SKC Prioritizes ESG in Investments... Introduces 'Internal Carbon Pricing'

Reflected in Investment Management Regulations
Checklist Items Increased 6 Times to a Maximum of 92

[Asia Economy Reporter Choi Seoyoon] SKC is significantly expanding the ESG indicators reflected in its investment decision-making process.

The company plans to further strengthen its identity as a "global ESG material solutions company" and achieve its mid- to long-term ESG goals of "Net-zero greenhouse gas emissions by 2040" and "Plastic net zero by 2030."

On the 14th, SKC reported these "ESG-based investment process improvement measures" to the ESG Committee, a sub-organization of the board of directors. While SKC already reflects ESG indicators composed of management items from external evaluation agencies in its investment decision-making process, it has developed advanced proprietary indicators to ensure decisions align with core sustainability management goals. Additionally, it will introduce an "internal carbon pricing" system that incorporates carbon emissions into investment decisions.

First, the "ESG checklist" reflected in investment decisions has been subdivided by investment type and investment stage. Going forward, appropriate ESG checklists will be reviewed at each stage?such as the investment review stage and the full execution stage?according to the type of investment agenda, including new mergers and acquisitions, large-scale expansions, and small-scale expansions, with the results reflected in decision-making. The number of checklist items has increased more than sixfold from the previous 14 to a maximum of 92, combining Environment (E), Social (S), and Governance (G) categories, establishing a review system for ESG opportunities and risks.

Furthermore, an internal carbon pricing system will be introduced that predicts the amount of carbon generated by the operation of the investment target business and reflects it as a "cost." Applying internal carbon pricing increases the economic viability of businesses that can reduce carbon emissions, while decreasing it for businesses with high carbon emissions. This provides an objective basis for prioritizing investments from an eco-friendly perspective and for preparing and applying carbon emission reduction measures. SKC plans to conduct reviews in the first half of this year and fully implement the internal carbon pricing system from the second half.

SKC will revise its investment management regulations in the first half of this year to reflect these changes. It will also distribute manuals and hold briefings to enhance the execution capability of all members, including investees, and plans to apply these measures to all investment decisions starting in the second half.

An SKC official stated, "We have expanded ESG indicators to be reflected in investment decisions across all departments to enhance execution capability for achieving mid- to long-term ESG goals and to strengthen our new identity as a global ESG material solutions company. SKC will continue to strengthen systems across management, including investments, to reinforce ESG management."