Dear colleagues,

Leaving the overwhelming 2020 behind us, the New Year has dawned. I would like to start by wholeheartedly wishing all of you nothing but great joy and prosperity in 2021.

Glancing back at 2020, all of us have experienced how a global pandemic could drastically disable our daily lives we have taken for granted. The Company was also faced with unprecedented challenges, posting all-time-worst financial results in the wake of the global economic slowdown and sluggish market environment. I express my profound gratitude to all of you for doing the utmost in your respective positions as we arduously maintained a year-long emergency management.

The situations that we face today may appear to originate from COVID-19, but in fact, they should be understood through global megatrend towards a Green Economy. Demand on businesses for ESG is surging globally, with voices specially calling for fundamental solutions to environmental (green) issues. Leading economies have proclaimed a series of robust and effective policy initiatives including European Green Deal (reaching climate neutral by 2050) and phasing-out of ICE vehicle sales. Moreover, global investors are requiring businesses to commit to various environmental initiatives such as Climate Action 100+ and RE100 for immediate implementation, and taking practical actions – such as pulling out their investments – against businesses that fail to honor these initiatives.

These changes are, in particular, posing existential threats to carbon-focused businesses. Exxon Mobil – which once topped all others in global market cap – was removed from DJIA in 92 years last August after its value was locked in downward spiral.

For us to rise above these challenging times and secure sustainable growth, SK Innovation must adapt holistically and in all aspects, but time is not in our favor.

Last year as we set sail for our next decade ahead, we crafted Financial Story that represents our genuine commitment to reinvent and renew ourselves for sustainability and growth.

Going forward, SK Innovation will make fundamental changes to our identity, business portfolio and asset structure with focus on green initiatives, and transform itself into a Green Energy & Materials Company that achieves Green Balance 2030. 2021 marks the beginning year for Financial Story. We must constantly communicate this story to our valued stakeholders and prove our value through implementation.

There are three things, in regards to Financial Story, that I would like to ask of you.

The first is on expediting our future growth with focus on Green.

The market began to notice the growth potential of our battery and materials businesses that drive SK Innovation’s green growth. When many petrochemical companies took a nose-dive in their enterprise values with the inception of COVID-19, SK Innovation remained resilient with its battery and materials businesses, and has been continuously gaining ground since the second half of 2020.

Moving forward, we will continue our investments to strengthen our technological leadership and expand global production footprints to expeditiously rise as a global top-tier player in the market.

In particular, our battery business will go beyond manufacturing to expand into BaaS (Batttery-as-a-Service) businesses to capture untapped values. We will also secure new future growth through Green Energy Solution & Total Transportation Services which would effectively combine assets and capabilities available both within and outside of SK group.

The second is on making tangible results from carbon business innovation.

Our petrochemical and lubricants businesses will focus on structural innovation to secure business sustainability, while concurrently resolving imminent existential threats. To this end, we will actively seek out both domestic and foreign partnership opportunities including JVs to bring about visible results.

In addition, we will further refine and expand green business models – such as biofuel, green lubricants, eco-friendly trading and hydrogen energy – to provide a solid basis to further enhance our value.

Especially, our chemical business will turn us into a green chemical company that takes leadership in addressing the most pressing plastic pollution issues affecting the global environment. Leveraging on our proprietary recycling technologies, we will work with a variety of stakeholders across the entire value chain – from production to scrapping – to proactively build a virtuous recycling economy. We will adapt so that the market cherish the new value we bring to the world.

The third is on instilling a winning culture within to navigate through the crisis head on.

Seeking stability and being complacent will never address issues that we face today and are ahead of us.

We must confront problems before us and proactively make breakthroughs in depth; this way of thinking and working is the type of culture to which we must adapt. Our winning corporate culture must foster strong willingness to speak out, act and improve. This culture is essential for us to implement Financial Story and secure sustainable growth and joy.

Dear colleagues,

We expect the business environment in 2021 to remain clouded with COVID-19 likely to linger on. The task before us and changes we must make are challenging and grave. But I am sure that with our collective efforts and resolves in implementing Financial Story, the fruits will surely be borne.

Let us work together to create a new SK Innovation that is trusted and recognized by all our stakeholders. You have my commitment as the CEO in leading this arduous but meaningful journey of change.

Once again, I wish all of you and your families enduring peace and prosperity in 2021.
Sincerely yours.

January 4, 2021

President & CEO

SK Innovation