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Our Approach

ESG Strategy Framework

ESG Management System and Vision

ESG Management System
Mission and Vision

SK Gas is committed to practicing ESG management aligned with its corporate mission and vision and leading the way in responding to climate change by pursuing a major transition to a Zero Carbon business portfolio. To this end, SK Gas has established the ESG vision of ‘Sustainable Energy, Better Future’ and set key focus areas based on the ESG directions of ‘For the Planet’, ‘With Stakeholders’, and ‘Through Transparency’.

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  • Corporate MISSION: We Create the Future of Energy
  • Corporate MISSION: Net Zero Solution Provider
  • Business Portfolio Transformation: Diversification of business areas [New Growth Engine]
    LPG BM Innovation
    Platform
    Eco Station
    PP
    Retail
    Autogas
    Regional Expansion
    PDH
    Home and Commercial Use
    TSP
    LNG/Power Sector Expansion
    Piping Network Business
    LNG Trading
    LNG Terminal
    LPG Trading
    Optionality
    LNG Bunkering
    SKMU
    UGPS
    Future Clean Energy Leadership (H2/NH3)
    H2 Distribution
    Hydrogen Liquefaction
    Liquefied Storage
    Blue H2/NH3 Import
    Extracted H2 Production
    Turquoise H2 Production
    Green H2/NH3 Import
    H2/NH3 Thermal Power Generation
    Fuel Cells
    NH3 Transport/Storage
Organizational Structure

The ESG Committee is responsible for advising and reviewing the company’s mid-to-long-term climate change response strategies and sustainable growth through ESG management. It oversees the organization’s climate-related response activities. The committee regularly monitors and discusses the status of climate change response and management, and reports the results to the board of directors. Additionally, decisions are made to identify and respond to climate change-related risks faced by SK Gas.

Organization Chart

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  • Board of Directors
  • ESG Committee: ESG-based management advisory, including mid-to-long-term strategies
  • CEO
  • Head of Management Support
  • Head of ESG Operations
  • ESG Operations Group
    Participation in ESG Initiatives
    Responding to ESG Evaluations
    Managing ESG Disclosures

Monitoring by the ESG Operations Group in the Board of Directors

Reports from the ESG Operations Group to the Board of Directors

Check ESG Committee Activities
ESG Master Plan

SK Gas established an ESG master plan in December 2021, recognizing the need for fundamental change to respond to evolving social needs and ensure sustainable growth. The ESG master plan of SK Gas is composed of an innovation plan for transitioning to a Net Zero Solution Provider and strategic directions for each ESG area. Going forward, SK Gas will promote ESG management activities based on the ESG master plan, aiming to secure sustainability for both society and business.

Key Tasks of ESG Master Plan 2.0 Refer to the description below for more details Refer to the description below for more details

For the Planet

1. GHG Emissions (Climate Change Response)
Scope 1, 2 Net Zero ('30)
RE: 60 ('25) -> 100 ('30)
Contribution to GHG emissions reduction through the supply of lower/zero carbon products/services
Establishment of Scope 3 reduction measures
2. Air Quality (Management of Air Pollutants)
Reduction of air pollutants emissions at business sites
Expansion of the supply of clean energy products/services to reduce air pollutants emissions
3. Water & Waste (Management of Water Pollution and Waste)
Reduction of water usage Intensity and increase in recycling rates
Maintenance of ZWTL “Gold/Platinum” level
4. Ecology & Biodiversity (Conservation of Biodiversity)
Prevention and restoration of marine and land pollution
Protection of biodiversity
Conservation and restoration of habitats

With Stakeholders

5. Health & Safety (Occupational Health and Safety)
Safety of employees
Safety of contractors
Safety of local communities
6. Human Values (Employees and Human Rights)
Establishment and implementation of human rights management policies
Talent development
Work-life balance
Employee diversity, equity, and inclusion (DEI)
Enhancement of employees' ESG awareness/practices
7. Responsible Business (Socially Responsible Management)
Strengthening supply chain management
Information security
Enhancing product responsibility and services
8. Society Engagement (Community Engagement)
Expanding eco-friendly initiatives in the community (Green)
Spreading happiness in the community (Health)
Improving the quality of life for vulnerable groups (Hope)

Through Transparency

9. Board Leadership (Governance)
Strengthening the expertise/diversity of the Board of Directors
Enhancing the independence of the Board of Directors
ESG-based executive evaluation/compensation system
10. Compliance & Ethics (Compliance and Ethical Management)
Anti-corruption/audit
Strengthening compliance practices
Establishing a fair trade practice system
11. Business Portfolio Management
Investing in new businesses applying ESG criteria
Establishing/executing an integrated risk management system
Managing investments in subsidiaries/affiliates
12. Sustainability Communication (Stakeholder Communication)
Enhancing shareholder value
Strengthening ESG disclosures
Expanding ESG global Partnerships
Materiality Assessment

SK Gas conducted a materiality assessment applying the concept of Double Materiality, which considers the financial impacts on the company from an internal perspective and the environmental and social impacts the company has from an external perspective. During the process of evaluating sustainability issues, focus group interviews were conducted with internal and external stakeholders (analysts, ESG experts, etc.) to enhance the reliability of the assessment.

  • *The assessment was developed by applying methodologies referenced from GRI (Global Reporting Initiative) 3: Material Topics 2021 and [Draft] EFRAG IG 1: Materiality assessment implementation guidance.
Materiality Assessment Process
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  1. step1. Understand the company and stakeholders

    Company activities and business relationships
    Vision and mission
    Main business
    Stakeholders impacted
    Identification of impacted stakeholders
    Stakeholder communication channels

  2. step2. Identify sustainability issues

    Identification of sustainability issues
    Derivation of sustainability issues based on ESG disclosure standards, ESG evaluation indicators, and SK Gas ESG Master Plan

  3. step3. Evaluate sustainability issues

    Impact materiality assessment
    Impact of the company on the environment and society
    Financial materiality assessment
    Impact of risks and opportunities on the company

  4. step4. Report materiality assessment results

    • Explanation of the process of identifying and evaluating significant impacts, risks, and opportunities
    • Report on SK Gas response measures
Materiality Assessment Matrix
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Materiality Assessment Results
  • ● ● ● High Impact
  • ● ● ○ Medium Impact
  • ● ○ ○ Low Impact
Materiality Assessment Matrix Ranking, Issues, Impact Materiality, Financial Materiality, GRI, SASB, UN SDGs
Issue Impact Materiality Financial Materiality GRI SASB UN SDGs
1 Climate Change Mitigation ● ● ● ● ● ● 305: Emissions EM-RM-110a.1, EM-RM-110a.2 13
2 Occupational Health and Safety ● ● ● ● ● ● 403: Occupational Health and Safety EM-RM-320a.1, EM-RM-320a.2, EM-RM-540a.1, EM-RM-540a.2, EM-RM-540a.3 3
3 Eco-friendly Business Models ● ● ● ● ● ● Non-GRI - 7, 13
4 Protection of Consumer and End-User Rights ● ● ● ● ● ● 416: Customer Health and Safety - 3
5 Ethical Management ● ● ● ● ● ● 205: Anti-corruption - 16
6 Energy Transition ● ● ● ● ● ● 302: Energy - 7
7 Air Pollution ● ● ● ● ● ○ 305: Emissions EM-RM-120a.1, EM-RM-120a.2 -
8 Soil Pollution and Waste ● ● ○ ● ● ● 306: Waste EM-RM-150a.1, EM-RM-150a.2 15
9 Supply Chain Management ● ● ○ ● ● ● 308: Supplier Environmental Assessment, 414: Supplier Social Assessment - -
10 Corporate Governance ● ● ○ ● ● ● Non-GRI - -

Key Issue ①. Climate Change Mitigation

Climate change is a critical challenge faced by all of humanity, and corporate efforts to reduce greenhouse gas emissions have become an essential element of management activities. Although SK Gas has minimal environmental pollution from its processes, it has selected climate change mitigation as a key issue and established a Net Zero roadmap encompassing the entire value chain, which is being steadily implemented. Comprehensive reviews of the roadmap's achievement rates and implementation plans are conducted with relevant departments. To achieve Net Zero by 2030, SK Gas monitors the feasibility of the strategy every year and transparently communicates the process with stakeholders.

Key Issue ①. Climate Change Mitigation: Type, Impact, Timing, Response Measures, and Goals
Impact Materiality Financial Materiality Response Measures Goal
Type Impact Occurrence Time Affected Stakeholders Type Impact Occurrence Time Affecting Value Chain
Positive Contributing to the reduction of greenhouse gas emissions through effective implementation of the Net Zero roadmap Long-term

  • Environment

  • Customers

  • Shareholders

  • Employees

  • Local Community

  • Partners

 Risk Increased costs for reducing greenhouse gases due to the operation of new business sites Short/Medium-term

  • Upstream

  • Business Site

  • Downstream
  • Introduce seawater heat exchangers and electric heaters
  • Expand the use of renewable energy
 Achieve Net Zero by 2030
Negative Increased greenhouse gas emissions due to new projects like Ulsan GPS and KET Short/Medium-term Risk Costs and revenue impact from environmental pollution throughout the LPG/LNG import-storage-utilization process Short/Medium-term

Major Issue②. Occupational Health and Safety

With the enforcement of the Serious Accidents Punishment Act, government regulations on workplace Health and Safety have been strengthened, emphasizing the importance of occupational Health and Safety issues. In the Oil & Gas industry, which handles high-pressure, high-temperature equipment and chemicals, there is a possibility of safety accidents during the process and distribution stages. SK Gas has a systematic Health and Safety management system in place, including the minimum personnel deployment and integrated control systems at its business sites. However, as major accidents can significantly impact both workers and the company, continuous efforts are being made for thorough prevention.

Major Issue②. Occupational Health and Safety, Impact, Occurrence Time and Response Measures, Goals
Impact Significance Financial Significance Response Measures Goal
Type Impact Occurrence Time Affected Stakeholders Type Impact Occurrence Time Affecting Value Chain
Positive Preventing adverse impacts on workers’ safety and health through advanced workplace safety management Continuous

  • Environment

  • Customers

  • Shareholders

  • Employees

  • Local Community

  • Partners

 Opportunity Cost savings through enhanced safety management capabilities of employees, partners, and customers & users Continuous

  • Upstream

  • Business Sites

  • Downstream
  • Identify and improve blind spots
  • Expand practical training programs
  • Strengthen equipment integrity
 Achieve an A+ rating in SHE management diagnostics
Opportunity Effective prevention of safety accidents through workplace system automation Continuous
Negative Occurrence of worker fatalities, injuries, illnesses, and disabilities due to serious or industrial accidents Continuous Risk Occurrence of worker fatalities, injuries, illnesses, and disabilities due to serious or industrial accidents Continuous
Risk Negative perceptions of the safety of LPG and LNG fuels impacting stock prices and revenue Short/ Mediumterm

Major Issue③. Eco-friendly Business Model

As a leader in transitioning from fossil fuels to new and renewable energy, the Oil & Gas industry must strengthen its sustainable business portfolio. SK Gas aims to ultimately become a hydrogen and ammonia company, which are zero-carbon energy sources. However, there are practical constraints to the full commercialization of hydrogen and ammonia at this point. Therefore, SK Gas is focusing on the LPG and LNG businesses, which emit fewer greenhouse gases compared to coal, as a stepping stone towards zero-carbon fuels. This is a crucial issue directly related to the company's competitiveness and profitability, and is being carefully managed in response to national energy policies and changes in customer demand.

Major Issue③. Eco-friendly Business Model, Impact, Occurrence Time and Response Measures, Goals
Impact Materiality Financial Materiality Response Measures Goal
Type Impact Occurrence Time Affected Stakeholders Type Impact Occurrence Time Affecting Value Chain
Positive Meeting demand for low-carbon and zero-carbon energy sources Continuous

  • Environment

  • Customers

  • Shareholders

  • Employees

  • Local Community

  • Partners

 Opportunity Increased sales due to growing demand for LPG and LNG Short / Mediumterm

  • Upstream

  • Business sites

  • Downstream
  • Expand the introduction of LPG 1-ton trucks
  • Commence commercial operation of Ulsan GPS
  • Promote the byproduct hydrogen fuel cell business
  • Enter the U.S. ESS (Energy Storage System) market
 Transition to Net Zero Solution Provider Business Portfolio
Opportunity Expansion of the hydrogen and zero-carbon energy market Long-term
Negative Negative environmental and social impacts from infrastructure development Continuous Risk Decreased demand for LPG and reduced profitability due to Net Zero policies Short / Mediumterm
Risk Weakened business competitiveness due to national passive energy transition policies Short / Mediumterm
Risk Failure in business due to the economic issues of hydrogen/ammonia fuels Long-term
Utilization of Materiality Assessment Results

Based on the results of the materiality assessment, 'Climate Change Mitigation', 'Occupational Health and Safety', and 'Establishment of an Eco-friendly Business Model' were selected as core topics related to SK Gas's sustainable management in 2023. This allowed us to identify stakeholder expectations and social responsibility requirements for climate change response, as well as to strengthen and build eco-friendly business models. The analysis results of other issues derived from the materiality assessment, along with the associated risks and opportunities, were reflected in the ESG master plan and implementation strategy.

Key ESG Indicators

Based on various global ESG guidelines, SK Group selects and manages key ESG indicators considering the industry of its affiliates. SK Gas sets and pursues goals to achieve the highest global level among similar companies for each indicator. We select the responsible organization for each indicator, implement improvement measures, and disclose the results annually. In addition to quantitative indicators, we manage qualitative indicators such as policies, goals, and implementation performance in the areas of environment, society, and governance.

'21~'23 Performance
'21~'23 ESG Key Indicator Performance
Category Unit 2021 Performance 2022 Performance* 2023 Performance 2023 Target
Environmental Total Energy Consumption (Intensity) GJ/KRW billion 104.44 84.75 99.31 97.54
Renewable Energy Usage Ratio % 10.05 23.76 37.59 24.00
Total GHG Emissions (Scope 1,2 Intensity) tCO2/KRW billion 5.46 4.01 4.40 5.05
NOx Emissions (Intensity) ton/KRW billion 0.0027 0.0022 0.0025 0.0030
SOx Emissions (Intensity) ton/KRW billion 0.00001 0.00001 0.00001 0
Dust Emissions (Intensity) ton/KRW billion 0.00001 0.00001 0.00001 0
VOCs Emissions (Intensity) ton/KRW billion 0 0 0 0
Total Waste Generated (Intensity) ton/KRW billion 0.12 0.12 0.08 0.15
Waste Recycling Rate % 97.7 98.8 98.2 98.02
Total Water Withdrawal (Intensity) ton/KRW billion 4.79 3.62 4.84 4.55
Total Water Recycling Rate % 7.1 8.5 9.4 8.5
Social Ratio of Employees with Disabilities** % 3.1 2.4 3.8 >3.50
Lost Time Injury Rate (LTIR)*** cases / 200,000 hours worked 0.00 0.00 0.00 0.00
Governance Percentage of Female Directors % 14 14 14 14
Social Value Creation through Products/Services KRW billion 169 163 158 179
  • * Data for 2022 has been revised due to changes in sales.
  • ** Based on domestic regulations.
  • *** Lost Time Injury Rate (LTIR): Number of lost time injury cases X 200,000 hours / total working hours.
'24~'26 Goals
'24~'26 ESG Key Indicator Performance
Category Unit 2024 Goal 2025 Goal 2026 Goal Global Top Peer
Environment Total Energy Consumption (Intensity) GJ/KRW billion 97.54 97.54 95.00 887.41
Renewable Energy Usage Ratio % 24.00 24.00 25.00 Exceeding 23.54
Total Greenhouse Gas Emissions (Scope 1, 2, Intensity) tCO2/KRW billion 5.05 5.05 5.00 324.18
NOx Emissions (Intensity) ton/KRW billion 0.003 0.003 0.002 0.401
SOx Emissions (Intensity) ton/KRW billion 0 0 0 0.144
Dust Emissions (Intensity) ton/KRW billion 0 0 0 0.017
VOCs Emissions (Intensity) ton/KRW billion 0 0 0 0.189
Total Waste Generated (Intensity) ton/KRW billion 0.15 0.15 0.15 14.78
Waste Recycling Rate % 100 100 100 76.64
Total Water Withdrawal (Intensity) ton/KRW billion 4.55 4.55 4.55 996.82
Total Water Recycling Rate % 10.0 11.0 13.0 81.03
Social Percentage of Employees with Disabilities** % Exceeding 3.50 Exceeding 3.50 4.0 3.00****
Lost Time Injury Rate (LTIR)*** cases/200,000 hours 0.10 0.10 0.10 0.08
Governance Percentage of Female Directors % 14 14 14 30
SV Performance Creation of Products/Services KRW billion 192 224 257 -
  • ** Based on domestic regulations.
  • *** Lost Time Injury Rate (LTIR): Number of lost time injury cases X 200,000 hours / total working hours.

Social Value

DBL Management
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SK DOUBLE BOTTOM LINE

  • Economic Value: The final outcome of corporate economic activities, disclosed according to generally accepted corporate accounting standards.
  • Social Value: The social performance created by generating profits through corporate economic activities and reducing social damage costs.

Pursuing social value based on a human-centered management philosophy rooted in happiness management.

SK aims to achieve sustainable growth by incorporating the Double Bottom Line (DBL) management philosophy, which simultaneously pursues and manages Economic Value (EV) and Social Value (SV), moving beyond the traditional Single Bottom Line that focuses solely on Economic Value and profits.