Decides to Stop Any New Coal-related Business
Samsung C&T has decided to stop any new engagement in coal-related investment, construction, and trading. Existing projects will be gradually withdrawn from depending on their contract status.
The company's coal exit plan is unprecedented for a non-financial company in Korea. The decision came following international criticism against its participation in Vietnam’s Vung Ang 2 coal power plant construction project.
According to a company statement, Samsung C&T has established an Environmental, Social, and Corporate Governance (ESG) strategy system centered on six non-financial areas – labor/human rights, environment/safety, co-prosperity, compliance, information security, and social contribution – based on ISO 26000, an international standard for corporate social responsibility management, and the United Nations’ Sustainable Development Goals. It has also been making efforts to preemptively respond to climate change, enhance social responsibility across all of its businesses, and create value for society.
Accordingly, the company’s Governance Committee, which consists entirely of independent directors, last month presented its opinion in favor of the company’s participation in Vietnam’s Vung Ang 2 Thermal Power Plant project after comprehensively reviewing various factors such as inter-governmental relations, the trust of customers and partners, and the company’s technological and execution capabilities.
Yet the company's participation in the Vietnamese power project drew fire from environmental groups from around the world.
On Oct. 23, the company's Governance Committee held an in-depth discussion on a coal exit for all of Samsung C&T’s businesses.
Based on the results of the committee’s discussion, the board of directors decided on Oct. 27 on a plan to completely stop new coal-related projects in order to comply with the company’s sustainable management policy and join efforts to cope with global climate change risks.
Samsung C&T Engineering & Construction Group will not participate in coal-fired power generation projects in any capacity, including investment or construction, starting Oct. 27. Regarding its existing projects, the group plans to apply stricter environmental standards than those required by international regulations to both the Vung Ang 2 Thermal Power Plant in Vietnam and Anin Thermal Power Plant in Gangneung, Korea.
The Trading & Investment Group, meanwhile, will also gradually withdraw from any coal-related business as its contracts end while continuing to provide stable services in the meantime.
Samsung C&T plans to continue to expand its sustainable business portfolio, focusing on its core business of LNG combined cycle power plants and storage facilities, as well as renewable energy such as solar and wind power projects.
In line with its coal exit pledge, Samsung C&T will contribute to the transition to a low-carbon society by reducing greenhouse gases and to the establishment of a circular economy system by increasing the efficiency of resource use. In addition, it will further enhance its sustainable management by maintaining efforts to develop and expand environmentally friendly projects and services.