Samsung to pump $7b into green projects, lobby Seoul to add clean energy

SEOUL - Samsung Electronics will invest 7 trillion won (S$7 billion) in green initiatives and lobby South Korea to add more clean energy as it looks to reverse a rise in emissions and zero out direct pollution by mid-century.

The world's largest memory chipmaker, which has seen its climate footprint swell in recent years as it grew energy-intensive manufacturing lines, plans to eliminate carbon emissions in categories known as Scope 1 and 2. It has not developed goals to reduce Scope 3 pollution like some peers, though it intends to set targets in future.

South Korea's biggest company also aims to switch overseas factories entirely to renewable electricity within five years, though it argues it cannot yet pursue a similar target for its most energy-hungry domestic plants - which account for the majority of production - because of constraints on the availability of clean power in the fossil fuel-reliant nation.

Samsung has long been criticised by investors and activists for a slower approach to climate action than industry peers like Apple, which says its operations are already carbon-neutral and has been pressing suppliers to follow suit.

"Addressing climate risks has been particularly challenging with our complex business portfolio," Ms Kim Soo-jin, its head of the environmental, social and governance strategy group, said in an interview. The firm's status as a manufacturer of a wide range of electronics and its extensive supply chains mean "the environmental pressure on our shoulders has been extremely heavy", she said.

A strategy announced on Thursday includes spending on carbon capture and storage, measures to cut water consumption and the release of gases during semiconductor manufacturing, work to boost energy efficiency of its products, and improvements to electronic-waste collection for recycling.

While cutting direct emissions is a priority, Samsung will also consider the use of offsets in voluntary carbon markets, Ms Kim said.

As the biggest electricity user in South Korea, Samsung's key challenge remains the country's grid. Fossil fuels accounted for more than 65 per cent of electricity generation last year and plans are being studied to scale back proposals for more renewables as President Yoon Suk-yeol's government touts a potential longer-term build-out of nuclear power.

Samsung's operations consumed 32,322 gigawatt-hours (GWh) of energy last year, including 25,767 GWh of electric power, the company said in its most recent sustainability report. This compares with South Korea's wind, solar and hydropower generation of 31,323 GWh in the same year, according to data compiled by BloombergNEF.

The company's emissions have risen in recent years as a direct result of the installation of new semiconductor manufacturing lines, according to its report.

Competition for renewable electricity is also likely to rise with all of South Korea's key conglomerates now pledging to run their operations using solely clean energy.

Samsung will ask Mr Yoon's administration for more help, such as in policy support. The firm said in a statement that local plants for consumer electronics will move to 100 per cent renewables by 2027. Ms Kim said it aims to run its semiconductor foundries entirely on clean sources by 2050.

BLOOMBERG