Climate Change Data

Environmental Metrics

ESG Focus Areas

• Economic Growth
• Eco-Value Creation
• Win-Win Partnership

Environmental Achievements

• All domestic sites (Suweon, Cheonan, and Busan) are ISO 14001 certified and officially recognized as Environmentally Friendly Companies by the Ministry of Environment.
• Reduced CO2 emissions per unit of sales year-over-year.
• 71% of all waste in 2002 were either recycled or reused.
• Recycled water use accounts for 40% of total water use.
• Development of 42” displays consuming 10% less power, 5% slimmer, and 10% lighter than previous products.
• Development of UFS-LCD with improved color, resolution, and brightness, while reducing power consumption and resource requirements.
• Development of lead-free VFDs and LCD modules without soldering.

Social Achievements

• Selected as the best company to join by Korean youngsters in 2002.
• Won the Best Economic Justice Award and the Best Award for a Great Place to Work in Korea in 2003.
• Overall employee turnover rate remains at only 1.5%~2%.
• 15.4 billion won (2.6% of net income) spent on social contribution activities in 2002, including free eyesight recovery operations.
• Active participation in community outreach programs, including the ‘One mountain, One river and One company campaign’.

Governance Achievements

• Won the 2002 Best Award for Transparent Accounting and 2003 Economic Justice Award.
• Four out of eight board members are independent from the company.
• Monthly consolidated accounting system developed to enhance transparency of accounting information of overseas sites.
• Fair and open procurement practices, including the ‘open procurement system’ and ethics education for suppliers.

Climate Goals & Targets

Environmental Challenges

• Global economic slowdown and fiercer competition within the industry.
• Increasing pressure on hazardous material use in products, call for recycling, and preferential tariffs on eco-friendly products internationally.
• Stricter environmental regulations in developed nations (e.g., RoHS, WEEE).

Mitigation Strategies

• Innovating business structures and enhancing product competitiveness.
• Implementing a green procurement system to review environmental performance of raw materials.
• Proactively removing hazardous materials from all products and considering recyclability from the design stage.
• Providing environment and safety audits and trainings to suppliers to improve their environmental performance.

Supply Chain Management

Responsible Procurement

• Environmental performance assessment of suppliers; providing support for ISO 14001 certification and LCA adoption; 6 Sigma trainings for suppliers; open procurement system (SDIBUY).

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI 2002 Sustainability Reporting Guidelines

Certifications: ISO 14001

Third-party Assurance: Center for Green Management and Policy, KAIST Graduate School of Management

Sustainable Products & Innovation

• Lead-free VFDs, LCD modules without soldering, 42” displays with improved energy efficiency, UFS-LCD, Li-ion batteries, Li-S batteries, AMOLED, FED, Digital Paper, fuel cells, solar cells.

Awards & Recognition

• Best Award for Transparent Accounting (2002), Economic Justice Award (2003), Best Shareholder-centered Company Award (2001), Best Environmental Management Award (2002), numerous other awards listed on page 67.

Environmental Metrics

ESG Focus Areas

• Climate Change
• Environmental Performance
• Social Responsibility
• Governance
• Supply Chain Management
• Human Rights
• Employee Well-being

Environmental Achievements

• Reduced greenhouse gas emission by 7% compared to 2006 (1,065,840 t-CO2e in 2007)
• Reduced water usage by 10.2% compared to 2006
• Developed lead-free panel materials for PDPs
• Reduced PDP module weight by 14% through glass thickness reduction
• Achieved 84.87% waste recycling rate globally

Social Achievements

• Returned KRW 1,680 million to society through various initiatives (including eyesight recovery operations and support for the visually impaired)
• Established sisterhood relationships with agricultural communities in Korea and China, providing various forms of support
• Implemented “Sympathy Plus” lunch workshops to enhance employee understanding and communication
• Trained 108 on-site counseling experts to support colleagues
• Maintained a low injury rate (0.14) and no fatal accidents

Governance Achievements

• Operates an independent Board of Directors (BOD) with external directors
• Implemented a Chief Risk Officer (CRO) system to manage various risks
• Established a Plant Operation Approval System to manage potential risks in new projects
• Implemented an ethical management training course for all employees (3,751 completed in 2007)

Climate Goals & Targets

Environmental Challenges

• Strong emergence of rival products
• Oil price surge
• Weakening of the dollar
• Fall in sales price
• Climate change
• Pollution
• Labor issues
• Human rights concerns
• Corruption
• Stricter environmental regulations on batteries
• Decreasing demand for Ni-Cd batteries
• Rising demand for large capacity, diverse exterior body, and high power capacity batteries
• Rising fuel prices
• Stricter international environmental regulations
• Demand for lower-priced products in emerging markets
• Challenges in AMOLED technology (image quality deterioration with larger screens, reduced lifespan, increasing part prices)
• Decreasing CRT market share
• Pressure for price cuts in CRT market
• Business restructuring and its impact on waste generation and sales

Mitigation Strategies

• Global Base Building strategy (setting up PDP module lines in Mexico, rechargeable battery lines in China)
• Extending production lines in China and Korea to meet rising demand for Lithium-ion batteries
• Establishing the Battery Safety and Reliability Center
• Dual product strategies for high-end and low-end products
• Proactive market exploration and product development for AMOLED
• Product standardization and simplification for CRT
• Investment in R&D (KRW 390.3 billion in 2007)
• Investment in production facilities (KRW 823.7 billion in 2007)
• Development of eco-friendlier PDPs (lead-free materials, reduced glass thickness)
• Development of lower power consumption PDPs (U series)
• Development of high-output power cells for HEVs
• Development of next-generation displays and energy products (flexible displays, 3D displays, fuel cells)
• Implementation of Utility Integrated System for energy management
• Voluntary energy saving agreement with the Ministry of Knowledge and Economy
• Development of products with less power usage and longer life cycle
• Development of products that are easy to recycle
• Development of fuel cells, HEVs batteries, and various types of rechargeable batteries
• Installation of greenhouse gas catalytic converters in AMOLED lines
• Energy saving methods (heat salvaging from incinerators)
• Recycling of product packing materials
• Packaging optimization for resource saving
• Relocation of CRT glass for reuse and recycling
• Environmental technology mentoring to SMEs
• Various environmental conservation activities (tree planting, water conservation campaigns)
• Installation of VOC and odor removal devices
• Replacement of diesel and residual fuel oil with LNG
• Mid to long-term roadmap for suppliers covering manufacturing innovation, quality innovation, 6 Sigma, logistics innovation and green purchase

Supply Chain Management

Supplier Audits: Evaluation of 167 firms in 2007

Responsible Procurement

• S-Partner system (evaluating suppliers on environmental and social standards)
• Green purchases
• Large and SME Green Partnership project

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Stricter environmental regulations
• Market shifts

Opportunities

• Development of energy-efficient products
• Development of fuel cells and HEV batteries

Reporting Standards

Frameworks Used: GRI G3

Certifications: ISO 14001 (implied)

Third-party Assurance: BSI and Sd3

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• AMOLED displays
• Lead-free PDPs
• Lithium-ion batteries for HEVs
• Fuel cells

Awards & Recognition

• 4th Korean New Growth Management Awards Presidential Award
• Best Environmental Management Award (2007 Eco-advancement and Production Cost Reduction Exhibition Awards)
• Best Firm (2007 Choong Nam Quality Management Awards)
• Ethical Management Award (Daily Economic Newspaper)

Environmental Metrics

ESG Focus Areas

• Climate Change
• Resource Conservation
• Eco-friendly Products
• Corporate Social Responsibility
• Good Corporate Governance
• Supply Chain Sustainability
• Employee Well-being
• Stakeholder Engagement

Environmental Achievements

• Reduced GHG emissions by 176,174 tCO2e compared to 2008; improved GHG emissions reduction to KRW 6.23 billion/kilo tCO2e (1.4 times improvement from 2005 baseline)
• Reduced water usage by 2,605 kilotons compared to the previous year; improved water use efficiency to KRW 595 million/ton (two-fold improvement over 2005)
• Reduced waste generation by 25 kilotons from 2008; achieved 91% waste recycling rate
• Reduced chemical use in PDP process by over 300 tons of hydrochloric acid and 2,000 tons of nitric acid and caustic soda annually at the Ulsan Plant
• Achieved zero reported work-related diseases for the second consecutive year

Social Achievements

• Launched GSCM (Global Supply Chain Management) system for batteries
• Launched win-win partnership initiatives at Ulsan and Cheonan Plants
• Expanded the Empathy Plus Seminar at Cheonan Plant to encompass the entire Energy Business Division
• Maintained the percentage of new female recruits at about 20% of total new hires
• Donated KRW 680 million (Korea basis) to support worthy causes; 7,542 employees engaged in volunteering

Governance Achievements

• Obtained BCM (Business Continuity Management) international certification (BS25999) for all segments of the battery business
• Introduced Plant Operation Approval System to manage potential risks in building new production lines
• Implemented Compliance Program to adhere to business-related laws and regulations
• Conducted companywide corruption inspection and disciplined violators

Climate Goals & Targets

Environmental Challenges

• Downward trend in CRT sales due to growing demand for flat panel TVs
• Supply chain disruptions due to the global economic downturn
• Need to curb the use of rare metals in rechargeable batteries
• Climate change and its impact on business operations
• Maintaining a clean corporate culture and preventing corruption

Mitigation Strategies

• Reduced the number of overseas CRT lines from nine to five
• Launched initiatives for efficient integration of individual systems and GSCM system
• Made facility investments for rechargeable battery materials to replace cobalt with non-cobalt material
• Developed high-capacity batteries for ecofriendly vehicles
• Implemented Compliance Program, conducted ethics training, and strengthened fraud monitoring

Supply Chain Management

Responsible Procurement

• S-Partner accreditation system assessing supplier's social and environmental standards

Climate-Related Risks & Opportunities

Opportunities

• Development of energy-efficient products
• Expansion into rechargeable batteries for automobiles and power storage

Reporting Standards

Frameworks Used: GRI G3 Guidelines, Environmental Reporting Guidelines of the Ministry of Environment of Korea

Certifications: ISO 14001

Third-party Assurance: Two Tomorrows (Asia) Limited; BSI Group Korea (for GHG)

Sustainable Products & Innovation

• Lithium-ion batteries for E-Bikes
• High-capacity 3.0Ah battery
• Large-area polymer batteries
• Ultra-thin PDP 850 TV
• Slim CRT products
• Dye-sensitized solar cells
• SOFC (Solid Oxide Fuel Cell) stack

Awards & Recognition

• Included in DJSI for six consecutive years
• Gold Class distinction in DJSI
• Sector Mover in DJSI
• 2009 Frost and Sullivan Best Practices Award for rechargeable battery

Environmental Metrics

ESG Focus Areas

• Securing Future Growth Engines
• Securing Product Quality and Safety
• Promotion of a Safe Workplace Culture
• Climate Change Response
• Human Resource Management
• Management of a Sustainable Supply Chain

Environmental Achievements

• Reduced GHG emissions by 52,877 tCO₂e
• Reduced energy consumption by 1,081 TJ
• Achieved 93.3% recycling rate for waste

Social Achievements

• Zero accidents at workplaces
• Invested 5 billion KRW in social contributions
• Improved employee education infrastructure

Governance Achievements

• Zero cases of imposed penalties or restrictions due to legal and regulatory violations
• Established a compliance management system
• Implemented a career level system for employee evaluation and compensation

Climate Goals & Targets

Environmental Challenges

• Difficult business environment in Korea
• Rapidly changing technology trends
• Strict environmental regulations
• Growing interest in renewable energy
• Global competition in battery and electronic materials sectors
• Supply chain risks related to responsible mineral sourcing

Mitigation Strategies

• Consistent investment in R&D
• Development of innovative products
• Development of high-efficiency, high-energy-density batteries
• Expanded application of energy management system
• Continuous improvement of HR management system and working environment
• Implementation of S-Partner certification system
• Partnership with GIZ for Cobalt for Development project

Supply Chain Management

Supplier Audits: 91/year

Responsible Procurement

• CSR Compliance Agreement
• S-Partner certification system
• Code of conduct for suppliers
• Responsible mineral sourcing policies

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Standards (Core Option), IIRC framework, K-IFRS

Certifications: ISO 14001

Third-party Assurance: DNV GL

UN Sustainable Development Goals

• Goal 7 (Affordable and Clean Energy)
• Goal 4 (Quality Education)
• Goal 8 (Decent Work and Economic Growth)
• Goal 12 (Responsible Consumption and Production)
• Goal 13 (Climate Action)

Activities contribute to these goals through energy efficiency improvements, education programs, job creation, waste reduction, and GHG emission reduction

Sustainable Products & Innovation

• Eco-friendly batteries
• High-efficiency batteries
• High-energy-density batteries

Awards & Recognition

• SK Hynix Best Partner Award
• Included in DJSI World for 14th time
• Selected as one of the 2019 Global 100

Environmental Metrics

ESG Focus Areas

• Infinite Safety
• Move to Net-Zero
• Partnership with Value-Chain Partners and Community
• Accountability in Value-Chain
• Credibility in Corporate Governance
• Transparency in Stakeholder Engagement

Environmental Achievements

• Joined RE100 and publicly committed to eco-friendly management
• Calculated Scope 3 emissions
• Achieved Carbon Trust carbon footprint certifications
• Expanded batteries closed-loop system to Malaysia/Hungary
• Achieved Zero Waste to Landfill (ZWTL) Platinum certifications
• Reduced direct GHG emissions by lowering LNG use and purchasing renewable energy certificates
• Increased water reuse rate

Social Achievements

• Appointed the Chief Safety Officer
• Created VR safety training rooms
• Established a mobile safety system (M-EHS)
• Introduced big data and AI analytics techniques for the quality analysis system
• Secured thermal propagation prevention technology
• Expanded the win-win cooperation organization
• Improved partners’ manufacturing capabilities
• Signed the autonomous agreement to narrow the gap between large businesses and SMEs
• Joined Samsung-wide CSR Programs
• Expanded third-party audits on conflict mineral smelters & refiners
• Hosted Tech & Career Forum
• Facilitated communication with employees

Governance Achievements

• Created the Sustainability Management Committee under the Board
• 50% in the proportion of females out of independent directors (two out of four)
• Advanced BOD
• Opened a whistleblowing website for ethics & compliance management
• Created the Global Privacy Office under the Legal & IP Team
• Announced our shareholder return policy

Climate Goals & Targets

Environmental Challenges

• Disruptions in the supply/demand of key raw materials
• Supply chain risk associated with the IRA (Inflation Reduction Act) of the US
• Demand for increasing recycled content for battery production

Mitigation Strategies

• Secure raw materials in the mid/long-term through J/V with key raw material partners, equity investment, LTA and other diverse means
• Recycle key metals reclaimed from end-of-life batteries in collaboration with partners who possess top-notch battery recycling technology
• Meet the requirements concerning the proportion of battery components by establishing battery plants in the US and encouraging our key partners to enter the North American market
• Develop and implement detailed plans to diversify our sourcing across North America and US’ FTA partners while reducing our reliance on China
• Building a closed-loop system to reclaim cobalt, nickel, lithium and other raw materials from the scraps generated from the manufacturing process in partnership with external companies specializing in this specific field, and are expanding this system across our overseas operations
• Partner with customers to establish an end-of-life battery recovery system

Supply Chain Management

Supplier Audits: 72 companies in 2022

Responsible Procurement

• S-Partner Certification system
• Samsung SDI Partner Code of Conduct
• Responsible minerals sourcing policy
• OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from CAHRA

Climate-Related Risks & Opportunities

Physical Risks

• Typhoons, floods, heat waves, and fires
• Abnormal temperature, drought, sea level rise

Transition Risks

• Current Regulation & Policy
• Emerging Regulation & Policy
• Proposal for an EU Regulation concerning batteries and waste batteries
• EU Corporate Sustainability Reporting Directive
• Expansion of R&D in low carbon technology and product
• Market
• Increasing demand for renewable energy transition
• Reputation

Opportunities

• Increasing sales by securing low-carbon products
• Resource efficiency

Reporting Standards

Frameworks Used: GRI Standards 2021, SASB Industry Classification System, TCFD recommendations

Certifications: ISO 14001, ISO 45001, IATF 16949

Third-party Assurance: Korea Management Registrar (KMR)

UN Sustainable Development Goals

• Good Health and Well-being
• Quality Education
• Gender Equality
• Clean Water and Sanitation
• Affordable and Clean Energy
• Decent Work and Economic Growth
• Industry, Innovation and Infrastructure
• Reduced Inequalities
• Sustainable Cities and Communities
• Responsible Consumption and Production
• Climate Action
• Peace, Justice and Strong Institutions
• Partnerships for the Goals

Awards & Recognition

• CDP Climate Change Score: A-