SK Chemicals Publishes TCFD Report on Comprehensive Climate Change Response Throughout All Processes

Cover of SK Chemicals' Climate Change Response Report. Photo by SK Chemicals

[Asia Economy Reporter Donghoon Jeong] SK Chemicals has published the 'TCFD Report' containing a climate change response strategy that covers the entire life cycle of its products.

SK Chemicals announced on the 4th that it has published its first 'SK Chemicals 2022 TCFD Report' to actively communicate with stakeholders. In particular, this report includes a 'net zero' strategy to reduce greenhouse gases (Scope 3) generated not only from emissions within business sites but also throughout all processes from raw material production to transportation, sales, consumption, and disposal. It also analyzes the financial impact of climate change. SK Chemicals is responding swiftly to the climate crisis through 'Eco Transition' efforts such as reducing carbon emissions at business sites and shifting its portfolio toward green materials and bio-businesses.

TCFD (Task Force on Climate-related Financial Disclosures) is an initiative established in 2015 by the Financial Stability Board, mandated by G20 finance ministers and central bank governors, to promote disclosure of climate-related information. Domestic and international stakeholders use TCFD information disclosed by companies for decision-making in investments and other areas.

The newly published 'SK Chemicals 2022 TCFD Report' details climate change response strategies and plans across four key areas recommended by TCFD: ▲Strategy ▲Governance and Risk Management ▲Risks and Opportunities ▲Metrics and Targets. The TCFD report is available on the SK Chemicals website.

In the strategy section, SK Chemicals established science-based greenhouse gas net zero targets and roadmaps to respond to new opportunities and risks posed by climate change, and specified achievement strategies.

The short- and medium-term strategy is 'Net Zero Operation.' The company plans to gradually expand the use of eco-friendly fuels such as LNG and hydrogen and renewable energy at its business sites to reduce 100% of direct and indirect greenhouse gas emissions (including offsets) by 2040. The long-term strategy is 'Net Zero Chemicals.'

Based on a chemical recycling business system, SK Chemicals aims to build a 'plastic circular economy ecosystem' where resources used in product manufacturing can be repeatedly reused, reducing greenhouse gas emissions in the value chain by up to 91% by 2050 compared to 2021. To actively participate in greenhouse gas reduction efforts, SK Chemicals declared support for TCFD in July and plans to join the Science Based Targets initiative (SBTi) in 2023.

In the governance and risk management section, the report emphasizes establishing board-centered climate change governance, incorporating ESG performance into executive evaluations, strengthening carbon neutrality capabilities and climate resilience, and establishing an enterprise-wide integrated risk management system.

In the risks and opportunities section, materiality assessments identified risks and opportunities. While there are potential risks such as regulations related to carbon emissions and plastics, and demands for investments in greenhouse gas reduction facilities and energy-efficient equipment, growth opportunities are expected through market expansion of low-carbon products and promotion of the circular economy.

In the metrics and targets section, measurable factors such as greenhouse gas reduction, fuel switching, renewable energy expansion, and net zero target achievement rates were quantified to specify goals.

Jeong Kwang-hyun, CEO of SK Chemicals, stated, "We have a sense of responsibility for the climate crisis and are continuously promoting eco transition efforts and investments to resolve it. We plan to maintain active communication with stakeholders through consistent disclosure of ESG management performance and plans."

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