■ SK Innovation released a special report titled “Net Zero Roadmap 1.0”, laying out specific implementation plans for reducing CO₂ emissions, previously mentioned during the SK Innovation Story Day

– The first Korean corporation to propose substantial reduction targets and implementation plans throughout the entire Scopes 1, 2, and 3 greenhouse gas (GHG) emissions

■ SK Innovation CEO Kim Jun expressed his strong commitment to ESG with his unwavering pledges to achieve net-zero

– Petrochemical business to cut carbon emissions by 30% by 2030… accomplishing net-zero by 2050

– Battery/materials business to reach net-zero by 2035

– Disclosing its ‘Scope 3 emissions reduction goals’, targeting not only direct emissions arising from business operations but also throughout the whole value chain

■ ESG Committee under the Board of Directors (BODs): “We aim to present clear goals and plans, managing execution perfectly by continuously checking on the implementation process”

In July, SK Innovation has published a Net Zero special report titled “Net Zero Roadmap 1.0” on the company’s official homepage (Korean: http://skinnovation.com, English: http://eng.skinnovation.com/), detailing its commitments to achieving net-zero and specific action plans for achieving the goal. The Korean version was released on the 20^th, followed by the English version on the 28^th. The roadmap was reviewed by a newly established ESG Committee under the Board of Directors before the publication. SK Innovation first expressed its strong will to reach net-zero by 2050 during the SK Innovation Story Day that took place on July 1^st.

The roadmap reveals SK Innovation’s detailed plans for different business sectors in attaining Net Zero, along with its general investment plan, step-by-step schedules, and etc. SK Innovation transparently disclosed not just the amount of direct GHG emissions from the company’s production process (Scope 1) and indirect GHG emissions from generating electricity necessary for the operations (Scope 2), but also the amount of GHG emissions occurring in the overall value chain (Scope 3), and presented its GHG emissions targets.

SK Innovation is the first Korean corporation to officially release a full special report on its implementation plan for achieving net-zero. Considering the fact that most companies tend to disclose only the amount of emissions from Scopes 1 and 2 and merely provide comprehensive and vague information on its efforts for net-zero, this is a highly remarkable roadmap of SK Innovation.

SK Innovation CEO Kim Jun stated, “Net Zero Roadmap is the manifestation of SK Innovation’s commitment to achieve net-zero emissions by 2050, as formally declared during the SK Innovation Story Day.” “With the Roadmap, we have expressed our will and devotion to fulfill ESG management by leading the transition to a new eco-friendly era,” he added.

| Scope 1, 2: Invest KRW 1.5 trillion to cut 50% GHG emissions by 2030 in petrochemical businesses, achieve Net Zero in green businesses by 2035

SK Innovation set a step-by-step goal to achieve 100% Net Zero before 2050 after reducing 12.43 million tons of carbon emissions generated in Scope 1 and 2 as of 2019 to 25% in 2025 and 50% in 2030.

To do so, the company plans to invest KRW 1.5 trillion to cut down 2.5 million tons of carbon emissions by 2030 by improving energy efficiency, making transition to renewable energy, introducing low carbon emission materials, and etc. It further aims to reduce another 1.8 million tons by gradually increasing the reliance on renewable energy such as photovoltaic and wind power by 25% by 2025, and 100% by 2030. With the adoption of Carbon Capture and Storage (CCS) technology expected to lead to another 1.5 million tons reduction, SK Innovation also plans to develop environmentally-friendly products and carbon offset programs for the remaining 500,000 tons.

The rapid growth of battery and materials business, which are the representative green businesses of SK Innovation, has led to increasing amount of GHG, but the company has been continuously making efforts to reduce it from the beginning of the business. SK Innovation aims to reach Net Zero in green businesses by 2035 after reaching the target of reducing an amount of GHG that is 87% less than the expected total amount of GHG emission of 2030 BAU* baseline.

*2030 BAU: Business As Usual scenario in 2030 implies what happens in 2030 if no measures are taken to reduce GHG emissions.

The company plans to convert all power sources deemed as a culprit of most of GHG emissions arising from the battery and material business to renewable electricity, reducing approximately 8.2 million tons of GHG emissions. It further plans to elevate factory operation efficiencies to cut about 3.2 million tons, and to switch to renewable energy sources for factory operation. These three strategies will enable the company to decrease about 13.6 million tons of GHG emissions from the battery and materials business by 2035.

| Scope 3: reduce 75% carbon emissions by 2050

SK Innovation enunciated the current amounts and future reduction targets for Scope 3 emissions, which signifies GHG emissions occurring from the whole value chain. Scope 3 emissions amounted to 134 million tons as of 2020, and SK Innovation established a set of indicators based on financial intensity (carbon intensity based on fixed asset) to reduce around 45% GHG emission by 2020, and 75% by 2050.

Along with shifting its portfolio to green businesses like battery and separator business, SK Innovation intends for a further eco-friendly innovation in its existing businesses through ▲ recycling 100% waste plastics produced by the company by 2027; ▲ producing/supplying 4.9 GW electricity at more than 3,000 gas/charging stations nationwide based on distributed photovoltaic/fuel cell power generation; ▲ developing innovative petrochemical product line portfolios by expanding production of low carbon-oriented products; and ▲ securing CCS technology (targeting 2 million tons by 2030), among others.

| A roadmap welcomed by global investment groups

SK Innovation’s Net Zero Roadmap received positive feedbacks from global investment groups
The Climate Action 100+ (hereinafter “CA100+”), an environmental initiative by global investment groups, publicly supported SK Innovation’s Net Zero plan through its website on July 9^th. (Click here for more information)

CA100+ quoted Yoo-Kyung Park, Head of Responsible Investment & Governance Asia-Pacific at APG, the biggest pension investment company in the Netherlands: “We are extremely pleased with SK Innovation’s public announcement of the Net Zero Commitment. This key milestone was possible thanks to a combination of strong buy-in from the company’s Board of Directors and senior executives, and the collective efforts of SK Innovation’s management/board, business heads and employees. This is clearly a crucial step forward and bold move in the era of energy transition.”

The same post on CA100+ also quoted Seiji Kawazoe, Senior Stewardship Officer of Sumitomo Mitsui Trust Asset Management: “As one of the lead investors engaging SK Innovation as part of Climate Action 100+, I would like to congratulate the company for making such a strong commitment, and look forward to discussing the details of its de-carbonization strategy as part of our ongoing engagement.”

On the other hand, SK Innovation explained that the Net Zero Roadmap is significant in that it is the first practical commitment made by the company for its ESG management since the foundation of the ESG Committee.

Kim Jung-gwan, Chairman of the ESG Committee and non-executive director elucidated, “The Net Zero Roadmap prepared by members of SK Innovation and the ESG Committee together was deemed to put forward unequivocal goals and attainment plans.” “As the carbon reduction performance is linked to CEO evaluation and remuneration, the implementation process will be regularly inspected by the BODs.

>> Visit SK Innovation’s English homepage to download the English version of SK Innovation’s Net Zero Roadmap 1.0 released in July 2021.

[Photos] SK Innovation employees read the Net Zero Roadmap uploaded on the company’s homepage