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ESG management

SK Hynix and other affiliates to become 100% powered by renewable energy

By Nov 02, 2020 (Gmt+09:00)

South Korea's SK Holdings Co., along with seven of its affiliates have submitted applications to join RE100, a global coalition of multinational companies committed to transitioning to using 100% renewable energy, on Nov. 2, according to the company.

SK Holdings, SK Hynix Inc., SK Telecom Co., SKC Ltd., SK Siltron Co., SK Materials Co., SK Broadband Co. and SK IE Technology Co. plan to completely switch over to renewable energy such as solar and wind power for their operations by 2050. Even semiconductor plants that require a massive power supply will convert to renewable energy.

The group's leap to renewable energy reflects SK Chairman Chey Tae-won’s determination to make environmental, social, and corporate governance (ESG) the mainstay of corporate management.

SK Chairman Chey Tae-won
SK Chairman Chey Tae-won

FIRST KOREAN COMPANIES TO JOIN RE100

RE100, Renewable Energy 100%, was established in 2014 as a campaign prompting companies to transition to using 100% renewable energy by 2025. Companies that consume over 100GWh annually are targets of the campaign. As of early November, around 264 companies have joined RE100, including Google, Ikea, Apple and General Motors.

Once the application is approved, companies need to submit an execution plan within a year of joining and will be subject to annual inspections. A company can keep its membership only if it is able to increase the portion of renewable energy in phases to 60% by 2030, and 90% by 2040.

These SK affiliates are the first Korean companies to officially apply for RE100 membership. Korea does not offer a system where companies can separately select renewable energy for purchases, and there isn’t enough supply — which has kept the industrial sectors’ consumption portion in the single-digits. These hurdles have kept Korean companies from joining the RE100 until now.

SK plans to increase its renewable energy consumption in stages through KEPCO’s green pricing, the third-party power purchase agreement, and stake investments in renewable energy power projects. 

SK Hynix and other affiliates to become 100% powered by renewable energy


Other SK affiliates — petrochemicals and gas — that have not applied for RE100, such as SK Innovation Co., SK E&S Co., and SK GAS, will set up their own goals in line with RE100 standards to expand their use of renewable energy.

BUILDING TRUST AS A GLOBAL ESG COMPANY

SK plans to secure credibility as a company committed to ESG practices on a global level through its RE100 membership. Chairman Chey has repeatedly emphasized ESG as a key area to innovate the group’s businesses.

Last month at a CEO seminar, Chey said: “Chief executive officers of affiliate companies need to develop a growth story grounded on ESG, and build trust and empathy.”

SK Group’s participation in RE100 is likely to prompt other Korean companies to take part in the initiative. In particular, being a member of RE100 may contribute to enhancing export competitiveness given that the global business culture has stepped up eco-friendly practices.

“As a domestic company highly dependent on trade, it is mandatory to introduce eco-friendly measures, such as those stipulated by RE100, to boost export competitiveness,” said an SK source.

Write to Kyung-min Kang at kkm1026@hankyung.com

Danbee Lee edited this article.

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