Welcome POSCO 16 May 2007

Ethics and Corporate Social Responsibility: Hong Kong and Korea, learning from each other Seminar with POSCO 16 May 2007 John F. Hulpke Hong Kong University of Science and Technology, Clearwater Bay, Hong Kong, China. contact

Welcome to my university! Since opening in October 1991, the Hong Kong University of Science and Technology has established itself as an intellectual powerhouse, and securing a place on the academic world map in record-breaking time. Check display, Library

POSCO: a world leader! HKUST: a world leader! Top in Asia! accounting, finance, management. ALSO, POSCO wins Financial Innovation Award Dec. 29, 2006 POSCO extends Vision Scholarship Program Mar. 09, 2007 POSCO selected as the best work place in Korea Apr. 13, 2007 POSCO wins `Knowledge Management Award` Dec. 08, 2006 POSCO acknowledged for Outstanding Sustainable Management Sep. 08, 2006 and many more

Today’s agenda Who am I? Came to HKUST in 1997 from USA Who are you? Some learning objectives: –Think about social responsibility in other firms –Learn about some Hong Kong leading firms How we learn at HKUST: teams –Learn by talking aloud, not only listening –Two is best: so 1A 1B, 2A 2B, 3A 3B, 4A 4B

Let’s learn together Exercise 1: new CEO wants your help! –See handout 1 for instructions –Feedback from seminar leader Exercise 2: congratulations, you are promoted –See handout 2 for instructions –Feedback from seminar leader

Exercise number 1 Your old friend AJ has just been named CEO! As a finance person, he knows little about ETHICS and CORPORATE SOCIAL RESPONSIBILTY. He knows you are an expert in these areas. He asks your advice: what three things should he look into first to see how the firm is doing in CSR/Ethics. Name THREE areas.

Your old friend AJ has just been named CEO! As a finance person, he knows little about ETHICS and CORPORATE SOCIAL RESPONSIBILTY. He knows you are an expert in these areas. He asks your advice: what three things should he look into first to see how the firm is doing in CSR/Ethics. 1A: Cathay Pacific Airlines 1B: Green Island Cement 2A: Standard Chartered Bank 2B: China Light and Power (CLP) 3A: MTR 3B: HK University of Science and Technology 4A: Salon Go-Ahead (hair styling, 22 staff) 4B: McDonald’s (Hong Kong) Optional: Giordano (clothing store chain)

Your old friend AJ has just been named CEO! As a finance person, he knows little about ETHICS and CORPORATE SOCIAL RESPONSIBILTY. He knows you are an expert in these areas. He asks your advice: what three things should he look into first to see how the firm is doing in CSR/Ethics. 1A: Cathay Pacific Airlines 1B: Green Island Cement 2A: Standard Chartered Bank 2B: China Light and Power (CLP) 3A: MTR 3B: HK University of Science and Technology 4A: Salon Go-Ahead (hair styling, 22 staff) 4B: McDonald’s (Hong Kong) Optional: Giordano (clothing store chain)

Exercise 2: congratulations, you are promoted! In fact, you have been promoted FIVE times! You are now a BIG BOSS in POSCO. And your daughter (who is now a student at HKUST) asks you: Mommy (or daddy), tell me what things will you do at work to make the world better in my lifetime. What are you, and POSCO, worried about in the Social Responsibility and Ethics areas for the years ahead? Remember, today is May 16

Time to ask HULPKE his opinion What are you worried about in the Social Responsibility and Ethics areas for the years ahead? 1. _ _ _ _ _ 2. _ _ _ _ _ _ _ _ _ _ _ _ _ (sometimes called _ _ _ _ _ _ _ _ _ _ _ _ _ )

HULPKE worries about 1. C H I N A Both on ETHICS area and on second worry area also, China is important! Second area? 2. _ _ _ _ _ _ _ _ _ _ _ _ _ or _ _ _ _ _ _ _ _ _ _ _ _ _

causes?

The world is using more energy every day We are running out of energy – especially cheap energy. Drastic effects in every country!! Impact on POSCO? The world will eventually use up all its economically available fossil fuels: oil coal gas and in so doing will create problems (global climate changes) When? Many experts believe before the end of this century* *See for example: “Out of gas”, by D. Goodstein, Vice Provost and Professor of Physics, California Institute of Technology; Norton Co., New York, (2004) From Prof Alan G McDiarmid, University of Texas at Dallas. Slides used at HKUST Nov 9, 2006

there are ALTERNATIVE FORMS OF RENEWABLE ENERGY Wind Hydroelectric Solar (photo-voltaic and photo-electrolysis of water) Geothermal Ocean currents, ocean tides and rivers Nuclear (fusion; fission) Hydrogen (renewable?) Bio-fuels (indirect solar power). BIO-FUEL (100 % Renewable Energy From Plants, etc.) What do you know about bio-fuels? Again, from Prof Alan G McDiarmid, University of Texas at Dallas. Slides used at HKUST

Any CO 2 produced by using bio-ethanol or bio-diesel does NOT add to the net amount of CO 2 in the atmosphere, because all carbon in bio-fuels came originally from CO2 already in the air. TODAY, BRAZIL LEADS THE WORLD. From 1985 to 1990, around 90% of all automobiles manufactured in Brazil were powered by ethanol. To date, more than 6 million ethanol and flexible fuel vehicles have been manufactured in Brazil. (Source: Ford Motor web page). During past 5 years cost of bio-alcohol from cellulose-material has dropped from $6.00/gallon to $0.5/gallon. At least 30 US/Canadian companies are actively working on conversion of cellulose-material to bio-alcohol. World need in the next few decades: billions of gallons of alternative fuels Source: Wall Street Journal June 29, 2006 Still from Prof Alan G McDiarmid, University of Texas at Dallas

Sustainable Environment and Business The motivation to find answers to the world’s environmental problems? MONEY!!! This is not sentimental dreaming. This will make somebody lots of money! Can POSCO make money and at the same time improve the environment? Can POSCO SAVE money, for example, cheaper energy?

Branson story September From Prof Alan G McDiarmid, University of Texas at Dallas. Slides used at HKUST Nov 9, 2006

Global warming, climate change Questions? Comments? Suggestions?

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