SK hynix Inc. (or ‘the Company’, www.skhynix.com) announced its achievements in creating social value (SV) in 2020. Since 2019, major affiliates of SK Group have been quantifying and announcing the SVs created in the previous year in three areas of “achievements in indirect contribution to the economy”, “business achievements in social performance”, and “achievements in social contribution”.

SK hynix’s achievements of SV last year in the three areas are as follows: KRW 5,373.7 billion for “achievements in indirect contribution to the economy” including tax payment, employment, and dividends; KRW -596.9 billion for “business achievements in social performance” including social (labor/shared growth) and environmental fields; and KRW 110.6 billion for “achievements in social contribution” including donation and social contribution activities.

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The achievements in indirect contribution to the economy has increased by 32% (KRW 1,314.3 billion) compared to the previous year as the semiconductor business conditions improved from last year. The business achievements in social performance, however, the negative amount has increased by 11% (KRW 57.1 billion) year on year due to environmental impacts such as greenhouse gas emissions. Meanwhile, the amount of achievements in social contribution has increased by KRW 41.3 billion mainly due to intensive support for overcoming COVID-19.

Looking into each area more specifically, the Company announced that the achievements in indirect contribution to the economy have shown meaningful results in all sectors of tax payment, employment, and dividends. Firstly, the amount achieved in the tax payment sector has significantly increased by 211% compared to the previous year. Also, SK hynix reached the quota employment rate for the disabled (3.1% for private companies with 50 or more employees at all times) in 2020, achieving results in terms of employing the vulnerable. In terms of dividends, the achievement amount has increased by 17% year on year. SK hynix expects that the achievements in indirect contribution to the economy will continue to grow with the clear signs of improvements of the industry conditions this year.

Business achievements in social performance incurred the negative costs of KRW 944.8 billion in the environmental sector, increased by KRW 127.2 billion from 2019. SK hynix explained that this is due to the characteristics of the semiconductor industry, which consumes large amounts of water and electricity and emits greenhouse gases during the manufacturing process. An official from SK hynix said, “As a result of efforts such as recycling resources across the company, the amount of greenhouse gas emissions per unit production has decreased. However, the Company feels regrettable to its stakeholders that total amount of emissions have increased. SK hynix will focus on reducing the total amount of greenhouse gas emissions by making efforts in various fields such as environmental technology development to reduce adverse environmental impacts.”

Nevertheless, SK hynix has shown the increase of 21% year on year by KRW 322.4 billion in social sector and 116% year on year by KRW 25.5 billion in the products/services sector, partially improving the negative result in overall environmental sector. The Company has strengthened support for its partners by operating “the Technology Innovation Company program” and “the analysis and measurement support center” to foster localization of materials, parts, and equipment. Also, the Company has expanded the supply of low-power products including SSDs that drastically reduce carbon dioxide emissions.

SK hynix has recorded a 60% increase year on year by KRW 110.6 billion in achievements in social contribution. Throughout last year, SK hynix continuously strived to contribute to overcoming the COVID-19 crisis. The Company showed its support to medical staff and provided smart devices necessary for remote learning for children from low-income families in order to build a social safety net.

SK hynix plans to concentrate the company-wide capabilities on “SV 2030”, announced in January this year as the company’s mid- to long-term plan for SV creation. Through this, the Company aims to achieve key goals including becoming net zero by 2050, vitalization of the semiconductor ecosystem, establishment of a social safety net, and internalization of a corporate culture based on diversity and inclusion.

In particular, as the first company to join RE100* in the semiconductor memory industry, SK hynix has shown its strong will to actively make improvements in the environmental field through various efforts such as minimizing greenhouse gas emissions, reducing waste, and expanding water resource recycling in the semiconductor manufacturing process. In addition to this, the Company plans to continue its efforts to replace the existing storage device, HDD, with low-power SSD to expand environment-friendly technology.

*RE100: Declaration to cover 100% of the company’s electricity us with renewable energy by 2050

Kim Youn-wook, Vice President for Corporate Sustainability Management of SK hynix said, “SK hynix has been raising the objectivity and reliability in measuring its performance by announcing the company’s social value achievements for three consecutive years. We also will keep seeking ways to contribute to humanity and society by increasing the scale of social value creation while strengthening ESG management at the same time.”

※ Reference: The purpose and future plans of SK’s social value measurement announcement

Since 2019, SK Group measures the social values created in the previous year based on the ‘Double Bottom Line (DBL) Management’ that pursues both economic value (EV) and social value (SV) and publishes the results every year.

Over the past three years, SK has achieved promising results in the products and services areas, such as displaying meaningful social value creation achievements, and expanding employment of socially vulnerable groups. Nevertheless, SK self-evaluated that the innovation of business model (BM) based on social values has not yet ridden the track, and that a breakthrough effort to drastically reduce greenhouse gas emissions is still necessary.

SK, which is implementing a financial story based on ESG, plans to actively connect its social value measurement with its ESG management, by reflecting social value measurement result in management strategies and decision-making of SK’s affiliates. It also plans to increase the reliability of measurement by transparently disclosing the greenhouse gas measurement index and formula to external stakeholders.

Meanwhile, the quantitative measurement of ESG performance is also spreading globally. The Value Balancing Alliance (VBA), launched by SK with more than 20 global companies and organizations such as BASF and Novartis in order to develop a global measurement model, is currently expanding its influence by collaborating with the International Financial Reporting Standards (IFRS) and the World Economic Forum (WEF), and Harvard Business School (HBS). SK plans to lead the global standardization of social performance measurement by strengthening cooperation with these organizations.

About SK hynix Inc.

SK hynix Inc., headquartered in Korea, is the world’s top tier semiconductor supplier offering Dynamic Random Access Memory chips (“DRAM”), Flash memory chips (“NAND Flash”) and CMOS Image Sensors (“CIS”) for a wide range of distinguished customers globally. The Company’s shares are traded on the Korea Exchange, and the Global Depository shares are listed on the Luxemburg Stock Exchange. Further information about SK hynix is available at www.skhynix.com, news.skhynix.com.

Media Contact

SK hynix Inc.
Global Public Relations

Technical Leader
Jaehwan Kevin Kim
E-Mail: global_newsroom@skhynix.com

Technical Leader
Eun Suk Yixi Lee
E-Mail: global_newsroom@skhynix.com

Technical Leader
Sejin Julia Yoo
E-Mail: global_newsroom@skhynix.com

The post SK hynix Announces 2020 Social Value (SV) Achievements first appeared on SK hynix Newsroom.

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.

SK hynix Inc. (or ‘the Company’, www.skhynix.com) issued a green bond with a total value of USD 1 billion to invest in environmentally friendly business projects for accelerating its environmental, social, and governance (ESG¹⁾) management.

A green bond is a type of bond with a special purpose, limited to use only to fund environmentally friendly projects. Among global semiconductor memory manufacturers, SK hynix is the first company which has issued a green bond.

Companies across the world are setting out for ESG activities in recent in order to proactively respond to environmental problems such as climate change. In fact, global IT companies like Apple and TSMC have already participated in RE100²⁾ and issued ESG bonds³⁾ as well. SK hynix also announced its participation in RE100 with other affiliates of SK Group in last year, being one of the first companies to do so in South Korea.

More than 230 global institutions ordered a total value of USD 5.4 billion for the green bond issuance. As such SK hynix decided to increase the total value of the issuance from USD 500 million to USD 1 billion.

With the finances raised by this bond issuance, SK hynix plans 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 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.

SK hynix thrives to gradually replace hard disk drives (HDDs), which are one of the representative storage devices, with SSDs. The effort will not only signal the improvement of product technology overall, but also contribute to carbon emission reduction significantly, resulting in a noticeable social value creation in environmental area. It is expected that if all the HDDs are replaced with SSDs, carbon dioxide emissions generated by HDDs can be decreased by 93% or even more.

Hyuk Joon Chang, Head of Finance at SK hynix said, “The successful issuance of the global green bond is the result of the global investors’ recognition of SK hynix’s proactive movements to achieve eco-friendliness, including the company’s participation of RE100. As a semiconductor memory manufacturer leading ESG management, SK hynix will continue to contribute to creating social value as well as economic value by securing sustainable sources for the growth of the Company.”

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. SK hynix aims to secure the trust and support of stakeholders to eventually increase the corporate value, by starting implementing the financial story in earnest this year.

Definition of Terms

1) ESG
– An abbreviation for environment, social, and governance, which stands for a standard for determining a company’s non-financial performance

2) RE100
– RE100 is a global initiative bringing together the world’s most influential businesses committed to 100% renewable electricity. Led by the Climate Group since 2014, 263 companies joined the initiative so far globally.

3) ESG bonds
– Bonds issued for the projects with the purpose of improving environmental, social, and governance aspects; divided into green bonds, social bonds, and sustainability bonds

Disclaimer

“These materials are not an offer for sale of the securities of SK hynix Inc. in the United States. The securities may not be offered or sold in the United States absent registration with the U.S. Securities and Exchange Commission or an exemption from registration under the U.S. Securities Act of 1933, as amended. SK hynix Inc. does not intend to register any offering in the United States or to conduct a public offering of securities in the United States.”

About SK hynix Inc.

SK hynix Inc., headquartered in Korea, is the world’s top tier semiconductor supplier offering Dynamic Random Access Memory chips (“DRAM”), Flash memory chips (“NAND Flash”) and CMOS Image Sensors (“CIS”) for a wide range of distinguished customers globally. The Company’s shares are traded on the Korea Exchange, and the Global Depository shares are listed on the Luxemburg Stock Exchange. Further information about SK hynix is available at www.skhynix.com, news.skhynix.com.

Media Contact

SK hynix Inc.
Global Public Relations

Technical Leader
Jaehwan Kevin Kim
E-Mail: global_newsroom@skhynix.com

Technical Leader
Sejin Julia Yoo
E-Mail: global_newsroom@skhynix.com

Technical Leader
Eun Suk Yixi Lee
E-Mail: global_newsroom@skhynix.com

The post SK hynix Issues a USD 1 Billion Green Bond to Strengthen Its ESG Management first appeared on SK hynix Newsroom.