Statement of continued support

[2020-October-06]

To our stakeholders:

I am pleased to confirm that [SK innovation CO, LTD] reaffirms its support of the Ten Principles of the United Nations Global Compact in the areas of Human Rights, Labour, Environment and Anti-Corruption.

In this annual Communication on Progress, we describe our actions to continually improve the integration of the Global Compact and its principles into our business strategy, culture and daily operations. We also commit to share this information with our stakeholders using our primary channels of communication.

Sincerely yours,


[Jun Kim]

[Chief Executive Officer]

Human rights policy
SK innovation established various policies to prevent direct or indirect violation of human rights or negative influences on human rights in business relations including talent employment, regulations on safety, health and environment, ethics regulation, behavioral standards for suppliers and ethical purchasing regulation to strictly comply with human rights principles. In addition, we joined the UNGC (United Nations Global Compact) global sustainability initiative as of October 2007 to fulfill our obligations as a conglomerate citizen and declare agreement with 10 principles in four fields: human rights, labor, environment and anti-corruption.

1. SK innovation respects the dignity and value as human beings for all stakeholders to realize sustainable happiness.
2. Based on the spirit of humanity, SK innovation makes every effort to maintain a safe and healthy working environment for all of the stakeholders to pursue happiness.
3. SK innovation supports and follows the human rights protection and labor standards of labor-related international organizations such as UNGC and ILO, and does not discriminate based on any grounds such as gender, race, nationality, religion or age.
4. SK innovation complies with the labor laws and regulations of each country or region in which human rights policy and the business sites of our company exist, and our company confirms that this policy is the fundamental obligation that all suppliers and business partners who do business with our company must comply with.
5. SK innovation shall designates a department in charge of human rights management and regularly conducts human rights education for all stakeholders

SK innovation conducts due diligence for human rights targeting employees of SK innovation subsidiaries and suppliers in order to prevent any human rights violations during business operations. Human Rights Due Diligence is defined as a due diligence process that a company is required to undergo in order to check and
prevent any possible potential (or negative) impact on human rights. SK innovation regularly executes the due diligence process stipulated by international guidelines for actual human rights protection of our employees and business partners. We also ethically report our findings to stakeholders. The procedure is in the following:
assessing influence on human rights, identifying the influence, setting goals for improvement, processing complaints, monitoring and external reporting and publication. Through this method, we continuously manage any effects on human rights on work sites. The human rights due diligence conducted in 2019 is stated in detail for the public on our SK innovation website.

We annually publsih our human rights audit report. Measurement of outcomes are disclosed in our website: http://eng.skinnovation.com/company/csr_021.asp

Employees are at the heart of our growth and development. We strive to ensure that SK innovation provides an ideal work places where where all of our employees bring out their best in their jobs. As part of efforts towards the best place to work, we carry out a wide range of activities, including the operation of systematic human resource development programs to help our employees enhance their capabilities and the implementation of an ability-based reward system.

Detailed Guidelines
Respect for human rights: SKI shall respect all its employees as humans, and endeavor not to make any compromises on human rights.
Prohibition of forced labor: SKI shall not force labor against an employee’s free will through mental or physical oppression including slavery and human trafficking. It shall not demand the transfer of government-issued IDs, passports, or labor permits as condition for employment.
Prohibition of child labor: SKI shall not hire children or youths under 15 years of age.Child labor Regarding anyone less than 18 years of age, SKI shall hire him/her in compliance with labor laws, and shall not put him/her to dangerous, hazardous work.
Working hours: Regular working hours and overtime work shall comply with the standards prescribed by the labor laws of the relevant country or region.
Wages: SKI shall set its employees’ wages at a level not lower than the minimum level set by the labor laws of the respective country or region.Non-discriminationSKI shall not discriminate when hiring on any basis including gender, race, nationality, ethnicity, or religion, and shall not discriminate in conditions of work such as wages and promotions on the basis of the same.
Freedom of association: SKI shall guarantee freedom of association and the right to collective bargaining under the labor laws of the relevant country or region, and shall not impose unfavorable treatment on the basis of labor union membership, activities, or organization.
Workplace safety and environment: SKI shall endeavor to create a pleasant work environment and prevent safety accidents by complying with international standards, applicable laws, and internal regulations on the work environment.
Due diligence process for human rights protection: SKI, for effective human rights protection, shall strive for risk prevention and human rights protection by diligently performing its human rights due diligence process.

We run a variety of channels including SK group online channel, phone, fax, e-mail, and mail dedicated for reports to make it easier for our stakeholders to get consultation or report about ethics management issues. The reported issues and consulted cases are handled in a transparent and systematic manner
through the informant protection program under the corporate regulation.

As of 2019, there were a total of 133 reports and consulting in regard of ethics management or a total of 67 cases excluding overlapped issues.
The department responsible for the ethics management refers to the complaints to the customer service department and later checks
the follow-up measures. The consulting for ethics management is carried out through the consultations with related departments. If any report requires further investigation, we conduct an audit to decide if any ethical violation in the management was committed. In 2019, 5 out of
30 cases we investigated were found unethical, and we took action according to the resolution of the Reward & Punishment and HR Committee in
accordance with the related regulations.

Fair Performance Appraisal and Reward System
SK innovation conducts regular meetings between team leaders and members, and hosts interim review sessions on the organizational level. Based on this, we have put in place a strategic and fair appraisal system where all facets of our employees, including competency, qualification and achievements are evaluated.
As part of efforts to make evaluation sound fair to our employees, we created an audit process for evaluation to be finally confirmed. And at the same time, our employees are allowed to raise objections to their results. Furthermore, SK innovation runs a performance-based reward system where promotion, cultivation and
compensation are defined based on performance appraisal. Not only individual performances but also short and long-term goals regarding
corporate sustainability are taken into account when it comes to the compensation policy. We evaluate and compensate our employees fair and square regardless of gender, age and academic background

SK innovation recognizes the needs for response to Environment issue (including climate change) at the management level. We discuss
major environmental issues at the strategy and risk management committee composed of three directors including CEO

SK innovation has established its company policy on managing safety, health, and environment.
Annually, CEOs of SK innovation subsidiaries deliver their signatures to show determination for successful safety, health, and environment
management to our stakeholders. In addition, we analyze the other global companies in their core management factors for safety to define 13
items. These items were included in our company regulations and detailed process for execution. Furthermore, we conduct activities to improve execution based
on CEO leadership. We have built a positive cycle to “Plan-Do-Check-Action” through regular
inspections of adequately executed items for improvement and modification. In 2019, we checked the status of international
standards over our management system and made workplaces renew their certifications in case of their standard certificates expired. As a
result, SK innovation successfully renewed ISO 14001 (environment) certification for SK innovation Battery Production & Tech. Center and switched
from OSHAS 18001 to ISO 45001 (safety), so that we can proactively respond to international standard SHE management system.

The environmental issue is a challenge that all humankind faces. With the increasing sense of
responsibility for environmental agendas that threaten the survival of humanity and greatly
influence the quality of life causing abnormal climate to fine dust, the world signed the Paris Agreement under the common goal of limiting the global average temperature increase to 1.5°C or below compared to the temperature of preindustrialization. The climate change agreement regulating greenhouse gas emissions are bringing about a shift in the business paradigm of corporations beyond just limiting GHG emissions. As more and more people see fossil fuels in a negative way as they are pinned as the major cause of GHG emissions, energy and chemical companies are seeing more demand from various stakeholders. Companies are faced with stringent environmental regulations of the governments, pressures from NGOs and local communities, demand for disclosing information related to climate change such as TCFD (Task Force on Climaterelated Financial Disclosures) and CDP (Carbon Disclosure Project), and stronger demand for responses from global investment companies due to downside risks of corporate value. Against this backdrop, preemptively integrating environmental agendas to corporate decision-making is not just an option now but a prerequisite for companies

All employees of SK innovation are firmly convinced that responsible management activities that solve various social issues play an indispensable role in ensuring the sustainability of the company, and thus, we would like to embark on our new journey toward that. In particular, we will make the environmental agenda, that was once viewed as a risk, serve as a momentum of “tough innovation” for the sustainable future, through which we will practice Double Bottom Line (DBL) management and
realize the happiness of our stakeholders.In 2019, SK innovation reestablished our new Vision "Green Balance 2030" which aiming to make our positive impacts on the environment exceed adverse impacts by 2030. It is a considerably challenging goal for SK innovation as our portfolio currently centers on energy and chemistry
sectors. However, we will sincerely pursue the goal to create sustainable happiness for customers and society. SK innovation will expand the proportion of our green portfolio such as batteries and materials through bold investments, while increasing a variety of eco-friendly products and services in the existing businesses at the same time to create new business models.

The strategy and risk management committee monitors SK innovation’s environment & climate-related response strategy,
risk management at the company level and the implementation of greenhouse gas emissions mitigation while reviewing “Green Balance 2030 Initiative” conducted by us. Besides, we formed a consultative body to systemically respond to climate change at the working level and make profound discussion on detailed
agendas. Our CEO and employees’ performances on climate change are part of Key Performance Indicator (KPI), and performances of the action are reflected in assessment and rewards of our CEO, management and major employees.

Based on SKMS (SK Management System), SK innovation has established the Code of Ethics as the standard for the correct behavior and value judgment all employees have to follow, and in the Code of Ethics Guideline, presents specific standards of judgment. All employees of SK innovation affiliates have a duty to comply with the Code of Ethics. SK innovation affiliates have established a separate code of ethics for the suppliers with transactional or contractual relationship with them and recommend suppliers to comply with the same.

Ethics Training Programs and Letter of Commitment for Ethics Management:
In order to help our employees internalize the values of ethics management, we have provided the ethics training for all staff in Korea and
beyond. In 2019, we provided an online training program delivering the basic concept of ethics management, ethical dilemma cases, and quiz
followed by the signing of a “Letter of Commitment to Ethics Management” to reinforce the sense of ethics.

Ethics Management Practice Workshop: SK innovation holds an annual Ethics Management Practice Workshop led by leaders of department for employees to have in-depth discussion of ethical dilemmas and risk cases. In 2019, workshops by 393 departments were held under the theme of our audit case and ethical dilemmas.

Survey on Ethics Management Practice: We conduct surveys every year to measure the level of ethics management practices while detecting the weak parts of our corporate system and culture. About 78% of all employees took part in the survey in 2019, and the major inquiries collected through the survey have been answered
after consulting with related departments.

We run a variety of channels including SK group online channel, phone, fax, e-mail, and mail dedicated for reports to make it easier for our stakeholders to get consultation or report about ethics management issues. The reported issues and consulted cases are handled in a transparent and systematic manner
through the informant protection program under the corporate regulation.

As of 2019, there were a total of 133 reports and consulting in regard of ethics management or a total of 67 cases excluding overlapped issues. The department responsible for the ethics management refers to the complaints to the customer service department and later checks
the follow-up measures. The consulting for ethics management is carried out through the consultations with related departments. If any
report requires further investigation, we conduct an audit to decide if any ethical violation in the management was committed. In 2019, 5 out of
30 cases we investigated were found unethical, and we took action according to the resolution of the Reward & Punishment and HR Committee in accordance with the related regulations. Two of them are still under investigation.