■ Total social value records KRW -219.2 billion, down KRW 390.8 billion compared to 2019

– Dividends and taxes due to low performances during the COVID-19 pandemic are main causes for the decline in indirect economic contributions

■ To improve Business Social Performance by expanding of eco-friendly products and services, reducing environmental pollution emissions

On the 3rd, SK Innovation announced the results of social value measurement last year, which showed a minus KRW 219.2 billion, a KRW 390.8 billion decrease from 2019’s record of KRW 171.7 billion.

Every year, SK Group’s affiliates announce the social value they generated after measuring and converting the value into monetary unit. The three key categories are as follows: Business Social Performance, which includes fields such as environment-friendly products and services, labor, shared growth, and environment; Social Contribution Social Performance, which measures social contributions, donations, and volunteer activities; and Indirect Economic Contribution Performance, which evaluates employment, tax, and dividends.

Despite the fact that the total social value generated by SK Innovation in 2020 decreased from the previous year, the following figures improved: Reduction of environmental pollution emissions; Employment; Social contribution activities; and Products and Services to Solve Social Problems.

SK Innovation said, “We will quickly expand the scale of eco-friendly businesses such as the battery and materials business, and increase social value performance by converting the refining/petrochemical businesses to low-carbon-oriented ones.”

Taking a closer look at each item, Business Social Performance recorded △KRW 1.5 trillion, a KRW 118.4 billion increase (+11%) from 2019’s performance.

Regarding the KRW 112.3 billion increase in the environment field of the Business Social Performance, SK Innovation explained, “Even though COVID-19 played a big part in improving the environmental performance by cutting down operations, further efforts, such as the streamlining of steam, building air pollutant reduction facilities, and changing into eco-friendly fuels, were also reasons of such improvement.” “Despite the temporarily reduced demand of existing eco-friendly products, products and services achieved performance similar to 2019 thanks to the launch of new products such as oil sprays for animals, high-function asphalt, etc.”

“In addition, labor and win-win growth sector improved by KRW 7.5 billion compared to the previous year with the operation of standard workplaces for the disabled, strengthened health safety for members, and support for technology development for partner companies.”

Regarding the Social Contribution Social Performance, various social contribution programs were developed, yielding a performance of KRW 37.4 billion.

Last year, SK Innovation made efforts to implement social responsibility practices such as enforcing the Safety Net, fostering environment-related social enterprises, and operating Mangrove Reforestation Project in Vietnam and Myanmar. However, the 2019 one-time donation of KRW 34.8 billion to foster eco-friendly businesses in Vietnam was excluded in 2020, leading to a rather lower performance compared to the previous year.

The Indirect Economic Contribution Performance fell by about KRW 470 billion, affecting the total performance. As the overall financial results last year were not good, the company was unable to pay dividends and the amount of taxes also reduced. However, employment-related performance, which has a large social impact, showed great improvements. Such is the result of continued job creation focused on new growth businesses such as the EV battery and materials businesses. SK Innovation increased the number of employees by approximately 1,300 people over the past two years.

CEO of SK Innovation Kim Jun said, “Though the negative social value of 2020 is directly related to the deteriorated business performances due to COVID-19, it confirms the desperate need for a fundamental innovation of business models through strategies such as Green Balance 2030.” “We will quickly shift SK Innovation’s portfolio to one that is centered on Green Energy & Materials, and accelerate ESG management to drastically increase the social value performance in 2021,” he added.

To accelerate ESG management, SK Innovation plans to soon announce and take actions to pursue the plans for SK Innovation’s “2050 Carbon Net Zero” goal. Furthermore, SK Innovation plans to create an ESG ecosystem in partnership with partner companies and eco-friendly, innovative technology startups, all the while establishing an organizational culture that enhances diversity, human rights, safety and working environment for its members. In regards to governance, SK Innovation plans to strengthen the role and independence of its board of directors to the global standard level to pursue ESG management led by the board.