Samsung’s carbon emissions rise despite ESG claims

Samsung Electronics’s rising carbon emissions and slow reduction of fossil fuel use is undermining the group’s sustainability claims, according to environmentalists.

The criticism comes as companies are under increasing scrutiny over climate change and concerns about greenwashing, whereby organisations overstate their environmental commitments and achievements.

“Everybody has ESG initiatives, everyone’s talking . . . but we don’t see real tangible changes,” said Youn Sejong, director of Solutions for Our Climate, a Seoul-based non-governmental organisation.

Samsung is one of the world’s biggest producers of computer chips, smartphones, electronic displays and appliances. The South Korean group has reported that its greenhouse gas emissions rose 5 per cent year-on-year in 2020.

The company also relies on fossil fuels for more than 80 per cent of its electricity, according to Greenpeace, the environmental campaign group.

The data have prompted questions over Samsung’s climate change efforts despite the group touting claims that its sites in the US, Europe and China now use only renewable energy.

Samsung declined to comment.

The company’s challenge to shift is highlighted by South Korea and Vietnam, two of its biggest manufacturing bases, where energy systems remain reliant on coal.

Samsung has been pushing Seoul and Hanoi to speed up energy market deregulation aimed at inviting renewable energy investments.

Samsung wants to be able to purchase power from independent renewable energy generators, bypassing state-owned energy groups that have been slow to transition away from coal.

The company is drawing up specific targets for renewable energy usage in both countries but no timeframe has been set, highlighting a lack of confidence in making significant near-term progress.

Samsung has also been looking for opportunities worldwide to purchase credits to offset carbon emissions and join other pricing schemes for boosting renewable energy. In Brazil and Mexico, for instance, the company plans to reach 100 per cent renewable energy by 2025.

But activists said Samsung should put more pressure on governments, given its immense political influence. In South Korea and Vietnam, the group is the single biggest corporate employer and contributor to gross domestic product.

“Given Samsung’s scale of business and impact on the overall economies of Korea and Vietnam and its pledge to pursue renewable energy goals in other markets, it has the power to make great strides in Korea and Vietnam by pursuing easier access to renewable energy in the two countries,” Greenpeace said.

Youn said “the real culprits” in South Korea are state-owned energy group Korea Electric Power Corp and government ministries for resisting energy market changes for years.

Renewable supply in the country is only about 5 per cent, although new rules to allow direct power purchasing agreements are being rolled out.

“It is ridiculously low, and that makes it really difficult to do any meaningful renewable energy initiatives,” Youn said.

Further undermining the company’s claims, Samsung affiliates — along with units of carmaker Hyundai, Kepco and other South Korean companies and financial institutions — have for years been at the forefront of coal power development in Vietnam.

“On one side they say they want more renewables for their electronics factory, and the other side, they’re building this unnecessary coal power plant . . . We all know that Samsung headquarters actually does co-ordinate between those decisions,” Youn added.

Several groups, including Samsung’s financial units, last year promised to end coal finance.