SK Inno's Social Value Creation Shrinks to 171.7 Billion KRW Last Year
Economic Indirect Contribution Drops by 1.2183 Trillion KRW Due to Industry Downturn
[Asia Economy Reporter Hwang Yoon-joo] Kim Jun, President of SK Innovation, declared that he will tenaciously implement 'Green Balance 2030.' This comes as the social value (SV) created by SK Innovation last year shrank to 14% of the 2018 level.
At an event on the 2nd to announce the measurement results of social value (SV) created last year, President Kim said, "We must tenaciously execute Green Balance 2030 to achieve fundamental and structural innovation, which will enable not only the creation of social value but also sustainable survival and growth."
Green Balance 2030 is SK Innovation's strategy to offset the negative environmental impacts arising from its energy and chemical-centered business structure by focusing on fostering green businesses that generate positive environmental impacts, aiming to turn negative environmental impacts into positive ones by 2030.
The social value created by SK Innovation in 2018 reached 1.1815 trillion KRW, but despite the introduction of Green Balance 2030 activities as part of the company's growth strategy last year, social value in 2019 sharply declined to 171.7 billion KRW.
President Kim emphasized, "The 2019 social value (SV) measurement results once again revealed the fundamental limitations of SK Innovation's business structure," adding, "For SK Innovation, Green Balance 2030 for deep change is a 'war that will determine future survival' with no room for choice. We must win."
The area where social value decreased the most last year was the 'economic indirect contribution performance sector,' which evaluates dividends, tax payments, and employment. It dropped to 1.2183 trillion KRW, a decrease of more than 1.1 trillion KRW compared to 2018. This caused the overall performance to fall sharply. SK Innovation explained that this was due to the worsening business conditions stemming from the downturn in the refining and petrochemical industries that began at the end of 2018, reflecting the limits of the business, and that this demonstrated the urgency of deep change.
However, investment in growth businesses such as electric vehicle batteries increased the workforce by 695 employees, pushing SK Innovation's employment to over 7,000 for the first time in its history, which relatively reduced the decline in the employment sector and lessened the overall drop.
Another crucial pillar, the 'social value in the business sector,' was analyzed at minus 1.1234 trillion KRW, an improvement of about 6% or 68.6 billion KRW compared to the previous year. SK Innovation stated, "Although the minus 1 trillion KRW barrier has not been broken due to the still carbon-centered business structure, efforts for business innovation have gradually borne fruit, resulting in improvement compared to last year."
President Kim promised, "This year, we will reduce the 'business social performance to below minus 1 trillion KRW.'"
To this end, SK Innovation plans to continue proactive investments in the battery business, the core of the company's green business, expanding the production capacity of domestic and overseas plants from the current 20GWh level to 71GWh in 2023 and over 100GWh in 2025.
Through this production expansion, SK Innovation intends to develop a business model based on batteries, namely BaaS (Battery as a Service), establishing an eco-friendly battery value chain that covers everything from battery production to usage and recycling.
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