SKC : will prioritize ESG in all investment decision-making processes

The ESG Checklist will be upgraded by investment type and phase with the items expanded by 6 times and the Internal Carbon Price system will be introduced.

· The Investment Management Regulations will reflect all the changes to enhance the corporate identity as a global ESG materials solution company and implementation capabilities for mid- to long-term ESG objectives.

SKC (CEO & President Woncheol Park) will drastically expand the number of ESG indicators that are reflected in its investment decision-making processes. Through this, SKC will carefully examine ESG elements in making all investment decisions, further strengthen its identity as a global ESG materials solution company, and not fail to achieve mid- to long-term ESG objectives including 2040 Greenhouse Gas Net Zero and 2030 Plastic Net Zero.

On February 14, SKC reported the ESG-based Investment Process Improvement Plan to the ESG Committee, a subcommittee of the Board of Directors. While SKC is already reflecting ESG indicators composed of management items of external rating agencies in its investment decision-making processes, it has developed its version of advanced indicators to make decisions more aligned with key sustainable management goals. The Internal Carbon Price is also newly introduced to reflect carbon emissions to investment decisions.

First, the ESG checklist which is reflected when making investment decisions is subdivided into investment type and stage. Through this, when making investment decisions in the future, the appropriate ESG checklist for different investment phases such as investment review and actual execution will be reviewed depending on the type of investment agenda be it a new M&A or large/small incremental investment. The checklist items are also increased by more than 6 times compared to the previous 14, up to 92 altogether including the existing E (Environment), S (Society), and G (Governance) to ensure a seamless review system for ESG opportunities and risks.

Also, the Internal Caron Price system will be introduced that forecasts carbon generated from business operations of investment targets and reflect it as 'cost.' If the Internal Carbon Price is applied, businesses that can reduce carbon emissions will have greater economic efficiency and those emitting a lot of carbon will have less economic efficiency. This will serve as an objective basis to determine investment priorities from an eco-friendly perspective and also prepare and apply carbon emissions reduction plans. SKC will review the system in the first half of this year and fully introduce the Internal Carbon Price System in the second half.

SKC will revise its investment management regulations to reflect all these within the first half of this year. In addition, it plans to distribute relevant manuals and hold briefing sessions to enhance the implementation capabilities of all members including invested companies, and apply the revised regulations in all investment decisions from the second half.

An SKC executive said, "We have expanded our ESG indicators that can be reflected in all business units' investment decisions to increase the implementation capabilities in achieving mid- to long-term ESG objectives and reinforce the new identity as a global ESG materials solution company," and added, "SKC will continue to enhance the overall management system including investment for reinforced ESG management. [End of document]