SK Discovery : chemicals, “Secures LCA for 84% of Products Sold, Aims for 100% by 2025”

- Published 2022 Sustainability Report, accelerates "Eco-Transition" business strategy centered on recycled materials

- Accelerates "Net Zero" via hydrogen boilers and solar power use, expands human rights management and supply chain management

SK chemicals announced on the 10th that it has published its "Sustainability Report" which captures its ESG activities during the year 2022.

The report, now in its 13th year since 2010, includes the performance in three main categories: transitioning to an eco-friendly business, strengthening the response system to climate change, and enhancing AI technology and R&D capabilities. The report also provides a roadmap for sustained growth based on the "Eco-Transition" strategy.

The most notable aspect of this report is the "LCA" (Life Cycle Assessment). It is a cornerstone of environmental transition that quantifies efforts to reduce greenhouse gases and receives international certification.

SK chemicals has obtained LCA certification from UL Solutions, an international certification authority, for 79 grades of 9 product groups, representing 84% of the projected sales revenue for this year. It plans to obtain LCA certification for all products by 2025. Through this, the company plans to secure additional carbon credits worth approximately KRW 190 billion through products using recycled raw materials produced based on depolymerization technology for five years starting from 2026. Such efforts are expected to contribute to reducing greenhouse gases not only for SK chemicals but also for companies and partners that purchase LCA-certified products from SK chemicals, ultimately contributing to nationwide greenhouse gas reduction.

The expansion of ESG in collaboration with partners is also reflected in SK chemicals' efforts to manage its supply chain. Last year, SK chemicals established an ESG management policy and system for partners, and from this year onward, it requires them to adhere to standards in the areas of child and human rights, the environment, ethics, and health and safety when entering into agreements. SK chemicals rewards outstanding companies and supports improvement programs for those that fall short, aiming for mutual growth with its partners.

Furthermore, SK chemicals declared human rights management last year and established a human rights management system reflecting international guidelines. This year, it is conducting impact assessments on how the corporate management activities at all its workplaces, including its headquarters and the Ulsan plant, can affect human rights, thereby strengthening its human rights management. In addition, SK chemicals is moving steadily toward its Net Zero goal by 2040 by converting some of the boiler fuel at its Ulsan plant to hydrogen and introducing solar power generation facilities at its Cheongju plant.

These efforts by SK chemicals have been recognized in both domestic and international ESG corporate evaluations, including continued inclusion in the DJSI KOREA Index, an upgrade in MSCI ratings (BBB → A), and acquiring the highest rating of A+ from the Korea Institute of Corporate Governance and Sustainability (KCGS).

Ahn Jae-hyun, the CEO of SK chemicals, stated, "This report contains many efforts to establish the company's human rights management system and lay the foundation for mutual growth with our partners." He emphasized, "We plan to steadily build a sustainable circular economy system by swiftly pushing forward with ESG strategic tasks along with the Eco-Transition strategy."

# Photo Description : The Sustainability Report visually represents SK chemicals' Eco-Transition strategy.

1. LCA (Life Cycle Assessment): A method to evaluate the impact of all industrial activities, including products, manufacturing processes and services, on the environment. It quantifies the use of energy and raw material resources and the resulting environmental load on the atmosphere, water system, and soil throughout the entire process of product raw material collection, production, distribution, use/recycling, and disposal. It includes an evaluation technique to identify and evaluate the impacts they have on the environment, and steps to reduce and improve them.

2. Carbon Credit: Carbon credits that can be traded on the Voluntary Carbon Market (VCM) are awarded as credits through greenhouse gas reduction certification that complies with international standards. They can be used as a means to achieve greenhouse gas reduction targets.

3. Depolymerization: A technology that chemically breaks down waste plastics into monomers, which are the raw materials of plastic.