▲ Kim Jun, Vice Chairman & CEO of SK Innovation

Through the new series “SK Innovation executives talk about plans in 2022, the first year of SK Innovation’s Financial Story execution,” SKinno News has met the top management of SK Innovation and all subsidiaries to learn about their plans to create a new history of 60 years.

The first guest we would like to introduce is Kim Jun, the Vice Chairman & CEO of SK Innovation. ‘We will make sure to create a big picture that will satisfy future stakeholders,” Vice Chairman Kim Jun shared with us.

Q1. 2022 marks the 60th anniversary of SK Innovation and the first year of realizing Financial Story. Your determination for this year must be different.

We are able to celebrate SK Innovation’s 60th anniversary thanks to joint effort of the passionate and innovative members from the past to now, along with the corporate culture that pursuits SUPEX based on SK Management System (SKMS), and our stakeholders. I believe with such power, we have been able to face challenges with innovation and turn difficulties into opportunities in the last 60 years.

This year is also the first year for us to execute the Financial Story. 2022 is going to be a highly significant year that will lay the bold foundation of the next 60 years and so on. This is shared by everyone in the company, including me. Personally speaking, as the Vice Chairman, I feel the heavy responsibility on my shoulders to make sure that we start the journey right towards the next 60 years. I will commit to creating a big picture that our future stakeholders will be satisfied with.

Q2. Your first overseas business trip this year was the CES 2022 held in the US. Please tell us about your experience.

I remember my message being broadcasted during the New Year sunrise event that went live last January 1. The key message was “the potential power that turned crisis into an opportunity.” It meant that we would attain “the potential power to create greater happiness” if we could go through these challenging times under the pandemic.

The message applies the same to SK Innovation. The last two years were tough, to say the least, but still, we managed to overcome it and established the Financial Story to create a new future. And now, we are left to act it out to bring out results. Every moment going forward will require our focus, and we will have to keep tension every single moment. So I headed to the CES event in the deliberation of making more opportunities.

The CES event, which I attend every year, is the place where there is a balance between opportunities and tension. In particular, we were slated to announce about carbon reduction of SK Group at the event, so it allowed me to verify how I can make the goal of carbon reduction to opportunities for growth and see how the market would respond to our direction.

And although the event was shortened and scaled down due to the COVID-19, I was still able to meet various corporations with technologies in the event. Interpretation of the event would vary between people who participated, but for me, I would summarize the event with the following keywords: “The companionship with the Earth and people.” This exactly aligns with what SK stressed in the event, “Going on a journey together for carbon reduction.” With regard to this, I am filled with the conviction that taking action towards this goal was the most important step.

▲ Vice Chairman & CEO of SK Innovation Kim Jun tours around SK Green Forest Pavilion at CES 2022

Q3. At the SK Group CEO Seminar last year, the creation of tangible outcomes, so-called  “Big Reap”, was declared and emphasized as the first task of this year’s New Year Address.

SK Innovation has repeatedly emphasized both internally and externally that 2022 will be the first year where we would set and strive towards the goal of ‘implementing our financial story.’ This is because it is essential for each of our business to create tangible results of the Financial Story that will be acknowledged and trusted by the market and stakeholders. And it is the way to earn recognition from the stakeholders of SK Innovation’s identity, “Green Energy & Materials Co.,” and to be assessed as having high corporate value. 

One of the goals is to make the battery business – the company-wide efforts – recognized for its distinguishing competitiveness by the market and stakeholders through quantitative and qualitative expansion. The first stage is to enhance the profitability the market can acknowledge.

“Carbon Net Zero,” the core of the Financial Story “Carbon to Green,” is being actively and strictly implemented at the moment by each business company in accordance with the roadmap. They are shifting their business model to green management. And I am confident that we will achieve it enough since we know better about the essence of carbon business than anyone in the market.

SK Energy’s R&S CIC, SK Trading International, and SK Incheon Petrochem are setting the details for their new business model with the goal of transforming into an eco-friendly refinery to achieve Net-Zero. P&M CIC is using its long years of marketing power for various projects, such as the demonstration project of fuel cells in gas stations, and obtaining a customer pool for eco-friendly cars. SK Geo Centric even changed its name to accelerate its goal of Waste & Carbon Net Zero, based on the plastic circular economy. SK Lubricants and SK Earthon are respectively pushing ahead with eco-friendly lubricant and Carbon Capture and Storage (CCS) businesses to achieve Green Transformation. 

▲ On January 6^th (PST) Vice Chairman & CEO of SK Innovation Kim Jun (first from left) and the top management of SK participate in the first strategic meeting of 2022 at CES 2022

Q4. A lot of stakeholders have shown interest in the direction of SK Innovation to achieve growth ever since the battery business and E&P business were separated.

SK Innovation is gathering capabilities so that our eight subsidiaries can execute their own Financial Story, while also creating a new growth strategy in the direction of “Portfolio Designer & Developer.”

In the Green area, we will strengthen our competence in the fields of Battery Metal Recycle (BMR), integrated R&D to secure future growth opportunities such as next-generation batteries, business development, and M&A.

For instance, let me address some more about the BMR business on which we are focusing now. BMR business is about recycling used batteries, and thus in the near future, it will become an important growth engine as much as the battery manufacturing business. We have already constructed the demo plant last December, and the next step is the construction of the factory for commercial production. This will also take place in the United States, China, and Europe, just like the existing global battery manufacturing facilities. SK Innovation plans to take the lead not only in the field of manufacturing EV batteries but also in the recycling of waste batteries, contributing to the vitalization of the ecosystem.

Just as I have mentioned to you briefly earlier, SK Innovation is a “Steering Center” that raises the  overall portfolio value across the subsidiaries, and a Center of Excellence (CoE) that empower each business to transform from Carbon to Green, leading and helping the subsidiaries to reach Net Zero together.

Moreover, we plan to make strategic investments to discover and internalize the green businesses in the market and industrial fields. To realize this, at the end of last year, we took a reorganization to expand the business development organizations at the company-wide level and SK Innovation’s Institute of Environmental Science & Technology, the think tank responsible for enhancing the competence. The large expansion of the research bases is already underway in and outside Korea. In particular, we have secured an additional research center in the Seoul metropolitan area. This has laid the solid foundation to ensure the growth of our company.

▲ (Left) Vice Chairman & CEO of SK Innovation Kim Jun talks about the company’s “Carbon to Green” strategy at SK Innovation’s Story Day event held at Seoul, Korea on July 1st. / (Right) Vice Chairman & CEO of SK Innovation Kim Jun hosted the Global Forum on October 2, 2021 (PST) at San Francisco, the U.S.

Q5. I believe the most emphasized keyword in SK Innovation’s New Year Address was ESG. How would you summarize ESG from SK Innovation’s perspective? 

I can simply term it as “The companionship with the Earth and people.” In other words, it’s the happiness of the stakeholders. What’s important here is that the earth is considered as one of the stakeholders, and this aligns with the emphasis made by Chairman Chey Tae-won in the New Year Address, how we should start communicating with the earth through carbon reduction.

To speak from the corporate management perspective, ESG to SK Innovation is “growing the company together with the Earth and people.” So the proposition is “survival and growth.” This is indeed heavy responsibility.

Q6. You have once stated that the “G.R.O.W.T.H.” strategy is the specific method of completing the Financial Story, and that is to practice ESG management. What does this mean?

For the past 60 years, SK Innovation has faced various challenges and taken one step ahead to overcome the adversity, becoming a ‘driving force that moves the world’ through the petrochemical business. To keep changing the world and remain so in the far future, we need a different type of innovation from the basis. Thus, SK Innovation has clarified ESG as our management philosophy and established the “G.R.O.W.T.H.” strategy as the first step towards sustainable growth.

The “G.R.O.W.T.H.” strategy is the unique ESG strategy of SK Innovation. The term is the abbreviation of our goals – Green Innovation for Road to Net Zero, Outstanding SHE Management which is the base of sustainable growth, Winning the Trust of the stakeholders, and being Together with Society in the pursuit of Happiness for All, which is our ultimate goal. To systematically practice this strategy, we plan to manage it by focusing on 6 main areas that are aforementioned, specifying the areas into 16 core tasks (Ambitions) and 25 mid-term goals (Aims).

The crux of the “G.R.O.W.T.H.” strategy is “systematic execution” and “transparency.” I believe it is essential not only to declare ESG management promotion, but to actually implement it as the core strategy of SK Innovation and its subsidiaries, and to reveal to the members and stakeholders with utmost transparency of our progress. This means that we are going to communicate with our stakeholders and proceed with the Financial Story as we move further. As one of the ways to communicate the ‘G.R.O.W.T.H.’ strategy with stakeholders, we plan to create an online data platform that is expected to be finished by the second half of the year. And just as we have done last year, we will continue to communicate more with the market at the executive and board of directors level this year.

▲ (Left) On January 24, Vice Chairman & CEO of SK Innovation Kim Jun gives a commemorative speech at the 2022 SK Innovation’s Win-Win Fund For Partners” delivery ceremony held at SK innovation Ulsan Complex. / (Right) Vice Chairman & CEO of SK Innovation Kim Jun delivers fund to the partner representatives at the same event

Q7. One of the SK Innovation’s management keywords under the spotlight this year is: “Separately yet Together.” Could you explain why you chose this?

“Separately yet Together” is one of the growth strategies SK Innovation has decided. Ever since 2009, we have started to turn each business to separate companies, and we have done so with SK On and SK Earthon last year. SK Innovation has 8 subsidiaries. However, as everyone is well aware, each subsidiary is very different from each other in terms of business, growth methods, ESG approaches, etc. Therefore, in order to effectively execute the financial story of each business, we created the growth strategy of “Separately yet Together.”

To tell you from the perspective of “Separately,” each subsidiary will lead their way to practice their own Financial Story. Not only that, they will create their own decision-making system and enhance management infrastructure, upgrading their independent governance to another level. Therefore, 2022 is the year of starting the independent governance necessary to the completion of their own Financial Story they have established in light of their business nature.

And with regard to the “Together” aspect, SK Innovation will create a new governance structure and management system to focus on the improvement of the corporate value of SK Innovation, which is the company-wide aim shared by every subsidiary. Accordingly, we will share and cooperate with one another our competence and infrastructure necessary to achieve this, creating synergy in the process.

▲ (Left) On January 24, Vice Chairman & CEO of SK Innovation Kim Jun visits the No.2 FCC (Second Advanced Facility) Integrated Control Room at SK Innovation Ulsan Complex to encourage employees. / (Right) At the same event, Vice Chairman & CEO of SK Innovation Kim Jun receives a portrait gift from a member of the NEP (New Ethylene Plant) maintenance building in SK Innovation Ulsan Complex.

Q8. To end the interview, do you have any message for the stakeholders, SKinno News readers, and SK members?

We now define this era as ‘”the time to communicate with the Earth,” which implies how much we are emphasizing the importance of efforts to reduce carbon and communicate with one another to achieve the goal.

SK Innovation has set up the Financial Story last year and explained it to the market and members. The ultimate goal and direction of SK Innovation’s Financial Story is the happiness of every stakeholder. We will commit to making visible, tangible results to achieve it no matter what.

Just as the 60-year history of SK Innovation was written with the joint effort of the members and stakeholders, we will continue to execute together the Financial Story that completes the new SK Innovation in the future. I am confident that we will pave a new path that everyone will be satisfied with, because I have my beloved, trustworthy, and competent members and stakeholders who are going to willingly help one another and go on the journey together towards this untrodden path.