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Morning features and interviews. A morning story over a cup.
ESG management carried on from the founding spirit of Dr. Ilhan NewThe start of a sound corporate governance in which ownership and management are separatedThe year 1926, when Yuhan Corporation was established, was under Japanese colonial rule—a time when it was difficult even to grow a company, let alone imagine the kind of active ESG management activities of today. Yet, on the basis of the founding ideal to "make the best products and be of help to the nation and its people," it laid the cornerstone of social-contribution activities. Ahead of its 100th anniversary in 2026, Yuhan Corporation newly established a dedicated organization reporting directly to the CEO, the "ESG Management Office," in 2022 for more strategic ESG management. Not only does the CEO directly oversee ESG management, but the company also published its first sustainability report containing its management achievements to date, communicating with numerous stakeholders. As a result, it took first place as the "Most Respected Company by Koreans" for 20 consecutive years, and in 2022 it also received the Minister's Award for the bio- and healthcare sector at the "Korea ESG Company of the Year Awards" hosted by the Environmental Foundation.Yuhan's Sustainable Management 1. Human Health, a Better 100 Years[The joint declaration ceremony for the practice of ESG management, held at Yuhan Corporation's headquarters in Daebang-dong, Seoul, in April 2023 ©Yuhan Corporation]For Yuhan Corporation, ESG management is not a new management activity. From its establishment in 1926 to the present, it has found the reason a company must exist in advancing the interests of our society, and on the basis of the spirit of its founder, Dr. Ilhan New—that "a company's profits must be returned to the society that raised it"—it led the beginning of ESG management in Korea. Yuhan's social contribution takes place within a social-return system centered on ▲Yuhan Corporation ▲the Yuhan Foundation ▲the Yuhan School Foundation. This is a system unique to Yuhan, created when founder Dr. Ilhan New donated his entire fortune to the Yuhan Foundation and the Yuhan School Foundation in 1971: when the company's profits are delivered through dividends to the public-interest foundations that are its largest shareholders, they are used as funds for the foundations' purpose projects, such as social welfare and education. Through this structure, a certain portion of the profits Yuhan generates can be returned to our society, and it created the framework for strategically operating social-contribution activities that make the most of the nature of its business.Yuhan's social-contribution activities are also grounded in the active participation of its employees. The message "A Healthy Tomorrow, Yuhan Together," which reveals Yuhan's aspiration, was selected through an in-house CSR contest in March 2023. Talent-donation-based volunteer corps by employees are also active for the development of local communities. All expenses needed for volunteer-corps activities are borne by the company, and it promotes active employee participation by giving awards to outstanding volunteers each year. In addition, at year-end it converts employees' volunteer hours into monetary value and makes donations for local communities and patient support.[Results of Yuhan employee participation activities ©2022–2023 Yuhan Corporation Sustainability Report]Volunteer-corps activity is pursued as an important social-contribution activity to the extent that, when volunteer-corps activities were suspended due to COVID-19, employees voluntarily carried out volunteer work centered on non-face-to-face online education. And by communicating continuously with 48 local social-welfare institutions and NGOs, it actively seeks project evaluation and directions for development. The volunteer corps runs a variety of programs, such as the Happy Home Repair Volunteer Corps, which directly repairs homes or makes furniture for families with members who have disabilities, and the Beodeul Science Career Camp, which cultivates future talent for the bio-pharmaceutical industry among young people.Yuhan's Sustainable Management 2. Sound Corporate Governance[Yuhan Corporation's shareholder composition ©2022–2023 Yuhan Corporation Sustainability Report]Yuhan Corporation is counted as an exemplary company in the area of governance. Yuhan's largest shareholder is the public-interest corporation the Yuhan Foundation; as of the end of 2022, the public-interest corporation's stake in Yuhan was 38.2%. The biggest reason Yuhan was able to have this unique social-contribution system, with a public-interest corporation as its largest shareholder, is the result of founder Dr. Ilhan New donating all of his shareholdings to ▲the Yuhan Foundation ▲the Yuhan School Foundation ▲Yonsei University ▲the Health Scholarship Association before he passed away in 1971. Furthermore, to put into practice the founding spirit that a company belongs to society, it introduced a professional-management system in 1969 so that the founding family does not directly participate in company management, thereby preemptively blocking the arbitrariness of an owner. It had major management decisions determined through consultation between the board of directors and the management, encouraging rational and responsible management by professional managers, and it granted independence so that oversight of management could be carried out efficiently by composing more than a majority of the board with outside directors. The form in which dividends are paid to shareholders is also carried out through a board resolution and shareholders'-meeting approval, and over the past seven years it has conducted a 5% bonus issue each year. In addition, to enhance shareholder value, in February 2022 it newly signed a treasury-stock acquisition trust contract worth 20 billion won, and through continuous treasury-stock acquisition, Yuhan's treasury-stock holding ratio as of the end of 2022 reached about 8.5% (*on a treasury-stock basis).Yuhan Corporation also obtained certification for an anti-bribery management system (ISO 37001) in March 2018, because it prepared measures to control the company's potential corruption risks with the goal of spreading an anti-corruption culture and creating a sustainable management environment to root out corrupt practices company-wide. Beyond this, through the operation of internal consultative bodies, it continuously operates the YCPM (Yuhan Compliance Program Meeting)* and the Clinical Trial Review Committee to respond to compliance risks company-wide.*YCPM: an internal consultative body in which the heads of the sales, marketing, and compliance-management teams review and discuss compliance issues across sales activities as a whole, such as the Pharmaceutical Affairs Act, the Fair Trade Act, and the Fair Competition Code.** Clinical Trial Review Committee: an internal consultative body in which review members, including the head of the compliance-management team, review the academic purpose, research funding, appropriateness of the scope of drug support, and plans for using research results for individual clinical projects, in order to mitigate risks that may arise during clinical-trial support activities.Yuhan Corporation is preparing for certification of ISO 22301, a business-continuity management system. Aiming to obtain certification in the second half of 2023, it has formed a company-wide TFT to carry out the related work; in addition, to build a stable management foundation, it has established a company-wide risk-management organization and a risk-management framework by type, continuously monitoring potential risks and thereby establishing and managing response measures.ESG is not expressed merely in numbers. The non-financial, intangible value that Yuhan creates has kept it at the top in sales among traditional pharmaceutical companies and is becoming the driving force of a 100-year company. Its sustainability report may have started late, but the beginning of ESG management in Korea came faster for Yuhan than for anyone; we look forward to Yuhan's good influence being as sustainable as ESG itself.by Editor N
ESG within a management philosophy carried on for 127 yearsSocial-contribution activities that stir up a healthy wind in the worldDong Wha Pharm, familiar to us for "Whal Myung Su," is a company with neither a dedicated ESG-management department nor a sustainability report. Yet it publishes quarterly business reports every year and shares the value of sustainable management while communicating with numerous stakeholders. Dong Wha Pharm's contribution to our society cannot but draw particular attention: first, it has a record of producing three independence activists during the Japanese colonial period, including its first president, Min Kang. Within Dong Wha Yak Bang, Dong Wha Pharm's predecessor, it also has a history of sparing no devotion for the nation and its people—establishing the "Seoul Yeontongbu," a secret administrative agency connecting the country's interior and abroad, and using the sales proceeds of Whal Myung Su as funds for the independence movement.Dong Wha Pharm's Sustainable Management 1. ESG Hidden in Its Management PhilosophyDong Wha Pharm's current management philosophy is: "Do not make it unless it is good medicine. Dong Wha belongs to the whole Dong Wha family, and also to this nation, so lead it as a company where the entire family gives its all and everyone can live well together." Using this philosophy—carried on since the time of the fifth president, Bodang Yoon Chang-sik—as a foundation, in April 2008 the late Chairman Yoon Kwang-yeol and his wife, Madam Kim Sun-nyeo, established the nonprofit foundation the "Buchaepyo Gasong Foundation." This is Dong Wha Pharm's representative social-contribution activity; through the foundation, Dong Wha Pharm established the "Yoon Kwang-yeol Medical Prize," the "Yoon Kwang-yeol Pharmacy Prize," and the "Yoon Kwang-yeol Dental Medical Service Prize," carrying out projects to support medical and pharmaceutical academic research and to provide scholarships to talented university students facing economic hardship.[The 13th Yoon Kwang-yeol Medical Prize award ceremony ©Dong Wha Pharm Gasong Foundation]It also actively carries out environmental-management activities. Centered on its Chungju plant, it is implementing the introduction of clean fire extinguishers as fire-suppression agents, reductions in production-waste discharge, and reductions in energy and greenhouse-gas use. As a result, it obtained good indicators in ESG evaluation as well, including quality management (ISO 9001) and environmental management (ISO 14001) in 2017 and safety and health management (ISO 45001) in 2018.Dong Wha Pharm's Sustainable Management 2. Social Contribution for the Future[Poster for the 8th Summer Saengsaek Exhibition, 2023 ©Dong Wha Pharm]Dong Wha Pharm is also carrying out various social-contribution activities for cultivating talent in culture and the arts and for children, through the "Gasong Art Prize"—derived from its corporate logo, the "Buchaepyo" (folding-fan mark), and its company name, "Dong Wha"—as well as the "Summer Saengsaek Exhibition," the "Clear Wind Campaign," and the "Water That Saves Lives Campaign." The Gasong Art Prize was established in 2012 to newly define and support the meaning of traditional culture on the theme of the "jeopseon (folding fan)" and to cultivate talent in the visual-arts world. The jeopseon is one of Korea's traditional arts carried on since the Goryeo period, and Dong Wha Pharm unveils the Gasong Art Prize winning works each year through the Summer Saengsaek Exhibition.The Clear Wind Campaign is a social-contribution activity that carries Dong Wha Pharm's wish to stir up a healthy wind in the world. Just like Dong Wha Pharm's wound-treatment product "Fucidin"—as famous as Whal Myung Su—so that children can pursue their dreams without wounds to body and mind, it has sponsored the "Hong Myung-bo Children's Soccer Class" since 2010 to promote youth sports in Korea. In addition, drawing on the meaning of Whal Myung Su—"water that saves lives"—it is carrying out the "Water That Saves Lives" campaign, which delivers clean water to children around the world whose lives are threatened because they cannot receive safe drinking water; it raises the campaign's support funds using the sales proceeds of Whal Myung Su.Dong Wha Pharm's sustainable management may not stand out greatly compared with other companies. But Dong Wha Pharm has a rich 127-year history of devotion to a nation and its people. Let us keep an eye on the sustainable management activities of Dong Wha Pharm, which will continue its beautiful journey alongside society on the basis of the Dong Wha spirit that pursues a healthy and happy life.by Editor L
According to the 2023 Informatization Statistics Survey released by the Ministry of Science and ICT, about 28% of domestic businesses with 10 or more employees were using AI in 2023. This is an 11-fold increase in three years compared with 2020, when AI-using companies were a mere 2.5%. Among large companies, the AI-technology utilization rate reaches a full 36.4%. Riding that trend, this article introduces a conversation about "the future of ESG" that we had with ChatGPT-4, which opened the AI era and was included in "Nature's 10," the journal Nature's annual list of those who helped shape science in 2023.[The thumbnail for this article, drawn by the image-generating AI DALL·E — from DALL·E]L: Hi :) I'm Editor L, who writes articles at the ESG webzine "ESG.ONL." I'm in charge of tenacious, long-form, sustainable stories. Today I'd like to talk about ESG with ChatGPT-4—is that okay?GPT-4: Hello, Editor L! Of course! A Q&A about ESG with ChatGPT-4—how interesting. I'm also curious about how AI technology like GPT-4's capabilities can be applied to ESG communication. Go ahead and ask. I'll do my best to answer!L: The topic of this article is "the future of ESG." I want to explain to readers how ESG will change the perspective of companies and brands in an era of low growth. If ChatGPT-4 were to interview an expert on the theme of "the future of ESG," what questions would you want to ask?GPT-4: Based on the background you've given, if I were to conduct an expert interview on the theme of "the future of ESG," I could consider the following questions. These questions would help draw out an expert's in-depth insights and outlook on "the future of ESG."1. The importance of ESG in an era of low growth — Why is ESG important to corporate strategy in a low-growth economy?2. The relationship between ESG and financial performance — How can ESG initiatives affect a company's long-term financial performance?3. Changes in sustainability strategy — How are companies' sustainability strategies changing in response to the recent economic environment?4. Consumer perception and ESG — How is consumer perception of ESG changing, and how is this affecting brand strategy?5. The role of technology — How can the latest technologies, such as AI, contribute to companies achieving their ESG goals?6. Changes in the regulatory environment — How are governments' ESG-related regulations and policies affecting corporate strategy?7. ESG investment trends — How can ESG investment contribute to corporate growth and innovation?8. The importance of global cooperation — Why are international cooperation and partnerships important for solving ESG-related problems?9. Risk management — How can ESG-related risks be managed and mitigated?10. Future vision — What changes do you expect ESG to bring to corporate activity and industry over the next 10 years?L: Thank you. Of the 10 questions, I'd like to ask further about "No. 1, the importance of ESG in an era of low growth." As an era of low growth and high prices continues, there are voices from companies saying it's too hard to even consider ESG. What do you think?GPT-4: This is a very important matter. In a situation of slowing economic growth, companies come to focus on cost-cutting and improving efficiency, and in that process they may regard considering ESG factors as a burden. ESG must be viewed from a long-term perspective. Investing in ESG is an essential measure for a company's sustainability and long-term success. Environmental protection, social responsibility, and transparent governance become key factors in a company maintaining competitiveness in the market over the long term and managing risk. A strategy centered on ESG plays an important role in strengthening a company's brand value and reputation and in inducing long-term investment and customer loyalty. Therefore, in a low-growth era when consumers and investors move more cautiously, the value of a sustainable, ethical business model will shine all the brighter.L: Would it be okay to view a company's survival through these two distinctions—short-term survival and sustainable survival?GPT-4: Yes, that's right. Viewing the importance of ESG as a criterion that distinguishes short-term survival from sustainable survival is a very useful perspective. Comparing these two concepts helps us better understand the key factors a company must consider for long-term success.[Short-term survival] Mainly a method companies focus on to survive amid current economic challenges and crises. It includes cost-cutting, cash-flow management, and crisis-response mechanisms. Short-term survival emphasizes overcoming immediate problem situations and maintaining competitiveness in the present market.[Sustainable survival] Focuses on strategies that guarantee a company's growth and prosperity from a long-term perspective. It includes ESG factors such as environmental protection, social responsibility, and ethical governance. Sustainable survival emphasizes a company adapting to market changes over the long term, managing risk, and growing in a sustainable manner.It is very important for a company to find a balance between short-term survival and long-term goals. Pursuing only short-term survival strategies risks neglecting long-term sustainability or the company's social responsibility. On the other hand, a sustainable-survival strategy may involve greater costs and effort in overcoming short-term challenges, but it will contribute to building a stronger and more solid company over the long term.L: I largely agree. Then let me ask the next question. Do you know that ESG disclosure for Korea's large companies has been postponed from 2025 to 2026? What do you think caused it?GPT-4: As for the postponement of ESG disclosure for Korea's large companies, several causes can be cited for such a decision. The exact reasons may differ depending on the policy-making process of the government and relevant agencies, but looking at generally considerable factors, they are as follows. Of course, this is only speculation, and the actual background of the decision could be explained in more detail by the Korean government or relevant agencies.1. Insufficient preparation period: It may be postponed to allow companies enough time for the data collection, management-system building, and internal-process improvements needed for ESG disclosure.2. Clarifying regulatory standards and guidelines: More time may be needed to make the regulatory standards and guidelines related to ESG disclosure clearer and to help companies understand and comply with them.3. Consideration of economic conditions: A decision to postpone disclosure requirements may be made so as not to place an additional burden on companies amid economic uncertainty or challenges.4. Reflecting stakeholder opinions: More time may be needed to gather the opinions of companies, investors, and other stakeholders and to reflect their requirements.5. Harmonization with international standards: It may be postponed to adjust domestic regulations to align with global ESG standards and to provide an adaptation period for this.L: Right, there must be more complex circumstances. Then what impacts can ESG disclosure have on ordinary consumers? Could you talk about the positive and negative aspects?GPT-4: Let me explain the impact of ESG disclosure on consumers.[Positive aspects]1. Increased transparency: Through ESG disclosure, companies more transparently reveal their activities and performance regarding the environment, society, and governance. Consumers can make careful purchasing decisions based on more information.2. Building trust: Disclosing a company's efforts and performance on ESG leads consumers to trust that company more, and companies can raise customer loyalty over the long term.3. Inducing better corporate behavior: ESG disclosure leads companies to pay more attention to environmental protection, social responsibility, and transparent operation. This can result in providing consumers with more sustainable and ethical products and services.[Negative aspects]1. Information overload: If too much ESG information is provided, consumers may have difficulty properly understanding and processing it. It can also make the consumption or investment decision-making process more complex.2. The risk of inadequate disclosure: Some companies may perform ESG disclosure only as a formality or omit important information. In this case, there is a risk that consumers make consumption or investment decisions based on incorrect or insufficient information.3. Cost pass-through: The costs of strengthening and disclosing ESG-related activities may be reflected in the prices of products or services. Accordingly, consumers' economic burden may increase.In conclusion, ESG disclosure is an important means of strengthening transparency and corporate responsibility, but the information must be provided in a way consumers can understand and must be well managed over the long term.L: ESG may make companies operate more ethically, but it sounds like you're saying that, whether policy or information, judging with a sense of balance is ultimately the consumer's part. I'm also curious whether you think ESG is a short-term fad or a theme that will operate over the long term.GPT-4: I believe ESG is not a passing fad but is settling in as a long-term trend. There are several reasons.1. A change in social awareness: Over the past few years, worldwide awareness of environmental protection and social responsibility has changed greatly. More and more people are supporting sustainable, ethical business models. This change in awareness is strong grounds that ESG will be a long-term trend.2. Growing investor interest: Investors, especially large institutional investors, regard ESG factors as an important part of investment decisions. They tend to invest, for long-term returns, in companies that act sustainably and in a socially responsible way.3. Strengthening of regulation and policy: Worldwide, regulations and laws related to ESG are being strengthened. This regulatory environment is forcing companies to take ESG more seriously and include it in their long-term strategy.4. Risk management: Considering ESG factors becomes an important risk-management tool for companies. For example, managing environment-related risks or strengthening diversity and inclusion will be advantageous to a company over the long term.5. A company's competitive advantage: Companies that focus on ESG tend to experience better customer loyalty, brand-value perception, and employee satisfaction. These factors will strengthen a company's competitiveness over the long term.In this way, ESG is settling in not as a short-term fad but as a core element of corporate operation. As part of a worldwide movement toward a sustainable future, it will continue to grow in importance.L: Thank you for giving consistent answers from beginning to end. I'm about to wrap up the interview now—could you say one last word to the readers of ESG.ONL?GPT-4: A sustainable future depends on all of our choices and actions. ESG is not a mere trend but an essential path for our society, our environment, and future generations. Please recognize each of your roles and responsibilities and join in moving forward together toward sustainable development. Your small interest and effort can gather to create big change. The road of ESG is not easy, but I believe that if we all work together, we can create a better future.L: It's okay if I ask for another interview next time, right? After all, there are still 9 questions left that you gave me on "the future of ESG."GPT-4: I look forward to being able to have deep and useful conversations about the remaining questions on "the future of ESG" as well. Please contact me anytime. Thank you for conducting a good interview!—And so the interview with ChatGPT-4 about "the future of ESG" came to a close. ESG, which is still closer to its nascent stage. We may not be able to hastily predict the future, but one thing is clear: ESG is presenting a new guide for how we look at companies.by Editor L
A fundamental transformation into an eco-friendly energy company that considers the future of the company and the future of the EarthAn eco-friendly, future-oriented vision drawn through investment in renewable energyDoosan Enerbility is the new name of Doosan Heavy Industries & Construction, a company familiar to us. Doosan Heavy Industries—which, with power-generation-equipment businesses such as coal-fired and nuclear power as its mainstay, had even been designated a company at high risk of becoming a stranded asset—began drawing attention as a key company positioned to contribute to carbon neutrality as it increased investment in the eco-friendly energy field. In 2020, keeping pace with government policy, it greatly strengthened investment in eco-friendly fields and received A+, the highest grade, in ESG evaluation. It was decisive that the Doosan Group pursued an active ESG management strategy centered on what is now Doosan Enerbility. Having published an integrated report—equivalent to a sustainability report—every July for more than 10 years since 2013 is also a reason Doosan Heavy Industries came to hold the title of ESG honor student.Doosan Enerbility's Sustainable Management 1. An Environmental Management System and Investment in an Eco-Friendly EcosystemDoosan Enerbility established the vision "Endeavoring toward a Sustainable & Green Future 2050"—sustainable growth through ceaseless effort and a transition to eco-friendly business—and set three management strategies to realize it. The gist is to place the value of environmental safety first in all business activities, to comply with environmental laws related to business activities, and to develop eco-friendly technologies and products for environmental conservation. In 2010, it obtained ISO 14001 certification, which evaluates environmental management systems, and it has since systematically managed the environmental performance of all business sites and all processes.[Doosan Enerbility's 2050 carbon-neutrality roadmap ©2023 Doosan Enerbility Integrated Report]In July 2023, Doosan Enerbility completed demand forecasting in Asia, Europe, and elsewhere and confirmed the issuance of a green bond(*) in the form of a three-year, 300-million-dollar Eurobond (Reg S). Beyond transforming its business portfolio toward eco-friendly business, it decided to lead full-fledged investment in eco-friendly business. Doosan Enerbility established a management framework for this green-bond issuance and also obtained certification from the global ESG certification body "S&P Global." It plans to use the funds secured through the green-bond issuance entirely in the eco-friendly energy field, such as renewable energy including wind power, and wind-turbine blade and waste-battery recycling. That Doosan Enerbility issued a green bond as an eco-friendly energy company is also the will of Chairman Park Gee-won. Chairman Park, starting as head of Doosan Heavy Industries' planning and coordination office in 2001, has been through the entire process from Doosan Heavy Industries to becoming Doosan Enerbility. Since taking office as chairman in 2016, he has emphasized the importance of the eco-friendly energy business and has led Doosan Enerbility's fundamental transformation by carrying out organizational restructuring and new-business initiatives to move away from the existing plant business toward a new energy-solutions business.*Green bond: also called a green bond (noksaek chaegwon), a bond issued to raise funds to invest in eco-friendly projects and related social infrastructure that contribute to environmental improvement.Doosan Enerbility's Sustainable Management 2. Transition to a Low-Carbon EconomyThe title of Doosan Enerbility's integrated report is "Energy Toward Sustainability." A particularly notable point in the 2023 report is that the disclosure scope for greenhouse-gas emissions information was expanded. Doosan Corporation has declared a 20% reduction in greenhouse gases by 2023 compared with 2018, and Net Zero (net greenhouse-gas emissions of 0) in 2050. Accordingly, it completed third-party verification not only of greenhouse gases generated directly and indirectly at business sites but also of other indirect emissions generated outside business sites, and disclosed the figures for the first time this year. As a result, direct and indirect emissions were found to be 79,733 tons, down 9,942 tons (12.5%) from the previous year.[Doosan Enerbility's R&D process ©2023 Doosan Enerbility Integrated Report]As a company engaged in the energy business, Doosan Enerbility recognizes that a "transition to a low-carbon economy" is important for securing sustainability. To this end, it has established and is carrying out a core strategy to accelerate its eco-friendly-portfolio transformation centered on four areas—renewable energy, gas turbines, hydrogen, next-generation nuclear power. Beyond responding to environment-related laws and regulations such as carbon border taxes and taxonomy, it is also striving to effectively reduce carbon emissions through improvements in business energy efficiency for actual low-carbon product manufacturing. Through GEMS (Green Energy Management System), it also carries out company-wide management, setting greenhouse-gas reduction targets for each business division in connection with the national greenhouse-gas emission-allowance quota and the company's carbon-neutrality goals, and monitoring greenhouse-gas emissions from energy use in real time each month.The Future of a Sustainable Energy IndustryRecently, Doosan Enerbility announced that it would establish a subsidiary specializing in battery recycling, "Doosan Recycle Solution," to build a commercial production facility, and it is also accelerating the expansion of renewable-energy businesses such as clean-hydrogen production through wind power. It has also developed battery-recycling technology. The technology Doosan Enerbility developed in-house to recover lithium from waste batteries holds great significance in that it is an eco-friendly processing technology that dramatically reduces greenhouse-gas generation and saves resources compared with the method of mining lithium from nature, such as mines.Doosan Enerbility expressed its will to secure sustainability by using the energy technology it holds to enrich human life and make the Earth cleaner. We look forward to the results that will appear in next year's integrated report, to be released in July.by Editor L
"Vegemil," made by putting a doctor's mission into a single bottle of an ordinary drinkLove that gives back as much as it received, through the Hyechun Scholarship FoundationDr. Chung's Food is not a company that publishes a sustainability report every year. But considering the value of "Vegemil," the drink that represents Dr. Chung's Food, the concepts of Dr. Chung's Food and sustainability feel fairly close. Vegemil began as a therapeutic food created in 1967 by the late Honorary Chairman Chung Jae-won, Dr. Chung's Food's founder and honorary chairman. Honorary Chairman Chung, who was working as a pediatrician, learned of a disease called "lactose intolerance" while studying in the United States. Realizing that the cause of death for many children was that they could not properly digest the lactose contained in breast milk or cow's milk, he set out to develop a substitute food free of lactose. And after long, repeated research, in 1967 he created the plant-based nutritional milk "Vegemil."Dr. Chung's Food's Sustainable Management 1. A Heart for Human Health[The very first Vegemil, developed in a hospital basement © Dr. Chung's Food]As can be understood from Dr. Chung's Food's founding ideal, "To devote this body to the culture of human health," Vegemil is a product made out of a single doctor's mission—to save children. The Vegemil born this way prepared for full-fledged sale after patenting and approval, but there were difficulties in immediately running a factory system. So Honorary Chairman Chung brought a small machine into the basement space next to his own pediatric clinic, which he was running in Hoehyeon-dong at the time, and produced soy milk as a cottage industry. Made by hand, only 500 bottles a day, Vegemil was dispensed at the pediatric clinic as a therapeutic food for young children then suffering from lactose intolerance. Later, to handle growing demand, a factory was built in Singal, Gyeonggi Province, in 1973, and Dr. Chung's Food began in earnest.Dr. Chung's Food established itself as the No. 1 company leading the soy-milk industry over the past 50-odd years. Not stopping there, in 1991 it introduced Korea's first enteral-nutrition brand, "Greenbia." Greenbia, Korea's first food for special medical purposes, was developed for patients with special conditions who felt burdened by high import prices or had difficulty consuming products that did not suit the Korean constitution. Because demand is very limited given the nature of the product, it could not contribute greatly to corporate sales, but the birth of Greenbia reduced the cost burden for patients with special conditions and made it possible to supply nutrition suited to Koreans' nutritional requirements. Initially produced mainly with products for diabetic and kidney patients, Greenbia now produces about 20 kinds of various enteral-nutrition foods, helping a small number of patients with special conditions.Dr. Chung's Food's Sustainable Management 2. Love That Gives Back as Much as It Received[The 39th scholarship award ceremony, held in May 2023 ©Hyechun Scholarship Foundation]A representative social-contribution activity of Dr. Chung's Food is the "Hyechun Scholarship Foundation," established in December 1984. The Hyechun Scholarship Foundation, named after Honorary Chairman Chung's pen name "Hyechun," began from his single-minded wish that "I want to make it so that no one has to agonize over their studies." Through the Hyechun Scholarship Foundation, which marks its 40th year since its birth this year, a total of 2,553 students have received support, and the cumulative scholarship amount alone reaches about 2.8 billion won. In 2020, amid a social atmosphere thrown into confusion by COVID-19, it increased the award amount by about 7 million won compared with the previous year for students facing difficulty in their studies due to economic hardship, paying out scholarships worth a total of 160 million won. The Hyechun Scholarship Foundation expands the number of scholarship recipients and the scale of scholarships every year so that more students can pursue their dreams, grow into excellent talent, and contribute to national development; this year, too, it paid scholarships to 45 undergraduate and graduate students with excellent academic records.Dr. Chung's Food also steadily carries out social-contribution activities together with consumers. A representative example is the "GOOD_BUY" ethical-consumption campaign, conducted since 2009 with Good Neighbors, a global non-governmental organization (NGO) specializing in children's rights. It attached a campaign logo in the form of a "red heart on a box" to all Vegemil products so that part of the proceeds is used as funds to help operate local children's centers and vacation classes for low-income children who go without meals. To date, it has provided a total of about 400 million won in donations and products to children who go without meals, and through this it is striving to build a society in which children can grow up as whole persons. The "Vegemil of Love Thermometer Campaign," steadily conducted since 2012, is another social-contribution activity not to be left out. When consumers leave a like (empathy) or comment on a campaign post on Dr. Chung's Food's SNS channels, or upload a photo including Vegemil with the required campaign hashtags, the Vegemil of Love thermometer rises by 1℃ per action, and Dr. Chung's Food donates Vegemil in proportion to the temperature that has risen. The Vegemil gathered this way is delivered to donation recipients such as ChildFund Korea and the Korea Social Welfare Society, and is donated to many places in need, such as children's facilities, senior welfare centers, and welfare facilities for people with disabilities. In addition, as a regular sponsor of the Korea Blood Cancer Association and the Korea Heart Foundation, it donates a set amount each month, helping patients who cannot receive treatment due to economic hardship and their families live healthy and happy lives.As if in return for the warm will to give the love it received back to society, Dr. Chung's Food has held the No. 1 spot in the soy-milk sector and No. 1 in Korea Industry Brand Power for 50 years. We look forward to the social-contribution activities carried on from its founding ideal continuing to serve as a great driving force for Dr. Chung's Food's sustainability.by Editor L
'Dutch Bros', a Coffee Chain Emerging as the Next StarbucksEmployee rating on company review site is 4.0, higher than Starbucks (3.9)Focusing on 'how money is made' beyond just making money... proven by industry's lowest turnover rateThere are no declining industries, only declining companies. - Tadashi Yanai, Chairman of UniqloIn 2020, the IBK Economic Research Institute released a study on the impact of the pandemic on Korea's small and medium-sized enterprises. According to the survey, 82% of 1,000 SMEs with fewer than 300 employees responded that they had suffered damage on the sales side due to COVID-19. For now, taking on debt and holding on while only hoping for the end of the pandemic. This seemed to be the sole survival strategy and methodology of the era.On May 9, 2023, when the threat of the pandemic had somewhat subsided, one franchise café company released IR materials."In the first quarter, we opened 45 shops for the first time since starting the company, and revenue increased by about 30%. Labor efficiency and the ratio of G&A (Selling, General & Administrative Expenses) also improved considerably, creating meaningful operating profit. I am proud of the way our team responded swiftly and decisively to the economic environment. This was proven by our expansion in shop scale and our strengthened profitability."This company is Dutch Bros, the next Starbucks, which achieved an IPO listing amid the pandemic in 2021 and has since shown astonishing growth. This franchise café brand is focusing, beyond making money, on "how you make money." And this process is leading to the industry's lowest turnover rate, one of the indicators of a healthy corporate culture.[Dutch Bros store view ⓒdutchbroscoffee instagram]Dutch Bros Doesn't Sell Coffee. It Sells Love.[The atmosphere of receiving a Dutch Bros drink at the drive-through; depending on the situation, all the staff sometimes come out ©dutchbroscoffee Instagram]If customers who visit a shop love the staff, how much does the scarcity of those staff rise? Starbucks, which accounts for more than 50% of the Korean café market's sales, maximizes the offline experience to create a value that differentiates it from other shops—namely, scarcity.Dutch Bros, which has operated all of its shops in a drive-through format since 1992, signaled continuous growth through its IPO even when the global F&B market was reeling from the pandemic. And at the drive-through shops the brand has insisted on, an event occurred that made the impact of the Dutch Bros brand visible. A single photo became known—of all the staff at a shop coming out to pray for a customer who had lost her husband.In this way, Dutch Bros became a brand that gives a special resonance in a world where the effort to chase operating profit amid infinite competition is taken for granted.It did not give resonance only to consumers. On the U.S. site "Indeed," similar to Korea's Jobplanet, Dutch Bros' employee rating in reviews is 4.0, higher than Starbucks' 3.9. You can see reviews such as a fun environment, great colleagues, an enjoyable and exciting workplace, and super fun. It can be interpreted to mean that while customers who receive love rather than coffee are happy, the side selling the love is quite happy, too.A Three-Year Promise to Run a Local Shop, and a Turnover Rate of About 0% Brought by a Sustainability Policy[Dutch Bros' secret menu is its friendly staff ⓒdutchbroscoffee instagram]Until its IPO, Dutch Bros operated only through directly run shops. But afterward it began creating franchise shops, and franchise shops now account for about 3% of all shops.Dutch Bros has a special policy for selecting franchise-shop owners: it gives the opportunity only to employees who have worked at Dutch Bros for at least three years. It regards three years as the minimum period needed to embody Dutch Bros' culture, its attitude toward customers, and its relationships with colleagues.Is it a reward for three years of effort? The head office bears most of the costs for opening a shop, from site selection to construction to interior work. This is a different approach from the usual franchise-opening process, in which one starts operating the brand while taking on a debt that cannot be ignored. Employees can start their own business at low cost, and Dutch Bros can entrust a shop with confidence to a proven person, so management risk is clearly reduced. A structure is created in which neither side has anything to lose. With this sustainability policy, new employees come to Dutch Bros dreaming of their own shop and work passionately. Dutch Bros employees' turnover rate is 66%, more than half lower than the industry average (144%), and the turnover rate at the regional-operator level is close to 0%. According to Dutch Bros, there are currently more than 200 regional-operator candidates, and it stated that, with their capabilities, it expects to be able to open about 1,000 more shops. This brightens the future outlook for the Dutch Bros brand.Support for ALS Patients That Began with a Founder's Death, Reaching 2.5 Million Dollars in Donations Before Long [Donations to end ALS have surpassed $2.5 million ⓒdutchbroscoffee instagram]In 2005, while Dutch Bros was undergoing astonishing growth, one of its founders, Dane Boersma, was diagnosed with Lou Gehrig's disease (hereafter ALS). ALS is a degenerative disease that affects nerve cells in the spinal cord and brain, and a person who contracts it gradually loses motor function and the ability to move freely. Dane Boersma fought ALS symptoms for more than five years before passing away.Dane Boersma's death had a profound influence on Dutch Bros' community spirit and culture. A key factor in Dutch Bros' success was his passion, and his devotion to developing himself as an entrepreneur and leader influenced the company's culture as a whole.Dutch Bros colleagues, who held his spirit in high regard, have carried on donation events under the slogan #EndALS, and recently shared the news that they had reached donations amounting to 2.5 million dollars.[A view of a Dutch Bros shop, sharing the specialness of a place where emotions are shared ©dutchbroscoffee Instagram]In an era when the faces at the counter are being replaced by kiosks, Dutch Bros is, paradoxically, drawing a picture of success by emphasizing the power of people and of love. Even if the resources that go into labor can be replaced, the joy of the exchange shared between people cannot be replaced.by Editor N