Robust environmental, social, and corporate governance (ESG) policies are quickly becoming corporate non-negotiables, and SK hynix is ensuring that its efforts exceed expectations.
The company’s ESG approach is underscored by its Double Bottom Line philosophy, which places equal importance on the economic and social value of business decisions. While economic value measures and manages financial performance, social value aims to quantify how the activities contribute to resolving social issues.
On the environmental side, SK hynix became the first memory chip manufacturer and one of the first South Korean companies to join the global RE100 initiative in November 2020. Under this initiative, the company aims to switch all its power sources to renewable energy and achieve net zero emissions by 2050. The company’s Carbon Management Committee delivers quarterly reports to the ESG Management Committee on various factors associated with SK hynix’s efforts on this front.
Additionally, SK hynix established its “Memory ForEST” (Memory for Environment, Society, and Tomorrow) roadmap, which involves designing more energy-efficient chips and minimizing the environmental impact of manufacturing processes.
Another important environmental focus for SK hynix is comprehensively managing water supply from the manufacturing process to wastewater treatment. The company’s Water Conservation and Wastewater Reduction task force has helped the company reuse 40.5 million cubic meters in wastewater discharge and conserve 42.8 million cubic meters of water as of 2020. In 2018, SK hynix also collaborated with partner companies to develop a water-free scrubber, which treats process gas without using water. After introducing the device at its processing plants, the company saved an average of 1,744 tons of water per day between 2018 and 2020.
As a socially conscious company, SK hynix is committed to closely monitor its supply chain and encourage its suppliers to improve their ESG management through a strict evaluation process. For example, SK hynix procures the minerals used in its products via methods that meet global human rights standards. It is a member of The Responsible Minerals Initiative (RMI), which enhances the collection, management, and disclosure of information such as conflict minerals’ origin and usage within the global supply chain. To ensure that the minerals are sourced in an environmentally friendly and socially responsible manner, SK hynix performs checks on whether the raw materials that it uses are certified and verifies the country of origin.
Governance-wise, SK hynix’s Sustainability Committee and ESG Management Committee play an important role in governing all ESG-related corporate activities. The ESG Management Committee, at the management level, reports to the Sustainability Committee. The latter then decides on the reported agenda at the board level. Both committees’ tasks involve managing progress towards the company’s sustainability goals, and the establishment of this governance structure testifies to SK hynix’s belief in and commitment to ESG.
All these steps are helping to build a firm foundation for SK hynix’s ESG path. Not content with resting on its laurels, the company will continue to pave a more sustainable way forward for both the present generation and generations to come.
