April 22, 2021 is the 52nd Earth Day. Over the years, SK hynix, the world’s leading semiconductor company, has been building a work system that places equal emphasis on economic value and social value, and firmly believes that a clean and safe environment is the basic human need and the responsibility of every member of society to the next generation. Since 2021, the company will start the realization of “Financial Story” (financial story 1)), and finally achieve the goal of enhancing corporate value by winning the trust and support of various stakeholders. Not only that, SK hynix has planned an ESG management blueprint for the next 10 years, announced Social Value 2030, and formulated a set of roadmaps to maximize the social value created by the company. In addition, SK hynix further announced the issuance of a USD 1 billion Green Bond, which it plans to use for investment in green environmental protection projects and accelerate the pace of ESG management.
Promoting long-term vision of social value
SK hynix pays great attention to the production, manufacturing and processing of its own products, and firmly believes that the social value created by the company is as important as the economic value. In October 2020, SK hynix announced its “Financial Story”, which aims to continue to create social value through ESG activities while consolidating its competitiveness based on the two major businesses of DRAM and NAND flash memory. In January 2021, SK hynix proposed the “Green 2030” project based on Social Value 2030, and is committed to achieving five goals by 2030: establishing RE100-related goals achievable by 2030 (and realizing RE100 commitments by 2050) ); achieve carbon neutrality; achieve zero new air pollutant emissions; obtain Zero Waste To Landfill (ZWTL) gold certification at global production sites; increase water conservation by 300%.
At present, SK hynix has begun to implement the Green 2030 environmental protection project, and has achieved phased progress in some core links.
Realizing the RE100 Commitment by 2050: On November 2, 2020, SK hynix and other SK Group subsidiaries announced that they will use 100% of new and renewable energy by 2050, joining the “RE100 (Renewable Energy 100%)” environmental movement initiative. The campaign was launched in 2014, and 263 companies around the world, including Google, Apple, GM, and IKEA, have also announced their participation.
Prior to this, SK hynix had already embarked on initial steps to introduce renewable energy. For example, the company deployed solar power generation equipment with a scale of 641kW in Icheon Park in South Korea in 2019, and installed two hydropower generation equipment in 2018.
Achieving carbon neutrality: In order to achieve carbon neutrality, SK hynix will launch a green tariff plan and a power purchase agreement (PPA), promote its Chinese subsidiaries to apply the RE100 standard, and participate in carbon emission reduction projects in developing countries. At the same time, the company also plans to further advance carbon neutrality by supplying low-energy semiconductors.
Figure 4. Overview of carbon emissions trading mechanism
Strengthening water resource management: In line with global trends, SK hynix also devotes its efforts to water resource management. According to the Green 2030 plan, SK hynix has formulated core policies related to water resources management: expanding reuse, optimizing water management, and ensuring a healthy ecosystem. Based on this, SK hynix plans to increase water resource conservation to more than 300% of that in 2019 in 2030, and conduct real-time monitoring of the impact of the company’s discharge water on the aquatic ecosystem, and carry out more activities that can ensure the protection of aquatic ecosystems. Activities for diversity and healthy water quality.
Specifically, SK hynix is committed to improving the water resources management system through continuous investment in facilities. Typical cases include SK hynix’s wastewater reuse system, cooling tower reuse facilities, and water-free scrubbers. . In 2021, the daily treatment capacity of SK hynix’s wastewater reuse system has reached 60,000 tons. In addition, the company’s daily water reuse through cooling tower systems reached 1,800 tons in the first quarter of 2021. In the future, SK hynix is also expected to increase the capacity of the wastewater reuse system to the level of 80,000 tons per day.
Reduction of Air Pollutant Emissions: SK hynix recognizes that air pollution has risen as a major environmental issue. By strengthening the systematic management of pollutant emissions, SK hynix not only actively participates in the reduction of air pollutants and greenhouse gas emissions, but also establishes a process that can properly remove dust generated during the greenhouse gas treatment process.
Figure 9. Greenhouse gas and fine dust treatment process of SK hynix scrubber
SK hynix has also achieved phased results in its overseas campuses. For example, SK hynix Wuxi subsidiary effectively reduced 2,397 tons of greenhouse gas emissions through greenhouse gas emission reduction activities in 2019, and maintains ISO14064 and ISO50001 and other energy greenhouse gas certification qualifications every year, and established a renewable energy TF to continue Operates and conducts greenhouse gas reduction activities. In 2019, the greenhouse gas and natural gas emissions of SK hynix’s Chongqing subsidiary decreased by 1,345 tons and 360,639 m, respectively.3.
In the future, SK hynix will actively explore and apply potential new technologies to reduce the impact of the company’s operations on the environment and help nearby communities to carry out atmospheric environmental management.
Obtaining ZWTL Certification: Another key indicator of Green 2030 is the successful achievement of Zero Waste to Landfill (ZWTL) Gold Certification at all sites. SK hynix has successfully obtained ZWTL certification in all parks around the world at the end of 2019. All parks including Icheon and Cheongju in South Korea and Wuxi and Chongqing in China have completed the construction of management systems.
SK hynix is committed to the recycling of waste in all aspects of the company’s manufacturing and operations; this includes recycling high value-added by-products associated with the production of chips such as tungsten trioxide (WO3), or using them in air conditioners The OAC filter membrane of the system is used as solid fuel (Solid Refuse Fuel, SRF) recycling and other specific measures. In addition, SK hynix will actively implement environmental protection policies, including reducing the use of plastic products and actively promoting the recycling of waste plastics in its parks.
In the future, the company will make concerted efforts to further promote the maximum operation of waste resource management in the park, and strive to reduce waste production while increasing its recycling rate as much as possible.
Issuing green bonds to help develop green environmental protection projects
In January 2021, SK hynix announced the issuance of USD 1 billion green bonds and plans to use them for investment in green environmental protection projects to accelerate the pace of ESG management. Green bond is a special purpose bond, and its financing purpose is strictly limited to investment in green environmental protection projects. At present, more than 230 investment institutions around the world have participated in the issuance of green bonds, with a total subscription amount of US$5.4 billion.
As the world’s first semiconductor manufacturing company to issue green bonds, SK hynix plans to use the funds raised from this bond issuance for green projects such as water quality management, energy efficiency, pollution prevention, and ecological restoration. Especially considering the importance of water resource management to the semiconductor industry, the company will promote the construction of a sewage treatment plant integrating cutting-edge technologies and build a water recycling system. Not only that, the company will also arrange projects that will help reduce the carbon footprint of the entire IT ecosystem, including the development of low-power solid state drives (SSDs).
SK hynix CEO Lee Seok-hee also emphasized in his recent IRPS2021 speech: “If we can replace hard disk drives (HDDs) in all data centers with low-power SSDs, business as usual (BAU) 3) we will be able to A reduction of 41 million tons of greenhouse gas emissions has a social value equivalent to $38 billion.”
Figure 10. Concept and classification of ESG bonds
The establishment of the ESG management committee opens a new chapter for transparent ESG management. SK hynix also strives to raise the level of ESG management to a higher level from the level of corporate operation and management. The company established the ESG Management Committee this year, which is a new conference organization directly led by the CEO of SK hynix. The committee will hold quarterly meetings to supervise and manage the progress of SK hynix’s social value 2030 goals, formulate ESG-related mid- and long-term corporate plans, and issue ESG-related strategic decisions. It is believed that such measures will also contribute to the timely realization of the Green 2030 goals.
Caring for the earth – enhancing social value
As a visionary company, SK hynix has always been committed to developing and tapping future potential. In the future, SK hynix will maintain cooperation with partners based on the viewpoint of pursuing social value, continue to take environmental protection as an important responsibility of the company, adhere to an environment-friendly management policy, and continue to work hard to protect and improve the environment.
1) Financial Story: SK Group aims to realize the development strategy and future vision of its subsidiaries by presenting the development strategy and future vision of its subsidiaries to various stakeholders such as customers, investors, and the market, and establish trust and consensus with them, so as to achieve the goal of including corporate governance. A new business strategy to increase the value of the total value (Total Value). For example, SK hynix has established a “Financial Story (financial story)” that promotes human and social development by strengthening ESG management policies while pursuing sustainable development through the use of DRAM and NAND flash memory. practice.
2) CDP (Carbon Disclosure Project): CDP is a non-profit organization headquartered in the United Kingdom. It was established in 2000 with the sponsorship of 35 investment institutions located in the European circle. Top 500 companies)” (South Korea is the top 50 domestic companies by market capitalization), and evaluate its response to emission reduction activities. Since 2003, the organization has surveyed the world’s major companies on their corporate risks related to climate change, their approach to becoming a social enterprise and reducing emissions, and their annual emissions reduction plans, and the results are made available to the public.
3) Business As Usual (BAU): The projected total emissions without taking any anthropogenic measures to reduce greenhouse gas emissions.
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