Chairman Chey Tae-won: "We Must Write a Group Story That Achieves Greater Harvests and Shares Them Through ESG"

SK CEO Engages in Three Days of Intense Discussions on Net Zero Initiatives, Financial Story, and Happiness Management
SK Group to Implement Detailed ESG Targets Including 200 Million Tons Carbon Emission Reduction by 2030

[Asia Economy Reporter Yoonju Hwang] SK Group Chairman Chey Tae-won evaluated that since 2016, each company’s fierce implementation of Deep Change has achieved certain results in the Financial Story, and emphasized that now it is necessary to create a new group story based on ESG (Environment, Social, Governance) that yields greater fruits to share with stakeholders.

According to SK Group, Chairman Chey stated in his closing speech at the '2021 CEO Seminar' held on the 22nd at the SKMS Research Institute in Icheon, Gyeonggi Province, "The final stage of the Deep Change journey is to weave the stories of affiliates based on ESG and create a clear group story that defines what SK aims for," adding, "Through this, we must achieve a 'Big Reap' and share it with stakeholders."

SK explained that the 'Big Reap' mentioned by Chairman Chey refers to creating economic value (EV) and social value (SV) through an ESG-centered group story and sharing these with stakeholders, which ultimately aligns with SK’s management philosophy.

From the perspective of ‘Big Reap,’ which aims to expand SK’s management philosophy and values, Chairman Chey personally designed detailed ESG stories that the group should target by 2030 and proposed them to the CEOs.

First, regarding the E (Environment) story, Chairman Chey presented a challenging goal: "By 2030, SK Group should contribute to reducing 200 million tons of carbon, about 1% of the global carbon reduction target (21 billion tons)."

He also stated, "SK, which has mainly operated in the petrochemical industry, has generated an estimated cumulative carbon amount of approximately 450 million tons so far, and it is our mission to eliminate all of this as soon as possible," expressing strong determination by saying, "With the sense of mission to lead future low-carbon eco-friendly businesses, SK should achieve 'carbon footprint zero' around 2035, where cumulative emissions and reductions offset each other."

Chairman Chey predicted, "In the near future, carbon prices will exceed $100 per ton much faster than expected and continue to rise," emphasizing, "Therefore, future business plans must be established under completely different conditions than now, and all affiliates’ capabilities must be focused on evolving business models that can reach carbon footprint 'zero' and developing advanced technologies."

In response, SK CEOs decided to first reduce 50 million tons out of the 200 million ton reduction target by improving process efficiency in existing business areas and purchasing renewable energy. Additionally, they plan to invest over 100 trillion won in eco-friendly new businesses such as electric vehicle batteries and hydrogen, and manage the value chain including support for partner companies to further reduce more than 150 million tons.

Earlier, on the 20th, Cho Dae-sik, Chairman of the SUPEX Council, said in his opening speech, "Net Zero is the most important challenging task for SK’s survival and future growth," urging, "Although it is an uncharted path and difficult, please do your best to turn it into an opportunity for business portfolio innovation." He added, "The commonality of companies that have become global leaders is that they turned crises into opportunities by creating markets with new technologies and services," presenting ESG as infinite potential and opportunity.

Regarding the S (Social Value) story, Chairman Chey explained, "Social value ultimately means the happiness of members and stakeholders," emphasizing that SK must continue to grow with the goal of creating over 30 trillion won in social value by 2030.

On the G (Governance) story, he urged, "We must become more transparent through board-centered system management," and said, "There will be many challenges, but let’s achieve governance innovation at the world’s highest level."

During the CEO seminar held from the 20th to 22nd, SK CEOs focused on discussing ways to strengthen execution in net zero, financial story, and happiness management.

In the net zero session, young next-generation leader candidates within the group participated and proposed new ideas on topics such as ‘renewable energy transition innovation,’ ‘eco-friendly new business challenges,’ and ‘accelerating greenhouse gas reduction.’

In the financial story session, CEOs of each company not only presented financial stories on three themes?‘member empathy,’ ‘sustainable management,’ and ‘growth’?but also reflected stakeholders’ voices by incorporating survey results from members and panel discussions with various market participants to enhance the completeness of the stories.

The CEOs also reexamined ways to evolve and develop ‘happiness management.’ They recognized that the conditions for members’ happiness are continuously changing due to COVID-19 and decided to expand the practice of happiness management from work and systems to emotional, physical, and mental health areas.

About 30 people attended this CEO seminar, including Chairman Chey, Senior Vice Chairman Chey Jae-won, Vice Chairman Chey Chang-won of SK Discovery, Chairman Cho Dae-sik, seven committee chairpersons, and CEOs of major affiliates. Considering the COVID-19 situation, the event was conducted in compliance with social distancing guidelines, and about 1,000 members from each company participated online.

An SK official stated, "SK’s Deep Change initiative has progressed beyond completing individual companies’ financial stories to a new journey that must evolve into a differentiated group story with philosophy and values based on ESG."

This content was produced with the assistance of AI translation services.