Samsung's USD 716 mn ESG fund disburses just 2% in first year

Citing data reviewed by Maeil Business Newspaper, the report stated that the fund was created in September 2024 in partnership with South Korea's financial authorities and five major banking groups. The two Samsung affiliates placed one trillion won (USD 716 million) in time deposits across various banks, with interest rates in the 3.5 per cent range. These deposits are expected to generate more than 30 billion won (USD 21.6 million) in interest income annually over a six-year period.

However, less than two-thirds of the annual interest has been allocated to SME loans in the fund's first year.

"The structure of the scheme is relatively generous. Suppliers recommended by Samsung Electronics and Samsung Display can apply for interest-free loans of up to 2 billion won (USD 1.44 million) for three years, with the option to extend twice in a year. With average SME lending rates at 4.06 per cent as of August 2025, a company borrowing 2 billion won (USD 1.44 million) would save roughly 7 million won (USD 5,040) in monthly interest payments," the report said.

However, few firms have qualified, with industry officials stating that the main hurdle lies in Korea's ESG system. The system requires applicants to demonstrate contributions to one of six environmental goals, such as reducing greenhouse gases or improving resource circularity, while also meeting human rights, labour, safety, and anti-corruption standards.

"Critics say these conditions are simply too demanding for most smaller firms, which lack both the resources and expertise to comply. As a result, eligibility has been mostly limited to first-tier suppliers for the two Samsung affiliates," the report noted

The sluggish performance prompted Samsung Electronics, Samsung Display and the five banking groups to convene a countermeasure meeting in September. According to the report, discussions focused on easing entry barriers and expanding the scope of eligible companies. (ANI)