Managing Business for a Sustainable Earth
SK networks has tweaked its business portfolio oriented towards reducing its impact on climate change with the board of directors decisions to transfer its LPG business (2017), petroleum product wholesale business (2017) and petroleum product retail business (March 2020), and withdrawal from the Australian coal business (2019). In March 2021, the ESG Management Committee composed of the CEO and five outside directors was newly launched so as to actively respond to environment-related issues including climate change, and all board of directors members have been participating in the ESG Management Committee since May 2022.
In recognition of sustainability issues including climate change as important decision-making matters, SK networks established the ESG Management Committee in March 2021 to facilitate decision-making over an integrated perspective. Later on, a process was set up so that matters reviewed in advance by the ESG Management Committee were subject to the final decision of the board of directors.
<History of discussions on climate change>
The ESG Management Committee discussed and deliberated issues related to climate change twice in 2021 and three times in 2022 (as of August).
|2021||1||June 18||Workshop on SK networks’ past, present and value-up directions||Net Zero 2040 promotion (agenda)|
|3||July 29||In-kind contribution to MINTIT Biz||Expansion of environmental value creation by building a circular economy.|
|2022||2||March 08||Approval of the 2022 management plan||Enhancement of Net Zero 2040 execution, participation in SBTi, etc.|
|3||April 28||Development of 2022 CEO KPI||Reflection of greenhouse gas emissions and key ESG indicators|
|4||August 19||Approval of investment in the EV charging business||Contribution to greenhouse gas reduction by expanding EV charging infrastructure|
SK networks offers various opportunities including workshops to help the ESG Management Committee’s outside directors make decisions based on climate change and sustainability and to enhance their ESG expertise. In 2021, SK networks hosted the Biz. Comm. Day to deliver lectures (May 2021) about ESG finance, carbon neutrality and TCFD recommendations on climate-related financial disclosures, to officials and shared SK networks environment consulting results (September 2021). In addition, the first ESG Management Committee meeting was held in June 2021 to report ESG-related BM Value Up directions and Net Zero 2040 targets. In the ESG Management Committee workshop held in July 2022, reports were made regarding the first-half performance of SK networks including carbon reduction and ESG-related index achievements. The workshop also involved discussions of trends and regulations related to climate change issues both at home and abroad as well as the current state, future direction and action plans of SK networks’ environment management. Through these arrangements, SK networks is actively providing support to increase the sensitivity of the board of directors members to climate change and environmental issues so that they can be reflected in their decision-making.
Since August 2021, SK networks has been running the company-wide ESG Promotion Committee attended by key executives including the CEO. In addition to the commission’s eight members, representatives and business unit heads of SK networks subsidiaries also participate in the committee’s meetings to discuss issues and trends related to climate change, follow up on risks and opportunities and response measures.
<History of discussions on climate change>
The Company-wide ESG Promotion Committee discussed issues related to climate change and environmental issues twice in 2021 and eight times in 2022.
· Joining global initiatives (introduction of and discussion about joining SBTi, ZWTL, EV100 and WWF PACT)
· Introduction of and response measures to the EU’s Carbon Border Adjustment Mechanism.
· ESG Performance Report for Q2 2021
· Sharing of SK networks environment consulting results
|2022||1||Jan||· Plans to join SBTi|
· ESG Trends - 10 ESG trends in 2022 by MSCI, Blackrock’s Annual Letter, introduction of the Framework Act on Carbon Neutrality
· KPI establishment for each ESG task by organization
|3||Mar||· ESG Trends - Draft of the EU Directive on Corporate Sustainability Due Diligence, EU’s accelerated efforts to secure renewable energy, new government’s carbon neutrality policy directions|
|4||Apr||· ESG Trends - Mandatory SEC climate disclosure, draft of IFRS sustainability disclosure standards, amendment of the EU’s Carbon Border Adjustment Mechanism (CBAM)|
· ESG enhancement support program for partner companies
· ESG Trends - Policy proposal for KSSB sustainability disclosure standards, alternative food which is receiving attention as the food of the future
|6||Jun||· Progress of Walkerhill’s ESG strategic tasks (measures to reduce waste and increase recycling rate)|
· ESG Signpost - Group’s key indicators, carbon emission reduction, transition to EV, percentage of disabled company members
· Status of participation in Korea’s TCFD Alliance
· ESG Signpost - Group's key indicators, carbon emissions reduction, transition to EV, percentage of disabled company members
· ESG Trends - Launching the Valuing Water Finances Initiative (VWFI), confederacy and alliance of global EV charging stations
In addition, the Social Value (SV) Promotion Office was created to establish company-wide climate response strategies, based on business model innovations as well as management system improvements that are in progress. The SV Implementation Office analyzes and evaluates risks and opportunities related to climate change and reports directly to the CEO on issues, establishing strategies and other tasks related to climate change.
The SV Implementation Office has been running the SV Board since 2020 which is a company-wide consultative body dealing with ESG issues. The office also launched the CoE (Committee of Experts) in 2022, following the Net Zero 2040 declaration, which meets bimonthly together with the SV Board to accelerate greenhouse gas reduction activities, enhance environmental management and train in-house environment experts. The environment CoE is composed of executives, officials and working-level employees from each business who share Net Zero 2040 progress of each business and business model improvement/innovation cases that reflect key climate-related risks and opportunities. The CoE is also developing environmental expertise of the members through lectures by external experts.
After the Net Zero 2040 declaration in June 2021, SK networks joined SBTi in September 2022 seeking to respond to climate change and resolve environmental issues.
*Scope 1, 2 emissions (Scope 3 excluded)
SK networks, SK networks service, SK magic, SK magic service, SK rent-a-car, SK rent-a-car service, MINTIT, cartini
Base year: 2021
Annual reduction of 4.2% during 2022-2031, and annual reduction of 6.4% during 2032-2040.
SK networks joined SBTi in September 2022, and Near term targets and Net Zero targets have been submitted that are pending verification.
|(tCO2eq)||1Q||2Q||3Q||2022. 3Q Total|
* Greenhouse gas emissions
In the first half of 2022, direct reduction of about 0.3 thousand tons of greenhouse gas was achieved through transition to EV, solar panel installation, replacement of old facilities and operational efficiency. Indirect reduction of 1.7 thousand tons of greenhouse gas emissions were achieved by using RE100.
In order to achieve Net Zero 2040 targets, greenhouse gas emissions are measured and reduction plans are reviewed every month to manage performance against targets. Results are shared with top management through the company-wide ESG Promotion Committee, Environment CoE and SV Board.
With the goal of a 100% transition to renewable energy by 2040, SK networks has established a mid to long-term roadmap based on REC purchases, third-party PPAs, and solar energy use.
|(MWh)||1Q||2Q||3Q||2022. 3Q Total|
- Base : K-EV100
SK networks plans to participate in global initiatives by performing an adequacy evaluation in terms of urgency, business relevance and market impact.
1) Adequacy evaluation is performed and a global initiative participation plan is established.
2) Major global initiatives are selected and membership is confirmed: Walkerhill is ZWTL-certified, SK networks joined EV100.
1) ZWTL certification goal is upgraded (certification rating).
-SK magic received a ZWTL certified gold rating.
2) Additional global initiatives are selected and membership is confirmed: SK networks joined UNGC and SBTi.
1) Performance management of global initiative membership.
2) Joining RE100 is additionally reviewed.
SK networks members* are raising their awareness of the importance of the environment though mySUNI, a SK Group’s training platform, where various subjects are covered including ESG, carbon neutrality, resource circulation and hydrogen energy. These sessions are further connected to in-depth learning about eco-friendly business models.
As of 2021, each member completed 9.2 hours of environmental training (* includes contract workers and excludes Walkerhill members).
- Major training curriculum: Understanding the need for Net Zero and ecofriendly business