Climate Change < Environment < Sustainability

Environment

Managing Business for a Sustainable Earth

Climate Change Governance System

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.

Climate Change Governance

BOD

ESG Management Committee
CEO

Sustainability Management Committee

Social Value Division

SV Implementation Team
Company-wide ESG Implementation Committee
SV meet up
Environmental CoE

ESG Management Committee

Preliminary deliberation of major decisions by reviewing and analzing strategies and matters related to environmental and social values and governance
Social Value Division SV Implementation Team

Working-level organization for Net Zero 2040, which participates in global environment-related initiatives and measures and analyzes environmental data
Company-wide ESG Implementation Committee Members: Key members of the management, including the CEO, and the CEO of each subsidiary

Strengthening the execution of ESG strategies, aligning business model strategies with ESG directions, and internalizing ESG management through the inspection and discussion of ESG management activities
SV meet up Members: CEO, Chief Sustainability Officer(CSO), Head of the social Value Division, executives, team leaders, and working-level employees of each business/subsidiary

Sharing the key SV promotion tasks and the progress of each business, discussing SV/ESG trends and response methods
Environmental CoE Members: Team leaders and working-level employees of each business/subsidiary

Promoting Net Zero 2040 (determing reduction methods), measureing and analyzing environmental data, internalizing the environmental system for each business, and securing expertise

Management and supervision of the Board of Directors on risks and opportunities associated with climate change

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.

Discussions over Climate Change Issues

The ESG Management Committee deliberated and discussed issues relating to climate change two times in total in 2023.

이 표는 기수 변화 이슈 논의 현황 정보를 제공하며 회차, 개최일자, 주요 안건, 세부 내용으로 구성되어 있습니다.
Round	Date	Agenda Items	Description
1	Mar. 9	Approval of 2023 management plan	Strengthening drive for Net Zero 2040 (approving SBTi targets, etc.)
6	Sep. 18	Reporting of ‘2022 Sustainability Report’ publication	Critical issues, ESG best cases per business line, better response to global climate disclosure requirements, etc.
6	Sep. 18	Key ESG Metrics of the Group in Q2, ‘23	Net Zero implementation status (Reduction records in Q1 and Q2, ‘23, Scope 3 emission in ‘22, etc.)

이 표는 기수 변화 이슈 논의 현황 정보를 제공하며 회차, 개최일자, 주요 안건, 세부 내용으로 구성되어 있습니다.
Round	Date	Agenda Items	Description
2	Mar. 8	Approval of the 2022 management plan	Enhancement of Net Zero 2040 execution, participation in SBTi, etc.
3	Apr. 28	Development of 2022 CEO KPI	Reflection of greenhouse gas emissions and key ESG indicators
4	Aug. 19	Approval of investment in the EV charging business	Contribution to greenhouse gas reduction by expanding EV charging infrastructure

이 표는 기수 변화 이슈 논의 현황 정보를 제공하며 회차, 개최일자, 주요 안건, 세부 내용으로 구성되어 있습니다.
Round	Date	Agenda Items	Description
1	Jun. 18	Workshop on SK Networks’ past, present and value-up directions	Net Zero 2040 promotion (agenda)
3	Jul. 29	In-kind contribution to MINTIT Biz	Expansion of environmental value creation by building a circular economy.

Management and supervision of top management on risks and opportunities associated with climate change

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 deliberated and discussed issues relating to climate change four times in Q3, 2023.

이 표는 기수 변화 이슈 논의 현황 정보를 제공하며 회차, 개최월, 주요 내용으로 구성되어 있습니다.
Round	Month	Major Agenda
1	Feb.	Subsidiary’s key ESG metrics management strategy
2	Apr.	Introduction & adoption of internal carbon pricing system
3	Jun.	Supplier’s ESG management strategy ‘22 SV measurement in monetary terms Q1 Groupwide key ESG metrics
4	Aug.	Analysis of physical risks from climate change

이 표는 기수 변화 이슈 논의 현황 정보를 제공하며 회차, 개최월, 주요 내용으로 구성되어 있습니다.
Round	Month	Major Agenda
1	Jan.	Plans to join SBTi
2	Feb.	Major ESG developments - 10 ESG trends in 2022 by MSCI, Blackrock’s Annual Letter, introduction of the Framework Act on Carbon Neutrality Defining ESG KPIs per organization (reduction of carbon emissions)
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-ISSB sustainability disclosure standards, amendment of the EU’s Carbon Border Adjustment Mechanism (CBAM)
5	May.	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)
7	Jul.	ESG Signpost - Group’s key indicators, carbon emission reduction, transition to EV Status of participation in Korea’s TCFD Alliance
8	Aug.	ESG Signpost - Group's key indicators, carbon emissions reduction, transition to EV ESG Trends - Launching the Valuing Water Finances Initiative (VWFI), confederacy and alliance of global EV charging stations, Enforcement of the US IRA (Inflation Reduction Act), Alternative protein poses the best climate initiative investment opportunity
9	Sep.	ESG Signpost - Group’s key indexes, carbon emissions reduction, EV transition Group’s key ESG indexes in 2Q
10	Oct	ESG Signpost - Group’s key indexes, carbon emissions reduction, EV transition Strategy to improve Group’s key ESG indexes
11	Nov.	ESG Signpost - Group’s key indexes, carbon emissions reduction, EV transition Major ESG developments - Samsung Electronics’ entry into RE100, launch of COP27 Report on 2022 Group’s key ESG indexes published [Expert Lecture] Changing World & Global Perspective

이 표는 기수 변화 이슈 논의 현황 정보를 제공하며 회차, 개최월, 주요 내용으로 구성되어 있습니다.
Round	Month	Major Agenda
1	Aug.	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.
2	Sep.	ESG Performance Report for Q2 2021 Sharing of SK Networks environment consulting results

SV Manager develops enterprise climate change response strategies and work on business model innovation and management system upgrade in conformance to such strategies. SV Manager also analyzes and evaluates risks and opportunities associated with climate change, reporting to the management leadership including the CEO on issues and strategies related to climate change and other achievements.

Furthermore, SV Manager has operated the ‘SV meet up,’ a body of enterprise consultation on ESG issues, since 2020, organizing the Environmental CoE (Committee of Experts) in 2022 to accelerate carbon emission reduction efforts in line with the Net Zero 2040 declaration, bolster environmental management initiatives and foster in-house environmental experts. The 2023 Environmental CoE studied and discussed Scope 3 estimation, the TNFD (Taskforce on Nature-related Financial Disclosures), and the K-Taxonomy. The SV Meet up nurtures environmental competence by communicating Net Zero 2040 implementation status per business line and business model improvement/innovation cases informed by major climate-related risks and opportunities.

Net Zero 2040

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.

Scenario of GHG* Emissions and Net Zero 2040(Unit: 1000 tCO₂eq)

온실가스 배출량 및 Net Zero 2040 시나리오 이미지입니다. 자세한 설명은 하단 내용을 참고하세요. — SK네트웍스 감축량 목표

*Figures are for eight companies, including SK Networks and its subsidiaries. Verification of SBTi goals is in progress, and figures are subject to change.
**Business-as-Usual
*** Scope 1, 2 emissions (excluding Scope 3)
**** Emissions reflecting the green premium

Business coverage: 8 companies (including second-tier subsidiaries)
SK Networks, SK Networks service, SK Magic, SK Magic service, SK Rent-a-car, SK Rent-a-car service, MINTIT, cartini

Application of SBTi 1.5°C scenario criteria (annual reduction of more than 4.2%)
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.
Greenhouse gas reduction strategies are implemented through various measures including fuel conversion, transition of business vehicles to EV, energy efficiency improvement/facility investment, use of renewable energy and new technology development.

GHG emissions

온실가스 배출 현황 표 입니다. 이 표는 (tCO2eq, 2022년 1Q, 2022년 2Q, 2022년 3Q, 2022년 3Q 누계)로 구성되어 있습니다.
(tCO₂eq)		2023. 1Q	2023. 2Q	2023. 3Q	2023. 3Q Total
Scope 1		3,816	2,417	2,236	8,469
Scope 2	Region Based	7,874	7,395	9,285	24,554
Scope 2	Market Based	7,455	6,970	8,695	23,120
Scope 1&2	Region Based	11,690	9,812	11,521	33,023
Scope 1&2	Market Based	11,271	9,387	10,931	31,589

※ Green Premium & REC-reflecting Emission

In 2023, we planned to save about 691 tons of greenhouse gas emission by shifting commercial fleets to electric vehicles (EVs), replacing outdated facilities and raising energy consumption efficiency and another 2,742 tons by adopting RE100-compliant measures. Until Q3, 2023, a total of 2,559 tons were reduced, including 51 tons from EV fleet transition, 2,508 tons from RE100 compliance (1,074 tons from in-house power generation, 73 tons from exhaustion of REC in possession, and 1,361 tons from green premium). In so doing, greenhouse gas emission in terms of market-based emission was reduced to about 70% of 2023 emission target (73% on the basis of local target).

To achieve Net Zero 2040, GHG emissions are measured monthly, and reduction measures are inspected to enhance execution. The Corporate ESG Promotion Committee and Environment CoE & SV Meet-up are in place to share the achievements with the management.

Plan for Renewable Energy Transition

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.

2040 RE100 Roadmap

Renewable Energy Consumption

EV 전환 Milestone 표 입니다. 이 표는 2021년, 2022년, 2023년, 2024년, 2025년, 2026년, 2027년, 2028년, 2029년, 2030년으로 구성되어 있습니다.
(MWh)	2023. 1Q	2023. 2Q	2023. 3Q	2023. 3Q Total
In-house generation (solar power)	681	918	739	2,338
Green premium	895	895	1,172	2,962
REC	16	31	112	159
Total consumption	1,592	1,844	2,023	5,459

※ 2023 share of renewable energy: 9.8% (RE100 estimation standard: renewable energy use/ total electricity use)

EV100 Roadmap

EV 전환 Milestone 표 입니다. 이 표는 2021년, 2022년, 2023년, 2024년, 2025년, 2026년, 2027년, 2028년, 2029년, 2030년으로 구성되어 있습니다.

'21

'22

ev전환 2022 표
’22.8(total)	Achievement rate compared to the target
5.0%	-

'23

'24

'25

'26

'27

'28

'29

'30

2.2%

5.0%

9.6%

16.3%

24.9%

36.8%

53.0%

70.3%

84.9%

100%

※ Base : K-EV100

Electric vehicle conversion

전기차 전환 실적 이미지 입니다. 자세한 설명은 하단 내용을 참고하세요. — 전기차 전환 실적

Eco-friendly (climate change) training

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
All employees completed 9.2 hours of eco-friendly training per person in 2021 and 5.8 hours per person in 2022.
* includes contract workers and excludes Walkerhill members