Reporting Framework


In 2021, SK ecoplant introduced disclosures in line with the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD), a climate change-related information disclosure framework. To facilitate active implementation, we registered as a TCFD Supporter in 2022 and are now participating in the Korean TCFD Alliance. To achieve external recognition of our Net Zero plan, we have also asked for target verification by SBTi in 2022. The Net Zero plan is disclosed via TCFD.


(1) BOD supervision of climate change-related risks and opportunities

In 2021, SK ecoplant established an ESG Committee – consisting of four outside directors and one non-executive director – within the Board of Directors to enable management and supervision of climate change by the highest decision-making body. Significant climate change agenda, such as climate change response strategies, Net Zero plans, company-wide GHG emission reductions, and investment reviews are considered in terms of climate change risks and opportunities and reported to the Board of Directors and ESG committee at least once a year. In November 2021, we reported our Net Zero plan and TCFD disclosure framework. In 2022, we added a CO2 emission reduction target in the KPI for our CEO to reinforce management's obligation to implement our Net Zero plan.
As we shifted our business model from construction to environment and energy in 2021, climate change has become a key business strategy. To consider climate change in the investment decision making process, especially if the investment volume exceeds a certain amount, climate change risks and opportunities are reported to the Board of Directors through a climate change review. ESG Promotion Division, which is in charge of responding to climate change, reviews the costs for reducing emissions, investment in businesses and technologies that can cut carbon emissions, and innovative technologies that can induce GHG reductions. The Board of Directors and the ESG Committee use these climate change reviews in the investment decision making process, and in business planning, to help realize The Zero City that pursues Zero Carbon and Zero Waste. For example, in the case of offshore wind power investment, which was reported to and approved by the Board of Directors in November 2021, the increase in demand for renewable energy sources as a result of climate change was considered.

- BOD/ESG committee

SK ecoplant manages and supervises responses to climate change at the level of the Board of Directors, the highest decision-making body. Significant climate change agendas are reported at least one a year. In March 2021, an ESG committee was established under the BOD to strengthen ESG management. The ESG Committee established and evaluates the company’s mid-to long- term strategies and annual management plans, including climate change response.
In 2021, we incorporated climate change into our core business strategy while transitioning our business model from the construction industry to the environment and energy industry. In the case of significant investments over a certain scale, climate change risks and opportunities are reported to the BOD through climate change review on the investment deliberation process.

이사회/ESG위원회 테이블 (Type, 위원, 전문분야, 주요기능)
Type Directors Specialization Main role
2 Independent director Seung-Ho Lee(chairman) finance, taxation, administration, risk management To advance ESG of SK ecoplant, committee review and discuss the company’s mid-to long-term strategy, annual management plan, significant individual investment agenda, governance improvement, social value creation and promotion, climate change response strategy, QSHE policy, etc.
Sun-Kyu Park industry expertise, safety management, Globality, organizational management
1 Non-executive director Sung-Hyung Lee management, finance, financing, M&A, risk management
[BOD and ESG committee agendas related to climate change]
BOD and ESG committee agendas related to climate change 테이블 (가결, 보고, 검토)
Approved Report Review
  • Equity investment in domestic offshore wind power business
  • ESG Management System
  • Agreement for ESG Management of SK ecoplant's subsidiary
  • Investing in 'Project Sun'
  • Investing in company T's
  • Review of participation in domestic offshore wind power business
  • Growth strategy of global leading environmental company
  • Apartment House Brand Rebuilding
  • Report on detailed investment plan for environmental business
  • Eco-friendly energy business strategy
  • Capital increase of 'offshore wind power Co., ltd'
  • ESG Management System
  • Agreement for ESG Management of SK ecoplant's subsidiary
  • Investing in offshore wind power system
  • Split-merge of Greenenergy division
  • Investing in the Environmental Business Fund.
  • Strategy of 'E-Waste recycling business'
  • Improving standards of ESG and Net Zero
  • Strategy of 'Offshore wind power' market entry
[BOD Supervision and the Roles and Responsibilities of Management]
이사회의 감독 및 경영진의 역할 테이블 (조직, 기후변화 대응에 관한 역할과 책임)
Organization Key Roles
BOD and Committee BOD, ESG Committee

Annual report

  • Review and supervise company-wide climate change strategies
  • Review investments considering climate change risks
  • Decide CEO incentives related to climate change, etc.
Management CEO, BU representatives, Center leaders

Quarterly scheduled report and regular reports for significant issues

Working Group ESG Division
  • Company-wide climate change response organization
  • Establish Net Zero Strategies and supervise company-wide Net Zero actions
  • Review climate change risks on significant investments agenda
Net Zero Transition Council

Operate once a month

  • It is a consultative council for the purpose of promoting company-wide Net Zero.
  • Business units: Net Zero business model development and decarbonization of existing businesses. Monitoring workplace GHG data and analyzing emission resources monthly
  • Management, purchasing: Reflecting Net Zero strategies in financial plans and purchasing low-carbon products (low-carbon cement, etc.)
  • R&D center: Review and invest in technologies for realizing Net Zero (CCUS, etc.)
Group Subsidiary ESG Committee

Operate once a month

  • Monitor and supervise subsidiaries' climate change strategy

※ CDP level improvement, etc.

  • Support them to achieve Net Zero goals.
Subsidiaries TES, EMC, Samkang M&T, Green Env. Tech, DDS, Saehan Env., City Environment, Daewon Green Energy, e-Medi One, JA Green, DY Indus, DY Polymer
  • Internalization of ESG management, including climate change.
SK Group SUPEX Council

Operate once a month

  • Connect SK ecoplant’s Net Zero plan with SK Group’s carbon reducing goals and strategies.
(2) Management’s role in assessing and managing climate change-related risks and opportunities
- Management

SK ecoplant’s CEO and senior management oversee the implementation of our climate strategies, including the Net Zero reduction process, goals, and investments. To enhance the responsibilities of management, a reduction target for CO2 emissions was included in the KPI for our CEO in 2022 to help realize the Net Zero plan. Our CEO will receive financial incentives when the relevant outcomes are achieved. Through monthly study sessions, the CEO is also acquiring specialized knowledge – such as CCUS and K-Taxonomy – to strengthen our ability to respond to climate change.
SK ecoplant's ESG Promotion Division is responsible for our climate change response, including the overall management of our climate change response processes – including Net Zero, SBTi, and TCFD disclosures. Issues are reported to the CEO.
In March 2022, the Net Zero Promotion Council, which includes executives from all business areas, was launched to ensure momentum through a company-wide consultative body to achieve Net Zero by 2040. A representative council, including C-Level executives, is convened every quarter, and a working-level council is held every month.

- Working Group
[ESG Division]

ESG Division is in charge of SK eocplant’s climate change response. This organization is establishing a company-wide Net Zero plan and promoting SBTi verification, TCFD disclosures, and reviewing climate change risks on significant investment agendas. Regularly reporting climate change agendas to the CEO.

[Net Zero Transition Council]

In March 2022, the Net Zero Transition Council, which includes executives from all business areas, was launched to ensure momentum through a company-wide consultative body to achieve Net Zero by 2040. A representative council, including C-Level executives, is convened every quarter, and a working-level council is held every month to discuss CCUS Pilot project, CDP, green purchasing policy, energy usage monitoring.

※ Major achievements of the Net Zero Promotion Council

1) Analyzed the reasons why CO2 emissions and energy consumption have increased at all sites compared to the same period last year, and applied improvement plans to all departments across the company
2) Installed solar panels on the roof of new site offices, etc.

※ Role of Net Zero Transition Council
넷제로 추진협의체에 관한 이미지 입니다. 자세한 설명은 하단 내용을 참고하세요.

의사결정, 논의 (의사결정 사항, 실행 필요 사항), 실행

  • 이사회
  • CEO
  • 넷제로 추진협의체
  • BU/센터
  • 실행 조직

Corporate Governance

(1) Climate change-related risks and opportunities over the short, mid- and long term, and the impact of risks and opportunities on our business, strategy, and finance

SK ecoplant’s Green Business is aiming to achieve circular economy with waste zero and carbon zero, and this goal is aligned with SK group’s goal which reducing 200 million tons of carbon by 2030. The climate change scenario analysis was conducted to identify risks and opportunities related to climate change. As the global scenarios are advanced, SK ecoplant will elaborate scenario analysis to identify future forward-looking.

- Identifying significant risks and opportunities

In 2021, we incorporated climate change into our core business strategy while transitioning our business model from the construction industry to the environment and energy industry. In order to identify risks and opportunities related to climate change, we analyzed the existing strategies of all business sectors, support organizations, domestic laws, and cases of advanced global companies. The identified risks and opportunities of climate change are embedded in each business sector’s strategy.

- Short/Mid/Long-term Plans
기후변화 대응 시나리오 적용에 관한 테이블 (구분 (단기, 중기, 장기)), 시작연도, 종료연도, 비고)
Category Starting year End year Remarks
Short-term 0 3 In 2021, SK ecoplant changed its name and transitioned its businesses. In order to become Asia's leading environmental company by 2023, we are expanding our business into waste treatment and energy, based on our existing EPC businesses.
Mid-term 3 10 2030 is the standard year for near-term goals, as suggested by SBTi.
Long-term 10 20 We have long-term plans to achieve our goal of Net Zero by 2040, which was announced in 2021
- Applied scenario models (used latest model)

SK ecoplant conducted scenario analysis with 1.5-degree transition scenario to establish the business strategy and financial plan aligned with 1.5 degrees. Korean NDC was considered to figure industry and regional features.
Transition scenarios: IEA B2DS, IEA NZE2050, NED, etc.
Physical scenarios: REC 8.5, etc.

- SK ecoplant’s Climate Change-related Risks and Opportunities
SK에코플랜트와 자회사의 기후변화 위험과 기회에 관한 테이블 (분류, 항목, 위험/기회, 재무적 영향 (설명, 잠재적 재무 영향 정도, 기간, 주요 잠재적 재무 영향), SK에코플랜트에 미치는 영향)
Category Type Risk/Opportunity Financial Impact Influence on SK ecoplant
Description Potential financial impact Period Major financial impact
Physical Risks Acute Risk [Housing, Infra, Plant] Construction delays due to natural disasters (typhoon) Low Short-term Increases in construction costs Increases in operating costs Since SK ecoplant operates many construction sites, we are physically affected by climate change through natural disasters such as typhoons. Climate change is directly related to the construction period and has an impact on operating costs, productivity, and insurance premiums. We recognize that delays in construction, damage to facilities, and worker safety are major risks from extreme weather conditions arising from climate change. In response, we have established and are distributing preventive measures for typhoon damage on a yearly basis throughout the company. As of 2021, we operate about 80 construction sites in Korea. Failing to prepare an on-site response system will negatively impact the labor productivity of approximately 2,000 field workers.
Chronic Risk [Housing, Infra, Plant] Construction delays due to high temperatures and increases in precipitation Low Long-term
Transition Risks Laws and Regulations Risk [Housing business] Zero Energy Building Certification KRW 62.9 billion each year Short-term Increase in construction costs In 2019, the Ministry of Land, Infrastructure, and Transport announced the “Detailed Roadmap for Phased Mandatory Zero Energy Buildings” to achieve carbon neutrality in Korea, and made it mandatory for companies to receive zero-energy building certifications. Constructors therefore have to submit blueprints to achieve 20% energy independence to receive approval for public buildings (500m2 or larger) from 2023, and for public and private buildings (1000m2 or larger) from 2025. SK VIEW and V1, our core products, are both subject to these reduction obligations, but our energy independence rate was around 5% in 2021. An analysis by an internal taskforce in 2021 found that the optimal method to increase energy independence is self-production of energy by installing solar panels on the exterior wall of our buildings. Additional construction costs for solar panels amount to KRW 120,000 per 3.3m2 (pyeong) for SK VIEW and KRW 190,000 per 3.3m2 for V1. The total floor area of SK VIEW, which was constructed in 2021, is about 420,000 pyeong, whilst that of V1 is about 60,000 pyeong. If this scale is maintained every year, the expected annual costs are about KRW 62.9 billion.
Risk [Subsidiaries] Incorporation of GHG target management system Low Short-term Increase in operating costs In 2021 6 incineration subsidiaries of SK ecoplant were selected as the target of incorporation into the GHG target management system in Korea. To comply with the system, there is a possibility that additional operating costs such as installation of facilities will be incurred, and fines will be incurred for non-compliance.
Reputation Risk/Opportunity [Plant business] No new coal-powered plants KRW 3.3 trillion Short- and mid-term Decrease in coal-powered plant sales Domestic and foreign institutional investors are withdrawing their investments in thermal power plants, in line with corporate climate change responses and ESG management becoming their main investment criteria. In accordance with the IEA NZE scenario, there should be no newly approved coal-powered plants from 2021. As SK ecoplant builds coal-powered plants, this directly relates to a decrease in our sales. The financial impact is expected to be similar to the sales volume of our Goseong Hai thermal power plant, which is around KRW 3.3 trillion.
Risk [Subsidiaries] Incineration subsidiaries’ Net Zero Low Short-term Revenue decrease The incineration plant is a representative GHG emission business. SK ecoplant is pursuing tasks to achieve Net Zero on the incineration subsidiaries, such as the CCU pilot project. Although these efforts, in the short term there is a possibility that the Net Zero reputation issue of SK ecoplant could appear.
Technology Opportunity [Housing business] Development of clean housing technology Medium Short- and mid-term Revenue increase As climate change intensifies, companies are experiencing an increasing demand for technologies to implement Net Zero and RE100. In particular, the growing preference for eco-friendly buildings, which is one of our main business sectors, is leading to increasing market demand for low carbon, green building technologies that maximize energy efficiency. Accordingly, we will have to seek and implement rapid changes in technologies.
Opportunity Market Opportunity [Housing, plant business divisions] Increase in demand for low-carbon industrial complexes HIGH Mid-term Revenue increase Korea must rapidly reduce emissions by 4.2% every year due to its slow carbon-neutral response compared to other advanced countries. Moreover, the industrial sector is obliged to reduce 80.4% of its emissions by 2050 relative to 2018, and domestic industrial complexes account for 36.9% of the country's total emissions. As enhanced obligations are being introduced for reducing CO2 emissions, not only large enterprises but also SMEs will be asked for new business models since they do not have adequate reduction plans in place.
Products/services Opportunity [Energy business] Expansion of the carbon credit business Medium Short- and mid-term Revenue increase As Korea's 2030 CO2 reduction target has been revised upward and energy prices are also on the rise, financial costs are expected to increase due to growing demand and decreasing supply for carbon credits. We have recently registered a renewable energy-based CO2 reduction program (Program of Activity) in Vietnam and Korea. In a first for a private construction company, we have registered our renewable energy power generation project in Vietnam as a clean development mechanism (CDM) program under the United Nations Framework Convention on Climate Change (UNFCCC), thus securing carbon credits from the UN equal to our reduced emissions. In addition, we are also developing a utility level, solar power business of more than 2GW. If CO2 emissions are calculated based on this 2GW solar power generation, we are expected to secure carbon credits worth 2 million tons by 2025. Moreover, by applying the price of KRW 37,600/ton (as of April 2021), Korea's i-KOC carbon credit is expected to have a potential financial impact of KRW 75.32 billion.
(2) Resilience of organizational strategies vis-a-vis climate change scenario

To achieve our goal of 2040 Net Zero and RE100, we conducted a scenario analysis based on IEA B2DS, IEA NZE2050, NDC, and RCP8.5. To realize the Net Zero plan and respond to the growing demand for low-carbon energy sources, SK ecoplant is expanding clean energy businesses, such as our SOFC fuel cell business. In addition, we are developing eco-friendly building technologies such as window-type photovoltaic power plants to respond to the growing demand for green buildings. With the goal of achieving Net Zero by 2040, we will strive to establish a strategy for reducing future uncertainties by upgrading scenarios suitable for our tangible and intangible assets.

조직 전략의 회복탄력성에 관한 테이블 (분류 (물리적위험, 전환적위험, 기회), 항목, 위험/기회, 설명, 완화를 위한 노력)
Category Type Risk/Opportunity Description Efforts for Issue Resolution
Physical Risks Acute Risk [Housing, Infra, Plant]
Construction delays due to natural disasters (typhoon)
  • We have established a safety control center to proactively detect employee-related safety risks and are monitoring all domestic and overseas sites in real-time. Through this center, we detect risk signs in advance, covering risk assessments, weather and diseases, and the occurrence of disasters
  • To prevent damage to facilities from typhoons or rainfall, natural disasters are included in the QSHE accident response system. Moreover, in terms of typhoon preparation, we operate an immediate report system to the CEO for human and material damages (more than KRW 10 million in material damage).
Chronic Risk [Housing, Infra, Plant]
Construction delays due to high temperatures and increase in precipitation
  • Starting with the Yeoju site in 2020, we have installed solar panels in our domestic offices to reduce electricity costs for heating and air conditioning.
Transition Risks Laws and Regulations Risk [Housing business]
Zero Energy Building Certification
  • By setting up an internal taskforce, we are reviewing response measures and analyzing a projected increase in construction costs.
  • We develop energy-saving buildings, such as Zero Energy Buildings and Long-life Houses, through our Eco Space and Solution business divisions.

※ The community center (guest house, book café) of the Gwacheon Weaverfield apartment, which was constructed in January 2021, was the first non-residential building in Korea to receive a Grade 1 certificate for Zero Energy Construction.

Reputation Risk/Opportunity [Plant business]
No new coal-powered plants
  • Expansion into the new energy business (Bloom SK Fuelcell)
Opportunity Market Opportunity [Housing, plant business divisions]
Increase in demand for low-carbon industrial complexes
  • Based on our existing EPC capabilities, we are preparing a carbon-neutral industrial complex model that utilizes the capabilities of the new SOFC business, carbon-neutral subsidiaries, and waste value chain infrastructure.
Technology development Opportunity [Subsidiaries]
Implementation of CCUS pilot project for incineration plant
  • In order to achieve Net Zero on incineration subsidiaries, SK ecoplant is conducting a pilot project to apply CCU of incineration plant.
  • As CCU technology is attracting attention as a key technology for reducing GHG emissions, SK ecoplant is making efforts to commercialize CCU.

Risk management

(1) Organizational processes for identifying and assessing climate change-related risks, and methods to integrate processes for overall risk management

While preparing for our business transition in 2020, SK ecoplant included climate change in our list of key risk assessment factors. The ESG Promotion Division, a dedicated group for climate change response, identifies and manages climate change risks in new businesses, investments, and overall company operations. Renewable energy, energy efficiency, and resilience in terms of adapting to climate change is reviewed. Moreover, the financial impact of carbon emissions, renewable energy usage, energy savings, air environment regulation levels, water recycling, waste reduction, and recycling is calculated. Climate change reviews for each investment are reported to senior executives and the Board of Directors.

(2) Organizational processes for managing climate change-related risks

To prevent risks, action plans are devised and implemented based on the level of risk impact. When promoting projects and new investments, SK ecoplant structures our risk management system with respect to the initial and operational stages to facilitate a step-by-step system for optimized risk response. If a potential risk is identified, it is reported as follows: dedicated risk organization → risk manager → C-Level. In the company-wide, business investment review process, a dedicated ESG organization reviews and reports potential risks using major indicators, including climate change-related CO2 emissions and atmospheric pollutants.

Metrics and Reduction Targets

(1) Metrics used by organizations to assess climate-related risks and opportunities

SK ecoplant manages CO2 emissions, energy use, water consumption, and waste to identify and manage risks and opportunities relating to climate change. In addition, with the update of our business direction to focus on the environment, we are complying with guidelines for disclosing key information, such as TCFD and SASB, while setting and managing key metrics such as environment-related patent applications and eco-friendly project orders. These climate change response metrics are disclosed annually through our sustainability reports, business reports, and via our CDP assessment.

기후 변화와 관련된 위험과 기회를 평가하기 위해 사용하는 지표에 관한 테이블 (구분, 단위, 2019, 2020, 2021)
Type Unit 2019 2020 2021
Scope 1 tCO2e 12,732 7,259 7,557
Scope 2 tCO2e 29,725 26,364 25,685
Scope 1 + 2 tCO2e 42,457 33,623 33,242
Total energy consumption per year GJ - 657,596 668,631
Scope 3 Total tCO2e - 648,764 1,787,739
Category 1 tCO2e - 618,049 437,740
Category 2 tCO2e - 369 71
Category 3 tCO2e - - 443
Category 4 tCO2e - 29,955 27,416
Category 5 tCO2e - - 701
Category 6 tCO2e - 389 1,329
Category 7 tCO2e - - 2,467
Category 8 tCO2e - - 53,273
Category 11 tCO2e - - 1,141,713
Category 12 tCO2e - - 3,414
Category 15 tCO2e - - 119,172
Zero Energy Building certificates Case 0 1 0
G-SEED certificates Case 4 9 10
Acquisition amount of environmental subsidiaries 1 trillion KRW - - 1.6

GHG emissions in FY 2020 and FY 2021 were re-calculated in June 2022 after reflecting organizational boundary changes, and were verified by a third party
GHG emissions and energy consumption are calculated based on domestic project sites.
Annual energy consumption = (direct energy consumption) + (indirect energy consumption)

(2) Targets used by organizations to manage climate change-related risks and opportunities

As SK ecoplant transition its business model to the environment set a goal to achieve Net Zero by developing infrastructure of renewable energy supply and consumption. In 2022, based on the 2021 domestic work site, we established a 2040 Net Zero road map and submitted it on SBTi. Scope 1, and 2 are targeting to reduce 42.5% of absolute emissions of 2021 by 2030 aligned with a 1.5-degree scenario. Scope 3 is targeting to reduce emissions of 2021 aligned with well below 2-degree scenario.

기후변화와 관련된 위험과 기회 및 성과를 관리하기 위해 조직에서 사용하는 목표에 관한 테이블 (범위 (Scope 1, 2), 기준 연도, 기준 배출량, 목표 연도, Target)
Scope Base year Standard emissions Target year Target
Scope 1, 2 2021 33,242 Short term: 2030 Long term: 42.5%
Short term: 2040 Long term: 100%