Seoul, May 10, 2021
SK hynix Inc. (or ‘the Company’, www.skhynix.com) announced its achievements in creating social value (SV) in 2020. Since 2019, major affiliates of SK Group have been quantifying and announcing the SVs created in the previous year in three areas of “achievements in indirect contribution to the economy”, “business achievements in social performance”, and “achievements in social contribution”.
SK hynix’s achievements of SV last year in the three areas are as follows: KRW 5,373.7 billion for “achievements in indirect contribution to the economy” including tax payment, employment, and dividends; KRW -596.9 billion for “business achievements in social performance” including social (labor/shared growth) and environmental fields; and KRW 110.6 billion for “achievements in social contribution” including donation and social contribution activities.
The achievements in indirect contribution to the economy has increased by 32% (KRW 1,314.3 billion) compared to the previous year as the semiconductor business conditions improved from last year. The business achievements in social performance, however, the negative amount has increased by 11% (KRW 57.1 billion) year on year due to environmental impacts such as greenhouse gas emissions. Meanwhile, the amount of achievements in social contribution has increased by KRW 41.3 billion mainly due to intensive support for overcoming COVID-19.
Looking into each area more specifically, the Company announced that the achievements in indirect contribution to the economy have shown meaningful results in all sectors of tax payment, employment, and dividends. Firstly, the amount achieved in the tax payment sector has significantly increased by 211% compared to the previous year. Also, SK hynix reached the quota employment rate for the disabled (3.1% for private companies with 50 or more employees at all times) in 2020, achieving results in terms of employing the vulnerable. In terms of dividends, the achievement amount has increased by 17% year on year. SK hynix expects that the achievements in indirect contribution to the economy will continue to grow with the clear signs of improvements of the industry conditions this year.
Business achievements in social performance incurred the negative costs of KRW 944.8 billion in the environmental sector, increased by KRW 127.2 billion from 2019. SK hynix explained that this is due to the characteristics of the semiconductor industry, which consumes large amounts of water and electricity and emits greenhouse gases during the manufacturing process. An official from SK hynix said, “As a result of efforts such as recycling resources across the company, the amount of greenhouse gas emissions per unit production has decreased. However, the Company feels regrettable to its stakeholders that total amount of emissions have increased. SK hynix will focus on reducing the total amount of greenhouse gas emissions by making efforts in various fields such as environmental technology development to reduce adverse environmental impacts.”
Nevertheless, SK hynix has shown the increase of 21% year on year by KRW 322.4 billion in social sector and 116% year on year by KRW 25.5 billion in the products/services sector, partially improving the negative result in overall environmental sector. The Company has strengthened support for its partners by operating “the Technology Innovation Company program” and “the analysis and measurement support center” to foster localization of materials, parts, and equipment. Also, the Company has expanded the supply of low-power products including SSDs that drastically reduce carbon dioxide emissions.
SK hynix has recorded a 60% increase year on year by KRW 110.6 billion in achievements in social contribution. Throughout last year, SK hynix continuously strived to contribute to overcoming the COVID-19 crisis. The Company showed its support to medical staff and provided smart devices necessary for remote learning for children from low-income families in order to build a social safety net.
SK hynix plans to concentrate the company-wide capabilities on “SV 2030”, announced in January this year as the company’s mid- to long-term plan for SV creation. Through this, the Company aims to achieve key goals including becoming net zero by 2050, vitalization of the semiconductor ecosystem, establishment of a social safety net, and internalization of a corporate culture based on diversity and inclusion.
In particular, as the first company to join RE100* in the semiconductor memory industry, SK hynix has shown its strong will to actively make improvements in the environmental field through various efforts such as minimizing greenhouse gas emissions, reducing waste, and expanding water resource recycling in the semiconductor manufacturing process. In addition to this, the Company plans to continue its efforts to replace the existing storage device, HDD, with low-power SSD to expand environment-friendly technology.
*RE100: Declaration to cover 100% of the company’s electricity us with renewable energy by 2050
Kim Youn-wook, Vice President for Corporate Sustainability Management of SK hynix said, “SK hynix has been raising the objectivity and reliability in measuring its performance by announcing the company’s social value achievements for three consecutive years. We also will keep seeking ways to contribute to humanity and society by increasing the scale of social value creation while strengthening ESG management at the same time.”
※ Reference: The purpose and future plans of SK’s social value measurement announcement
Since 2019, SK Group measures the social values created in the previous year based on the ‘Double Bottom Line (DBL) Management’ that pursues both economic value (EV) and social value (SV) and publishes the results every year.
Over the past three years, SK has achieved promising results in the products and services areas, such as displaying meaningful social value creation achievements, and expanding employment of socially vulnerable groups. Nevertheless, SK self-evaluated that the innovation of business model (BM) based on social values has not yet ridden the track, and that a breakthrough effort to drastically reduce greenhouse gas emissions is still necessary.
SK, which is implementing a financial story based on ESG, plans to actively connect its social value measurement with its ESG management, by reflecting social value measurement result in management strategies and decision-making of SK’s affiliates. It also plans to increase the reliability of measurement by transparently disclosing the greenhouse gas measurement index and formula to external stakeholders.
Meanwhile, the quantitative measurement of ESG performance is also spreading globally. The Value Balancing Alliance (VBA), launched by SK with more than 20 global companies and organizations such as BASF and Novartis in order to develop a global measurement model, is currently expanding its influence by collaborating with the International Financial Reporting Standards (IFRS) and the World Economic Forum (WEF), and Harvard Business School (HBS). SK plans to lead the global standardization of social performance measurement by strengthening cooperation with these organizations.
About SK hynix Inc.
SK hynix Inc., headquartered in Korea, is the world’s top tier semiconductor supplier offering Dynamic Random Access Memory chips (“DRAM”), Flash memory chips (“NAND Flash”) and CMOS Image Sensors (“CIS”) for a wide range of distinguished customers globally. The Company’s shares are traded on the Korea Exchange, and the Global Depository shares are listed on the Luxemburg Stock Exchange. Further information about SK hynix is available at www.skhynix.com, news.skhynix.com.
Media Contact
SK hynix Inc.
Global Public Relations
Technical Leader
Jaehwan Kevin Kim
E-Mail: global_newsroom@skhynix.com
Technical Leader
Eun Suk Yixi Lee
E-Mail: global_newsroom@skhynix.com
Technical Leader
Sejin Julia Yoo
E-Mail: global_newsroom@skhynix.com
