SK’s Double Bottom Line: Challenges and Way Forward

SK’s Double Bottom Line: Challenges and Way Forward

By
Yong Suk Jang, Mooweon Rhee, Tae-won Chey, William P. Barnett
2019|Case No.SM324| Length 19 pgs.

SK Group, one of Korea’s largest conglomerates, announced its Double Bottom Line (DBL) initiative in 2018. In January 2019, Chairman Tae-won Chey unveiled the company’s pledge not only to monitor and report SK’s social value, but also see social value account for 50 percent of the company’s key performance indicators. This case study follows SK’s shift to DBL management and efforts to place social value at the core of its business model.

Social media and a hyper-connected society heaped unprecedented pressure on corporates to deliver value and to make sure no-one was left behind. To implement its DBL initiative, SK, a leading producer of energy, chemicals, telecoms, and semiconductors, needed to investigate how to measure social value created in all its business operations in monetary terms – whether value created (positive value) or value destroyed (negative value).

SK began to measure its indirect contributions to the economy and business activity, in addition to social contributions like employee volunteer programs, and SK donations and CSR activities. These efforts covered all aspects of SK’s operations, from the 3,600 SK-operated gas stations throughout Korea to water-free scrubbers designed to process impurities discharged during semiconductor production. The case also looks at SK’s efforts to explore new institutional frameworks to multilateralize its social value agenda, to build a common and actionable approach to social value creation and measurement within the broader global business community.

Learning Objective

Students will learn about the process and methodology of implementing DBL – and the challenges of measuring “social value” as a core pillar of its business model. SK’s management pursued both economic value and social value in all areas of company operations, and saw DBL accounting and management as the critical next step in the company’s evolution.

This material is available for download by current Stanford GSB students, faculty, and staff, as well as Stanford GSB alumni. For inquiries, contact the Case Writing Office.