SK Group's eight affiliates will join 'RE100' for the first time in Korea. SK Group Chairman Chey Tae-won will accelerate the implementation of the environmental sector among the "ESG (Environmental and Social Governance) Management," which he emphasized at the CEO seminar last month as one of his future growth strategies.
‘RE100' stands for 'Renewable Energy 100%. This means that a company will mobilize 100% of its electricity it will use with renewable energy sources such as wind and solar power by 2050.
The Climate Group, a London-based multinational non-profit organization, started it in 2014 and as of October, 263 companies from around the world, including Google, Apple, GM and IKEA, have joined.
According to SK on Nov. 1, eight companies including SK Corp., SK Telecom, SK Hynix, SKC, SK Siltron, SK Materials, SK Broadband, and SK ie technology will submit their applications to the RE100 Committee of Korea on Nov. 2.
SK E&S, SK Energy, SK Gas and other non-subscribed companies are planning to expand their use of renewable energy with their own goal of equivalent to RE100.
Although SK Innovation's battery business is not able to join this time due to conditions of joining the company's unit, it is planning to set and implement the same goal as RE100 considering demands from global electric vehicle OEMs and institutional investors.
Chairman Chey has been emphasizing ESG for fundamental innovation in the group's business. Chey once mentioned at the 2018 group CEO seminar, "We should prepare specific strategies such as technology development for eco-friendly transformation."
At the CEO seminar held in October, he also called for all related companies to steadily pursue eco-friendly efforts to suit their respective businesses. In an e-mail sent to all employees in September, Chairman Chey also expressed his intention to use ESG as a new pillar of corporate management.
Once the eight SK companies submit their applications, their membership will be finalized after review by The Climate Group. The implementation plan will be submitted within one year of joining RE100 and the implementation status will be checked each year, and the use of renewable energy power will be increased to 100 percent by 2050.
The eight companies plan to increase the percentage of renewable energy use through various methods the government is preparing to implement in the future.
The methods include a "third party PPA" (Power Purchase Agreement) that receives renewable energy under a contract with Korea Electric Power Corp. (KEPCO) and "Green Rate System" that is recognized as the use of renewable energy when purchasing power after paying premium fees to KEPCO.
Investment in shares is also expected to be one of the major methods. Investment in renewable energy generation projects can be recognized as using renewable energy.
SK Group said that it expects to secure trust from the market and society as 'the world's best ESG practice company' and to take a step ahead in terms of strengthening supply chain management of global companies such as the U.S. and Europe.
In addition, the international community is strengthening eco-friendly regulations, with the European Union (EU) considering introducing a "carbon border tax" (imposing tariffs on imported products with high carbon emissions).
In the case of Korea, which is highly dependent on foreign trade, it is essential to introduce low-carbon and eco-friendly management such as RE100 in order to strengthen the competitiveness of national exports.
"It is meaningful that Korean companies will also participate in the eco-friendly trend of reducing carbon emissions to solve global problems such as abnormal weather conditions," said Lee Hyung-hee, chairman of the SK SUPEX Pursuit Council. "We hope it will serve as a small foundation for expanding the domestic renewable energy market and fostering new growth industries such as energy solutions."
