Climate Change Data

Environmental Metrics

ESG Focus Areas

• Customer Value
• Employee Competency
• Economic Value
• Business Partnerships
• Social Issues
• Environment

Environmental Achievements

• Reduced paper usage by an estimated 916 tons through e-mail and M-billing systems.
• Received the Grand Prize at the Jeju Eco-friendly Base Station Contest for the second consecutive year in 2004.
• Received an award for outstanding facility maintenance from Korea’s Commerce, Industry, and Energy Minister in July 2003.

Social Achievements

• Retained its number one position in three major customer satisfaction surveys (NCSI, KS-SQI, and KCSI).
• Launched various customer-centered innovation programs under the ‘Rainbow’ brand.
• Implemented measures to protect minors from harmful content and excessive fees.
• Implemented a program to benefit wireless internet users by exempting data usage fees exceeding KRW 200,000.
• Took actions to curb random spam mail.
• Engaged in efforts to create jobs, with a plan to generate approximately 4,000 new jobs in three years, starting from 2005.
• Developed a standard model for meal provisions to undernourished children and the elderly.
• Trained education assistants to help physically challenged students.
• Participated in the Habitat for Humanity program.
• Organized the ‘Sunny’ volunteer group for university students.

Governance Achievements

• Established a global standard of corporate governance with a Board of Directors (BOD) including a high percentage of independent directors.
• Won the corporate governance award given by the Corporate Governance Service for two consecutive years (2005 and 2006).
• Established a Global Committee to review overseas business strategies and investments.
• Implemented an ethics management program with a Code of Ethics and an Ethics HelpLine.

Climate Goals & Targets

Environmental Challenges

• Protecting minors from harmful content and excessive fees.
• Curbing random spam mail.
• Reducing greenhouse gas emissions.
• Minimizing the environmental impact of base stations and repeaters.
• Adhering to fair trade regulations.

Mitigation Strategies

• Implemented various measures to protect minors, including discontinuing adult content from July 2006.
• Implemented tough sanctions on content providers sending illegal spam.
• Took actions to reduce energy consumption and greenhouse gas emissions.
• Set up eco-friendly wireless stations.
• Established an ethics management office and implemented a compliance program.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Guidelines

Third-party Assurance: Korean Foundation for Quality (KFQ)

Sustainable Products & Innovation

• Standardized cell phone rechargers, memory cards, and earphones.
• Eco-friendly lithium polymer batteries.

Awards & Recognition

• Various awards for customer satisfaction, labor-management relations, corporate governance, and environmental initiatives.

Environmental Metrics

ESG Focus Areas

• Inclusive Information Society
• Customer Care
• Innovative Workplace
• Green ICT
• Business Integrity
• Corporate Philanthropy

Environmental Achievements

• Installed 66 small repeaters powered by solar cells
• Introduced natural air-conditioning systems, reducing electricity consumption by more than 50%
• Reduced annual paper usage by 600 tons through email and M billing
• Established a standard 20-pin size for earphones

Social Achievements

• Launched “Mobile Phone Usage Education” program for the elderly
• Introduced payment plans for users with hearing or speech disabilities
• Opened IT Training Centers in Vietnam and China
• Continued free surgeries for Vietnamese children with facial deformities
• Expanded 1318 Happy Zone and SK Happy Meal Box programs
• Increased employee volunteer hours to an average of 18.6 hours per year

Governance Achievements

• Became the first telecommunications company to gain CCMS certification
• Expanded autonomous and responsible management
• Improved corporate transparency
• Enhanced the role of outside directors
• Strengthened internal audit functions based on the Sarbanes Oxley Act
• Joined the UN Global Compact

Climate Goals & Targets

Environmental Challenges

• Severe competition in the industry
• High telecom expenditures in Korea
• Failure to prevent problems related to youth telecom spending
• Low availability of renewable energies in Korea
• Decreasing amount of collected handsets for recycling
• Difficulty in requesting uniform participation in social responsibility activities from small-scale business partners

Mitigation Strategies

• Steady investment in product and service development
• Offering various affordable products and plans
• Implementing various programs to promote the proper use of mobile phones among youth
• Striving to reduce energy consumption levels and pursuing efficient network operations
• Launching collection campaigns for discarded handsets
• Expanding social responsibility training program to business partners
• Including a social accountability clause in supplier agreements

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Green purchasing; providing financial assistance to business partners; supporting R&D of SME partners.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather conditions

Transition Risks

• Higher oil prices

Opportunities

• Development of energy-efficient products and services

Reporting Standards

Frameworks Used: GRI G3 Guidelines

Certifications: CCMS

Third-party Assurance: Samjong KPMG Advisory Inc.

Sustainable Products & Innovation

• T-MAP navigation; D Home service; TPEG Service; intelligence building service using ZigBee technology.

Awards & Recognition

• Award of Excellence Winner in corporate governance assessment (2007)
• Best Employers in Asia (2007)
• Best Asian Telecom Carrier (2007)
• World’s Top 100 Innovative Companies (2006)

Environmental Metrics

ESG Focus Areas

• Environment
• Win-win partnerships
• Customer protection
• Community involvement
• Ethics

Environmental Achievements

• Reduced CO2 emissions by 9,506 tons in 2008 through energy saving actions.
• Replaced around two thousand signboard lighting with environmentally friendly LED.

Social Achievements

• Launched various initiatives to provide truly needed services and created more than 6,000 jobs (from 2005 to 2008).
• Expanded the application of fee reduction program for the underprivileged, offering discounts on basic fee and call charges.

Governance Achievements

• Established the Corporate Citizenship Committee under the Board of Directors.
• Received ISO27001 certification for its customer data management system (SK Communications).

Climate Goals & Targets

Environmental Challenges

• Growing demand for green IT.
• Fierce competition coupled with slumping demand in the wake of the global economic crisis.
• Concerns over customer privacy.
• Lower scores in risk management, environmental management, and stakeholder engagement in Dow Jones Sustainability Indexes.

Mitigation Strategies

• Preparing measures in response to growing demand for green IT.
• Implementing companywide energy saving campaigns.
• Designated a CPO (Chief Privacy Officer) and a CSO (Chief Security Officer).
• Improving the process of handling customer information, updating policies and guidelines, and introducing the CPO pre-approval process.

Supply Chain Management

Supplier Audits: 2,380 inspections and education programs on customer privacy (retail network)

Responsible Procurement

• Review to ensure fairness in signing and implementing business contracts, and in selecting and managing suppliers.
• Purchasing review committee to guarantee appropriateness, fairness and lawfulness during contract signing and pricing.

Climate-Related Risks & Opportunities

Physical Risks

• Higher average temperatures increasing the need for air conditioning
• Extreme weather conditions and rising water levels threatening the operation of mobile telecom networks

Transition Risks

• Growing importance of GHG emissions control

Opportunities

• Development of energy-efficient products and services, such as green IT and Smart Grid.

Reporting Standards

Frameworks Used: GRI G3 Guidelines, AA1000 APS

Certifications: ISO 27001 (SK Communications)

Third-party Assurance: Two Tomorrows (Europe) Limited

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Energy-efficient products and services (e.g., green IT, Smart Grid)
• Eco-friendly mobile phone accessories
• Solar-powered cell phone chargers

Awards & Recognition

• Dow Jones Sustainability Indexes
• AccountAbility Rating Korea 2008 (third place)
• Award of Excellence in corporate governance from the Korea Corporate Governance Service
• ARC Award for Annual Report
• Frost & Sullivan Asia Pacific ICT Award for Gifticon
• GSM Association award for Gifticon

Environmental Metrics

ESG Focus Areas

• Environmental Management
• Win-Win Partnership
• Customer Protection
• Community Involvement
• Ethics Management

Environmental Achievements

• Reduced office waste by 16.5% through the Eco Office campaign
• Expanded the use of wind/solar powered repeaters
• Reduced CO2 emissions by 4,068 tons year-on-year
• Cut water consumption by 3,658m³ (0.797m³ reduction per person)
• Increased recycling rate by 13.2% compared to 2008

Social Achievements

• Launched T together, a wired/wireless social contribution portal
• Founded Sichuan SK Happy School in Sichuan, China
• Expanded the application of the fee reduction program for the underprivileged
• Developed specialized handsets with powerful TTS functions for the visually impaired
• Provided education on mobile handset utilization to 3,000 senior citizens

Governance Achievements

• Strengthened the risk prevention process by introducing mandatory preliminary screening for risks to customer value
• Established a master plan for customer privacy protection and introduced a privacy protection authentication system
• Reinforced disciplinary actions against ethics violations
• Introduced the Compliance Program in 2002

Climate Goals & Targets

Environmental Challenges

• Growing concern over customer privacy protection
• Escalating number and types of grievances with the spread of smartphones
• Potential risks to customer value posed by new product development and launch
• Need to improve the process on aggregating enterprise sustainability data and managing key performance

Mitigation Strategies

• Designated a CPO and CSO to oversee customer privacy protection and security matters
• Strengthened customer privacy management system and policies
• Introduced an authentication system for handling customer information and provided employee training
• Introduced mandatory preliminary screening for risks to customer value
• Established a companywide greenhouse gas inventory system
• Developed an environmental management strategy with reduction targets for energy consumption and greenhouse gas emissions

Supply Chain Management

Supplier Audits: Incorporated UN Global Compact’s four major principles in assessment criteria for new supplier candidates; evaluation of business partners for policies, processes, and training programs on environment, human rights, and labor

Responsible Procurement

• Green procurement; purchasing certified eco-friendly products

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Development of energy-efficient products and services

Reporting Standards

Frameworks Used: GRI G3 Guidelines, AA1000 APS

Certifications: ISO 27001 (Information Security Management System)

Third-party Assurance: Samjong KPMG Advisory Inc.

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Low-power repeaters
• Specialized handsets for the visually impaired

Awards & Recognition

• Selected two years running as a component of the Dow Jones Sustainability Indexes
• Best Converged Service at Telecom Asia Awards
• Grand prize at the 8th Korea Ethics Management Awards
• Grand prize at the 8th Information Security Awards

Environmental Metrics

ESG Focus Areas

• Environmental Management
• Win-Win Partnership
• Customer Protection
• Community Involvement
• Ethics Management

Environmental Achievements

• Reduced GHG emissions by 1,258 tons year-on-year; overall GHG emissions decreased by 0.2 percent year-on-year through various measures including installing low-power repeaters and energy conservation efforts.
• Reduced water consumption by 5% by switching to water-saving toilet valves and installing drift eliminators in cooling towers.
• Reduced total waste generated by 17.9 percent compared to the previous year; increased recycling rate by 0.3 percentage points.
• Installed low-power repeaters consuming 13% less power than their analogue counterparts in 43,536 places.
• Invested KRW 17.2 billion in 25 sites with poor access to power supplies and installed base stations powered by renewable energy sources.

Social Achievements

• Established a subsidiary to deal with customer complaints, improving customer service quality.
• Received the Korea Fair Trade Commission’s Consumer Complaints Management System (CCMS) certification.
• Expanded fee reduction program for the underprivileged, resulting in overall savings of KRW 220.2 billion for these customers.
• Distributed 5,000 specialized handsets with a text-to-speech function to visually impaired people.
• Provided handset instruction classes to 600 North Korean defectors.

Governance Achievements

• Created the Corporate Citizenship Committee for the implementation of sustainability management activities.
• Included on the Dow Jones Sustainability Index (DJSI) for the third year in a row.
• Chosen as the top global mobile service provider on the DJSI.
• Reinforced disciplinary action against ethics violations; no fines levied by the Fair Trade Commission.

Climate Goals & Targets

Environmental Challenges

• Climate change posing a bigger threat.
• Increasing importance of win-win management.
• Need to provide differentiated customer value.
• Requests for a more active role in solving society-related problems.
• Importance of maintaining stakeholder trust.

Mitigation Strategies

• Operates a Green ICT Committee to promote eco-friendly management; established an IT inventory system of greenhouse gases.
• Established the SK Win-Win Committee for win-win management decisions.
• Strives to prevent customer inconveniences and provide a differentiated experience through Customer Experience Management (CEM).
• Actively involved in social issues through volunteer groups.
• Practices ethics management through various organizations and creates an ethical corporate culture.

Supply Chain Management

Supplier Audits: All business partners evaluated on their policies, processes, and training programs concerning environment, human rights, and labor.

Responsible Procurement

• Green procurement for 40 products

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Green growth based on green ICT

Reporting Standards

Frameworks Used: GRI G3 Guidelines, AA1000 APS, ISO 26000, UN Global Compact

Certifications: ISO 27001

Third-party Assurance: ERM

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Low-power repeaters
• Base stations powered by renewable energy sources

Awards & Recognition

• Dow Jones Sustainability Index (DJSI) inclusion
• Top global mobile service provider on DJSI

Environmental Metrics

ESG Focus Areas

• Customer Relationship Management
• Win-win Partnerships
• Community Involvement
• Ethics Management
• Environmental Management

Environmental Achievements

• Obtained ISO 14001 certification.
• Achieved a 2.7% reduction in electricity consumption.
• Installed 58,435 eco-friendly radio stations.
• Launched T-Eco phone project for recycling smartphones.

Social Achievements

• Established ‘Happy ICT’, a social enterprise creating IT-based jobs for disadvantaged people.
• Provided free tablet PCs and online courses to 350 teenagers from low-income families.
• Developed ‘Library that Reads Happiness’ app for the blind.
• Conducted mobile phone user training for senior citizens and North Korean refugees.

Governance Achievements

• Appointed an external director as Chair of the Board of Directors.
• Operates an Ethics Management System including consulting, auditing, and investigation.
• Implemented company-wide ethics management training.

Climate Goals & Targets

Environmental Challenges

• Increased customer privacy risks.
• Increased social monitoring of privacy policies.
• Maintaining communication quality and reasonable rates.
• Increased government regulations and social demand for win-win partnerships.
• Increased need for the development of the ICT industry ecosystem.
• Increased demand for corporate social responsibility.
• Increased demand for the establishment of a transparent governance system.
• Widespread global understanding of the climate change crisis.
• Strengthening of climate change policies and regulations.

Mitigation Strategies

• Strengthened company-wide customer privacy system.
• Introduced SCAN technology to improve call quality.
• Expanded LTE network.
• Signed win-win partnership agreements with 349 partners.
• Implemented various support programs for partners.
• Established ‘Happy ICT’ social enterprise.
• Implemented various programs to bridge the digital divide.
• Operates an Ethics Management System.
• Implemented company-wide ethics management training.
• Established an integrated lighting control system and operating high-efficiency heat/air conditioners.
• Expanded the scope of greenhouse gas management.
• Encouraged the paperless culture.

Supply Chain Management

Responsible Procurement

• Supplier Management Rules
• Compliance Program

Climate-Related Risks & Opportunities

Opportunities

• New and renewable energy business opportunities

Reporting Standards

Frameworks Used: GRI G3 Guidelines, AA1000 APS, ISO 26000 Guidelines, UN Global Compact

Certifications: ISO 14001

Third-party Assurance: BSI Group Korea Limited

Sustainable Products & Innovation

• Green T application
• Smart Bill service
• T-Eco phone project
• Cloud BEMS

Awards & Recognition

• Dow Jones Sustainability Index (DJSI) for four consecutive years
• Best global mobile telecommunications company for two years straight
• Best CDP Company in the CDP telecommunications field for two consecutive years
• Community Service Award at the 1st UNGC Value Awards

Environmental Metrics

ESG Focus Areas

• Customer Experience Management
• Win-Win Growth
• Social Contribution
• Ethics and Compliance
• Environment

Environmental Achievements

• Reduced GHG emissions by 0.59% compared to the target.
• Reduced annual energy consumption by 7.2% in office buildings, saving about 160 million KRW.

Social Achievements

• Reduced major customer complaints (8 VOCs) by 50% compared to late 2011.
• Topped the three biggest customer satisfaction indexes in Korea (NCSI, KCSI, KS-SQI) in the mobile phone service sector.
• Launched innovative services (T-Freemium, T-Baseball) and improved 8 major Voices of Customer (VOC), reducing complaints by 50%.
• Surpassed the 1-million SNS fan mark.
• Provided support for traditional markets utilizing business solutions and created jobs for the disadvantaged through the ICT-based social enterprise "Happy ICT".
• Launched a donation platform and enhanced R&C-based social contributions, including the "Visiting Smart Class".

Governance Achievements

• Appointed Outside Director Lim Hyun-chin as Chairman of the Board of Directors, strengthening the independence of its governance.
• Established the Win-Win growth-related KPI and strategy.
• Improved the supply chain risk management system and increased the level of procurement policy disclosure.

Climate Goals & Targets

Environmental Challenges

• Declining growth of mobile telecom operators and devaluation of the telecommunications market due to market saturation and depression.
• Competitive advantages perceived by customers diversified from traditional ones (i.e., quality) to brand, released smartphones, corporate image, etc.
• ICT providers' expansion into adjacent markets and competition over integration.
• High expectations for fair competition with other operators and fair marketing communication.
• Differences in perception of investment and efficient use of network technologies and the role of such technologies as public goods.
• Social expectations for SK Telecom shifted from the sale of traditional goods & services to the provision of innovative products through the best channel.
• Appropriate protection policy is required for service users due to the complexity of the rate structure.
• Increasing digital divide means a decline in service opportunities and potential customer base in the long term.
• Increased natural disasters, such as typhoons and floods due to climate change in Korea.
• Increased social priorities in green growth and GHG reduction after the government suggested the GHG reduction targets.
• Direct demand for Win-Win growth among large and small/medium enterprises, including economic democracy.
• Increased digital divide since the distribution of the Internet due to changes in the smart environment, such as the adoption of the smartphone.
• Socioeconomic polarization due to the gap in information accessibility.
• Need for CSR activities based on key capabilities due to the paradigm shift from traditional CSR to CSV (Creating Shared Value).

Mitigation Strategies

• Provide the best network quality and call services.
• Provide new value based on ICT industry convergence.
• Pursue customer happiness as well as customer satisfaction by providing the best services.
• Commercialize LTE-A (By 2013).
• Create an ICT convergence system through active M&As (By 2012).
• Reduce smartphone-related VOCs by 25% compared with 2012 (By 2013).
• Expand into healthcare prevention/care industry (By 2013).
• Implement CE innovation tasks (By 2013).
• Reach 100% multicarrier coverage targeting high data traffic areas (By 2013).
• Reach 40% investment in R&D compared to net profit (By 2014-2015).
• Resolve the ICT exclusion and digital divide of the disadvantaged.
• Provide opportunities and sharing platforms through ICT.
• Contribute to preventing climate change using technologies and platforms.
• Create an industry ecosystem based on Win-Win climate.
• Develop specialized human resources with the best ICT skills.
• Increase ICT programs for the disadvantaged (By 2013).
• Provide public solutions for the disadvantaged and increase solution usage (By 2013).
• Provide assistance in ICT-based start-ups for the baby boomers' generation (By 2013).
• Contribute to revitalizing the ICT-based traditional market (By 2013).
• Adopt the international standard for estimating social GHG reductions using RNS (Real-time Navigation Service) (By 2013).
• Publish an ITU report on social GHG reduction in the ICT area (By 2013).
• Adopt and operate the four fair trade guidelines (By 2012).
• Improved the supply chain risk management system and increased the level of procurement policy disclosure (By 2013-2014).
• Announce and execute human culture innovation tasks (By 2012-2013).
• Use the smart learning (T-earning) system in at least 50% of job training (By 2014).

Supply Chain Management

Supplier Audits: Approximately 720 companies evaluated and registered as new partners in 2012.

Responsible Procurement

• Fair Trade Consent required for all partners.
• Assessments of suppliers before registration, including reviews of financial information and CSR items.

Climate-Related Risks & Opportunities

Physical Risks

• Increased natural disasters, such as typhoons and floods due to climate change in Korea.

Opportunities

• Reducing social GHG emissions using green ICT.

Reporting Standards

Frameworks Used: GRI G3.1, AA1000AS(2008), UN Global Compact

Third-party Assurance: Det Norske Veritas Certification Ltd. (DNV), Lloyd's Register Quality Assurance Ltd. (LRQA)

Awards & Recognition

• Mobile Communications Sector Leader for three consecutive years in the Dow Jones Sustainability Index (DJSI)
• Listed in the DJSI World Index for five straight years
• Global recognition in the area of climate change strategy since 2010 through CDP
• Best company in the telecommunications sector by the Carbon Disclosure Project (CDP) for 3 consecutive years
• Outstanding LTE Contribution award at MWC 2013 Global Mobile Awards

Environmental Metrics

ESG Focus Areas

• Climate Change (carbon neutrality)
• AI Transformation of Core Business
• Privacy Protection

Environmental Achievements

• Reduced carbon emissions by 47.7% by 2030 (compared to 2020)
• Achieved CDP A List (Top 1.6% globally)
• Secured 260,000 tons of carbon credits through cookstove project
• Saved 7.45 million disposable cups through Happy Habit project

Social Achievements

• Launched AI Care/Call service, providing emergency rescue to 450 people and serving 50,000 households
• Blocked over 4 million smishing messages
• Included in 2022 DJSI World Index (one of 6 global telcos)
• Supported 384 startups since 2013 (total corporate value exceeding KRW 6.3 trillion)

Governance Achievements

• Established ESG Committee under the Board of Directors
• Obtained ISO 37001 certification for anti-corruption management system
• Implemented quarterly dividends since 2021
• Maintained #1 position in Korea's 3 major customer satisfaction surveys for the longest consecutive period

Climate Goals & Targets

Environmental Challenges

• Increased operating costs due to climate change regulations
• Investment costs for AI and ICT development
• Risks of personal information leakage and cybercrimes
• Maintaining supply chain sustainability

Mitigation Strategies

• Implementing 3 Green Strategies for Net Zero (Green Operation, Green Energy, Green Forest)
• Redefining core businesses through AI innovation
• Strengthening information security management system and customer awareness
• Establishing Supplier ESG Code of Conduct and conducting ESG risk assessments

Supply Chain Management

Supplier Audits: 1,118 suppliers (100% coverage)

Responsible Procurement

• Supplier ESG Code of Conduct
• ESG risk assessments
• Mutual growth programs

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events (heavy rain, landslides, forest fires)
• Damage to communication equipment

Transition Risks

• Increased carbon costs due to regulations
• Investment costs for renewable energy
• Reputational risks related to climate change response

Opportunities

• Increased demand for low-emission products and services
• Opportunities in energy convergence through AI and renewable energy

Reporting Standards

Frameworks Used: GRI Standards, SASB, TCFD, UN Global Compact, UN SDGs

Certifications: ISO 37001

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 9 (Industry, innovation, and infrastructure)
• Goal 10 (Reduced inequalities)
• Goal 13 (Climate action)

Initiatives contribute to these goals through renewable energy adoption, AI-based solutions for social issues, digital inclusion programs, and climate change mitigation efforts.

Sustainable Products & Innovation

• AI-based energy-saving network equipment
• High-efficiency communication equipment
• AI visual aid service (Sullivan Plus)

Awards & Recognition

• MWC GLOMO Award
• CES Innovation Award
• Presidential Award for Family-Friendly Certification
• Best Employer of Korea

Environmental Metrics

ESG Focus Areas

• Governance
• Environmental Efficiency
• Social Value
• Supply Chain Sustainability
• Climate Change

Environmental Achievements

• Installation of 4.6MW of solar power generation facilities by 2022, generating 3,459MWh.
• Deployment of Happy Habit Project (eco-friendly platform for resource circulation).

Social Achievements

• Employees’ volunteer activities (Pro Bono volunteer Group, Happy Community volunteer Group, etc.)
• Reducing communication expenses for vulnerable groups, bridging the digital divide, supporting startups in the ICT sector, etc.

Governance Achievements

• Establishment and operation of a company-wide risk management system.
• Ensuring the independence, expertise, efficiency, and transparency of the Board of Directors.

Climate Goals & Targets

Environmental Challenges

• Rising energy prices and increased network utilization leading to higher operating costs.
• Geopolitical risks in Korea, particularly from North Korea's actions, impacting communication infrastructure.
• Potential service disruptions due to destruction of communication infrastructure in case of war or disaster.

Mitigation Strategies

• Utilizing energy efficiency, investing in renewable energy, fuel conversion, and resource recycling.
• Establishment of a wartime response system, measures to protect service (disaster roaming, diversified communication stations, cyberattack response system), and backup of important data.
• Regular training and participation in National Emergency Preparedness Training (Eulji Exercise).

Supply Chain Management

Responsible Procurement

• Evaluation and improvement activities for supply chain human rights, environmental and social impacts, corruption, and fair trade issues.

Climate-Related Risks & Opportunities

Transition Risks

• Rising energy prices
• Regulatory changes related to climate change

Opportunities

• Expansion of eco-friendly products and services

Environmental Metrics

ESG Focus Areas

• Governance
• Social Value
• Environmental Management

Environmental Achievements

• Achieved CDP A rating (top 1.5% globally)
• A- grade in the KCGS assessment
• MSCI ESG Evaluation AA Rating
• Included in DJSI World Index for 15 years
• Ranked 15th in WBA’s 200 global advanced ICT companies
• Presidential Commendation for Sustainable Management
• Implementing strategies to achieve Net Zero
• Eco-friendly Platform (Happy Habit)
• Strengthening infrastructure and operating system for circular economy

Social Achievements

• Solving social problems based on AI through barrier-free AI, AI care, etc.
• Strengthening personal data protection, mutual growth, human rights management, safety and health, etc.

Governance Achievements

• Advancing board-centric management activities
• Compliance rate of core governance indicators: 86.7%
• Established basic AI principles, 'T.H.E. AI' and decision-making process
• Acquisition of ISO/IEC 42001 certification by Telco for Humanity with Ethics AI

Climate Goals & Targets

Environmental Challenges

• Need to improve PSR by materializing future growth potential
• Need to improve PER through operational efficiency (increasing profitability)
• Need to improve market evaluation by applying separate multiple to our new growth businesses
• High leverage compared to other domestic telcos
• Need for continuous improvement in asset productivity
• Recognize the stagnation of the profitability of the core business (telecommunications)
• Operational efficiency and new growth strategies are required to improve profitability

Mitigation Strategies

• Pursue active repayment of borrowings between 2024 and 2026
• Review securitization of non-core/inefficient assets
• Promote robust and sustainable ROE enhancement based on debt-to-equity ratio reduction/asset turnover improvement
• Set AI VISION 2030
• Develop AI Pyramid strategy and monetization plan
• Expand cooperation in AI businesses and continue investments
• Strengthen the fundamental competitiveness of core businesses through operational improvement
• Focus on two portfolios: telecommunications and AI
• Improve productivity through paradigm shift
• Actively reflect shareholders' demand to remove the upper limit on dividend payout
• Promote a stable, predictable, and sustainable shareholder return policy

Supply Chain Management

Climate-Related Risks & Opportunities

Awards & Recognition

• Presidential Commendation for Sustainable Management