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ESG

SK Chairman vows to achieve carbon neutrality ahead of 2050 UN target

SK Global Chemical acquires 10% stake in Nasdaq-listed Loop Industries as part of its long-term net-zero initiative

By Jun 23, 2021 (Gmt+09:00)

SK Group Chairman Chey Tae-won speaking at the 2021 SK Extended Management Meeting on June 22.
SK Group Chairman Chey Tae-won speaking at the 2021 SK Extended Management Meeting on June 22.

SK Group has pledged to achieve carbon neutrality prior to 2050, the year set by the United Nations (UN) to reach net-zero carbon emissions globally.

At the 2021 Extended Management Meeting held on June 23 at the SK Management System (SKMS) Institute in Icheon, Gyeonggi Province, SK Chairman Chey Tae-won urged the group’s CEO-level executives to widen efforts to accelerate the achievement of carbon neutrality goals.

SK’s Extended Management Meeting is an annual strategic business planning session to discuss the group’s long-term vision and devise short-term action plans for the year’s second half. 

SK said that more than 30 executives were present at the meeting, including Chey Jae-won, the group’s executive vice-chairman, and Cho Dae-sik, chairman of the SK Supex Council.  

“While governments around the world have set 2050 as the target year for carbon neutrality, SK must reach the goal faster. As carbon emissions are becoming more costly, any company’s market competitiveness will be dependent on whether or not it has achieved carbon neutrality,” said the SK Group Chairman.

At the annual meeting, SK’s affiliates agreed to expand the use of renewable energies including solar power, as part of a larger plan to cut emissions of the seven major greenhouse gases, including carbon dioxide.

According to the group, it also set out specific milestones in achieving its long-term goal. From the starting point of 2020, SK Group will cut its carbon emissions by 35% as of 2030 and 85% by 2040.

Among SK’s affiliates, the industrial gas supplier SK Materials Co. is set to be the first to achieve carbon neutrality by 2030. Other affiliates will also soon be drafting their own 10-year plans in achieving the net-zero target and disclose their progress every year.

The SK Group Chairman also emphasized the need for “deep change,” a key phrase he has been stressing since 2017. The deep change, in short, stands for the fundamental group-wide transformation to maintain competitiveness and ensure business sustainability.

“We used to discuss how business innovations, social values or ESG management can achieve deep change. But if we focus too much on the methodologies, we often miss out on the big picture. We will achieve the deep change more efficiently if we can put all the different methodologies in a single bowl, deliver it to our stakeholders, and take all the relevant action,” said Chey.

BUSINESS INITIATIVES FOR CARBON NEUTRALITY

On the same day, SK Group said that it has acquired a 10% stake in the Nasdaq-listed Loop Industries Inc., a company specializing in clean technologies with aims to build a sustainable plastics economy. SK paid $56.5 million for 10% of Loop’s shares.

According to Loop, its patented technology allows waste PET plastic and polyester fiber to be upcycled into virgin-quality PET using low heat and no added pressure.  

The plastic circular economy (Courtesy of Loop Industries)
The plastic circular economy (Courtesy of Loop Industries)

SK said that Loop’s chemical recycling technology is considered more advanced than that currently in widespread use, as its depolymerization process can break down previously unrecyclable PET plastic and polyester fiber waste into their base building blocks, dimethyl terephthalate (DMT) and mono-ethylene glycol (MEG).

SK Global Chemical Co. (SKGC) and Loop will also form a joint venture (JV), held 51% by SKGC and 49% by Loop, to build a waste PET plastic processing plant by 2023 that can annually handle 84,000 tons of waste PET plastic and polyester fiber.

The JV will construct four additional facilities in Asia by 2030, with a total projected annual capacity of 400,000 tons.

“We look forward to collaborating closely with Loop, which has great competencies in the plastics recycling category. We will work with Loop together in Asia to add value to the region, backed by Loop’s chemical recycling technology that will enable the creation of a plastic circular economy,” said SKGC CEO Na Kyung-soo.

Write to Jae-kwang Ahn at ahnjk@hankyung.com

Daniel Cho edited this article.

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