We disclose the following information based on the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD) to share our track record of climate action with our stakeholders.
| TCFD Recommendation |
Related Contents | Page/ Reference |
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|---|---|---|---|
| Governance | a) Describe the board's oversight of climate-related risks and opportunities. | Regulatory and supervisory developments related to climate change and the continued emergence of physical climate impacts directly affect our business operations and financial performance. Thus these climate change issues and our responses to address them are reported to the Board of Directors, our overarching decisionmaking body responsible for the oversight of our climate action and resource circulation management. | P.23 CDP : CC1.1a, CC1.1b |
| b) Describe management's role in assessing and managing climate-related risks and opportunities. | The CEO is given the responsibility and authority to finalize company-wide measures, such as establishing climate change response strategies, developing relevant tasks, and implementing investments. The performance of our executive management is also assessed based on KPIs that include climate change-related metrics to ensure the substantive fulfillment of given roles. The CEO leads the Sustainability Council comprising the executives in charge of the major business areas and the consultative body consisting of the executives responsible for environment to establish and review the implementation status of relevant plans. The Environmental Management Task Force develops and oversees environmental management tasks including climate change responses. The EHS Council under each business unit monitors relevant issues at individual business sites and explores ways to resolve them. The Eco-Council advances strategies to develop eco-conscious products and reviews outcomes. | P.23 CDP : CC1.2a | |
| Strategy | a) Describe the climate-related risks and opportunities the organization has identified over the short, medium, and long term. | Risks and opportunities incurred by climate change affect not only products and services but also manufacturing processes, supply chains, R&D, and other business activities. We regularly monitor the risks facing our business sites around the world in accordance with procedures and manuals established for different areas of environment and safety, climate change and energy, and compliance. To identify the financial impacts of these risks, we categorize them into conversion risks and physical risks and analyze opportunity factors as well. In the short term, we view emissions permit price increases, extreme weather events, and the requirement to introduce high-efficiency technologies as potential risks and emissions permit purchasing and reduced energy costs as opportunities. We project changing consumption patterns and expanded renewable energy use as medium-term opportunities and the physical impacts of climate change (warming temperatures, etc.) as long-term risks. We establish response measures for long-term risks based on the countryspecific emissions mitigation plans pursuant to the Paris Agreement, emissions scenarios of the Intergovernmental Panel on Climate Change (IPCC), and Energy Technology Perspectives of the International Energy Agency (IEA). For more details, refer to the section entitled “Risks and Opportunity Analysis” on page 26 herein. | P.23, P.25 CDP : CC2.2c, CC2.3a, CC2.4a, CC3.1c |
| b) Describe the impact of climate-related risks and opportunities on the organization’s businesses, strategy, and financial planning. | As climate change continues to have adverse effects around the world, many countries are strengthening their relevant regulations. The costs related to natural disaster recovery and lost business opportunities are expected to rise in line with the aggravation of climate change. We continue to make investments in the areas of environment and safety and disaster-proof equipment to preempt the impacts of natural disasters as much as possible, which in turn will decrease our insurance premiums. As a company subject to Korea’s emissions trading scheme, we project that our costs for responding to reinforced GHG emissions regulations and renewable energy purchasing will inevitably increase. In addition, failure to comply with global regulations and implement proper climate actions may compromise our brand value and adversely affect our sales. | P.26 CDP : CC2.5, CC2.6 | |
| c) Describe the resilience of the organization’s strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario. | Climate change-related risks are anticipated to have far-reaching effects through a set of highly complex channels. We strive to identify the socioeconomic impacts of climate change on our business through various scenarios, which are classified into aggressive action scenarios that require our global stakeholders to reach more ambitious targets and passive action scenarios that focus on maintaining the status quo. In accordance with the aggressive action scenarios, products with low energy efficiency ratings are projected to decrease in sales in the long term, while eco-conscious, high-efficiency products are expected to record continued sales growth. To remain prepared for such scenarios, we plan to make continued investments to develop ultra-low-power semiconductors and improve the energy efficiency of the representative models of the six main product categories. We will also take active measures to ensure GHG emissions mitigation and full conversion to renewable energy, while also promoting the energy efficiency enhancement of all of our products. | P.26-31 CDP : CC3.1c, CC3.1d | |
| Risk Management | a) Describe the organization’s processes for identifying and assessing climate-related risks. | Our climate change-related risks concerning business operations, product planning, and industry trends are assessed regularly by related organizational units based on the environmental management frameworks of ISO 14001 and ISO 50001. Individual business sites are required to enter their GHG data (electricity, fuel, manufacturing process gases, etc.) into the EHS System, and we review their changes on a monthly basis and analyze the causes of such changes. Respective organizational units control GHG emissions in an integrated manner accordingly, and annual third-party audits are conducted to ensure the credibility and alignment of emissions data. | P.25 CDP : CC1.2a, CC2.2b |
| b) Describe the organization’s processes for managing climate-related risks. | To more effectively manage climate change-related risks, the company-wide organizational unit in charge of EHS monitors our energy consumption, GHG emissions, and renewable energy use as well as the physical impacts of climate change. Relevant issues already faced by or expected to affect our business sites around the world are discussed at the EHS Council of each business unit and other regularly convened consultative bodies to seek optimal solutions. The Sustainability Council discusses relevant risks and opportunities from a company-wide perspective and makes necessary decisions. The Eco-Council examines climate change-induced business opportunities and shares the findings with pertinent business units for execution. | P.23 CDP : CC2.2d | |
| c) Describe how processes for identifying, assessing, and managing climate-related risks are integrated into the organization’s overall risk management. | Semiconductor manufacturing requires a massive amount of power, and thus emissions permits and renewable energy prices are closely monitored and managed as factors that directly affect our business competitiveness. As the climate change-related regulations of individual countries influence our business activities and reputation, compliance with them is also managed within our company-wide risk management system. | P.25-26 CDP : CC2.2 | |
| Metrics and Targets | a) Disclose the metrics used by the organization to assess climate related risks and opportunities in line with its strategy and risk management process. | To more accurately assess and manage the risks and opportunities related to climate change, we monitor diverse metrics including the GHG emissions, per-unit GHG emissions , energy consumption, renewable energy use, and water consumption of individual business sites as well as the share of recycled materials in products, amount of e-waste collected, and average power consumption of individual products. | P.27-31, P94-95 CDP : CC11.3 |
| b) Disclose Scope 1 (direct emissions), Scope 2 (indirect emissions), and Scope 3 (miscellaneous indirect scope) greenhouse gas (GHG) emissions, and the related risks. | We disclose our Scope 1, 2, and 3 emissions via the Sustainability Report and CDP Report. Our direct emissions (Scope 1) in 2021 stand at 7.6 million tonnes and our indirect emissions (Scope 2) reflecting renewable energy use at 9.8 million tonnes. For total GHG emissions and emissions of individual GHGs over the last three years, refer to page 94 herein. | P.31, P94 CDP : C6, C7 | |
| c) Describe the targets used by the organization to manage climate-related risks and opportunities and performance against targets. | To curtail our GHG emissions, we have continued to expand our use of renewable energy. In June 2018, we announced the plan to power our business sites in the US, Europe, and China with 100% renewable energy by 2020. We also released the plan to install solar and geothermal power generation facilities in the parking lots, rooftops, and new buildings of the Suwon, Hwaseong, and Pyeongtaek sites for the promotion of renewable energy use in Korea. We installed renewable energy facilities of 1.9MW in 2018 and 1.5MW in 2019 at the Suwon and Giheung sites, respectively. From 2018 to 2020, we established and implemented action plans optimized for individual regions, from solar power generator installation to REC purchasing, PPA adoption, and Green Pricing. As a result, our renewable energy use in 2020 increased nearly three-fold compared to 2018, and all the preset targets were reached. In 2021, our renewable energy use increased by 30% from 4,030GWh in 2020 to 5,278GWh. To reduce manufacturing process gases and thereby achieve emissions mitigation by over 90%, we are striving to develop new catalysts to enhance gas disposal efficiency and expand gas disposal facilities. For reduced fossil fuel use, we will fully leverage waste heat to phase out LNG-fueled boilers. | P.28, P31 CDP : C4 | |
