Promoting Long-term Vision for Social Value

SK hynix cares about the way products are manufactured and treated, and firmly believes the social value it created must equal economic value. In October 2020, SK hynix announced a financial story that envisions the fortification of its business competitiveness with both DRAM and NAND Flash segment, while engaging in social value creation via ESG activities simultaneously. In January 2021, the company put forward the Green 2030 based on SV 2030 and is committed to achieving five goals by 2030: establishing RE100-related goals that can be achieved by 2030 (and fulfilling the RE100 commitment by 2050); achieving net zero by 2050, zero additional emissions of air pollutants, a gold rating at ZWTL at global production sites; and increasing in water resource savings by 300%.

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Currently, SK hynix has begun to implement the Green2030 and has achieved phased progress in some core areas.

Achieving RE100 Benchmark by 2050: On November 2, 2020, SK hynix announcedwith other SK Group subsidiaries that they will use 100% new renewable energy by 2050 and join the “RE100 (Renewable Energy 100%)” environmental movement initiative, an event launched in 2014, and 263 global companies including Google, Apple, GM, and IKEA have also announced their participation.

Prior to this, SK hynix had already embarked on initial measures to introduce renewable energy. The most representative examples are the installation of 641 kW solar power generation facilities in 2019 and two hydro-generators in 2018 at the Icheon Site in South Korea.

Figure 1: Solar Power Panels at Icheon Site

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Figure 2: Inverter Panel for Solar Power Modules at Icheon Site

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Figure 3: Hydro-generators at Icheon Site

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Achieving Net Zero by 2050: In order to achieve net zero by 2050, SK hynix will apply green tariff plans and PPA, promoting RE100 for Chinese production sites, and participating in carbon reduction projects in developing countries; the company will also promote CO2 reduction by supplying low-power semiconductors.

Figure 4: Operation of the Emissions Trading System

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Strengthening Water Resources Management: In line with the global trend, SK hynix is also committing itself to water management. According to the Green2030 plan, SK hynix has formulated core goals in the water management field, include maximizing water management efficiency through the expansion of reuse and securing ecological health. From this perspective, SK hynix plans to increase the amount of water saved in 2030 by 300% compared with 2019. Also, it will conduct real-time monitoring of the influence of effluent water on the aquatic ecosystem and carrying out more activities to secure biodiversity and prove the healthiness of water quality.

Figure5: Wastewater Recycling System & Cooling Tower Reuse System of SK hynix

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Figure 6: Diagram of Water Flow at SK hynix’s Sites

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Specifically, SK hynix is committed to improving the water resources management system through continuous facility investment. Representative examples include SK hynix’s Wastewater Reuse System, Cooling Tower Reuse facility, and water-free scrubber (WFS), etc. Through the process like these, SK hynix carries out quality control strictly according to the water quality standards required for each use. The capacity of wastewater reuse system is 60,000 tons a day as of 2021. Furthermore, the amount of water reused per day through the cooling tower system is 1,800 tons as of the first quarter of 2021. In the future, SK hynix anticipates to increase the capacity of wastewater reuse system to 80,000 tons a day.

Figure 7: SK hynix winning grand prize of Water Security 2019 Awarded by CDP²

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Figure 8: SK hynix Discovered Otters near SK hynix Icheon Production Site

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Reducing Air Pollutant Emission: SK hynix realizes that air pollution has risen as a major environmental problem. By strengthening the systematic management of pollutant emissions, SK hynix not only actively participates in activities to reduce air pollutants and greenhouse gas emissions, but also has established a treatment process in which it simultaneously removes fine dust generated while processing greenhouse gases.

Figure 9: GHG & Fine Dust Treatment Process through SK hynix’s Scrubber

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SK hynix has already achieved phased results in its overseas sites. For example, SK hynix Wuxi production site has effectively reduced 2,397 tons of greenhouse gas emissions through greenhouse gas emission reduction activities in 2019. The site maintains ISO14064 and ISO50001 energy greenhouse gas certification qualifications every year and established a renewable energy TF to continue to operate and carry out greenhouse gas emission reduction activities. In 2019, the greenhouse gas and natural gas emissions of SK hynix Chongqing production sites were reduced by 1,345 tons and 360,639 m³ respectively.

In the future, SK hynix will actively explore and apply potential new technologies to reduce the environmental impact of company operations, and help neighboring communities carry out atmospheric environmental management.

Obtaining ZWTL Validation: Another major indicator of Green2030 is to successfully obtain the Zero Waste to Landfill (ZWTL) gold rating for all production sites. SK hynix has successfully obtained ZWTL Validationin all production sites worldwide by the end of 2019. All the production sites including Icheon (Silver), Cheongju (Silver) production sites in South Korea, and Wuxi (Gold), Chongqing (Silver) production sites in China have established the management systems.

SK hynix is committed to the recycling and utilization of waste in all processes of the company’s manufacturing and operations, including the recycling of high value-added by-products that accompany the chip production process such as tungsten trioxide (WO3), or that of OAC membrane for air conditioning system as Solid Refuse Fuel (SRF). In addition, SK hynix will proactively apply environmentally friendly policies including the reduction of plastic product usage and the waste plastic recycling in our sites.

In the future, the company will make concerted efforts to maximize the operation of waste resource management in all sites and to reduce waste output while increasing its recycling rate as much as possible.

Issuing a Green Bond to Fund Environmentally Friendly Projects

In January 2021, SK hynix issued a green bond with a total value of USD 1 billion to invest in environmentally friendly business projects for accelerating ESG management. A green bond is a type of bond with a special purpose, limited to use only to fund environmentally friendly projects. At present, more than 230 global institutions have participated in the issuance of green bonds, with a total subscription amount of USD 5.4 billion.

Figure 10. Concept and Classification of ESG bonds

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As the world’s first semiconductor memory manufacturing company to issue green bonds, SK hynix plans to use the finances raised to invest in environmentally friendly projects which are associated with water quality management, energy efficiency improvement, pollution prevention, and ecological environment restoration. In particular, SK hynix plans to prioritize the establishment of a new state-of-the-art wastewater disposal plant and a water recycling system as water management is extremely critical in the semiconductor industry. Also, the company will proceed with various projects including the development of low-power solid state drives (SSDs), in order to reduce carbon emission throughout the IT ecosystem in general.

Seok-Hee Lee, SK hynix CEO, emphasized in his recent IRPS2021 speech: “If HDDs in data centers around the world are replaced with low-power SSDs, greenhouse gas emissions are expected to be reduced by 41 million tons based on business-as-usual (BAU³) estimates, which is equivalent to USD 3.8 billion of social value.”

Establishing ESG Management Committee, Opening a new Chapter for Transparent ESG management

SK hynix also strives to raise the level of ESG management from corporate operation and management perspectives. The company established ESG Management Committee this year. It is a new meeting body led directly by the CEO and meets quarterly to supervise and manage the progress of SK hynix’s SV 2030 goals, formulate mid-to-long-term ESG-related policies and issue ESG-related strategic decisions. It is believed that such measures will also contribute to the early realization of the Green2030 goals.

Caring for the Earth

As a forward-looking company, SK hynix is always growing and looking to the potential of tomorrow, and the day after that. In the future, the company will continue to maintain cooperation with business partners from the viewpoint of social value, and take environmental protection as our corporate responsibility, adhere to an environmentally friendly management policy, and continue to work to protect and improve the environment.

¹) Financial Story: SK Group’s new management strategy to increase the total value that includes corporate value by presenting the growth strategy and future vision of each subsidiary company of SK to various stakeholders such as customers, investors, and the market, generating trust and sympathy. SK hynix has established and initiated in earnest its Financial Story to contribute to humanity and society by strengthening ESG while pursuing continuous business growth through DRAM and NAND as two main pillars.

²CDP (Carbon Disclosure Project): An organization that evaluates companies’ responses to the reduction of carbon dioxide, targeting “FT 500 Global Index” companies, which are the world’s top 500 companies based on the market capitalization (In the case of Korea, top 50 companies based on the market capitalization); headquartered in the UK, a non-profit organization founded in 2000 with the support of 35 European institutional investors; since 2003, the organization has been investigating corporate risks related to climate change, social enterprises, carbon emission reduction methods, annual reduction plans, etc., of major global companies to publish the results.

³Business as usual (BAU): A total amount of greenhouse gas expected if no artificial measures are taken to reduce greenhouse gas emissions

The post Caring for the Earth: SK hynix’s Green 2030 first appeared on SK hynix Newsroom.

As a forward-looking company, we are always growing and looking to the potential of tomorrow, and the day after that. This applies to our vision for social value as well. To guide our trajectory over the next decade, SK hynix has announced SV 2030, a roadmap for maximizing social values across the company. Organized across four core areas of Environment, Shared Growth, Social Safety Net, and Corporate Culture, the ambitious project will aim to meet specific goals in each sector by 2030.

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A newly established Environmental, Social, Governance (ESG) Management Committee will convene on a quarterly basis to oversee the progression of our SV 2030 goals. This progress will be reported yearly in our annual sustainability management reports.

In his 2021 New Year’s speech, SK Chairman Chey Tae-Won emphasized the importance of this moment for the company: “It is a time when we need a new entrepreneurial spirit to empathize with society and work together to solve problems.”

Environment – Green 2030

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Environmental issues are a global concern – they affect us all, the planet we live on, and the air that we breathe. That’s why we care about the way in which our products are made, manufactured and treated. No matter the importance of a certain product, we believe its economic value must equal its social value.

Through Green 2030, SK hynix will join companies like Apple in achieving the RE100 benchmark by 2050, and thrive to achieving net zero (by 2050), zero additional emissions of air pollutants, a gold rating at ZWTL at its domestic production sites. Also, by advancing an eco-friendly semiconductor manufacturing system and increasing water reuse up to 3 times, we aim to contribute to a healthy planet that will continue to support future generations for years to come.

Shared growth – Advance Together

When our company succeeds, we all succeed. SK hynix aims to increase the competitiveness of the Korean semiconductor industry by enhancing the capabilities of our partner companies including suppliers of semiconductor materials, components, and equipment. As semiconductors have a profound impact on the national economy, we believe that revitalizing the semiconductor ecosystem through partnerships can reinvigorate our economy.

To this end, we will achieve KRW 3 trillion in cumulative investment in technological cooperation for business partners. We will sequentially invest KRW 1.2 trillion in the establishment and operation of a ‘We Do Tech Center,’ operated as SK hynix’s flagship semiconductor ecosystem platform. In addition, it will expand and implement a win-win growth program, including support for technologically innovative companies, industry-academia, and national projects.

Social Safety Net

A social safety net is an infrastructure to establish the role of companies in preparation for crisis situations such as pandemics or natural disasters, and to enhance their capabilities to solve social problems. We plan to create a system of roles that companies should perform in emergency situations and create a separate fund to implement them. We will also invest in the specific needs of the local communities where our production bases are located.

Building a healthy social safety net is no mean feat, but SK hynix has managed to do just that thanks to its tireless work for local communities made possible by its kindhearted employees. Our main goal is supporting those who need it the most, like low-income families and the elderly. This is why SK hynix America founded the VOICE (Valuable Opportunities for Interaction, Collaboration, and Engagement) initiative which allows its employees to do their bit for the local society through food bank volunteering, toy and backpack drives, fundraisers, and events supporting important social movements and celebrations like International Women’s Day. To assist elderly locals, the company set up a social contribution program that already benefits 100,000 people who are not familiar with modern technologies like using unmanned convenience stores.

SK hynix is helping communities in numerous ways. Take its job creation track record as a perfect example, is aiming to create 1,000 jobs for people with disabilities and encouraged more than 100,000 to participate in a its global ICT human resource development program. And SK hynix did not shy away when the pandemic struck the globe in early 2020, its US division donating an incredible 50,000 masks to medical workers around San Jose, California, where its HQ is based.

In the future, SK hynix plans to create a system of roles that companies should perform in emergencies and create a separate fund for this.

As we have seen through the COVID-19 pandemic, crises such as these tend to impact the weakest places in society. That’s why SK hynix plans to actively support the vulnerable against the threat of public safety, health and livelihood.

Corporate Culture – Diversity and Inclusion

SK hynix’s working culture continuously evolves, the company focusing on improving the happiness of its employees by providing a level playing field for all and the opportunity to grow as people and professionals. To foster an effective learning environment, we encourage employees with 200 hours of self-development education on top of insightful diversity training that promotes equal opportunities. The company is also making efforts to establish gender-balanced workforce, with a commitment to guarantee leadership-nutruring training programs for female employees twice the number of current female managers.

At SK hynix, the purpose of corporate management is to ensure the happiness of its members. We are committed to promoting a diverse and inclusive corporate culture where self-development is encouraged and supported.

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Our goal is to create a truly inclusive, vibrant community where all voices are lifted up and celebrated. To achieve this, we will implement education trainings on diversity and inclusion topics, expand our female recruitment rates, and reinforce our female leader training programs.

Your Questions Answered

Curious to hear even more? We’ve answered some of the top questions about our SV 2030 commitment below.

Q: What are we doing to become Net Zero by 2050?
A: A total of 13 million tons CO2 will be saved by 2030. Specifically, 6.5 million tons of CO2 emissions will be reduced  through domestic RE certification using green tariff plans and PPA, RE100 for Chinese business sites, and participation in carbon reduction projects in developing countries. Another 6.5 million tons will be saved by promoting CO2 reduction by supplying low-power semiconductors (detailed measurement methodology being developed).

Q: What are the air pollutants we’re concerned with? How much are we emitting?
A: Sulfur oxide, nitrogen oxide, dust, fluorine, ammonia, hydrogen chloride, formaldehyde (VOCs), etc. According to our Sustainability Reports, we emitted about 690 tons in 2020 and about 650 tons in 2019.

Q: What are we doing to expand waste recycling?
A: Enhancement of the actual recycling rate of designated wastes, promotion of heat recovery and reuse of incineration waste, reinforcement of waste resource recycling efforts, etc.

Q: What are some of the representative water resource saving activities?
A: There is a case of a water-free scrubber that breaks the common sense of conventional scrubbers that purify harmful gases with water and treats high-temperature gas with an indirect cooling method to save water and costs with a waterless scrubber.

Q: Is the ESG Management Committee a regular meeting body led by the CEO?
A: As the recent emphasis on ESG management continues, it is a new meeting body led directly by the CEO, and mid- to long-term ESG-related policies and strategic decisions are made.

Q: What is the status of RE100 declaration in the semiconductor industry?
A: In July 2020, Taiwan’s TSMC declared that it would achieve RE100 by 2050. SK hynix is the first among semiconductor memory companies to do so.

Q: Are there any plans for cooperation with partner companies as well as customers in the future related to RE100?
A: Many global clients have already declared and implemented RE100 and are requesting cooperation from our company in the supply chain to achieve their environmental goals. In the future, we will continue to maintain cooperation from the viewpoint of social value, and we will support environmental management of business partners through the ECO Alliance, etc.

The post SK hynix Announces SV 2030: A Long-Term Vision for Social Value first appeared on SK hynix Newsroom.