Lotte Group is trying to realize the values of shared growth under the catchphrase “Make Tomorrow Beneficial” by Supporting Its Cooperative SMEs.
The business group is offering multi-facetted support, ranging from supporting liquidity and ESG management consulting to fostering startups.
Lotte Corp., the holding company of Lotte Group, said on Oct. 28 that subsidiaries of the group are operating a system to support the liquidity of funds to stabilize the management of cooperative SMEs.
Specifically, Lotte has a shared growth fund, operates a shared growth settlement system and offers earlier payments to partners for traditional festivals.
Lotte has operated about 1 trillion won in a shared growth fund. The business group raised the funds in cooperation with commercial banks to lower interest rates for cooperative companies.
Under the program, about 1,800 beneficiaries have been supplied a combined 640 billion won.
In 2018, Lotte Group became the first Korean conglomerate to have its all subsidiaries introduce a shared growth settlement system by striking a deal with the “Win-Win Foundation for Large- and Small-sized firms, Agriculture and Fishing Industry.”
The shared growth settlement system is a regime in which conglomerates issue bonds sans the right of recourse, and all cooperatives may cash them in at discounted rates equivalent to those of large-sized companies.
Lotte offers payments to cooperative firms during Lunar New Year and Chuseok holidays every year to secure their money liquidity.
A combined 2.66 trillion won was paid to about 63,000 companies between 2020 and 2021 in consideration of additional money demand.
Lotte assists SMEs with which the business group has no dealings by contributing to a shared growth fund for large- and small-sized firms, agricultural and fishing villages.
For instance, Lotte Corp. contributed 15 billion won in a shared growth funds, and a mutual collaboration fund, to agricultural and fishing villages.
The money has been used to help SMEs explore Korean and foreign markets and implement diverse collaboration programs, such as the development of regional society and agricultural and fishing villages.
Last year, 1 billion won was offered to help youth startups enter foreign markets and another 900 million won was put to develop and operate plastic PET retrieval robots.
Lotte offered 1.5 billion won in projects to help disaster victims in the agricultural and fishing areas and dispense emergency relief product vouchers to overcome disasters.
Lotte Assists Efforts to Strengthen Capabilities Like ESG Management Consulting
ESG management, pursuing three core factors to achieve corporate management sustainability, has become the buzzword of the business community.
Lotte has come forward to help SMEs which find it hard to employ ESG management.
Lotte said the business group has assisted SMEs’ efforts to ramp up management capabilities by sharing know-how in the implementation of ESG management.
In July 2021, Lotte Group held a ceremony to declare ESG management with a goal of achieving carbon neutrality by 2040.
All companies of the business group have hit the gas to purse systematic and transparent ESG management by having listed companies inaugurate an ESG committee under the umbrella of a board of directors and building an ESG management regime in an CEOs’ performance evaluation.
Last year, all 10 listed companies, including Lotte Corp, had inaugurated an ESG committee under the umbrella of a board of directors, and all of them have published a report of sustainability management this year.
Lotte is also offering a program to educate executives and staff of its cooperative firms through the “Shared Growth Academy,” operated by the group.
A Lotte official said, “About 630 cooperative firms with which Lotte’s chemical and distribution subsidiaries have dealings are offered with consulting services to spread ESG management and education tailored to meet their needs on consulting services to invigorate sales using big data.”