SK Square

Sustainability Report

SK Square is transparently disclosing our ESG activities and performance to stakeholders through the Sustainability Report. We will continue to identify stakeholder needs and implement various communication activities, and advance the ESG management framework based on them.

2022 ESG Report

2022 ESG Report

SK Square published our first Sustainability Report in 2023 to transparently disclose key ESG activities and performance and to communicate with stakeholders. SK square will continue to advance ESG management by sharing the philosophy and principles of the company with all stakeholders.

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ESG Performance Data

GRI Content Index

GRI 101: Foundation 2016
General Disclosures

Classification	Code Indicators Contents
GRI 102: General Disclosures 2016	Organizational profile
	102-1 Name of the organization SK Square, Co., Ltd. 102-2 Activities, brands, products, and services Investment specialized company Portfolio 102-3 Location of headquarters SK T-tower, 65, Eulji-ro, Jung-gu, Seoul 102-4 Location of operations As an investment specialized company, headquartered in Seoul 102-5 Ownership and legal form IR - Corporate Governance 102-6 Markets served Portfolio 102-7 Scale of the organization IR - Key Financials 102-8 Information on employees and other workers Sustainability > Social - Employee values 102-9 Supply chain Sustainability > Social - Win-win management 102-10 Significant changes to the organization and its supply chain - 102-11 Precautionary Principle or approach Sustainability > Environment - Response to climate change 102-12 External initiatives Sustainability > Fact Book - ESG Initiative 102-13 Membership of associations -
	Strategy
	102-14 Statement from senior decision-maker Company - CEO Greeting 102-15 Key impacts, risks, and opportunities Sustainability > Environment - Response to climate change
	Ethics and integrity
	102-16 Values, principles, standards, and norms of behavior Sustainability > Governance - Ethical management 102-17 Mechanisms for advic and concerns about ethics Sustainability > Governance - Ethical management
	Governance
	102-18 Governance structure IR - Corporate Governance 102-22 Composition of the highest governance body and its committees Sustainability > Governance - BOD operation 102-23 Chair of the highest governance body IR - Corporate Governance 102-24 Nominating and selecting the highest governance body Sustainability > Governance - BOD operation 102-25 Conflicts of interest Sustainability > Governance - BOD operation 102-27 Role of highest governance body in setting purpose, values, and strategy Sustainability > Governance - BOD operation 102-35 Remuneration policies Sustainability > Governance - BOD operation
	Stakeholder engagement
	102-40 List of stakeholder groups Sustainability > Governance - Stakeholder engagement 102-41 Collective bargaining agreements Sustainability > Social - Employee values 102-42 Identifying and selecting stakeholders Sustainability > Governance - Stakeholder engagement 102-43 Approach to stake holder engagement Sustainability > Governance - Stakeholder engagement 102-44 Key topics and concerns raised Sustainability > Governance - Stakeholder engagement
	Reporting practice
	102-45 Entities included in the consilidated financial statements IR - Audit Report 102-46 Defining report content and topic Boundaries Major non-financial activities and performance since establishment in 2021 102-47 List of material topics Sustainability > Governance - Stakeholder engagement 102-48 Restatements of information - 102-49 Changes in reporting - 102-50 Reporting period November 2021 ~ September 2022 102-51 Date of most recent report - 102-52 Reporting cycle 1 year 102-53 Contact point for question regarding the report esg_sksquare@sk.com 102-54 Claims of reporting in accordance with the GRI Standards GRI Standards Core Option 102-55 GRI content index Sustainability > Fact Book - ESG Performance Data 102-56 External assurance -
	Management approach
	103-1 Explanation for reporting the management approach Sustainability > Governance - Stakeholder engagement 103-2 The management approach and its components Sustainability > ESG management - SK DBL management 103-3 Evaluation of the management approach Sustainability > ESG management - SK DBL management

Economic Performance(GRI 200)

Classification	Code Indicators Contents
Economic Performance
	201-1 Direct economic value generated and distributed Sustainability > ESG management - SK DBL management 201-2 Financial implications and other risks and opportunities due to climate change Sustainability > Environment - Response to climate change
Indirect Economic Impacts
GRI 203: Indirect Economic Impacts 2016	203-1 Infrastructure investments and services supported Sustainability > Social contribution Sustainability > ESG management - SK DBL management 203-2 Significant indirect economic impacts Sustainability > Social contribution
Anti-corruption
GRI 205: Anti-corruption 2016	205-1 Operations assessed for risks related to corruption Sustainability > Governance - Ethical management 205-2 Communication and training about anti-corruption policies and procedures Sustainability > Governance - Ethical management 205-3 Confirmed incidents of corruption and actions taken Sustainability > Governance - Ethical management
Anti-competitive Behavior
GRI 206: Anti-competitive Behavior 2016	206-1 Legal actions for anti-competitive behavior, anti-trust, and monoploy practices Sustainability > Governance - Ethical management

Environmental Performance(GRI 300)

Classification	Code Indicators Contents
Emissions
GRI 305: Emissions 2016	305-1 Direct (Scope 1) GHG emissions Sustainability > Environment - Net-Zero 305-2 Energy indirect (Scope 2) GHG emissions Sustainability > Environment - Net-Zero 305-3 Other indirect (Scope 3) GHG emissions Sustainability > Fact Book > ESG Performance Data - ESG Data 305-5 Reduction of GHG emissions Sustainability > Environment - Net-Zero 305-6 Emissions of ozone-depleting substances (ODS) Sustainability > Environment - Net-Zero
Environmental Compliance
GRI 307: Environmental Compliance 2016	307-1 Non-compliance with environmental laws and regulations No violations

Social Performance(GRI 400)

Classification	Code Indicators Contents
Employment
GRI 401: Employment 2016	401-1 New employee hires and employee turnover Sustainability > Social - Employee values 401-2 Benefits provided to full-time employees that are not provided to temporary or part-time employees Sustainability > Social - Employee values 401-3 Parental leave Sustainability > Social - Employee values
Occupation Health and Safety
GRI 403: Occupational Health and Safety 2018	403-1 Occupational health and safety management system Sustainability > Social - Safety and health management *SK Square has introduced a safety and helath management system in accordance with the Occupational Safety and Health Act. 403-2 Hazard identification, risk assessment, and incident investigation Sustainability > Social - Safety and health management 403-3 Occupational health services Sustainability > Social - Safety and health management 403-4 Worker participation, consultation, and communication on occupational helath and safety Sustainability > Social - Safety and health management 403-5 Worker training on occupational health and safety Sustainability > Social - Safety and health management 403-6 Promotion of worker health Sustainability > Social - Safety and health management 403-9 Work-related injuries Sustainability > Social - Safety and health management 403-10 Work-related ill health Sustainability > Social - Safety and health management
Training and Education
GRI 404: Training and Education 2016	404-1 Average hours of training per year per employee Sustainability > Social - Employee values 404-2 Programs for upgrading employee skills and transition assistance programs Sustainability > Social - Employee values
Diversity and Equal Opportunity
GRI 405: Diversity and Equal Opportunity 2016	405-1 Diversity of governance bodies and employees Sustainability > Governance - BOD operation Sustainability > Social - Employee values
Non-discrimination
GRI 406: Non-discrimination 2016	406-1 Incidents of discrimination and corrective actions taken Sustainability > Social - Employee human rights
Child Labor
GRI 408: Child Labor 2016	408-1 Operations and suppliers at significant risk for incidents of child labor Sustainability > Social - Employee human rights
Forced or Complusory Labor
GRI 409: Forced or Compulsory Labor 2016	409-1 Operations and suppliers at significant risk for incidents of forced or compulsory labor Sustainability > Social - Employee human rights
Human Rights Assessment
GRI 412: Human Rights Assessment 2016	412-1 Operations that have been subjected to human rights reviews or impact assessments Sustainability > Social - Employee human rights
Local Communities
GRI 413: Local Communities 2016	413-1 Operations with local community engagement, impact assessment, and development programs Sustainability > Social contribution
Supplier Social Assessment
GRI 414: Supplier Social Assessment 2016	414-1 New suppliers that were screened using social criteria Sustainability > Social - Win-win management 414-2 Negative social impacts in the supply chain and actions taken Sustainability > Social - Win-win management
Socioeconomic Compliance
GRI 419: Socioeconomic Compliance 2016	419-1 Non-compliance with laws and regulations in the social and economic area No violations of laws and regulations in social and economic fields that are significant or reqire attention during the reporting period

Classification	Indicators	Code	Contents
Greenhouse Gas Emissions	(1) Gross global Scope 1 emissions	TC-SC- 110a.1	Sustainability > Environment - Net-Zero
	(2) Total emissions from perfluorinated compounds	TC-SC- 110a.1	-
	Discussion of long-term and short-term strategy or plan to manage Scope 1 emissions, emissions reduction targets, and an analysis of performance against those targets	TC-SC- 110a.2	Sustainability > Environment - Net-Zero
Energy Management in Manufacturing	(1) Total energy consumed	TC-SC- 130a.1	Sustainability > Fact Book > ESG Performance Data - ESG Data
	(2) Percentage grid electricity		-
	(3) Percentage renewable		Sustainability > Fact Book > ESG Performance Data - ESG Data
Water Management	(1) Total water withdrawn	TC-SC- 140a.1	Sustainability > Fact Book > ESG Performance Data - ESG Data
Water Management	(2) Total water consumed, percentage of each in regions with High or Extremely High Baseline Water Stress	TC-SC- 140a.1	-
Waste Management	Amount of hazardous waste from manufacturing, percentage recycled	TC-SC- 150a.1	Sustainability > Fact Book > ESG Performance Data - ESG Data
Recruiting & Managing a Global & Skilled Workforce	(1) Percentage of employees that are foreign nationals and (2)	TC-SC- 330a.1	2%
Recruiting & Managing a Global & Skilled Workforce	(2) Percentage of employees that are located offshore	TC-SC- 330a.1	1%
Product Lifecycle Management	Percentage of products by revenue that contain IEC 62474* declarable substances *International standard of contained materials in electrical and electronic products	TC-SC- 410a.1	No direct products manufacture
	Processor energy efficiency at a system-level for: (1) servers	TC-SC- 410a.2	No direct products manufacture
	(2) desktops		No direct products manufacture
	(3) laptops		No direct products manufacture
Materials Sourcing	Description of the management of risks associated with the use of critical materials	TC-SC- 440a.1	Sustainability > Social - Win-win management *The principle of 'Responsible minerals procurement' is specified in the Partner ESG Code of Conduct
Intellectural Property Protection & Competitive Behavior	Total amount of monetary losses as a result of legal proceedings associated with anti-competitive behavior regulations	TC-SC- 520a.1	None

Classification	Indicators	Contents
A. Corporate Governance Disclose the organization’s governance around climate-related risks and opportunities.	a) Describe the board’s oversight of climate-related risks and opportunities. (Discussion procedure and frequency, strategy and action plan establishment, etc.)	Sustainability > Environment - Response to climate change SK Square reviews and approves company-wide climate change countermeasures and strategic directions through the ESG committee within the BOD.
	b) Describe management’s role in assessing and managing climate-related risks and opportunities.	Sustainability > Environment - Response to climate change The ESG committee manages and oversees the implementation performance of environmental issues response activities, including company-wide climate change strategies. The ESG committee is held regularly and has an efficient climate change response process, such as deliberation on climate change-related agendas that have been proposed through discussions with the management and working level councils.
B. Strategy Disclose the actual and potential impacts of climate-related risks and opportunities on the organization’s businesses, strategy, and financial planning where such information is material.	a) Describe the climate-related risks and opportunities the organization has identified over the short, medium, and long term.	Sustainability > Environment - Response to climate change
	b) Describe the impact of climate-related risks and opportunities on the organization’s businesses, strategy, and financial planning.	Sustainability > Environment - Response to climate change
	c) Describe the resilience of the organization’s strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario.	Sustainability > Environment - Net-Zero Sustainability > Environment - Response to climate change
C. Risk Management Disclose how the organization identifies, assesses, and manages climate-related risks.	a) Describe the organization’s processes for identifying and assessing climate-related risks.	Sustainability > Environment - Response to climate change
	b) Describe the organization’s processes for managing climate-related risks.	Sustainability > Environment - Response to climate change
	c) Describe how processes for identifying, assessing, and managing climate-related risks are integrated into the organization’s overall risk management.	Sustainability > Environment - Response to climate change
D. Metrics and Targets Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities where such information is material.	a) Disclose the metrics used by the organization to assess climate-related risks and opportunities in line with its strategy and risk management process.	Sustainability > Environment - Net-Zero
	b) Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas (GHG) emissions, and the related risks.	Sustainability > Environment - Net-Zero
	c) Describe the targets used by the organization to manage climate-related risks and opportunities and performance against targets.	Sustainability > Environment - Net-Zero

Classification	Unit	2021	2022
General Energy Consumption
Total energy consumption (intensity)	GJ/KRW 1 billion	0	19.8
Total energy consumption	GJ	1,605	11,697
Comsumption by direct energy source
Natural gas	GJ	257	1,259
Gasoline	GJ	0	1,129
Diesel	GJ	0	2
Kerosene	GJ	0	0
Others	GJ	0	0
Comsumption by indirect energy source
Electricity	GJ	1,348	9,307
Steam	GJ	0	0
City gas	GJ	0	0
Others	GJ	0	0
Renewable Energy Consumption
Renewable energy consumption ratio	%	0	0
Total electricity consumption	MWh	140	970
Total renewable energy consumption	MWh	0	0
Comsumption by renewable energy source	MWh	0	0
Renewable energy consumption by procurement method	MWh	0	0
Greenhouse Gas Emissions
Percnetage of achievement of GHG reduction target	%	0	0
GHG target emissions(Scope 1+2)	tCO2e	-¹⁾	567²⁾
GHG reduction achievement	tCO2e	0	0
Total GHG emissions (intensity)	tCO2e/KRW 1 billion	0	1
Total GHG emissions (Scope 1+2)	tCO2e	94	595
Scope 1 emissions	tCO2e	29	149
Scope 2 emissions	tCO2e	65	445
Scope 3 emissions³⁾	tCO2e	174,195	1,632,153
Purchased goods and services	tCO2e	636	6,380
Fuel-and-energy-related activities(not included in Scope 1 or 2)	tCO2e	575	-
Waste generated in operations	tCO2e	2	11
Business travel	tCO2e	13	194
Employee commuting	tCO2e	6	41
Investments	tCO2e	172,964	1,625,527

Classification	Unit	2021	2022
Air pollutant emissions
NOx emissions (intensity)	Ton/KRW 1 billion	0	0
NOx emissions	Ton	0	0
SOx emissions (intensity)	Ton/KRW 1 billion	0	0
SOx emissions	Ton	0	0
Dust emissions (intensity)	Ton/KRW 1 billion	0	0
Dust emissions	Ton	0	0
VOC emissions (intensity)	Ton/KRW 1 billion	0	0
VOC emissions	Ton	0	0
Waste generated and recycled
Total waste generated (intensity)	Ton/KRW 1 billion	0	0.028
Total waste generated	Ton	1.4	16.5
Waste generated by type
Non-hazardous waste	Ton	1.4	16.2
Hazardous waste	Ton	0	0.3
Recycling rate of waste	%	57	49.7
Total waste recycling	Ton	0.8	8.2
Water consumption and reuse
Total water withdrawals (intensity)	Ton/KRW 1 billion	0	9.3
Total water withdrawals	Ton	747	5,475
Water withdrawals by intake source
Municipal water	Ton	747	5,475
Underground water	Ton	0	0
Water withdrawals in sensitive areas	Ton	0	0
Total water reuse rate	%	0	0
Water consumption	Ton	747	5,475
Water reused	Ton	0	0
Discharge of water pollutants
COD emission (intensity)	Ton/KRW 1 billion	0	0
COD emission	Ton	0	0
BOD emission (intensity)	Ton/KRW 1 billion	0	0
BOD emission	Ton	0	0
T-N emission (intensity)	Ton/KRW 1 billion	0	0
T-N emission	Ton	0	0
Environmental education
Education hours per person	Hour	-	0.6
Participants	Person	-	87
Total education hours(including environmental skills training)	Hour	-	55.1
Breach of environmental laws and regulations
Domestic and overseas environmental regulatory violations	Count	0	0
Amount of fines for domestic and overseas environmental regulatory violations	KRW 1 million	0	0

Classification	SK Square
Clean Technology
Strategic focus on clean technology development	No clean technology development strategy as there is no technology development capabilities in company currently
Target to increase investment in clean tech	No direct clean technology investment
Clean technology R&D expense	No expenditure related to clean technology R&D
R&D activities corresponding to clean technology	No clean technology R&D activities
Numbers of patents related to clean technology	No patents related to clean technology
Clean technology activities(Biz) sales	No sales from clean technology activities
Clean technology activities(Biz) performance	No direct clean technology activities
Product Environmental Efficiency
Percentage of products that can be recycled or reused (by ton)	No direct products manufacture
Percentage of products containing IEC 62474 reportable substances (based on sales) *International standard of contained materials in electrical and electronic products	No direct products manufacture
Integrated (hardware + software) energy efficiency process management and energy efficiency performance by product category(server, desktop and laptop)	No direct products manufacture
Eco-friendly design (eco design)	No direct products manufacture
Third-party certification and Type II certificateion product	No direct products manufacture
Controversial Materials Emissions and Waste
Management of soil, noise, vibration and odor	We do not have production facilities such as factories, and there is no hazardous waste other than non-hazardous waste
Strategies to reduce controversial material footprint in the supply chain	Through the Supplier ESG Code of Conduct, we obligate all our suppliers to comply with environmental responsibilities
Regular environmental impact audits (for all business sites)	We do not have production facilities such as factories, and there is no hazardous waste other than non-hazardous waste
Regular environmental impact audits (per year)	We do not have production facilities such as factories, and there is no hazardous waste other than non-hazardous waste
Raw Material Use
Raw material consumption and intensity	No raw materials directly used or procured ourselves

Classification	Unit	2021	2022
Employee Status
Total employees	Person	82	87
By gender
Number of male	Person	66	68
Number of female	Person	16	19
By age
Number of ~29	Person	2	3
Number of 30~49	Person	76	81
Number of 50+	Person	4	3
By employment type
Number of regular	Person	81	84
Number of temporary	Person	1	3
Number of new hires	Person	5	4
Percentage of employees with disabilities	%	0	0
Number of employees with disabilities	Person	0	0
Percentage of women in executive positions	%	17	17
Number of women in executive positions	Person	2	2

Classification	Unit	2021	2022
Employee Safety
LTIR(Lost time injuries rate)	per 200,000 working hour	0	0
LTIR by employee type
Regular	per 200,000 working hour	0	0
Temporary	per 200,000 working hour	0	0
Number of LTI	Case	0	0
Employee fatality rate	%	0	0
Number of employee fatality	Case	0	0
Employee Heatlh
OIFR(Occupational illness frequency rate)	per 200,000 working hour	0	0
Number of occupational illness	Case	0	0
Employee Compentency Development
Employee training	Hour	0	2,008
Product/Service SV and Safety/Quality
Social value creation(total) of product and service	KRW	0	103,286,730,150
Number of violations of laws and regulations related to product and service safety	Case	0	0
Employee Turnover*
Total Turnover *SK Square is a newly incorporated company in November 2021, so we calculate and manage the annual employee turnover rates since 2022	%	0	2.3
Contributions and Other Spending
Total amount of political contributions	KRW 10,000	0	0
Total lobbying funds	KRW 10,000	0	0
Total amount of assoiation fees* *20 for Korea Listed Companies Association, 84 for Korean Bar Association, 248 for Seoul Bar Association	KRW 10,000	0	352
Others	KRW 10,000	0	0
Human Capital ROI
Total Revenue(A)	KRW 1 million	1,146,414	4,510,691
Total Operating Expenses(B)	KRW 1 million	726,623	4,347,928
Total Employee-related Expenses(C)	KRW 1 million	197,491	1,116,360
Human Capital ROI((A-(B-C))/C)	-	3.13	1.15

Classification	SK Square
Employee Compentency Development
Employee stock ownership plan (ESOP) or employee stock purchase plan (ESPP)	SK Square is implementing a program that allows employees to select incentives as treasury stock so that employees can voluntarily participate in enhancing the company's corporate value. All permanent employees(96.6% in FY 2022) are eligible to participate in corporate value enhancement as a shareholder by selecting the amount of stocks received within the size of their incentives. In 2022, about 66% of all employees participated. SK Square enhances implementation for ESG management by adding factors covering all ESG areas(e.g., GHG reduction, employee safety and health, and anti-corruption practices) to KPIs in the performance evaluation. In addition, the ESG performance will be reflected in compensation for all management members.
Determining factors for compensation (remuneration system)	In order to maximize company-wide performance and motivate individual employees, SK Square implements compensation in consideration of both collaboration-based company-wide performance and organizational and individual differential performance.
Regular performance appraisals and feedback processes	SK Square conducts performance evaluations based on fair procedures every year to check the performance and skill levels of employees. Evaluation results are finalized through sufficient discussion and debate, feedback process through personnel evaluation sessions for each organization. The finalized results are provided as individual feedback to each employee and used for development, compensation, and position assignment. In 2022, 100% of all employees received performance evaluation according to SK Square's performance evaluation system(employees on annual leave, etc. are excluded from the evaluation).

Classification	Revenues (FY 2022)
Classification	KRW 1 million	%
Total Revenues	4,510,691	100
Eligible Business Activities	2,665,627	59
Holding Company	364,626	8
Security Business	1,778,697	39
Platform Business	522,304	12

Domestic
Names of entities (primary activities)	SK Square CO., LTD. (Investing)
Number of employees	86
Revenues (KRW 1 million)	591,185
Profit(Loss) before tax (KRW 1 million)	430,739
Income tax accrued (KRW 1 million)	-
Income tax paid (KRW 1 million)	(2,399)
Global
Names of entities (primary activities)	SK Square Americas, Inc. (Investing)
Number of employees	1
Revenues (KRW 1 million)	-
Profit(Loss) before tax (KRW 1 million)	-
Income tax accrued (KRW 1 million)	-
Income tax paid (KRW 1 million)	-
Total
Number of employees	87
Revenues (KRW 1 million)	591,185
Profit(Loss) before tax (KRW 1 million)	430,739
Income tax accrued (KRW 1 million)	-
Income tax paid (KRW 1 million)	(2,399)

Classification	Names of entities(primary activities)	Number of employees	Revenues (KRW 1 million)	Profit(Loss) before tax (KRW 1 million)	Income tax accrued (KRW 1 million)	Income tax paid (KRW 1 million)
Domestic	SK Square CO., LTD. (Investing)	86	591,185	430,739	-	(2,399)
Global	SK Square Americas, Inc. (Investing)	1	-	-	-	-
Total		87	591,185	430,739	-	(2,399)

Classification	Unit	2021	2022
Earnings before tax	KRW	-17,462,164,694	430,738,749,701
Reported(nominal) taxes	KRW	-4,933,589,850	-2,398,855,045
Adjustments	KRW	10,461,093,214	-413,318,723,351
Effective tax rate	%	-	-
Cash tax paid	KRW	0	1,459,348,959
Cash tax rate (Cash tax paid/Earnings before tax)	%	0	0.34