Materiality
SCG reviews enterprise materiality on a yearly basis through the SCG Sustainable Development Committee, taking into consideration both internal and external impacts.
Double and Dynamic Materiality Assessment Process
1
Analysis of Megatrends and Organizational Context
• Analyze external context and trends that may impact business operations, including climate change, regulatory developments, technological advancement, and stakeholder expectations.
• Benchmark approaches and performance against international standards and indices to support the identification of sustainability-related risks and opportunities.
• Gather perspectives and insights from key stakeholders through various channels to support the assessment of sustainability issues relevant to the business.
• Analyze external context and trends that may impact business operations, including climate change, regulatory developments, technological advancement, and stakeholder expectations.
• Benchmark approaches and performance against international standards and indices to support the identification of sustainability-related risks and opportunities.
• Gather perspectives and insights from key stakeholders through various channels to support the assessment of sustainability issues relevant to the business.
2
Identification of Sustainability-related Risks and Opportunities Across the Value Chain
• Gather Sustainability-related Risks and Opportunities (SROs) from all business units and analyze sustainability risks and opportunities across the entire value chain.
• Assess risks by considering both financial impacts and environmental and social impacts.
• Apply international frameworks, such as TCFD, TNFD, and TISFD, to support risk analysis across short-, medium-, and long-term timeframes.
• Conduct sustainability risk assessments through internal organizational mechanisms, such as the Safety Performance Assessment Program (SPAP), the Environmental Performance Assessment Program (EPAP), and the Human Rights Due Diligence Process.
• Gather Sustainability-related Risks and Opportunities (SROs) from all business units and analyze sustainability risks and opportunities across the entire value chain.
• Assess risks by considering both financial impacts and environmental and social impacts.
• Apply international frameworks, such as TCFD, TNFD, and TISFD, to support risk analysis across short-, medium-, and long-term timeframes.
• Conduct sustainability risk assessments through internal organizational mechanisms, such as the Safety Performance Assessment Program (SPAP), the Environmental Performance Assessment Program (EPAP), and the Human Rights Due Diligence Process.
3
Impact Significance Assessment
• Analyze and prioritize key issues through a Double Materiality Workshop conducted with senior executives and relevant working committees.
• Gather perspectives from stakeholders to support the identification and prioritization of sustainability-related issues.
• Assess the impacts of sustainability issues across short-, medium-, and long-term timeframes.
• Integrate the results of the assessment into the organization’s enterprise risk management process.
• Analyze and prioritize key issues through a Double Materiality Workshop conducted with senior executives and relevant working committees.
• Gather perspectives from stakeholders to support the identification and prioritization of sustainability-related issues.
• Assess the impacts of sustainability issues across short-, medium-, and long-term timeframes.
• Integrate the results of the assessment into the organization’s enterprise risk management process.
4
Defining and Approving Key Material Topics
• Analyze and define key material topics based on the assessment results to serve as a framework for guiding the organization’s operations.
• Present the identified key material topics to the relevant committees and integrate them into risk management and business planning processes.
• Communicate key material topics and management approaches to stakeholders through various channels and disclose relevant information in accordance with international standards.
• Analyze and define key material topics based on the assessment results to serve as a framework for guiding the organization’s operations.
• Present the identified key material topics to the relevant committees and integrate them into risk management and business planning processes.
• Communicate key material topics and management approaches to stakeholders through various channels and disclose relevant information in accordance with international standards.
Key Material Topics
Through the Double Materiality Assessment, SCG has identified five key material sustainability topics aligned with the Inclusive Green Growth approach: Net Zero, Nature Positive, and Inclusive Society. These topics serve as an important framework for guiding the Company’s sustainability direction, aiming to reduce greenhouse gas emissions, conserve and restore natural resources and ecosystems, enhance the quality of life in society, and strengthen competitiveness through sustainable innovation.
Further details appear in “Sustainability Performance in 2025”, page 128-136, of the Annual Report 2025
Net Zero Transition
Manage risks and opportunities arising from the transition toward Net Zero by planning for the reduction of greenhouse gas emissions in Scope 1 and 2 in alignment with SBTi and the organization’s transition plan, while preparing for carbon pricing and volatile energy costs. In parallel, manage Scope 3 emissions through collaboration with suppliers across the value chain to enhance system-wide decarbonization capabilities, and develop low-carbon products, services, and solutions to strengthen long-term competitiveness and growth.
Climate Resilience to Physical Risks
Assess and manage physical risks from climate change, such as extreme heat, floods, and droughts, which may impact operations, infrastructure, and supply chains. This includes applying climate scenario analysis to support long-term planning, resource allocation, and financial planning, while strengthening the Business Continuity Management (BCM) system and improving infrastructure resilience to ensure business continuity and stability during disruptions.
Circular Economy
Manage natural resources efficiently across the value chain by applying circular economy principles in process design and waste management to reduce impacts on ecosystems, increase resource reuse, and minimize waste, particularly plastic waste. At the same time, strengthen resource security, reduce regulatory risks, and respond to stakeholder expectations in alignment with international frameworks such as TNFD.
Just Transition
Manage the impacts of the transition to a low-carbon economy in a holistic manner by placing importance on workers, communities, and stakeholders across the value chain. This includes supporting access to green finance and creating new business opportunities for partners and SMEs, while driving circular economy practices and green product markets to promote fairness, transparency, and improved standards across the value chain.
Digital Innovation & Cybersecurity
Drive the adoption of digital technologies, such as AI, automation, and the Internet of Things, as fundamental enablers to enhance operational efficiency and support sustainability objectives. At the same time, strengthen cybersecurity and data governance to build trust in data management, leveraging the ESG Data Platform as a central system for data collection, analysis, and strategic decision-making, while developing digital capabilities among personnel to support long-term growth.
