Dear Stakeholders, I would like first to express my appreciation for your continued support and interest in Samsung Electronics. I’m delighted to meet you in cyberspace..

Dear stakeholders,

As you well know, our industry was confronted with numerous challenges during 2013: There was continued uncertainty over U.S. monetary policy, and a delayed economic recovery in Europe. Coupled with currency volatility and weak consumer sentiment in Korea and many emerging markets, these economic factors created a difficult and complicated business environment. However, as a result of our employees’ passion and dedication, Samsung Electronics managed to achieve record revenues and profits— further solidifying our position as a global electronics leader.

Samsung Electronics is focused not only on relentless technological innovation and maximizing shareholder value; we also want to become a leader in corporate citizenship and strengthen our interaction with customers, local communities and stakeholders. We see it as our responsibility to help enhance the quality of life for the people we serve and the local communities in which we operate, and to share our progress in achieving these goals. In our Sustainability Report for 2014, I would like to share with you our most recent achievements as well as our vision for the future.

First and foremost, we have focused our efforts on pursuing sustainable and positive growth. That is the path toward achieving our ‘Vision 2020’: we want to inspire the world with innovative technologies, products and designs — in order to enrich peoples’ lives while contributing to a socially responsible future. We consider creativity to be the seed of innovation and as such invest in a wide range of initiatives and programs that foster the creative spirit and autonomy of our employees across the company. This report will show you the many different forms these initiatives take, from our expanded C-Lab (Creative Lab) — an initiative where the company provides personnel and budget to support projects proposed by employees - to our flexible work schedule and the Idea Open Space. During the past year we also sought to enhance our capabilities to manage and detect risk.

For Samsung Electronics to see continued growth, it is essential that we have the ability to respond promptly to uncertainties and risks in our business environment. Already we hold our manufacturing facilities to the highest labor and environmental regulations worldwide. This year, we also strengthened supplier compliance by reinforcing our Code of Conduct and actively monitoring and managing our dynamic supply chain. Samsung has one top priority: To ensure the health and safety of our employees and the communities where we operate. We are focused not only on improving our processes for promptly dealing with accidents, but we also established precautionary measures; for example, we established a direct management system for hazardous substances – thus improving the safety of our facilities and increasing the number of people dedicated to prevent future accidents. We now have over 2,000 highly-trained Samsung employees who oversee factory operations and conduct regular inspections; among them are experts and engineers who are specialists in ensuring chemical safety and preventing accidents.

As a responsible corporate citizen, Samsung is sharply aware of the growing environmental impact associated with the sourcing, manufacturing, use, and disposal of our products. Our Green Management philosophy, which prioritizes the future health of our people and our planet and mandates environmentally responsible practices throughout our operations, drives our environmental sustainability initiatives. Let me give you one example: As part of our eco-design process, we consider the environmental impact of new products during their whole development cycle. We implemented this philosophy in 2009, and since then Samsung has invested 6.6 trillion KRW (6.3 billion USD) in sustainability efforts – resulting in a 50 percent reduction in greenhouse gas emissions and over 3,300 third-party verified product environmental certifications.

As I mentioned, we see it as our responsibility to help enhance the quality of life for the people we serve and the local communities in which we operate. It is in this spirit that Samsung invests more than 500 billion KRW (384.4 million USD) globally to support our citizenship and community engagement activities. While we are incredibly proud of the support we provide, Samsung Electronics is adopting a rigorous and more consistent long-term approach to our activities, which are focused on education, health/medical care, employment and the economies of local communities.

We delivered many projects during 2013, but I want to highlight just five major social initiatives that were tailored for local needs: the Smart School, the Nanum Villages, Samsung Care Drive, Solve for Tomorrow, and the Samsung Tech Institute. Our support is not only financial; every year nearly 70 percent of our global workforce participates in volunteer activities in local markets.

Finally, Samsung Electronics continues to reinvent itself around one key concept: reinvesting the dividends of our work into the growth of our company and the communities we serve. We will use this Sustainability Report as a compass. It allows us to reflect on past efforts and assists us in achieving maximum impact in the future.

I look forward to your continued trust and support in our endeavors to create a more sustainable society. Thank you.

Thank you.

ceo sign

Oh-Hyun Kwon

Vice Chairman & CEO, Samsung Electronics