-Hui: 0.74% Shareholder Samsung Life Insurance National Pension Service Samsung C&T Lee Geon-Hui Shareholding Ratio 7.55% 7.00% 4.06% 3.38% Samsung Fire & 1.26% Samsung Fire & Marine Insurance: 1.26% Lee Jae-Yong: 0.57% Lee Geon-Hui: 3.38% Marine Insurance Hong Ra-Hui Lee Jae-Yong 0.74% 0.57% Samsung C&T: 4.06% Samsung Welfare Foundation 0.06% Samsung Foundation of Culture 0.03% 20 c Copyright 2016 Who s Good.

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22 Acknowledgement About Who s Good Who s Good is the fin-tech social venture as a B-corporation to disclose, compare and analyze of dynamic data on environmental, social and Governance risks for an unlimited universe of companies and projects. The company s web-based tool, Who s Good, allows you to identify and manage the ESG issues. It is used by investment professionals, financial institutions, supply chain managers, multinational corporations and compliance managers, and includes a variety of features enabling clients to monitor risk trends over time, create customized watch lists, tailor alert services and more. The tool plays an integral role in increasing transparency and ensuring compliance with internal and international standards, thereby helping reduce risk exposure. Who s Good s comprehensive and relevant database enables you to meet the risk management and compliance challenges in an increasingly complex world. On a daily basis, Who s Good tracks a company s ESG risk exposure by monitoring independent third-party sources such as all major print media, news sites and governmental agencies. Controversial issues covered include environmental footprint and climate change, human rights and community relations, labor conditions and employee relations as well as corruption and money-laundering. Understanding the Who s Good ESG Analysis System Who s Good provides an independent judgment of environmental, social and Governance impact for both companies and investor using a ratings scale of 1 to 100 score easier. Through a very broad spectrum of indicator regarding impact models, practices, policies and achievements, the system is designed to be applicable to a wide range of industries and business models. Also, Who s Good sets itself apart from socially responsible investment ratings, which typically focus on negative screens, as ratings score recognize only positive impact generated by a company or fund. Who s Good ESG Business Intelligence Who s Good provides business intelligence on environmental, social and governance (ESG) risks. This allows clients to identify and assess the ESG issues which may present financial, reputational and ethical risks across an unlimited universe of companies and projects. The Who s Good application includes a variety of features enabling clients to monitor risk trends over time, create customized watchlists, tailor alert services, and more. The Who s Good tool plays an integral role in financial risk management, enterprise reputation risk management and compliance with internal and international standards. Who s Good can be integrated seamlessly into existing processes and can be customized according to the needs of the user. Who s Good provides a Software as a Service (SaaS) solution and offers several tailored packages to its clients. These include access to the Who s Good Tool, Company Reports, Tailored Client Reports, Screening Reports and Data Feeds. 24 c Copyright 2016 Who s Good.

23 1, June, 2016 Customer s Benefits Investors/Advisors Fund manager Reduce risk & Improve Financial Performance Avoid risky investment by screening out companies with negative practice social and environmental performance create operational efficiencies. Improve Your Impact Using Analytics to determine if you are meeting your social and environmental performance goals and create a baseline for improvement. Reduce risk & Improve Financial Performance Avoid risky investment by screening out companies with negative practice social and environmental performance create operational efficiencies. Improve Your Impact Using Analytics to determine if you are meeting your social and environmental performance goals and create a baseline for improvement. Save time & Money Reduce your staff s time committed to collecting and managing impact data. Avoid the Tech and validation costs associated with setting up your own proprietary management system. Lead Help build the field of impact investing by helping build a standardized platform to serve the industry. Save time & Money Reduce your staff s time committed to collecting and managing impact data. Avoid the Tech and validation costs associated with setting up your own proprietary management system. Company Reduce risk & Improve Financial Performance Companies with a commitment to social and environmental performance perform better financially. Improve Your Impact and Reputation Using Analytics to determine if you are meeting your social and environmental performance goals and create a baseline for improvement. Manage Supply Chain risk Identify Supplier s risk quickly affecting your supply chain value and manage the situation safely. 25

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