SK Gas Achieves 45% Increase in Social Value Creation Compared to Previous Year... Record High

[Asia Economy Reporter Donghoon Jeong] SK Gas has been found to have created the largest social value (SV) since it began measurement in 2018, based on strong business performance.

On the 26th, SK Gas announced that it created a total social value of 252.4 billion KRW last year, including ▲economic indirect contribution performance of 221.4 billion KRW ▲environmental performance of 12.1 billion KRW ▲social performance of 18 billion KRW. This represents a 45% increase compared to the previous year’s 174.3 billion KRW.

The most noticeably increased area was economic indirect contribution performance. SK Gas achieved a pre-tax profit of 329.6 billion KRW last year, resulting in social value of 89 billion KRW in the tax payment sector, a 140% increase. Due to changes in the dividend policy to enhance shareholder value, the dividend per share also increased from 4,000 KRW to 5,100 KRW, raising the total dividend amount by 28%.

By actively promoting business portfolio innovation through eco-friendly businesses such as liquefied natural gas (LNG) and hydrogen, employment performance also increased by 26% compared to the previous year, reaching 82.8 billion KRW. The total economic indirect contribution performance rose 56% year-on-year to 221.4 billion KRW, driving the overall increase in social value.

In particular, product and service performance, which measures achievements in solving social and environmental issues through business, recorded 16.9 billion KRW, a 12% increase from 15.7 billion KRW last year. SK Gas has been focusing on reducing air pollution emissions by expanding the supply of liquefied petroleum gas (LPG) vehicle fuel. LPG emits fewer air pollutants compared to other fuels, making its air quality improvement effect significant. SK Gas has expanded the distribution and fuel supply of LPG vehicles, especially targeting cargo trucks and vans with high mileage. However, due to reduced demand for LPG fuel for transportation caused by COVID-19, the related social value decreased by about 23% last year.

On the other hand, by newly introducing the greenhouse gas reduction effect through the ‘conversion of bunker C oil to LPG’ used in industrial boilers by many small and medium-sized enterprises as social value performance, the overall product and service performance increased compared to the previous year despite the decline in transportation LPG demand. For every ton of LPG supplied to industries replacing bunker C oil, greenhouse gas emissions are reduced by 0.7 tons. SK Gas plans to continuously discover and nurture new social values in the product and service sector and enhance its social contribution through business.

Social performance, including labor achievements such as education, training, and employment of vulnerable groups, doubled compared to the previous year, but overall social performance decreased by 10% year-on-year due to slight declines in win-win growth and social contribution.

An SK Gas official stated, "SK Gas is achieving solid business results through low-carbon LPG supply while actively creating social value by serving as a bridge to a decarbonized society. Going forward, SK Gas will accelerate the creation of social value in environmental and social fields by gradually realizing new businesses such as LNG and hydrogen and opening the Net Zero era."

Meanwhile, social value is a business model innovation direction focused on by the SK Group. Each affiliate measures social value (SV) alongside economic value (EV) such as operating profit annually and establishes and executes strategies to strengthen it, making the 'Double Bottom Line (DBL)' a key management indicator. Since the first measurement announcement in 2019, this marks the fourth year.

In particular, starting this year, to enhance the objectivity and transparency of the measurement system and strengthen communication with stakeholders, SK Group has disclosed detailed social value measurement formulas and related data on its website. Formulas and data for each group company will also be sequentially disclosed through their respective websites and sustainability management reports.

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