Managing Business for a Sustainable Society
SK networks seeks to establish sustainable, ethical procurement in terms of ESG (Environment, Society, Governance) as a hedge against possible ESG risks with suppliers and increase corporate value. We have prepared a Supplier Code of Conduct that contains regulations regarding corporate ethics, respect for human rights, safety & health, environment protection, etc. We also provide the Guideline for Sustainable Supply Chains and reflect the aspect of social responsibility in the supplier selection and appraisal process.
All suppliers of SK networks should comply with its Guideline for Sustainable Supply Chains. The Guideline defines basic principles related to labor, human rights, safety, health, ethics, fair trade, and general management. All suppliers of SK networks should comply with its Guideline for Sustainable Supply Chains. The Guideline defines basic principles related to labor, human rights, safety, health, ethics, fair trade, and general management.
SK networks reflected environmental and social items in the regular evaluation of existing suppliers to manage ESG risks of suppliers preemptively. We plan to implement the criteria on 100% of our significant suppliers by 2021, and performance measurement and re-evaluation will be carried out in 2022 after setting the improvement goals. From then on, we will improve the sustainability of our supply chain through annual ESG risk management. In addition, the ESG evaluation system, which evaluates not only work performance but also environmental and social performance when selecting suppliers, was introduced and operated on a trial basis in Walkerhill. We plan to continuously improve and manage the system by applying it to products that may have an environmental/social impact, and so on.
SK networks singled out 50 major suppliers (accounting for about 48% of total purchase volume) from 683 suppliers from July to August, 2021 considering their transaction value and strategic criticality and assessed/evaluated their ESG risks on a pilot basis. The ESG risk assessment listed 20 suppliers who performed poorly in the assessment (40% of the assessed suppliers) as a high-risk group. Short/mid/long-term improvement projects were identified by an independent consultant per ESG domain and practical support was provided to facilitate improvement. As a result, a total of 33 improvement projects out of 221 as of November, 2022 were successfully concluded (15% improvement ratio). In addition, a suppliers’ ESG risk monitoring platform used universally across SK Group (Click ESG) was adopted in September, 2022 based on the 2021 experience. An ESG assessment/evaluation was conducted on 49 major suppliers considering their transaction value and business impact. SK networks will continue to improve ESG compliance of its supply chain by supporting ESG assessment/evaluation and improvement (with supplier-specific consulting programs) and monitor high-risk suppliers on a 1 on 1 basis.