| Governance |
A) The board of director’s oversight of climaterelated risks and opportunities |
The Board of Directors discusses climate change issues as one of the overarching corporate management issues, manage and make decisions on this matter in an integrated way. Sustainability Management Committee, established in 2020, is supposed to put climate change on the agenda, and will hold a meeting for detailed review by identifying and supervising potential financial impacts derived from climate change, such as tightening GHG emission reporting and raising prices of the amount emitted. The board meetings on risk deliberation is held twice to three times a year, and the results of the deliberation are integrated into the annual budget for climate change and the establishment of performance indicators. |
14 |
| B) Management’s role in assessing and managing climate-related risks and opportunities |
SK gas formed a company-wide SHE Committee under the CEO and has made it take charge of climate change-related accountability. The company-wide SHE Committee, chaired by the head of the introduction infrastructure division, sets overall environmental management targets and strategies related to air pollution and climate change, while deliberating on major issues. Furthermore, the SHE Committee evaluates and manages climate change-related issues and reports them to the management. |
46 |
| Strategy |
A) Climate-related risks and opportunities the organization has identified over the short, medium, and long-term |
Accordingly, we actively reflect the risks and opportunities brought by climate change in the process of formulating environmental management strategies such as growth, risk management, and operation of eco-friendly business sites.
· In the short term, we identify policies tightening regulations as potential risks, such as energy consumption and waste, and cost expenditures incurred from it. At the same time, we recognize the cost reduction through cutting energy and recycling as well as the development of new products or services through R&D and innovation as opportunity factors.
· In the medium term, the business impact derived from policy changes, including the GHG Target Management System and the national energy master plan, is identified and reflected in the management plan. Going beyond, the areas requiring advancement among the ESG evaluation results are selected as mid-term tasks to be improved.
· In the long term, emerging risks are managed separately, and we manage risks such as international LPG price fluctuation and derivatives transaction profit and loss volatility for risk hedging. |
15, 46 |
| B) The impact of climate-related risks and opportunities on the organization’s business, strategy, and financial planning |
Climate change-related risks and opportunities are affecting SK gas’ LPG business and new businesses as well as R&D.
· As the government paid attention to LPG as an energy to respond to climate change that can reduce dependence on fossil fuels and abolished fuel use restrictions in 2019, LPG vehicles are drawing attention as an energy to counteract. This serves as a major opportunity for our transportation fuel business.
· To keep up with the growing trend of energy reduction in the industrial world SK gas is focusing on new and renewable energy businesses including hydrogen as an opportunity factor, promoting the zero carbon energy business. |
32-41 |
| C) The resilience of the organization’s strategy, taking into consideration different climaterelated scenarios, including a 2°C or lower scenario. |
In order to join the global efforts to prevent the global average temperature from rising by more than 2°C, SK gas has drawn up a strategy to mitigate greenhouse gas emissions.
· Efforts to cut down GHG emissions: we manage our emissions after establishing a GHG reduction target jointly with the government on a yearly basis.
· Operation of eco-friendly business sites: we ameliorate our facilities, such as the motor operation method at our production bases, and minimize our environmental impact through investments in eco-friendly facilities. From the perspective of Scope 3, new businesses and support policies are being promoted to curtail GHG emissions for the industry and customers.
· Transition to sustainable business: we respond to climate change scenarios by ramping up business sustainability by focusing on fuel cell, LPG/LNG combined cycle power plant., conversion to LPG from B-C oil, support for the development of LPG 1-ton trucks, and operation of ecostations and eco-friendly hydrogen multi energy autogas stations. |
46-49 |
| Risk Management |
A) The organization’s processes for identifying and assessing climate-related risks |
SK gas operates an integrated risk management committee under the CEO and manages risks through prevention, detection and response procedures on the foundation of the company-wide risk management and response principles. |
14-15 |
| B) The organization’s processes for managing climate-related risks |
SK gas has established an integrated risk management system to minimize the impact of corporate-wide risks. Based on the overall risk management and response principles, risks are managed through the procedures of prevention, detection and response. |
| C) Integration of identification, assessment, and management process of climate-related risks and company-wide risk management system |
SK gas classifies major risks that affect business activities into financial risks, business risks, and operational risks, then manages them in an integrated manner. In case of climate change risks, we integrate and manage them at the company level within our operational risk system designed for the management of environmental, ethical, and social issues. |
| Indicators and Targets of Reduction |
A) Indicators used by the organization to assess climate related risks and opportunities in line with its strategy and risk management process |
With an aim to measure and manage climate change-related risks and opportunities, SK gas is overseeing various indicators for reacting to climate change. These indicators include GHG, energy, and the reduction rate of GHG emissions compared to the target. Furthermore, we have measured the cost of social value incurred by GHG emissions and officially disclose since 2018. |
46, 67-68 |
| B) Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas (GHG) emissions |
SK gas measures GHG emissions every year and discloses them transparently. The amount of GHGs emitted in 2020 was as follows.
· Scope 1: 23,992 tCO2eq
· Scope 2: 10,100 tCO2eq
· Scope 3 is yet to be individually handled as it is not yet applicable and is expected to be managed
in the future. |
| C) Targets used by the organization to manage climate-related risks and opportunities and performance |
In compliance with the national GHG target management system standards, we created a step by step scenario with the goal of achieving Net Zero for Scope 1 and 2 emissions by 2030.
· Step 1: Improving existing facilities in a way that reduces greenhouse gas emissions
· Step 2: Expanding independent power generating facilities such as sunlight generation
· Step 3: Switching to renewable energy capitalizing on hydrogen as well as adopting
new technologies such as CCUS to remove greenhouse gas and achieve Carbon Net Zero |
