SK Group Chairman Chey Tae-won called for a shift to a "new capitalism" in which companies are rewarded for creating social value. Rewarding firms for social performance, based on a sophisticated measurement system, can motivate them to tackle social problems rather than simply pursue profit, he said.
Speaking on the 12th in Seoul at the keynote session of the Ecosystem Leadership Exchange (ELE) program hosted by the Social Enterprise World Forum (SEWF), Chey said relying on altruism alone cannot deliver the scale needed to address expanding social problems. "A sophisticated, performance-based incentive system that stimulates companies' voluntary motivation is essential," he said.
Chey also stressed the need for precise performance measurement as a basis for rewards. "Conventional corporate social responsibility has centered on budget spending and publicity, with relatively little in the way of systems to measure actual social outcomes," he said. "The high transaction costs of precise value measurement can be resolved through recent advances in artificial intelligence."
SK Group has long operated platforms supporting the social economy ecosystem, including the Happy Lunchbox program, Happynarae, a social enterprise MBA program and the Center for Social Value Enhancement Studies. Chey described the Social Progress Credit (SPC) initiative pursued through that work as "a kind of new method that reduces costs for the state and society." He added: "Just as capitalism and democracy move forward together, we must accelerate the transition to a new capitalism in which creating social value, beyond pursuing profit, is rewarded."
The SPC project measures the social performance generated by social enterprises in monetary terms and pays cash incentives in proportion to that value. At the Schwab Foundation general assembly held by the World Economic Forum (WEF) last year, Chey proposed a way to trade social value within market systems.
In a report released on the 8th of this month by the WEF's Schwab Foundation and the Center for Social Value Enhancement Studies, Chey defined an economy in which social and environmental performance is measured and rewarded by markets and financial systems as an "impact economy." He also recommended that regulation, investment, financial linkages and multilateral cooperation frameworks be put in place to spur demand for social value.
ELE is the first global leadership program created by SEWF to examine a country's social economy ecosystem on the ground and exchange experiences across nations. Through the 15th, participants plan to discuss a broad range of topics, beginning with systems for rewarding social value and extending to social economy policy and legislation, private sector participation and investment, and ways to build national social economy ecosystems.