Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Joined RE100 Initiative in December 2020 and set RE100 2040 and Net Zero 2040 goals.
• Purchased 5.7GWh of green premium electricity in 2021.
• Acquired ISO 14001 certification in June 2021.

Social Achievements

• Created KRW 942.1 billion of Social Value in 2020.
• Implemented an in-house investment competition program, One Investment Center-One Impact, where employees voluntarily participate in impact investment.
• Operated the SIAT project to foster talent of young people with disabilities and support their employment.

Governance Achievements

• Established an ESG Committee with 6 members including 5 independent directors.
• Established a global first-rate premium governance system.
• Acquired ISO 37001 certification in 2021 for anti-corruption management.

Climate Goals & Targets

Environmental Challenges

• Rising cost for carbon credit purchase due to increase in carbon emission and price hike of carbon credit.
• Increase in additional cost due to purchase of renewable electric energy power.
• Increased investment for new technology self-generation and expanding low carbon eco-friendly facilities.

Mitigation Strategies

• Implementing diverse preemptive reduction measures, such as moving to renewable energy, self-generation, enhancing electric power efficiency of the data center, and planning to garner carbon credits from emission reduction.
• Implementing an optimal mix of procurement means and from transactional income from carbon credits etc.
• Proceeding with the expansion of self-generation and investment in energy efficiency of the data center to minimize environmental impact, and be at the forefront of the renewable energy ecosystem by securing/applying renewable energy and low carbon technology.

Supply Chain Management

Supplier Audits: 52 superior and superior S BPs in 2021

Responsible Procurement

• Code of conduct for business partners
• Green purchase policy
• ESG practice support policy for business partners

Climate-Related Risks & Opportunities

Physical Risks

• Data center power outage
• Damage to data center facilities in large-scale disasters
• Increase in data center operating cost due to temperature rise

Transition Risks

• Increase in the cost of purchasing carbon credits
• Increase of additional costs associated with purchasing renewable electricity
• Increased investment due to new technology self-generation and expansion of low-carbon eco-friendly facilities

Opportunities

• Expanded business demand for high-efficiency/eco-friendly data centers
• Introduction of various new technologies and renewable energy
• Expanding demand for ICT based eco-friendly product/service

Reporting Standards

Frameworks Used: GRI Standards (Core Option), UNGC CoP, TCFD, SASB

Certifications: ISO 14001, ISO 45001, ISO 37001

Third-party Assurance: Korea Management Registrar Inc. (KMR)

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 8 (Decent work and economic growth)
• Goal 9 (Industry, innovation and infrastructure)
• Goal 13 (Climate action)

Initiatives contribute to these goals through renewable energy adoption, job creation, technological innovation, and greenhouse gas reduction.

Sustainable Products & Innovation

• Eco-friendly data centers
• AI-based solutions for environmental management
• Eco-friendly materials replacing plastic and paper

Awards & Recognition

• Included in DJSI World for 9 consecutive years
• Rated A+ in ESG by KCGS
• Presidential Commendation for Sustainability Management

Environmental Metrics

ESG Focus Areas

• Climate Change
• Green Technologies
• Biotechnology
• Digital Innovation
• Governance
• Shareholder Value
• Ethical Management
• Human Resources

Environmental Achievements

• Expanding the share of renewable energy in power supply to approximately 10% in 2022 (from 3% in 2021), aiming for 16% in 2023.
• Achieved approximately 93.2% waste emission reduction based on Zero Waste To Landfill (ZWTL) standards.
• Invested 30% of total investment in eco-friendly businesses in 2022.

Social Achievements

• Launched a mid- to long-term shareholder return policy in March 2022.
• Awarded the 2023 Presidential Commendation for Excellent Employment Equality between Men and Women.
• Created social values of KRW 1,489.4 billion in indirect economic contribution, KRW 94.1 billion in environmental performance, and KRW 79.7 billion in social performance in 2022.

Governance Achievements

• Established a board-centric corporate governance structure.
• Achieved an ‘A+’ grade in corporate governance from the Korea ESG Standards Institute.
• Obtained the highest rating of ‘AAA’ from MSCI.

Climate Goals & Targets

Environmental Challenges

• Volatility of Korea's RE100 implementation policy.
• Strengthening of the Emissions Trading System (ETS).
• Potential lawsuits against companies failing to reduce greenhouse gas emissions.
• Failure to secure clean tech investments.
• Increased demand for information on environmentally certified products.
• Demand for disclosure of climate change plans and implementation results.

Mitigation Strategies

• Developed a roadmap to achieve RE100 by 2040, prioritizing self-generation and exploring PPAs.
• Implementing the Net Zero 2040 roadmap and reduction plans, promoting various mitigation projects.
• Transparent disclosure of annual greenhouse gas reduction performance.
• Actively investing in clean tech and expanding the proportion of environmentally friendly investments.
• Managing the presence of eco-labels for purchased hardware products and enhancing supplier engagement.
• Transparent disclosure of strategies and performance through TCFD reports and sustainability reports.

Supply Chain Management

Supplier Audits: 791 suppliers participated in ESG diagnosis in 2022.

Responsible Procurement

• Green procurement policies.
• Supplier ESG Code of Conduct.
• ESG risk management policy for all suppliers.

Climate-Related Risks & Opportunities

Physical Risks

• Increased frequency and intensity of natural disasters.
• Increased likelihood of extreme climate/sea level rise.

Transition Risks

• Volatility of Korea's RE100 implementation policy.
• Strengthening ETS.
• Introduction of CBAM.
• Failure to secure clean tech investment.

Opportunities

• Transition into renewable energy sources.
• Growing demand for electric vehicle materials and technologies.
• Growing demand in the sustainable food market.
• Emphasis on eco-friendly bioenergy.
• Expanding demand for IT solutions/services to respond to climate change.

Reporting Standards

Frameworks Used: GRI Standards, UNGC Communication on Progress (CoP), TCFD recommendations, SASB industry-specific considerations

Certifications: ISO 14001, ISO 45001, ISO 27001, ISO 27017, ISO 27018

Third-party Assurance: ESG reporting specialist

UN Sustainable Development Goals

• Goal 7 (Affordable and Clean Energy)
• Goal 8 (Decent Work and Economic Growth)
• Goal 9 (Industry, Innovation and Infrastructure)
• Goal 13 (Climate Action)

Various initiatives contribute to these goals through renewable energy expansion, job creation, digital innovation, and climate change mitigation.

Sustainable Products & Innovation

• Carbon Reduction Certification and Trading Platform (Centero)
• ESG Management Platform (Click ESG)

Awards & Recognition

• 2023 Presidential Commendation for Excellent Employment Equality
• CDP Climate Change Korea Awards (Carbon Management Sector Honors)

Environmental Metrics

ESG Focus Areas

• Climate Change Response
• Ethics and Compliance
• Talent Management
• Portfolio ESG Management

Environmental Achievements

• Achieved 18.1% renewable energy usage rate in 2023, exceeding the target of 16%
• Reduced Scope 1+2 emissions to 126,641 tCO2eq in 2023
• Achieved a 93.59% waste recycling rate in 2023

Social Achievements

• Improved employee satisfaction score to 76 points in 2023
• Implemented various work-life balance programs, including spousal maternity leave and family care programs
• Launched C&C College to enhance employee competencies

Governance Achievements

• Maintained AAA rating from MSCI for two consecutive years
• Included in the Dow Jones Sustainability Index (DJSI) World Index for 12 consecutive years
• Implemented an active shareholder return policy

Climate Goals & Targets

Environmental Challenges

• Volatility in South Korea's renewable energy policy
• Strengthening of the Emissions Trading System (ETS)
• Increased data center operating costs due to rising temperatures
• Increased disaster recovery costs for data centers due to major river flooding
• Supply chain manufacturer operational stoppage due to natural disasters
• Climate risk management requirements in the investment portfolio
• Increased financial impact from physical risks in the investment portfolio

Mitigation Strategies

• Installing solar power facilities for self-generation
• Implementing the Net Zero 2040 roadmap and reduction plan
• Replacing air conditioning equipment and optimizing IT infrastructure
• Conducting disaster response drills and preventive maintenance
• Annual data collection on greenhouse gas reduction strategies from key suppliers
• Calculating actual risk costs and comparing them with operating profits
• Using external climate/weather data to estimate financial impacts

Supply Chain Management

Supplier Audits: 1,262 suppliers underwent ESG screening in 2023; 86 significant suppliers received in-depth assessments.

Responsible Procurement

• Supplier Code of Conduct
• ESG screening
• ESG consulting program
• Incentive and penalty programs

Climate-Related Risks & Opportunities

Physical Risks

• Increased frequency and intensity of natural disasters
• Increased likelihood of abnormal climate/weather, sea level rise

Transition Risks

• Volatility in South Korea's RE100 implementation policy
• Introduction of CBAM
• Strengthening of ETS

Opportunities

• Increased demand for electric vehicle materials and technologies
• Increased demand in the sustainable food market
• Increased demand for IT management solutions/services for climate change response

Reporting Standards

Frameworks Used: GRI 2021 standards, EU Corporate Sustainability Reporting Directive (CSRD), TCFD

Certifications: ISO 14001, ISO 45001, ISO 37001, ISO 37301, ISO 27001, ISO 27017, ISO 27018

Third-party Assurance: Third-party assurance provider mentioned, but not specified.

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 8 (Decent work and economic growth)
• Goal 9 (Industry, innovation, and infrastructure)
• Goal 12 (Responsible consumption and production)
• Goal 13 (Climate action)

The report explains how various initiatives contribute to these SDGs.

Sustainable Products & Innovation

• Eco-friendly digital products and services under the CodeGreen brand
• Low-carbon products and services

Awards & Recognition

• AAA rating from MSCI
• Inclusion in DJSI World Index
• Gold grade Zero Waste to Landfill (ZWTL) certification