SK Innovation Strengthens Supply Chain Management by Supporting Partners' ESG Capabilities

On the 1st, at the 'Shared Growth? ESG CEO Seminar' held at SK Ulsan Complex (Ulsan CLX) in Nam-gu, Ulsan, Jae-young Yoo, General Manager of SK Ulsan CLX (far left), and Yang-seop Kim, Head of Finance at SK Innovation (far right), are taking a commemorative photo with representatives of partner companies selected for SK Innovation's carbon reduction facility introduction support project. Photo by SK Innovation

SK Innovation is making efforts to promote win-win cooperation by strengthening the ESG (Environmental, Social, and Governance) capabilities of its partners.

On the 1st, SK Innovation hosted the 'Win-Win Growth & ESG CEO Seminar' at SK Ulsan Complex (Ulsan CLX) in Nam-gu, Ulsan, inviting over 80 partner companies that do business with SK Innovation affiliates such as SK Innovation, SK Energy, SK Geocentric, and SK Enmove. Executives and stakeholders from partner companies in the Busan, Ulsan, and Gyeongnam regions attended to share their respective management statuses and exchange opinions related to the purchasing policies of SK Innovation affiliates. SK Innovation’s working-level staff introduced policies related to ESG management, including ESG promotion status, ethical management, and compliance monitoring, followed by a Q&A session.

SK Innovation believes that practical carbon reduction efforts are essential for the establishment of ESG management among its partners. Accordingly, it is conducting a ‘Carbon Reduction Equipment Introduction Support Project’ targeting small and medium-sized partner companies this year. After objective project feasibility evaluations by external specialized institutions, verification of greenhouse gas and energy reduction effects, and analysis of workplace safety and environmental improvement effects, four projects were selected, with a total support amount of approximately 310 million KRW decided. The selected partners will replace equipment such as air compressors, transformers, and electric induction melting furnaces with energy-efficient facilities, with SK Innovation supporting up to 80% of the replacement costs.

Kim Kyung-seop, CEO of Seoul Engineering, a supplier of heat-resistant material piping located in Gimhae, Gyeongnam, said, "Based on SK Innovation’s support, we will introduce an electric induction melting furnace at our site, which is expected to reduce greenhouse gas emissions and energy usage." He added, "The improved process efficiency of the equipment will also greatly contribute to improving the safety environment for workers."

Meanwhile, SK Innovation is encouraging active ESG capability enhancement among its partners by continuing the 'ESG Excellent Partner Certification and Awards' program this year, following last year. At the awards ceremony held in April this year, 43 partner companies were selected based on last year’s performance and received certification plaques and SK Innovation’s ESG consulting vouchers, which were used for building internet websites for ESG disclosures. SK Innovation is expanding its support scope this year with measures such as increased loan interest support, incentives for responsible personnel, and priority funding for ESG, following the consulting services initiated last year through the ESG Excellent Partner Awards.

SK Innovation’s ESG consulting, designed to encourage voluntary ESG capability enhancement among partners, has been expanded to second-tier partners this year. With SK Innovation’s financial support, 191 consulting sessions, including advanced courses on carbon-neutral management innovation, on-site safety inspections, and ESG information disclosure, were conducted for 147 first- and second-tier partners. Thanks to this, 25 companies newly received ‘ESG Excellent’ evaluations, and among partners who underwent advanced consulting, the proportion classified as ‘Needs Improvement’ decreased by 7 percentage points compared to last year, approaching nearly 0% this year, clearly showing improvement trends.

Kim Yang-seop, Chief Financial Officer of SK Innovation, said, “Recently, the European Union (EU) has introduced the ‘Supply Chain Due Diligence Act,’ mandating supply chain due diligence and disclosure, making the strengthening of ESG capabilities in supply chains important not only domestically but globally. SK Innovation will continue to provide related support under the recognition that strengthening the ESG capabilities of partners is directly linked to enhancing SK Innovation’s own ESG capabilities.”