Climate Policy Engagement Overview: SK innovation appears to have limited engagement with climate change policy in South Korea. The company has issued top-line support for climate action and the Paris Agreement. However, the company has shown mixed engagement on the energy transition, in particular around the long-term role of oil and fossil gas in the energy mix.

Top-line Messaging on Climate Policy: SK innovation has broadly positive top-line messaging on climate change, including climate science and the UNFCCC climate process. The company’s position on the wider need for climate change regulation remains unclear. In its 2021 ESG Report, published in August 2022, SK Innovation stated that it strongly supports the Paris Agreement, and the goal to limit global warming to 1.5°C. As reported by Maeil Business Newspaper in April 2022, the CEO of SK Innovation, Kim Jun, stated support for achieving carbon neutrality, however he did not present a clear timeline for GHG emissions reductions in line with IPCC recommendations.

Engagement with Climate-Related Regulations: SK innovation appears to have limited engagement with climate change regulations in South Korea. SK innovation does not appear to disclose its positions toward, or engagement with, various strands of climate policy on its corporate website. In its CDP 2022 Climate Change response, the company disclosed that it engages with policymakers on the Korea Emissions Trading Scheme (K-ETS), but did not provide further details.

Positioning on Energy Transition: SK innovation shows mixed support of the energy transition. In its Net Zero Roadmap report in July 2021, the company appeared to suggest that an urgent phase-out of fossil fuels from the energy mix was not needed, despite acknowledging the ‘limitations’ of fossil fuels.

However, as reported by Yonhap News in March 2023, the CEO of SK Innovation, Kim Jun, stated support for ammonia in the energy mix to supply ‘clean energy’ without specifying the need to decarbonize ammonia production. In a January 2023 article by Yonhap News, SK Earthon, an SK Innovation subsidiary, advocated that CCS could be used for decarbonizing hard to abate sectors, including steel, cement and fertilizer, while “maintaining the efficiency” with no clear mention on a need to transition away from carbon-intensive production methods. In its CDP 2022 Climate Change response, SK Innovation suggested a reduction in the LNG import charge for power generation. In an interview published in October 2021 on the corporate newsroom, Myeong Seong, the CEO of SK Earthon appeared to state that oil and gas is ‘absolutely necessary’ while alternative energy and infrastructure is developed, without clear conditions on the pace of transition that would align the statement with IPCC advice.

SK innovation has shown support for the decarbonization of the transport sector. In January 2021, the company announced that it had signed an MOU with the Seoul City government in order to improve EV charging infrastructure, and indicated that it would advocate for improved green energy policy to the national government through this partnership.

Industry Association Governance: SK innovation has disclosed a list of its industry association memberships in its ESG Report 2021, but with no further details of the company's role within each organization's governing bodies nor influence over their climate change policy positions. SK Innovation has not disclosed an audit of alignment with its industry associations on climate change.

In its 2022 CDP Climate Change disclosure, SK Innovation disclosed its membership to the Korea Battery Industry Association (KBIA), the Energy and Mineral Resources Development Association of Korea (EMRD), and the Lubricants Industry Association. In its 2021 CDP Climate Change disclosure, the company disclosed its membership to the Korea Petrochemical Industry Association (KPIA), the Korea Petroleum Association (KPA), the Korea Battery Industry Association (KBIA), and the Korea Lubricating Oil Industries Association. However, it did not disclose and assess its relationship with the Korea Chamber of Commerce and Industry (KCCI). SK Inc.’s (SK Innovation’s parent company) Chairman Chey Tae-won is the Chairman of the KCCI.

*A note on SK Group’s corporate governance structure: SK innovation is 33% owned by SK Inc., the holding company of SK Group companies. Companies that form part of the SK Group operate under the shared SK Management System (SKMS), which is steered by the SK Inc. SUPEX Council. SK Group’s corporate website describes the SUPEX council as the ‘official highest consultative body of the management of SK Group’, and 18 of the SK Group affiliate companies sit on the council. SK innovation CEO Kim Jun is the President of the SUPEX Council Green Business Committee.

SK Inc., SK innovation’s parent company which houses the SUPEX Council, has made positive top-line statements on the energy transition and engaged positively on renewable energy in South Korea, but has also made statements opposing the need for climate regulation. SK Inc. did not support South Korea’s upward revision of its 2030 NDC emissions reduction target, citing concerns about realistic targets and a burden on industry.*