This is the abstract of an article on SRI(Socially Responsible Investment), which is contained in the Ko-whang Law Review, Vol.4, published in March 2004.

Foreign investors have got a stronger voice than ever before since the volume of foreign investments in the Korean stock market is on the steady increase. As of the end of October 2003, foreign investors' holdings rose over 40 percent of the total market value of publicly listed companies. Though foreign investors' preference is focused on a few corporations like Samsung Electronics, POSCO, Kookmin Bank, etc., other ordinary companies are also paying more and more attention to the movement of foreign investors. In order to attract the foreign investors' favor, Korean entrepreneurs are increasingly careful of the transparency of management and investor relation.

It should be noted that a large number of investors from the United States and the European countries have been interested in the socially responsible investment (SRI) as well as financial performances. It means that they are reluctant to invest in such companies as yield high profits but deserve social criticism. In addition, a number of governments and international institutions like UNEP and IFC are encouraging sustainable development by means of SRI-oriented financial products or financial markets. Though developing countries usher in few socially responsible investment so far, it seems to be the unique solution for affluent foreign investments and sound corporate governance.

Initially, SRI started in the United States as a religious investment campaign against drug and alcohol, gambling industries. In the 1990s, more and more investors and investment analysts were required to pay more attention to social and environmental responsibilities. Also the management of U.S. companies regarded the corporate social responsibility (CSR) as an effective tool for risk management and worldwide marketing.

In the aftermath of the illegal political money scandals, the general public seem to be unfavorable to Korean companies. If the Korean businessmen respect SRI or CSR seriously, and efficient communications with shareholders and stakeholders alike take place, there will be favorable atmosphere for Korean companies to enjoy a new dimension of business environment.