CSR REPORT2014/2015o f G e r m a n C o m pa n i e s i n K o r e a

02

KGCCI CSR ReportFirst edition, April 2015

© KGCCI DEinternational Ltd.8th Fl., Hannam Plaza 85, Dokseodang-ro, Yongsan-gu, Seoul 140-884, Korea

T + 82 2 37804 600 F + 82 2 37804 637

www.kgcci.com

A portion of the proceeds from this brochure was donated to SROLANH, a social welfare organization located in Yongsan-gu which fosters inclusion of the mentally handicapped by providing education and employment through its flower shop/café and restaurant.

Design and Print

BORNCREATIVET 02 2278 1940 F 02 2275 5329

www.borncreative.com

PubLiSHeD bY KGCCi DeiNteRNAtiONAL LtD.

KGCCI CSR REPORT2014 /2015O F G e R m A N C O m P A N i e S i N K O R e A

03

Contents

Preface

Stuttgart Sports Cars Ltd.

Audi Korea

BASF Company Ltd.

Bayer Korea Ltd.

BMW Group Korea

Boehringer Ingelheim Korea Ltd.

Kärcher Korea Co., Ltd.

Mercedes-Benz Korea Ltd.

Merck Ltd.

Siemens Ltd. Seoul

Konrad-Adenauer-Stiftung e.V.

04

06

08

12

14

18

20

22

24

26

30

32

04

The social market economy forms a pivotal part of a free and open society, which is also characterized by solidarity. It has proven itself as an economic system that allows for prosperity and full employment whilst also providing welfare and promoting a strong social fabric.

Corporate social responsibility can be seen as an integral part of the social market economy. In Ger-many, the socially responsible entrepreneur who is not guided alone by profit maximizing, finds its paradigm in the family owned “Mittelstand” company, i.e. small and medium-sized enterprise (SME), in which the manager-owner takes care of all aspects and effects of his entrepreneurial endeavor, from environmental issues down to the personal wellbeing of the employees and their families – quite similar to Confucian virtues, “(…) correcting thoughts with sincerity, cultivating the moral self, manag-ing the family (…)”.In globalized, stock market listed companies, whose boards are closely monitoring quarterly bal-ance sheets, corporate social responsibility has not been as obvious a philosophy as in family-owned SMEs. But during the last decades, along with increasing globalization, a socially responsible behavior of global companies became increasingly important.The European Parliament adopted in April 2014 the “Directive on disclosure of non-financial and di-versity information by large companies and groups”. Companies concerned will need to disclose information on policies, risks and results as regards environmental matters, social and employee-re-lated aspects, respect for human rights, anti-corruption and bribery issues, and diversity on boards of directors.

German federal Chancellor Dr. Angela Merkel, in her speech at the trade union’s G7 dialog forum on March 23rd 2015, also emphasized the importance of more transparency about the corporate social responsibility of large stock listed companies.

In this context, as German Ambassador to Korea, I fully support the endeavor of the Korean-German Chamber of Commerce and Industry and German companies in their effort to further promote corpo-rate social responsibility in Korea.

rolf mafaelGerman ambassador to the republic of Korea

Dear Readers,

The Federal Republic of Germany has a longstanding tradition with respect to social responsibility. Since the mid-20th century, Germany’s economic policy has been based on the concept of the social market economy (or “soziale Marktwirtschaft”). The roots of this concept go back to Ludwig Erhard, who served as the first Minister of Economic Affairs of the Federal Republic of Germa-ny from 1949 to 1963. The underlying idea of the social market economy is to protect the freedom of all market participants on both the supply and demand side, whilst also providing for a strong safety net.

05

These companies do not only provide meaningful employment - their activities often in-volve the whole family: They provide vocational training for high school graduates, estab-lish training facilities for continued education, in many cases are life-time employers for multiple generations of families, sponsor local soccer teams, engage in city politics and much more. In this sense, German companies understand themselves as active communi-ty-builders and are very much present in local life. This is the tradition German companies bring along when they invest in Korea and establish a subsidiary.

Therefore, when German subsidiaries engage in CSR activities to contribute to the Korean people and Korean society, they also like to share their knowledge and resources as they do in Germany: Instead of relying only on non-governmental organizations doing the CSR work for them by simply donating money, German companies prefer to initiate their own CSR projects and invest their time and money and active engagement of all employees into these projects. This is sometimes misunderstood by the Korean public and classified as “stingy” because the CSR activities of German companies in Korea are not simply re-flected as a line item in the year-end financial reports so that it is measurable or compara-ble how much German companies have indeed engaged in CSR activities.

We have put this brochure together to provide some examples of what German compa-nies in Korea do in the field of CSR. As you can tell from the pictures they have much fun engaging actively and they contribute to a number of causes.

As German companies abroad are frequently “hidden” world champions with regard to their products, they are also many times world champions in understatement. This is why not all German subsidiaries in Korea of which we know that they run CSR projects have made their activities public in this brochure. But you can take for sure one thing home from this brochure: German companies have not come to Korea for a short-term gain. They have come to Korea to stay and to be an active contributor to society and life in Korea.

Barbara Zollmannsecretary General & executive DirectorKorean-German Chamber of Commerce and industry (KGCCi)

Dear Members and Friends of the Korean-German Chamber of Commerce and Industry,

It is with great pleasure that we present the first CSR Report of German companies in Korea to you.

German companies have a longstanding tradition with CSR, long before this term was coined.98% of German companies belong to the catego-ry of small and medium-sized enterprises, and, as Germany is very much decentralized, many com-panies are not located in big cities but small villag-es and cities.

06

Parti

cipa

nts

of th

e Dr

ive y

our D

ream

pro

gram

sho

win

g ele

gant

pos

es w

ith b

aller

ina

Yenn

a Ka

ng fr

om th

e Un

ivers

al Ba

llet C

ompa

ny

“Drive your Dream” program

Stuttgart Sports Cars Ltd. launched the Drive your Dream program in collaboration with the Korea Mecenat Associa-tion in 2012. It aims to provide those who show potential in ballet with a chance to develop their talent through financial support and systematic training opportunities. In addition, Stuttgart Sports Cars Ltd. offers opportunities for culturally underprivileged families to enjoy national renowned ballet performances.

Stuttgart Sports Cars Ltd. is said to be a company selling dream cars for many. Based on this characteristic, the com-pany designed the Drive your Dream program to support talented Korean ballet prodigies to “drive their dreams”. Ulti-mately, Stuttgart Sports Cars Ltd. hopes to contribute to cul-ture and art development in Korea under the guiding princi-ple of contributing and giving back to the Korean society for the great loyalty and enthusiasm the company has received from its customers with the Porsche brand in the past years.

The Drive your Dream program consists of two parts: Ballet Training Program and Ballet Dream Ticket. The Ballet Train-ing Program specializes on students with advanced skills in ballet for personal and intensive professional ballet training.

Among supporting programs, especially the “Master Class” has a great appeal to the students. The Master Class, com-posed of ballet lessons and mentorship from internationally renowned Korean prime ballerinas and ballerinos, is provid-ed every month. Through the Master Class, the students re-ceive practical advice from the instructors. Moreover, the in-structors present developments in the ballet field and share their experience and know-how with the participants.

Stuttgart Sports Cars Ltd. (SSCL) was estab-lished in 2005 and is currently operating the largest official Porsche dealer network in Korea. Stuttgart Sports Cars Ltd. strives to provide the best customer service through six major Por-sche showrooms in Daechi, Seocho, Bundang Seohyun, Bundang Pangyo, Incheon, Busan and four Porsche Centre Workshops.

Stuttgart Sports Cars Ltd.’s CSR Activities

07

Prim

a ba

llerin

a Jo

owon

Kim

sha

res

her e

xper

ienc

e w

ith

Driv

e yo

ur D

ream

par

ticip

ants

at M

aste

r cla

ssOl

ivie

r Lu

cea

from

Roy

al B

alle

t Sc

hool

in M

onac

o in

-st

ruct

ing

parti

cipa

nts

of “

Driv

e yo

ur D

ream

” at

201

4 In

tens

ive

Sum

mer

Bal

let S

choo

l

2015

Driv

e Yo

ur D

ream

Bal

let

Stud

ents

with

Gra

eme

Hunt

er,

CEO

of S

tuttg

art

Spor

ts C

ars

Ltd.

and

Inh

ee

Kim

, Hea

d of

Seo

ul B

alle

t The

atre

Driv

e yo

ur D

ream

par

ticip

ants

per

form

“Th

e N

utcr

ack-

er”-

the

mos

t po

pula

r ye

arly

per

form

ance

of

Seou

l Ba

llet T

heat

re

Pan

Li L

i fro

m U

nive

rsal

Bal

let i

nstru

ctin

g pa

rtici

pant

s of

Driv

e yo

ur D

ream

at 2

014

Inte

nsiv

e Su

mm

er B

alle

t Sc

hool

Appl

ican

ts o

f 20

15 D

rive

your

Dre

am p

rogr

am a

re

show

ing

bar m

ovem

ent a

t the

aud

ition

Aside from that, all participants are invited to a summer ballet camp providing intensive ballet classes which are very unique and rarely offered by schools. Together with this, they receive financial support for international concourse and can watch and appreciate differ-ent ballet productions.

The “Ballet Dream Ticket” program complements the program for ballet prodigies by expanding benefits to the underprivileged fam-ilies with little opportunity to enjoy cultural events. National basic livelihood and lower income families are invited to various ballet performances held by renowned national ballet companies throughout the year. About 250 families participated in the program and enjoyed the famous ballet performances last year.

Within three years, Stuttgart Sports Cars Ltd.’s Drive your Dream program achieved admirable results which are worthy of attention. In 2014, three participants of the program were selected as scholarship recipients from the Royal Ballet School in the United Kingdom and a school in Monaco. Especially, one of the recipients was the first Asian who was admitted to the upper class of the Royal Ballet School as a full scholarship recipient. With this remarkable achievement, the number of applicants this year has increased twofold compared to last year. As the one and only ballet nurturing program, the Drive your Dream program is successfully emerging in the Korean ballet field. In celebration of the 10th anniversary of Stuttgart Sports Cars Ltd., the company expands the scale of its Drive your Dream program from 2015 on, hoping to offer a pleasant experience to more people. The number of students doubled to 30 which are divided into two groups: Full Scholarship and Hopeful Scholarship recipients. The Hopeful Scholarship, newly created in 2015, aims at regular middle and high school students who have an interest and talent in ballet and provides diverse benefits. Moreover, the “Ballet Dream Ticket” program will be expanded to provincial areas in order to allow people of all ages in diverse parts of the country to experience cultural performances.

08

1. Carbon offset program

The “Carbon Offset Program” refers to a program that launches campaigns to reduce CO2 emissions and prepare activity funds to offset CO2 generated by everyday energy consumption. The CO2 offset fund is used for realizing carbon neutrality by planting trees to foster healthy forests, distributing energy-efficient devices to energy have-nots, and assisting in installing renewable energy devices, among other projects.The “Carbon Offset Program” was introduced in 2008 to raise public awareness and encourage voluntary participation in Greenhouse Gas (GHG) mitigation activities. Audi Korea, as part of its activities to strengthen bonds with the local community, in 2012 became the first auto brand in Korea to participate in the Carbon Offset Program headed by the Ministry of Trade, Industry and Energy (MOTIE) and the Korea Energy Management Cooperation (KEMCO).In 2014, Audi Korea provided funds amounting to 200 million KRW to KEMCO, which is twice of the amount from 2013 and enough to offset 13,000 tons (15,000 KRW/ton) of emissions in order to help offset carbon dioxide emissions after joining the “Carbon Neutral Program”. This contribution was used mainly to foster forests and to distribute energy-efficient boilers and LED lighting for the needy under the name of Audi Korea.Audi is one of the most environment-friendly car brands, currently developing top-notch electric vehicles (PHEV) like “A3 e-tron” and others and having over 100 kinds of vehicles that produce less than 140g/km of CO2 emissions. In accordance with Audi’s commit-ment towards the protection of the environment, Audi Korea plans to increase its social contributions, especially through participation in environment conservation projects as well as by helping the energy poor to spend a warm winter.

2. audi apprentice program

Audi Korea has been operating an academic-industrial cooperation program titled “Audi Korea Apprentice Program” together with a total of eight Korean colleges. In 2010 the company collaborated with Yeoju Institute of Technology, Osan University and Shinheung College; in 2012 with Busan Polytechnic College, Changwon Polytechnic College and Dong-Eui Institute of Technology; and in 2013 with Kookje College and Ajou Motor College. In this program which has been established under the premise of future recruitment, those participants who pass the inter-view receive a special three-month training which combines both theory and practice. Each course is systematically formed similar to an internship to allow students to study Audi’s advanced technology so that trainees can directly learn from practical work. What is more, each student receives financial assistance amounting to 1.2 million KRW during the training period.Until now, Audi Korea has hired a total of 94 service advisors and technicians through this special course and plans to hire 50 more engineering students by the end of 2015 (with the total cumulative head count then standing at 144).

Audi Korea’s CSR Activities 2015

09

From left to right: Johannes Thammer, CEO of Audi Korea; Ilse Aigner, Dep-uty Minister-President of Bavaria and Bavarian Minister of Economic Affairs; H.E. Rolf Mafael, German Ambassador to the Republic of Korea; and Thomas Schöck, CEO FAU Busan.

3. Vehicle donations for faU Busan Campus

In 2014, Audi Korea assisted the first overseas campus of Ger-many’s prestigious Friedrich-Alexander University (FAU) in Bu-san with three of Audi’s vehicles, one A6 and two A4, through a vehicle assistance ceremony. Audi Korea has been maintaining close ties with FAU Busan Campus, providing the school with Audi vehicles every year since its establishment in 2010.In Germany, Audi and FAU have been launching various cooper-ative programs together in the past, as well as conducting joint research activities and managing support funds, among other collaborations. Audi Korea has furthermore been assisting FAU Busan Campus with Audi vehicles to support the school’s fos-tering of excellent talents to lead in the sector of state-of-the-art science and industry.FAU Busan Campus stands as the first German campus estab-lished in Asia and as the first overseas education institute built in the city of Busan. The Busan Jinhae Free Economic Zone where the campus is located also serves as a base to many oth-er renowned global automotive parts companies that advanced into Korea, including Visteon, Calsonic Kansei, and SKF. As a re-sult, the site is currently emerging as an important car industry hub in Northeast Asia.

10

4. audi Design Challenge mentorship program

Since 2013, Audi Korea has organized a design competition titled “Audi Design Chal-lenge” (ADC) to seek and reward creative designs which carry the philosophy of the Audi brand. Anyone who is interested in Audi and design is qualified to join the com-petition as an individual or a team of two people.The latest competition, “Audi Design Challenge 2014”, was opened for four catego-ries including music, motion graphics, products, and furniture under the theme of Audi lifestyle and driving experience. In the “music design” category, contestants could compose one to three minute long pieces without any restrictions on the genre or musical instruments as long as the pieces delivered the sensitivities and values of Audi. Within the “Motion graphics design” category, Audi’s challenging spirit and creativity was to be represented in a 5-minute long video in which other brand logos were not to be exposed.While contestants within the “product design” category again were supposed to re-flect Audi’s design philosophy, the subjective products encompassed all products and devices used on the inside and outside of a car - another condition was, however, that it should be possible to mass-produce them immediately. Only products used inside the car such as side brake designs or A/C grill designs were excluded from this rule. Lastly, the “furniture design” category included living room furniture design for imme-diate mass production, based on the solid understanding of Audi lifestyle.In each Audi Design Challenge, the 16 finalists who receive the highest scores during the first round can join a special mentoring program which is led by experts from each category well known for their capabilities in their respective fields. These experts en-courage competitors to further improve their designs before entering the final round of the competition. The winning artworks of the “Audi Design Challenge 2014” were showcased on the first floor of Art Hall 1 in the Dongdaemun Design Plaza.

11

BASF: Creating chemistry with Korea

12

social responsibility

BASF aims to be an attractive employer, reliable partner, and good neighbor. We are involved in diverse projects worldwide, especially in the communities in which our sites are located. Our main focus is on education and sustainability. In this way, we promote innovative capacity and future viability.

Basf Kids’ Lab

BASF has invited children across Korea to attend BASF Kids’ Lab since 2003. BASF Kids’ Lab is an interactive chemistry education program designed for children aged 6 to 12. Children can experi-ence the enjoyable and creative world of chemistry by participat-ing in carefully chosen, safe experiments that demonstrate the importance of chemistry in everyday lives.BASF Kids’ Lab marked its 10th anniversary in Korea since 2003 when it was first launched. In celebration of the occasion, BASF Kids’ Lab visited the elementary schools in Ulsan and Yeosu where the program first began in Korea. More than 100 children took part in BASF Kids’ Lab in 2013, making a total of more than 3,300 participants since 2003. A total of 18,631 kids participated in Kids’ Lab in the Asia Pacific region in the year 2013.

The Kids’ Lab program is expanded each year.

BASF is the leading chemical company in the world. Its product portfolio ranges from chemicals, plas-tics, performance products and crop protection products to oil and gas. Globally, BASF had sales of about 74 billion in 2013 and over 112,000 employees as of the end of the year. In Korea, BASF has been active since 1954. BASF is a leading foreign investor in the chemical industry in Korea, with activities in chemicals and specialties. BASF Korea has six world-scale production sites in Yeosu (polyurethane raw materials, specialty plastics), Ulsan (expandable polystyrene – EPS, chem-icals, pigments), Gunsan (vitamin B2) and Ansan (engineering plastics), and is planning to open a new production site in Yesan (engineering plastics) at the end of 2015. Moreover, BASF Korea operates one R&D center in Suwon and five application technology centers. The Asia Pacific headquarters of BASF’s Electronic Materials business is located in Seoul. BASF posted sales to customers in Korea of 1.05 billion in 2013, and employed 1,028 employees in Korea as of the end of that year. As the world’s leading chemical company, BASF combines economic success with environmental protection and social responsibility. In this context, BASF aims to build sustainable partnerships with the Korean society.

Students conducting an experiment at BASF’s Kid’s Lab. Within the last ten years, more than 3300 children took part in this science education program in Korea.

13

Community science education

Providing education opportunities and offering more access to science education is very important for BASF. Therefore, BASF grants scholarships to university students and graduates each year in Korea. Furthermore, based on strong indus-try-academic relationships in Korea, BASF has offered promising university students and graduates opportunities for summer internships at the BASF headquarters in Germany since 2009.BASF was also one of the first companies in Korea to launch a web magazine, entitled “Chemizine”, in 2003. Since then, BASF has been providing the public with attractive educational content to enhance the understanding of science and chemistry among students and the general public. Comprehensive information about BASF solutions that affect everyday lives is posted on BASF websites, and since 2012, easy-to-read and fun chemistry content is provided via a social media platform for interested users and social media users.

Close dialog with local communities

BASF focuses on regular and open communication with local communities in Korea where BASF produc-tion sites are located. With Community Advisory Panels (CAPs), BASF provides transparent information about its activities and discusses current issues with the pan-el members, around 10 opinion leaders within the local community, including environment, health, and safety experts, university professors, teachers, and medical doctors, etc. BASF is the first chemical company to set up a CAP in Yeosu, Korea. The CAP meetings at the Yeo-su site are held quarterly and have become an example to the industry. Together with the CAP meetings, BASF publishes a quarterly CAP newsletter entitled “Love Envi-ronment, Love Safety” to enhance public understanding of environment and safety issues.A structured, continuous community dialog is also a cru-cial part of BASF’s strategy to foster sustainable growth in Korea. BASF currently supports 84 community adviso-ry panels around the world.

employee donations in Korea

Following the decision of the Board of Executive Direc-tors of BASF SE to contribute €300,000 Euro as an imme-diate aid to victims of Typhoon Haiyan, BASF employees in Korea also conducted a voluntary donation campaign to help the typhoon victims. The collected aid funds were sent directly to the Red Cross Philippines.BASF Korea delivered 15 million KRW to UNICEF in Ko-rea to help children suffering from Malaria in Africa. To promote the message and raise public awareness, BASF organized a BASF mosquito net donation campaign through its social media in commemoration of “World Malaria Day.” To celebrate the year-end holiday season, BASF employees in Korea held a fund-raising campaign within the company to help the neighbors in need. A to-tal of around 13 million KRW was collected and donated to social welfare organizations.

Volunteer projects for communities

BASF employees in Korea participate in community services where BASF production sites are located. The “Love Always Service Club”, comprised of 150 volun-teers of the BASF Yeosu site, provides home repair ser-vices since 2005 for local residents in poor living condi-tions. Employees of BASF production sites in Ulsan and Yeosu also participate each year in making Kimchi to donate to people in need in the neighboring communi-ties. This demonstrates BASF’s effort and commitment as an active member of the community. BASF employ-ees and their family members gathered for a volunteer wall - painting project in Seoul. This volunteer event was held on the theme of “travel around the world, children all over the world” to inspire children of the next genera-tion who will grow into global leaders. Participants took part in coloring the wall with key monuments from each continent.BASF is committed to ensuring that economic bene-fits never come before environment, safety and health. BASF not only practices this philosophy at its own pro-duction sites in Korea, but also promotes environmental protection and safety in the community through a num-ber of volunteer activities. For instance, BASF is actively engaged in the “One Company - One River” and “One Company - One Mountain” cleaning initiatives to protect and preserve the environment around us.

Community engagement: BASF employees at a volunteering activity for an elementary school in Seoul.

about Bayer

Bayer is a global enterprise with core competencies in the fields of health care, agriculture and high-tech poly-mer materials. As an innovation company, we set trends in research-intensive areas. Our products and services are designed to benefit people and improve their quality of life. At the same time we aim to create value through innovation, growth and high earning power. We are com-mitted to the principles of sustainable development and to our social and ethical responsibilities as a corporate cit-izen. Bayer Korea started as business in 1955, celebrating 60 years of foundation in Korea this year. Bayer Korea has around 950 employees with employing four manufactur-ing facilities and two research facilities.

14

1. Bayer Clinical medicine award

We constantly work to improve health services and social conditions in Korea. Bayer Clinical Medicine Award was estab-lished jointly by the Korean Academy of Medical Sciences and Bayer HealthCare in 2004 to contribute to the advancement of clinical research and development in Korea. With the aim to encourage research in clinical science and practice, the award has been granted to physicians who are recognized for their dedication and achievement in diagnosing and treating life-threatening and chronic diseases in particular. The award has been given to over ten outstanding researchers who con-tribute to the treatment of human diseases.

2. Bayer Health Day for senior’s Better Life

Bayer Health Day is an employee volunteer program supporting seniors to remain healthy during the cold winter season. Bayer employ-ees participated in providing many servic-es for the seniors, including shining shoes, providing beverages and serving free lunch. Some of the licensed nurses and pharmacists among the volunteers further ran a health consultation booth as part of their talent shar-ing. At the health consultation booth, people could check their blood pressure and blood sugar levels and consult with Bayer employ-ees on various issues related to health and medicine.

Bayer Korea’s CSR Activities

Csr activities in Korea

In line with its corporate mission “Sci-ence for A Better Life”, Bayer has been contributing to improve people’s lives in the field of health and social needs in Korea with various activities, as listed below.

15

3. Kimchi for a Cause

As a socially responsible com-pany, Bayer Korea is actively involved in its local community. Hence, Bayer Korea has been hosting a Kim Jang (Kimchi mak-ing) event every winter for the last three years at the Senior Welfare Service Center. Kimchi made by Bayer employees has been pro-vided to underprivileged families and especially to seniors living alone in Gwanak-gu, Dongjak, where the headquarter of Bayer Korea is located.

4. Donation to Youth football Club

In 2014, Bayer Korea held a fund-ing event together with players of Bayer 04 Leverkusen including Heung-min Son for children of World Vision FC. The event aimed at supporting future soccer play-ers who are developing their tal-ents and possibilities in difficult circumstances. Bayer 04 Lever-kusen soccer club started off as Bayer’s employee sports club in 1904, aiming at improving the life of our employees, and later devel-oped in the current professional soccer club.

5. support employee’s social commitment project

The global Bayer Cares Founda-tion annually supports employees around the world who endeavor to improve living conditions in the communities surrounding their company’s sites through their own project ideas. So far, two employees in Korea received awards: One employee is in-volved in caring for handicapped children and the other employee provided transportation services for the disabled for over 11 years.

16

BMW Group Korea,BMW Financial Services Korea - CSR Report

Company introduction

BMW Group Korea has been making a series of quantum leaps ever since its foray into the Korean car market in July 1995 by keeping the number-one position in the import car market for years. Its brilliant performance is not just confined to Korea and even Asia; its sales record level is so impressive by global standards that it draws strong attention. Specifically, BMW brand crossed the 40,000-unit mark in 2014 for the first time for a foreign auto brand in Korea, accomplishing the largest cumulative sales. Also, BMW Financial Services Korea reached its 200,000th contract in early 2015 and continues to offer an extensive product portfolio and premium services regarding financing and leasing of BMW Group automobiles.

Meanwhile, BMW Group Korea is fully committed to leading the new automotive culture by realizing the company philosophy of sustainability and differentiated customer satisfaction. As part of its initiatives, the company opened the BMW Driving Center in August 2014 in Yeongjong-do, Incheon. This is the market’s first cultural complex for a brand and driving ex-perience comprised of track circuits, a variety of automotive exhibits, experience spaces and an eco-friendly sports park.

17

BmW Korea future fund

Introduction

In July 2011, BMW Group Korea established the BMW Korea Future Fund (Chairman of the Board of the Directors: Dr. Hyo-Joon Kim), a non-profit organization for a charitable cause, in concert with BMW Financial Services Korea and eight official dealerships. Aiming to support sustainable growth and talent cultivation initiatives, which are essential for future society, this foundation operates a variety of purpose-driven programs and projects such as global talent cultivation and dissemination of culture of sharing.

The operating funds are raised from BMW Group Korea as well as from its official dealers and customers’ voluntary donations through a matching funds scheme. When an individual customer of BMW or MINI donates 30,000 KRW, BMW Group Korea, respective deal-erships and BMW Financial Services Korea will pay an equal amount of funds, which is 30,000 KRW for each.

main projects

Junior Campus

“Junior Campus” is a science and creativity education program for children. The program was benchmarked from BMW Welt, located in Munich, Germa-ny, and is based on the STEAM (Science, Technology, Engineering, Art and Mathematics) education principles. The Junior Campus is divided into two programs: the “BMW Driving Center Junior Campus” for elementary school students in the Seoul metropolitan area and the “Mobile Junior Campus” which visits remote areas where oppor-tunities for education are scarce.Children participating in the BMW Driving Center Junior Campus can contem-plate the environment by playing games through an interactive display in the “Portal”. They can further learn about the science behind a car in an engaging way through various experiments as well as hands-on experience-installations in the “Laboratory”. Participating students can furthermore build their own eco-friendly cars via educational apps.The Mobile Junior Campus, a renovated 11.5-ton freight truck, offers diverse experiences in its “Laboratory”, where students can learn basic technologies applied to a car. In the “Workshop”, students can develop a better under-standing of sustainable energy by actually making their own eco-friendly cars.

Young Engineer Dream Project

First launched in November 2013, the Young Engineer Dream Project aims to share the talents of BMW/MINI professional technicians with aspiring, yet underprivileged students majoring in the automotive department at industrial high schools and meister high schools. The participating technicians become mentors for the students’ future directions and studies.In 2013, the very first project started with 24 participants. Along with monthly regular mentoring sessions, the students visited the Busan International Mo-tor Show, experienced diverse cultural activities, and had the chance to visit the BMW Shenyang Plant in China. In November 2014, the 2nd cycle of the project began with a new one-to-three match system. Especially this year, the project also includes a women’s team (one female mentor with two female students) as part of its effort to discover and nurture women talents.

18

Hope Sharing School

In 2012, BMW Korea Future Fund established the “Hope Sharing School”, a voluntary work in cooperation with the NGO Good Neigh-bors. During vacations, this project provides underprivileged elemen-tary students short on proper care with lunch and special extracur-ricular activities that can nurture their physical, emotional, cognitive, and social abilities. So far, 1,140 schools and 23,000 children from low-income families have benefited from this program and from 2014 on, the organiza-tion has expanded its support to both seasonal vacations.

During the 2015 Winter Hope Sharing School, the participants had the chance to draw paintings and produce UCC videos under the theme of “Future That We Dream Of”. In addition, 258 students from twelve schools experienced BMW’s Mobile Junior Campus pro-grams, while 187 students of nine schools visited the BMW Driving Center in Yeongjong-do. Lastly, 80 senior students were supported with their middle school uniform costs.

From Idea to Startup

Aiming to impart Korean students with a sense of “responsible fu-ture leadership,” BMW Korea Future Fund has been the sponsor of “From Idea to Startup”, a competition for technology-based com-mercialization among undergraduates and graduate students nation-wide, since 2012.This project aims to help university students build up a spirit of entre-preneurship and create successful startup businesses.

So far, a total of 275 universities, 1,585 teams, and 3,408 contestants participated in this contest. Especially in 2014, ten teams that made it to the final round received specific advice and feedback about their ideas and business plans from venture capitalists and industry ex-perts. The winning team was given the chance to visit successful “Hidden Champion” enterprises in Korea and network with them.

Corporate social responsibility

DonationsBMW Group Korea has been dedicated to socially conscious activities in the Korean society by engaging in diverse donation activities. First off, the company has been donating BMW vehicles to colleges/universities and high schools since 2001, in total amounting to 67 units worth nearly six billion KRW. This year, in particular, it plans to donate 20 cars to celebrate the company’s 20th anniversary. Moreover, the company is spearheading the development of the domestic electric car industry and the establishment of the EV charging infrastructure, and, for this purpose, donated 30 charging stations to Jeju island.

Most notably, BMW Group Korea and its eight official dealerships donated a total of one billion KRW to support the victims of the Sewol Ferry through the Community Chest of Korea last year. The funds were provided to support the families of the Sewol Ferry victims and to strengthen the social safety infrastructure.

19

Cooperation and Collaboration with industry/academia

BMW Group Korea is contributing to the Korean academia by collab-orating with multiple local universities and colleges through providing support to their automotive and business administration departments by European standards. In particular, it concluded a Memorandum of Understanding (MOU) on the operation of a BMW Fellowship Program with Hanyang University and is supporting the development fund to nurture future talents. Likewise, its ambitious plan even stretches out to sponsoring the establishment of the “Europe Management Center” of Yonsei School of Business.

Furthermore, BMW Group Korea operates a talent cultivation pro-gram to select talented and enterprising students. Specifically, it pro-vides an apprentice program which trains students to start a career as BMW dealers. BMW Group Korea has supported a total of 384 students from automotive departments of ten universities/colleges to start their careers through the industry-academia collaboration pro-gram from 2004 to 2012. In 2013, 35 high school students and 90 undergraduates participated in the program.

Corporate Volunteer program

BMW Group Korea and BMW Financial Services Korea have been fully engaged in diverse socially conscious activities joined by their employees and executives ever since the establishment of the BMW Korea Future Fund in 2011. The specific volunteer activities include baking for the marginalized, tidying up the environment in Seoul For-est, taking care of abandoned pets, and many more. The company also encourages its employees to participate in such volunteer activi-ties at least once a year.

Contribution to Local economy

BMW Group Korea continues its effort to contrib-ute to the Korean economy and business land-scape through business cooperation and allianc-es with domestic firms. In 2014, it signed an MOU with Samsung SDI to expand the electric car bat-tery cell supplies so as to strengthen cooperative ties on the technological development in regard to stable supplies of battery cells in the mid- to long-term, since global demand for electric cars is on the rise.

Moreover, the company’s effort for shared growth applies equally to small and medium-sized enter-prises (SMEs). In 2014, particularly, it hosted the BMW Group Hidden Champions Conference to discuss the future roles and the development model of Korean SMEs with the “hidden champi-on” companies that led the growth of the German economy through cooperative business models with large companies.

Its commitment does not end here; signing MOUs with provincial governments is another seminal project to which BMW Group Korea is fully dedicated. In 2014, an MOU was concluded between the company, Incheon Metropolitan City and Jeju Special Self-Governing Province in order to reinforce their future cooperative relations and contribute to the regional economies.

20

Corporate Social Responsibility Activities of Boehringer Ingelheim Korea

our major Csr activities

1. Making More Health Initiative

Making More Health is a long-term global initiative driven by Boehringer Ingelheim based on a part-nership with Ashoka, the world’s largest social entrepreneur network organization, with the goal of identifying new and innovative ways to improve health globally.In 2014, Boehringer Ingelheim Korea launched the Making More Health - Healthcare Changemakers Competition in Korea to identify and support social innovators who are working to identify issues in domestic healthcare and propose fundamental solutions to them. The competition accepted applications detailing innovative solutions for two months and the MMH advisory board, consisting of nine healthcare experts in Korea, completed a fair review of the documents and presentations. In the end, the RAIN Team (Choi Sung-min and others, solution to promote diagnosis and research of rare disease through next-generation sequencing technology and crowd funding) was selected as the winner of the “Project” category and the Healive Team (Kook Kyung-min and four others, sick childcare platform connecting sick children with nursing professionals, nursery schools, and medical institutes) as the winner of the “Idea” category.The competition has received great attention from the industry and media as the first attempt to find innovative social entrepreneurs in Korean healthcare and has positioned itself as part of the advanced creating shared value activities of a global pharmaceutical company.

Our CSR Mission Corporate social responsibility has been the most important element in the corporate culture of Boehringer Ingelheim Korea, which has not only fulfilled its duty as a pharmaceutical company to sup-port the advancement of Korean medical science but also has consistently contributed to the communi-ty and society as a trusted corporate citizen.

2014 Making More Health - Healthcare Change-makers Competition Award Ceremony

21

2. Wunsch Medical Award

Boehringer Ingelheim Korea is contributing to the ad-vancement of medical research in Korea through the Wunsch Medical Award, which the company estab-lished in 1990 together with the Korean Academy of Medical Sciences in honor of Dr. Richard Wunsch, the first German physician in Korea. The Wunsch Medical Award is annually given to three physicians whose outstanding achievements in research have led to the advancement of Korean medical science. With a 25-year-history, it is one of the most honored medical awards in Korea, with fair screening and a long tradi-tion, and is widely renowned as the “Korean Nobel Prize in Medicine.”

3. Bodeumeum Campaign

Since 2012, Boehringer Ingelhiem Korea has carried out its Bodeumeum Campaign in an attempt to positively influence the underprivileged in the community by sharing traditional Korean culture. The Bodeumeum Campaign is a volunteer program that aims at effective improvement of the conditions of physically or mentally challenged people using a form of traditional Korean music called Gugak. In collaboration with Jeong Ga Ak Hoe, a Gugak performance organization, Boehringer Ingelheim devel-oped a Gugak treatment program with modified instruments. A group of employee volunteers participated in the eight week training program to help the participants learn Gugak, at the end of which they gave a perfor-mance. In recognition of its value, the campaign received the 2013 Social Contribution Award for Happiness in the “Healthcare” category from the Korea Employers Federation.

Dream Science ClassDream Science Class is designed to provide science learning experiences to children in the community and help them grow as future leaders.

Charity BazaarFor the past ten years, Boehringer Ingelheim Korea has annually organized a “Love Bazaar” at the end of the year to support local communities. Proceeds from the bazaar along with donations matched by Boehringer Ingelheim Korea are used to support Haesimwon, a child welfare center located in the Yongsan district of Seoul, and many other centers like it.

4. Community Grants & Contribution

Chaboom Football ClassBoehringer Ingelheim Korea has since 2012 supported Bumkun Cha’s Football Class, a joint community contribution activity initiative to support the healthy development of children through football.

Wunsch Medical Award Bodeumeum Campaign

Dream Science Class

22

Kärcher: Cleaning and Restoring Historical Buildings and Monuments

The statue of Christ the Redeemer in Rio de Janeiro, one of the New Seven Wonders of the World, has lost none of its splendor in 84 years. Mount Rushmore, with its stone faces depicting four famous presidents of the United States, and the Colossi of Memnon in Luxor, dating back over 3,300 years, are magnificent monuments, unchanged since they were first built. How can these cultural landmarks retain their glorious beauty over so many years? One company has worked on these monuments behind the scenes – Kärcher, a world leader in cleaning technology and cleaning systems.

Kärcher is a German-based premium cleaning company with 80 years of history in the cleaning industry. Kärcher specializes in the development, production and sale of high-end cleaning technology, leading the industry with more than 1,500 patents in cutting-edge technologies and solid brand credibility with its customers. Kärcher is a pioneer of cleaning technology, having invented the world’s first hot water high-pressure cleaners, paving the way for the development of new cleaning solutions.

“Kärcher World Heritage Cleaning Campaign” improves Kärcher’s expertise

Since 1980, Kärcher has carried out restorative cleaning projects on historical monuments all over the world, working to clean and preserve them for posterity as part of a cultural sponsorship program. Kärcher has worked on more than 100 historical monuments so far. Working on these precious monuments is a delicate task, requiring efficiency and great care to clean weathered historic structures without causing any damage. Kärcher has received high praise for the artistic elements of the project, garnering the attention of the world.

Mount Rushmore

Colossi of Memnon Christ the Redeemer

23

Kärcher’s cleaning projects include the famous statue of Christ the Redeemer in Rio de Janeiro (1980, 1990, 2000), the Statue of Liberty in New York (1985), the Brandenburg Gate in Berlin, and Mount Rushmore, all of which were cleaned with the greatest care and skill. In South Korea, Kärcher cleaned an open-air stage and the N Seoul Tower (2011), and the Chungju Dam (2012). More than just cleaning the dam, Kärcher first used pressure washers to remove stains and moss from the side of the dam in patterns, creating a giant artwork depicting a tiger and pine trees – a temporary artwork representing Korean culture.

Creating shared Value beyond Csr with Cultural sponsorship

One of the main purposes of the projects is developing new technologies and Creating Shared Value (CSV), using CSR as a starting point. For example, Kärcher’s jet blasting system was invented to clean the 284 Tuscan pillars and 88 columns that surround St. Peter’s Square in Rome, each one made of travertine limestone (stone formed from freshwater calcareous mud). Kärcher’s world heritage cleaning project has been acclaimed as a great example of a CSR activity that illustrates the company’s eco-friendly practices, its spirit of innovation, and its pioneering cleaning technology.

Colossi of Memnon St. Peter’s Square in Rome

N Seoul Tower

Chungju Dam

24

Mercedes-Benz Promise

Launching of Mercedes-Benz Promise CSR Committee Hand-Printing Launching Event

program 1: mercedes-Benz mobileKids

Developed in 2001 by Daimler AG, “Mercedes-Benz MobileKids” is the world’s first traffic safety education program for chil-dren. To date, the program has reached 1.6 million kids from 13 countries worldwide, and it was first introduced in Korea in 2014. Localized to match Korea’s traffic situation and rules, the curriculum is available to underprivileged children, raising their awareness of possible traffic dangers by learning and practicing traffic safety in a fun way.By the end of 2014, MobileKids was provided to more than 1,500 children at 70 social welfare and local children facilities in Seoul and other major metropolitan areas with four education modules at each facility.

In 2015, the program will be expanded to cover twice the number of facilities and child beneficiaries. Moreover, together with existing indoor education last year, the curriculum will be reinforced by implementing outdoor education as well. As part of the plan, an agreement was made with the Road Traffic Authority to renovate Shincheon children’s traffic park located in Jamsil, Seoul on February 16, 2015.

Indoor class educationMobileKids with employee volunteer University Student Volunteers

On June 29, 2014, Mercedes-Benz Korea officially launched its CSR program, “Mercedes-Benz Promise”, with joint efforts of Mercedes-Benz Korea, Daimler Trucks Korea, Mercedes-Benz Financial Services Korea and eleven authorized dealer companies. Mercedes-Benz Promise comprises three programs in fields which Mercedes-Benz has strengths and has com-petency as the leading automobile brand: 1) Mercedes-

Benz MobileKids 2) Mercedes-Benz Mobile Academy 3) Mercedes-Benz All Together. The programs are supported by a strong team spirit cre-ated between the contributors to build a sustainable en-deavor to benefit Korean society over a long term. The cooperation also opens the door for employees to par-ticipate as program volunteers, engaging and providing helping hands to the local community and society.

25

program 2: mercedes-Benz mobile academy

“Mercedes-Benz Mobile Academy” is an industry-academy cooperation program with the goal of educating college students of automotive-related majors. As of July 2014, an MOU was concluded between the Mercedes-Benz CSR Committee and a total of ten colleges with the purpose of assisting the college students to establish solid career development and to develop themselves as experts in associated fields.

The program provides students with valuable training, utilizing Mercedes-Benz’s global expertise with the brand’s leading technology. Expert trainers lead the lectures at each chosen college, teaching with a balance of theory and practical les-sons. Moreover, Mercedes-Benz also enhanced practical learning experience for students by donating 10 vehicles to Mobile Academy colleges.

Participating students are given priority to take part in Mercedes-Benz’s Automotive Mechatronic Traineeship (AMT), which is a specialized training program that nurtures professional technicians. Selected outstanding participants receive opportunity to visit the Mercedes-Benz head office in Germany, including other Mercedes-Benz related sites such as the Mercedes-Benz Museum, Mercedes-Benz Classic Center, Unimog Museum, etc.

The first semester of Mercedes-Benz Mobile Academy commenced with the autumn college semester in September 2014. New classes taught at the remaining five colleges have begun in this year’s spring semester.

program 3: mercedes-Benz all Together

“Mercedes-Benz All Together” is a dealership and employee participation program that allows participants to suggest ideas and contents for social services and later participate in actual activities. By showing interest in various social problems and finding ways to help, dealer companies and employees are encouraged to donate their time and share ideas, thereby contributing to the society that they live in.

In 2014, eleven projects had been successfully implemented including activities such as Love House, Habitat, Blood Dona-tion and Santa Day. More than 300 Daimler entities and dealership employees volunteered in the program. Newly selected projects for 2015 are about to be implemented by all Daimler entities and dealer companies.

As responsible corporate citizens, Daimler entities and authorized dealer companies will continue with efforts to contribute to Korean society in the long term.

Student Career Workshop

Blood Donation

Mercedes-Benz HQ Visit

Habitat Activity

Visit to Unimog Museum

Love House Activity

26

Merck Korea’s CSV(Creating Shared Value)

In compliance with the headquarters’ guide-line, Merck Korea has advanced efforts in Creating Shared Value. These efforts belong to several areas: science education, cultural support and community activities led by the company and/or supported by employees on a voluntary basis.

1) r&D support

A. Chemicals

Merck Award

The “Merck Award” was established for technology research pa-pers in 2004 during the IMID (International Meeting on Information Display) organized by the Korean Information Display Society. The year 2004 marked the 100th anniversary of Merck’s liquid crystal re-search and the award was designed to recognize outstanding sci-entific contributions to display technologies. After the worldwide first discovery of the liquid crystal phenomenon in 1988 Merck has started R&D in the liquid crystal field in 1904 and since then has led the display industry for over 100 years with continuous efforts and contributions. In 2006, the scope of Merck Award was enlarged from liquid crystal display technology to all display technologies along with young scientists by establishing the “Merck Young Sci-entist Award.” In 2013, when the 125th anniversary of liquid crystal discovery was celebrated, Merck Korea and the Korean Informa-tion Display Society decided to expand the scope of the eligibility criteria from published papers to research activities from the 10th Merck Award on, another milestone in supporting the development of Korea’s display industry. Merck will remain committed to sup-porting future innovative technologies that involve research in all areas: liquid crystal, flat panel display (OLED/OTFT & PDP), flexible display, and transparent display.

1. Corporate-led activities

27

2) Cultural support

Introducing Korean Fine Art through Merck Calendar

Since 2009, Merck Korea has been introducing Korean fine art through the Merck Calendar distributed to Merck’s global network. The activity is the extension of a program run by the headquarters in Germany and it is significant that Korea has been included. This initiative aims to introduce Korean artists and their work to a broader public through calendars which - since used every day - are a perfect medium for this purpose. The Program is ongoing.

Oh In-Soon, well known for her brilliant, colorful images, was the first painter selected for the 2010 Merck Calendar. For 2011, Lee Kye-Song was selected. He has expressed a bal-ance and harmony with light and lines by using Korea’s unique five traditional colors. For 2012, Jeong Myoung-Jo, an artist who uses Hanboks as her painting motifs, was selected. The calendar with her paintings helped to introduce Korea’s long history and refined culture. The artist for 2013 Merck Calendar was Kim Ji-Hye, who has gained prominence through her re-constructive work with today’s sensibility and aesthetic sense into the image and concept of traditional bookshelve paint-ings, flower and bird paintings as well as landscape paintings which were common in the Joseon Dynasty. For 2014, Hong Ji-Yeun, an artist who depicts the image and motifs of Korean folk painting with values of tradition and modernity, Western and Eastern culture, was selected. Kim Geon-Il, who has used anamorphosis to his painting and metaphorically expresses that knowing the truth is important, but how the truth is pre-served and applied in real life is even more important, was selected for the sixth calendar (2015).

B. Pharmaceuticals

Merck Serono Award to support research and academic activities in the area of colorectal cancer and head & neck cancer

The “Merck Serono Award” was established by Merck Korea’s pharmaceutical unit Merck Serono in 2011 together with the Ko-rean Cancer Association to encourage research and academic activities in the area of colorectal cancer and head & neck cancer. Every year, three award recipients are selected by the Korean Cancer Association in the area of colorectal cancer and head & neck cancer and the award ceremony is held at the annual conference or the board meeting of the Korea Cancer Association.

Korean Association for Clinical Oncology-Merck Serono Colorectal Cancer Research Award

The Korean Association for Clinical Oncology-Merck Serono Colorectal Cancer Research Award was established in 2012 to support research in the area of colorectal cancer. The Korean Association for Clinical Oncology selects two excellent papers on colorectal cancer and the awards are given during the association’s annual general meeting.

Merck Serono Scientific Award for Reproductive Medicine Researchers

The Merck Serono Scientific Award was launched at the Annual Meeting of the Korean Society for Reproductive Medicine in November 2013 to support scientific achievements and encourage technology development in the fertility research field. Merck Serono selects two excellent research papers (basic research and clinical research) led by a Korean scientist and published in SCI (SCI-E)-indexed journals in the previous year.

3) supporting patients

Orange Tree Program

The Merck Serono Division has supported costs of anti-cancer drugs for patients in need together with the Korean Cancer Society from 2011.

Supporting costs of treatment for children in need with short height

Merck Serono Division has supported costs of growth treat-ment for children in need with short height together with ChildFund.

28

Year event Detail

2007“International Forum on Materials & Components Technology”

(Host: Ministry of Trade, Industry and Energy, Korea Materials

and Components Industry Agency (KMAC))

Merck’s growth background and strength, sharing information on technol-

ogy developments, marketing strategies, cooperation opportunities and

investment direction

2010

“Korea-EU FTA and Corporate Strategy in the Globalization

Era’” seminar

(Host: European Union Chamber of Commerce in Korea

(EUCCK), Ministry of Health and Welfare)

- Industry’s progress after the Ministry-EUCCK memorandum of under-

standing on the Code of Ethics in the pharmaceutical sector signed in 2009

- Importance of ethical management, one of key elements for competi-

tiveness

2012 -

“Joint Korean-German Conference on Future and Technology”

(Host: Alumni Network Germany-Korea (ADeKo), the German

Embassy to Korea, the Ministry of Trade, Industry and Energy

and Science & Technology Policy Institute (STEPI))

- 2012: Importance of Basic Science

- 2013: Research and Industry

- 2014: Future and Technology

2013

“Skilled Workforce in German Companies in Korea – Demand,

Challenges and Solutions” Workshop

(Host: Korean-German Chamber of Commerce and Industry

(KGCCI), Deutsche Gesellschaft für Internationale Zusamme-

narbeit (GIZ), Germany Embassy to Korea)

German Vocational Training System

“Global Technology Development Partner Workshop”

(Host: Korea Institute for Advancement of Technology (KIAT),

Swiss Embassy to Korea)

- Successful cases in international technology cooperation

- Ways to cooperate in future technology development in areas of ma-

terials, components and parts for the machinery, electronics and power

industry

“Global Green Growth Forum”

(Host: Aju Business Daily, Global Economic and Financial Re-

searchInstitute (GEFRI))

Merck’s success strategies and technologies with Korea

“Global HR Forum”

(Host: Ministry of Education, Korea Research Institute for Vo-

cational Education & Training (KRIVET))

2013 -“Global Materials Tech Fair”

(Host: The Electronic Times, Korea Evaluation Institute of In-

dustrial Technology (KEIT))

2014“World Knowledge Forum”

(Host: Maekyung Media Group)

4) Knowledge sharing

Sharing Merck’s success strategies with future leaders

Merck Korea has deepened its exchanges with Korean students through EBS’ “Global CEO Lectures”. The program was attended by Korea University Business School from 2005 to 2007, Seoul National University Business School in 2007 and Yonsei University Business School. Merck also shared its business strategy and management values as a family-owned company operating in various industry areas for more than 340 years with students of Yonsei University and Kyunghee University in 2012, SNU Business School in 2013 and Yonsei University in 2014, suggesting ideas for how Korean family-run companies can last for a long time. During each lecture, Merck Korea provides a Q&A session between its head and students to share its experience with the younger generation via direct communication.

Consulting with top experts in each field

Merck Korea has continued its efforts to invite authorities in chemistry and life engineering to speak at lectures and conferences host-ed by the government and public institutions to help share their knowledge with Korean industries and communities.

29

Volunteer Club “onnuriae”

Merck employees of Anseong-shi, Gyeonggi-do, organized the volunteer club “Onnuriae” in January 2012 which is registered in Anseong-shi. During the five years before the club was established, one employee donated briquettes, rice, and clothes to the disabled and the elderly living alone with support from the company and acquaintances. In 2012, Onnuriae club was founded to expand his efforts into an employee-led activity. The club since then has supported the underprivileged and the elderly living alone in Anseong-shi. Onnuriae also further supported two high-school students from second grade of high school until their graduation. Also, with money from employees and the company, employees visit houses of elderly people living alone in order to support them by repairing facilities, cleaning, and through in-kind donations. On children’s day, the club donates toys to underprivileged children and students invited from Anseong volunteer center. Every November, employees make Kimchi and donate it to about 20 people including the underprivileged, the elderly living alone, and welfare facilities. Just recently on November 29, 2014, Kimchi was warmheartedly shared.

Volunteer Club “picnic”

“Jacob’s House” near Merck’s liquid crystal R&D center in Poseung, Pyeongtaek, Gyeonggi Province, is home to baby orphans aged three and below. The welfare center also runs a bakery to train unadopted children and a facility to help single mothers become eco-nomically independent. Since 2005, Merck employees have visited this place every month under their volunteer program of “Sopoong” to spend time playing together with kids there. In October 2010, employees enjoyed an outing with Jacob’s House children at an aquarium in downtown Seoul.

Beautiful store

In 2004, Merck Korea employees voluntarily joined the Beautiful Store’s charity initiative which led to the event “Beautiful Saturday with Merck” held in 2012 at the Beautiful Store’s branch in Pyeongtaek, where Merck’s R&D center is located. The proceeds from the event were donated to Oseongmyeon Childcare Center and were used for purchasing books for children of multicultural families.

Donations through a year-end party to the needy

Since 2009, Merck Korea employees raise donations through a year-end party and deliver them to the needy in Jongro District, Seoul.

Ja Korea - Youth business education volunteer program

In 2008, Merck Korea employees participated in JA Korea’s program on economy education for the youth. Employees served as one-day teachers for children.

2. employee-led Volunteer activities for Local Community

30

Sustainability at Siemens

Siemens (Berlin and Munich) is a global powerhouse positioned along the electrification value chain – from power generation, transmission and distribution to smart grid solutions and the efficient application of electrical energy – as well as in the areas of medical imaging and in-vitro diagnostics. With about 343,000 employees working in 200 countries, Siemens focuses its core capabilities on electrification, automation, and digitalization.

More than a century ago, the company’s founder Werner von Siemens insisted: “I won’t sell the future of my company for a short-term profit”. Sustainability is the cornerstone of Siemens values. The activities and goals of Siemens Sustainability Program are focused on the three strategic fields of Business Opportunities, Walk the Talk and Stakeholder Engagement. It included a) growing the environmental portfolio, b) enhancing sustainability in business units, c) increasing focus on social contribution of business activities; and d) pushing innovation in sustainable products and business models.

Environmental and climate protection is a key component of business strategies at Siemens. The company runs businesses in the areas of energy technology and climate protection to address global issues such as global warming and climate change. The Siemens Environmental Portfolio largely consists of energy-efficient products and systems such as combined-cycle power plants and intelligent building technologies; renewable energy systems such as wind turbines; and environmental technologies.

Only clean business is Siemens business and compliance as part of corporate responsibility is the first priority at Siemens. This means that the focus does not rest purely on adherence to laws but is actually much wider, encompassing responsible business management, the integrity of individual employees and the formation of lasting relationships with the stakeholders. The Siemens Compliance System is divided into three action levels: Prevent, Detect, and Respond. These action levels encompass a comprehensive system of activities by which Siemens intends to ensure that its business is completely in accordance with all applicable laws and regulations, as well as with internal principles and rules. Compliance in Siemens is not a one-time program, but the way of doing business.

31

siemens mobile Clinic

The Siemens Mobile Clinic provides nationwide free healthcare check-up service to elementary school children right at their doorstep who lack proper healthcare services, utilizing a full-size bus that features ultrasound equipment and other diagnostic medical devices combined with the help of a volunteer group consisting of healthcare professionals and Siemens employees. The check-up service includes height, weight, body-fat, eyesight, blood, urine, hearing, and ultrasound examinations.

siemens The nanUm Volunteer Corps

The NANUM Volunteer Corps, an in-house volunteer corps, conducts tailored volunteer activities and contributes to eco-friendly activities. Siemens employees have participated in activities which include briquette delivery, environmental cleaning activities along the Han River, serving meals to needy neighbors, and more.

With this efforts, Siemens ranked first in the Capital Goods Industry Group, which includes about 350 companies from seven sectors, of Dow Jones Sustainability Index (DJSI) in 2014, with a very high total score of 93 out of a maximum of 100 points. At the same time, the company again captured the No. 1 spot in the area of Industrial Conglomerates for the 7th consecutive year among 46 companies. This sector also includes companies such as 3M, Philips and Toshiba.

Siemens is also committed to the societies through corporate citizenship activities. In doing so, Siemens applies high management standards and strategicallyfocuses corporate citizenship activities on areas where company competencies, resources, and employee volunteering can make a meaningful difference - such as education and science, society, environment, and arts and culture. In particular, Siemens in Korea has run several corporate citizenship programs successfully. These include:

siemens Green school

The Siemens Green School is an eco-friendly science education program for elementary school students to foster talents in the environment and science fields which is fully financed by the “Ai SaRang KiKeum” fund, a matching grant program that requires Siemens to donate the same amount of money donated by its employees every month.

32

Corporate Social Responsibility: Focus of the project work of the Konrad Adenauer Foundation in Korea

The reach of responsibility of companies towards society has become an important issue in many countries and increasingly also in Korea. The ever-growing loss of acceptance and confidence which market economy has had to face in recent years has led many enterprises to commit themselves to Corporate Social Responsibility (CSR). The problem which arose from this development is a missing theoretical concept of CSR that is commonly ac-cepted around the world and, at the same time, offers useful advice for practical implementation.

Companies fulfill a core function of a society: They organize the creation of value in such a way that many groups – consumers, employees, suppliers and investors – are brought together in order to improve their respective eco-nomic basis and potential. This contribution to value creation symbolizes the companies’ responsibility towards society.

However, relations between these stakeholders are highly complex and can create lasting conflicts. Therefore, a system of rules can be helpful in order to prevent such problems from turning into dominating burdens for the business environment. Hence, active CSR engagement is productive for both society and companies.

The Konrad Adenauer Foundation (KAS) which started its project work in the Republic of Korea in 1978 made CSR one of its focus issues as early as 2006. Since then the foundation’s local cooperation partners have been the Korean Standards Association (KSA, http://www.ksa.or.kr/) and the Korea Sustainability Investing Forum (KOSIF, http://www.kosif.org/main/).

Initially, KAS’s objective was that CSR in Korea should become entrepreneurial normality rather than a seasonal extravagance or just a public relations tool. Annual project work included not only seminars, workshops and publications with leading German experts as resource persons on the subject but also the annual Korean Sus-tainability Award ceremony, organized by KSA, when Korean companies with best practice CSR models were publicly honored.

33

Main topics during numerous events since 2006 were:Strategic CSR

While it has seemed over a long time that CSR would change companies views in the long-term perspective, Internet research revealed that most business publications labelled as CSR activities were, in fact, company public relations tools. However, strategic CSR aims at integrating a company’s resources and social needs in its routine business procedures.

Role and Perspectives of CSR under the Park Geun-hye Administration

Analyses focused on the question how deeply CSR and economic democracy have really been rooted in Korean society and which developments could be expected in this area after the new administration took office in early 2013 after the previous government’s failure to take appropriate action in order to support the introduction of ISO 26000 requirements in Korea.

How to facilitate Environment Social Governance (ESG) disclosure legislation and use of ESG information by the stakeholders

The main purpose of this topic was to sound out the possibility of ESG disclosure legislation as well as to check how to best use such ESG information and promote CSR practices in Korea. In order to make this event useful in the most effective sense, legislators of the National Assembly who are very much interested in this subject and willing to reflect the deliberations in their legislation were invited as speakers.

CSR in the aging society - why companies need to actively respond to low fertility

The birth rate in Korea is a very serious issue as it currently is the lowest birth rate among the 34 members of Organization for Econom-ic Cooperation and Development (OECD). Judging from a company’s standpoint, the low fertility problem means that the domestic market is shrinking axiomatically; it will have a huge impact on the sustainability of enterprises in Korea. Furthermore, if domestic mar-ket size dwindles, global companies which can easily switch to markets abroad will suffer relatively less damage than domestic con-glomerates or SMEs, while domestic companies will face the insolvency. In the middle and long term, the cause and resolution of the low fertility issue is directly related to the following issues of enterprises: youth unemployment, equality between men and women, reconciliation between family and work through raising female employment and guaranteed income. Therefore, the low fertility prob-lem challenges the survival of all companies. Thus, efforts of companies to solve it can be described as Corporate Social Responsibility.

There have been lots of seminars and conferences on why and how companies should implement CSR which helped Korean businesses and other stakeholders to understand the implications of CSR better and to build their capability even to a limited extent. Many of the large companies are trying to communicate with their stakeholders by making public their ESG perfor-mance with a view to getting credited for their CSR effort as well as achieving long term profits and sustainability. A compa-ny’s “Sustainability Report” is the most preferred way of communication with stakeholders including the investors. Therefore, the efforts of KAS and our partners in the more recent past have been directed to counter any sentiment in business circles that companies do not have to find any justification to publish such reports because such ESG information and CSR perfor-mances are not utilized by the investors in a proper way. In order to give both Korean and foreign experts interested in the Korean business environment an insight into CSR in this country, KAS Korea has published in 2014 an issue of its occasional papers on “Corporate Social Responsibility in Korea: State and Perspectives”. It is available for download at http://www.kas.de/korea/en/pages/13005/.

Dr. Norbert EschbornResident Representative to KoreaKonrad-Adenauer-Stiftung e.V. (KAS)

34

35

KGCCI CSR REPORT2014 /2015

O F G e R m A N C O m P A N i e S i N K O R e A

KGCCI CSR ReportFirst edition, April 2015

© KGCCI DEinternational Ltd.8th Fl., Hannam Plaza 85, Dokseodang-ro, Yongsan-gu, Seoul 140-884, Korea

T + 82 2 37804 600 F + 82 2 37804 637

www.kgcci.com

PubLiSHeD bY KGCCi DeiNteRNAtiONAL LtD.

KGCCI CSR REPORT2014 /2015

O F G e R m A N C O m P A N i e S i N K O R e A

W W W . K G C C i . C o m