Case study: How Korean Air creates economic value for its stakeholders
Korean Air is the largest airline and flag carrier of South Korea, owning a total of 154 aircraft which operate regularly between 13 domestic cities and 107 cities in 42 countries around the world. Distributing long-term, sustainable economic value to its stakeholders, including employees, customers, and shareholders, is a top priority for Korean Air.
This case study is based on the 2022 ESG Report by Korean Air, prepared in accordance with the GRI Standards, that can be found at this link. Through all case studies we aim to demonstrate what CSR/ ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.
Korean Air seeks to share the economic value created as a result of its business activities with its various stakeholders Tweet This!, gaining their trust. In order to create economic value for its stakeholders Korean Air took action to:
- create economic value for employees
- create economic value for creditors
- create economic value for the state
- create economic value for suppliers
- create economic value for local communities
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With this case study you will see:
- Which are the most important impacts (material issues) Korean Air has identified;
- How Korean Air proceeded with stakeholder engagement, and
- What actions were taken by Korean Air to create economic value for its stakeholders
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What are the material issues the company has identified?
In its 2022 ESG Report Korean Air identified a range of material issues, such as sound governance, health and safety of passengers, ethical and compliance management, customer privacy protection, employee health and safety. Among these, creating economic value for its stakeholders stands out as a key material issue for Korean Air.
Stakeholder engagement in accordance with the GRI Standards
The Global Reporting Initiative (GRI) defines the Principle of Stakeholder Inclusiveness when identifying material issues (or a company’s most important impacts) as follows:
Stakeholders must be consulted in the process s of identifying a company’s most important impacts and their reasonable expectations and interests must be taken into account. This is an important cornerstone for CSR / sustainability reporting done responsibly.
Key stakeholder groups Korean Air engages with:
| Stakeholder Group | Method of engagement |
| Customers
| · Website · Korean Air Newsroom · Newsletter · SNS channels · Service centre · Voice of Customer (VOC) · Chatbot · NPS (Net Promoter Score) survey |
| Shareholders/ Investors
| · General meetings of shareholders · Corporate briefings, IR meetings · Website (disclosures) · Operation of IR communication channels (IR e-mail, phone) |
| Employees | · Labour-management council · On-site visit of Human Resources Division · Intranet (communication / employee information system) · Newsletter · KAL Daily Newsbytes · Internal misconduct reporting system · Employee grievance management system |
| Partner companies
| · Portal site for partner companies (Intranet) · Production Management Council · Workshops and meetings with partner companies |
| Local communities
| · Website · SNS channels |
| Government/ related organisations
| · Interviews with administrative departments and policy meetings · Technical meetings, technical consultation · Participation in international organisation meetings |
How stakeholder engagement was made to identify material issues
To identify and prioritise material topics Korean Air engaged with its stakeholders through interviews and an online survey.
What actions were taken by Korean Air to create economic value for its stakeholders?
In its 2022 ESG Report Korean Air reports that it took the following actions for creating economic value for its stakeholders:
- Creating economic value for employees
- In 2021, Korean Air paid KRW 13,430 (Unit: KRW 100 million) in labour expenses and KRW 3,503 (Unit: KRW 100 million) in welfare expenses.
- Creating economic value for creditors
- In 2021, Korean Air paid KRW 3,637 (Unit: KRW 100 million) in interest expenses.
- Creating economic value for the state
- In 2021, Korean Air paid KRW 1,473 (Unit: KRW 100 million) in corporate income taxes.
- Creating economic value for suppliers
- In 2021, Korean Air paid KRW 16 (Unit: KRW 100 million) in rent expenses, KRW 1,602 (Unit: KRW 100 million) in manufacturing expenses, KRW 18,000 (Unit: KRW 100 million) in fuel expenses and KRW 6,605 (Unit: KRW 100 million) in airport expenses.
- Creating economic value for local communities
- In 2021, Korean Air paid KRW 30 (Unit: KRW 100 million) in donations.
Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?
The GRI Standard addressed in this case is: Disclosure 201-1 Direct economic value generated and distributed
Disclosure 201-1 Direct economic value generated and distributed corresponds to:
- Sustainable Development Goal (SDG) 8: Decent Work and Economic Growth
- Targets: 8.1, 8.2
- Sustainable Development Goal (SDG) 9: Industry, Innovation and Infrastructure
- Targets: 9.1, 9.4, 9.5
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References:
This case study is based on published information by Korean Air, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original please revert to the following link:
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