SK D&D has established and is operating the ESG Committee, a committee under the board of directors. To strengthen ESG risk management centered on the board, the ESG Committee and the Board of Directors carry out review of ESG risks and opportunities and report and approval procedures for major issues. Also, we are carrying out a review of ESG performance and the discovery and execution of improvement projects through the Sustainability Management Committee.

We are promoting fundamental ESG management activities through the Sustainability Management Committee, an organization directly under the CEO. The ESG part, a working-level promotion organization, establishes environment-related strategies and goals based on environmental information at each business area to promote systematic environmental management, reporting them to the board of directors through the Sustainability Management Committee, an internal promotion organization. Furthermore, we are striving to reduce our environmental impact by considering eco-friendly factors from the project promotion stage based on our company-wide Environmental Management policy.

We review non-financial risks as well as financial risks for sustainable corporate growth. ESG risks

are derived through industry analysis and literature review, carrying out materiality assessment based on financial impact and likelihood of occurrence to identify risk and opportunity factors for each business, systematically responding to and managing risks. Also, the ESG Committee establishes countermeasures to practically manage potential risks at the board level.

SK D&D’s management goal in responding to climate change is to ‘create sustainable space and energy’. We have established mid-to long-term plans for Scope 1, 2 Net Zero, and long-term plans for Scope 3 Net Zero. We hope to develop sustainable space through the strengthening of eco-friendly portfolio and active ESG management, realizing Net Zero. We will also continue our efforts to respond to climate change while communicating progress for 2030 Net Zero with external stakeholders.

We examine mid to long-term business strategies by analyzing the global milestones for the IEA’s 1.5℃ scenario (NZE2050). In the case of the real-estate development business, land use, convenience, use of raw materials, indoor environment, energy efficiency, greenhouse gas emissions, and ease of maintenance are considered in order to minimize the impact on the environment throughout the life-cycle. Based on these considerations, we will secure eco-friendly certifications for all development projects.

SK D&D has established departments in charge of each area and a decision-making system to continuously monitor in order to systematically manage potential financial and non-financial risks in the entire process of corporate management activities for stable growth.

Decision-making on investigations and responses according to risk management results is carried out on board level, identifying and analyzing risks that may occur in corporate business activities and from the perspective of ESG through the ESG Committee under the board of directors. In order to flexibly respond to fluctuating risks, each department in various fields is responding to risks in consideration of business, market environment, and stakeholder characteristics in complex manner.

Risks are identified in consideration of business areas, market environment, and stakeholder characteristics through the company-wide risk management system (ERM), setting risk limits and managing risks on a company-wide level. In addition, we systematically manage business-specific ESG risks by establishing emergency response guidelines to respond to situations such as natural disasters and preparing for disasters and major accidents.

SK D&D selects ESG management tasks based on the results of the stakeholder materiality assessment, risks, opportunities and domestic and international ESG standards and evaluation standards, and selects and manages key indicators for continuous monitoring, including measurable factors such as fuel switching, renewable energy usage, and overall greenhouse gas emissions.

We are managing and responding to company-wide GHG emissions and energy consumption in

order to understand the seriousness of the climate crisis. Although SK D&D is not included in the domestic GHG-related system, we are preemptively building and operating a company-wide GHG and energy management system in accordance with domestic GHG emission calculation and certification guidelines. SK D&D's GHG emissions in 2022 are as follows.

Scope1: 242.65 tCO2eq.

Scope2: 810.49 tCO2eq.

Scope3: 25,409 tCO2eq.

Through its Net Zero Roadmap, SK D&D has set a goal to achieve net zero GHG emissions for both Scope 1 and Scope 2 by 2030. To this end, it has set targets such as achieving a 100% renewable energy conversion rate by 2023 and a 100% electric vehicle conversion rate by 2030. In addition to collaborating with partners to reduce carbon emissions in the supply chain, in the short term SK D&D will strengthen the screening of LEED-certified buildings when reviewing its real estate development and investment portfolio, and gradually increase the proportion of business with LEED-certified buildings.