Environmental Management Policy

SK earthon Co., Ltd. (“SK earthon”) applies a SHE management system throughout its businesses. SKI’s environmental policy on key items is as follows.

• Production
  activities /
  Business
  facilities Throughout its production activities and business facilities, SK earthon defines ‘environmental management’ as its core task and preserves the global environment by reducing GHGs and minimizing pollutants. To minimize the impact on the environment of its production activities and business facilities, SK earthon has introduced and operates an environmental management system, and systematically manages the entire process covering goal-setting, planning, execution, and improvement of environmental management.
• Suppliers,
  service
  providers,
  and
  contractors SK earthon, in contracts with construction (works)/service suppliers, conducts SHE evaluations and selects suppliers according to its ‘eligible supplier registration criteria table’. Evaluation items include SHE management and system, SHE training, SHE regulations and procedures, accident management and emergency response, safety & health activities, legal compliance, number of industrial accidents, etc., and where a supplier is subjected to a sanction of one year of transaction suspension or higher due to SHE problems, SK earthon re-conducts the SHE evaluation at the time the sanction is terminated and re-determines the supplier’s eligibility.
• Development
  of new
  products and
  services SK earthon, in the manufacturing of new chemicals, states the names of chemicals comprising the product, content of the chemicals, CAS (Chemical Abstracts Service) number, etc., and submits a ‘Letter of Confirmation’ to the Korea Chemicals Management Association. When manufacturing 1 ton or more of chemicals, SK earthon files a registration application to the National Institute of Environmental Research, and if necessary, receives a toxicity examination and a hazard evaluation. Also, it prepares MSDS and hazard pictograms according to GHS standards and communicates them to consumers, so that the relevant chemicals can be safely handled, used and destroyed.
• Product
  distribution
  and
  logistics SK earthon, to prevent environmental pollution which can occur during the storage and transportation of a product, systematically manages not only the operation of environment-related facilities but business partners performing the relevant job. SK earthon has established and operates operational standards related to air, water quality, wastes, soil, marine environment, and GHGs, and so that there will be no SHE incidents among the business partners, provides related information and training and periodically inspects the progress of work, thus preventing environmental pollution.
• Wastes
  management SK earthon, to minimize wastes from production activities and efficiently dispose of wastes produced, has established and operates standards for their storage, transportation, disposal, etc. All teams of SKI’s plants estimate the annual amount of waste produced and prepare plans to reduce the amount by considering the previous year’s waste disposal, and self-manage their performance each month. Also, they perform storage and transportation under the aforesaid standards according to waste types, and strictly manage waste contractors so that the latter dispose of waste legally
• Engineering /
  maintenance During periodic maintenance, SK earthon gives priority to SHE matters in decision-making related to maintenance, regardless of the length of time or cost required. The department in charge of work site SHE management establishes a safety management plan enabling safe periodic maintenance and, also, establishes an environment management plan including disposal of waste produced through maintenance, trains site supervisors and business partners on the foregoing, and periodically checks the compliance of the foregoing during maintenance.
• New projects SK earthon, when implementing a large or medium-sized project, systematically conducts SHE management necessary for the EPC stage. At the project launch stage, SK earthon identifies SHE items to be reviewed and the stakeholders, and appoints personnel in charge of SHE matters according to the project size to establish SHE plan and SHE training program for the project. At the project execution stage, SK earthon conducts, together with business partners, SHE meetings, risk assessments, operation permits, environment management, etc., and periodically performs site inspections. At the completion of the project, it prepares the ‘SHE evaluation sheet for the business partner’ and reflects the same in the ‘investment project completion report.’
• Work sites
  outside of
  SKI’s
  management,
  third-party
  producers,
  and joint
  ventures SK earthon identifies SHE-related key issues and regulatory matters from the stage of reviewing a new investment project, and classifies and manages the grade of the target company according to the level of SHE risk. SK earthon classifies SHE risk from grades 1 to 5 by considering SKI’s degree of influence according to the degree of management participation and the chance of risk occurrence according to the business characteristics, and after diagnosis of potential risks according to the grade, builds a SHE management system and continuously monitors SHE performance.
• Due diligence,
  acquisition
  and merger SK earthon, in mergers and acquisitions (“M&A”), conducts SHE due-diligence and thereby identifies potential risks which do not satisfy standards including SHE-related laws, and petroleum and chemical industry codes and standards. By doing that, SK earthon reflects, in the enterprise value or terms of contract, the cost which can accrue after the M&A due to unidentified SHE risks. SHE due-diligence is divided into the three stages of the feasibility study, pre-DD and full-DD according to the order in time.