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Owners & Other Stakeholders

C·E·O

S-OIL's ESG management starts from understanding the expectations of C.E.O. (Customers, Employees, Owners & other stakeholders). Going forward, the Company will create economic, environmental, and social values reflecting the expectations of C.E.O. and contribute to the development of society and the nation.

With the aim of securing the core competencies for sustainable growth, S-OIL has been making continuous investments based on a stable financial structure and carrying out activities to improve operational efficiency. S-OIL is also proactive in transparently and accurately disclosing management information to protect stakeholders' interest as well as pursuing shared growth with its suppliers based on mutual trust. S-OIL is not only joining the global efforts to tackle climate change through analyzing associated risks and opportunities and incorporating them into management decisions but also carrying out differentiated environment management activities. S-OIL's social contribution is in line with its management strategies in order to pursue co-prosperity with local communities.

Improvement of Operational Efficiency / Investment in New Projects

S-OIL seeks to continuously improve its operational efficiency through various profitability activities. S-OIL is also constantly striving to sharpen its competitive edge and creating new values by tapping into core technologies of the 4th Industrial Revolution. In particular, in order to attain Vision 2030 and realize sustainable growth, S-OIL is striving to enhance existing business, expand petrochemical business and seed new growth engine according to its investment roadmap.

Improvement of Investment Efficiency

S-OIL has continuously made an effort to improve investment efficiency through objective and strategic review via external consulting and benchmarking. S-OIL conducts the thorough verification that increases the accuracy of investment cost estimations and prioritizes investment items. The results are then incorporated in its business plan. After completion of investments, systematic performance analysis further enhances the efficiency and performance of new investments in the future. Through this efficient investment decision-making process, S-OIL promoted No.1 RHDS Revamping project since 2018 in response to the International Maritime Organization's stricter regulations on sulfur content for marine fuels. The project is completed in the first half of 2021, after completing all phases including finalization of investment items, basic design, EPC contractor selection, detailed design, and key equipment procurement & installation, and construction. S-OIL will start a commercial operation during the turnaround and inspection (T&I) period in 2021 and generate a new revenue source by converting surplus high-sulfur fuel oil to be produced in T&I period into high value-added low sulfur marine fuels.

Various Activities for Profitability Enhancement

To minimize unnecessary loss and improve operational efficiency throughout the entire processes from import of crude oil to production and market distribution, S-OIL continues to carry out various profit improvement activities. Through diverse channels including Employee Suggestion Program (ESP), periodic brainstorming sessions and Request for Technical Service (RTS) system for investment idea review, S-OIL develops various profit improvement ideas such as upgrading facilities, adopting latest technologies, optimizing the operational conditions of production facilities, expanding production capacity of high value-added products, reducing fuel consumption and adjusting mixture ratios of products. The profitability improvement reward system and ESP additional incentive program are in operation in order to promote profit improvement activities and encourage voluntary employee participation. In addition, S-OIL operates S-RICH (S-OIL Refinery Improvement Communication Hub) system to efficiently manage the identified profit improvement tasks and provide a platform for sharing data among employees. This effort resulted in a profit improvement of about KRW 139 billion in 2020 through the Profit Improvement Program (PIP) such as increasing production capacity of high value-added products, improving product yield, energy saving and shipment optimization.

Energy Consumption Reduction

S-OIL continues to improve its operational efficiency by reducing energy use through in-house energy saving programs and external consulting. In 2020, S-OIL found energy saving ideas through various energy saving activities that could improve Energy Intensity Index (EII) by 2.22, and plans to continue energy saving activities in 2021. In addition, S-OIL receives low-cost steam and hydrogen from LS-Nikko Copper, Korea Zinc and Deokyang Chemical, adjacent to the Refinery, to cut costs and greenhouse gas emissions, while the steam supplying companies create additional profits from selling surplus steam and hydrogen, achieving shared energy growth. As such, S-OIL will continue to discover and expand energy saving businesses by reinforcing partnerships with neighboring companies to achieve higher operational efficiency.

Digital Transformation

S-OIL has selected a Digital Transformation (DT) as one of strategic initiatives to achieve Vision 2030, and is developing innovative action items to achieve greater work efficiency, cost reduction, operational optimization and business capabilities enhancement through utilizing the key technologies of the 4th Industrial Revolution. To further drive the DT that the Company has been driving since 2017, S-OIL laid out a DT roadmap in 2020, and is implementing the first phase of the roadmap, which is to initiate the DT in three areas – Digital Refinery, Digital Marketing, and Smart Work – by 2023.
In the Digital Refinery area, 11 innovative items have been identified, and an establishment of S-OIL Integrated Manufacturing Operations Management System (S-IMOMS) is in progress. S-IMOMS will take operational efficiency to another level by supporting rational decision-making through comprehensive monitoring of the Refinery conditions such as production, safety, maintenance and quality management, and utilizing big data and artificial intelligence. In addition, the Refinery drives the DT by the Smart Transformation for Advanced Refinery (STAR) project and finding and prioritizes innovation tasks in a systematic manner.
In the Digital Marketing area, S-OIL established a demand forecasting model on domestic light oil and uses it for actual market demand forecasts, and 2 chatbot systems for enabling customer services 24 hours a day and educating service station attendants. In 2020, S-OIL upgraded its online order system so as to improve user experience and security for clients, and implemented a block chain-based electronic contract system that enhances transparency. S-OIL also operates Logistics Operation & Automation system for transportation optimization and Shipment Planning system for optimal ship berthing planning. In 2021, S-OIL plans to upgrade Customer Relationship Management (CRM) system to intensify its marketing capabilities based on data analysis.
In the Smart Work area, S-OIL introduced collaboration tools and video conferencing solutions in 2020 to lay the groundwork for Smart Work and implemented a chatbot system to effectively handle frequent inquiries. In addition, S-OIL has applied Robotic Process Automation (RPA) to simple repetitive tasks, and integrated HR data to elevate work efficiency. In 2021, S-OIL plans to develop Procurement System to calculate estimated prices and introduce a big data analysis system. S-OIL will also continue to provide data analysis training for employees.

Shaheen Project

In 2018, S-OIL successfully delivered the Residue Upgrading Complex & Olefin Downstream Complex Project (RUC/ODC Project), the largest scale investment in its history with a total investment of KRW 4.8 trillion. To enhance profitability and diversify its business, S-OIL plans to continue investing in the petrochemical business following the completion of the RUC/ODC Project. As part of such effort, S-OIL is pushing for Shaheen Project to build a steam cracker that produces ethylene from naphtha and off-gas, and olefin downstream facilities that produce polyethylene. S-OIL has completed investment feasibility study and selection of technology providers based on economics evaluation of steam cracker and olefin downstream facilities. As the project experienced the inevitable schedule delays due to COVID-19 and lockdown measures, S-OIL plans to resume the project with front-end engineering design (FEED) to maximize synergies with existing plants in 2021. If Shaheen Project, which will incorporate highly advanced Thermal Crude to Chemicals (TC2C) technology of Saudi Aramco, is implemented as planned with the final investment decision to be made by the BOD, S-OIL is expected to further strengthen the foundation for sustainable growth by diversifying its business portfolio, enhancing competitiveness and creating a stable profit structure.

Investments for Future Growth

In order to proactively and preemptively cope with changes in the future business environment, S-OIL is looking for opportunities for investments in areas which can create synergy with the existing businesses in fuel, lube and petrochemicals, areas which connect to it R&C, and new business areas which have great potential to become a new growth engine for the Company. To attain this goal, S-OIL actively communicates with various players in the industry to identify target start-ups and develop potential investment options. Currently, S-OIL is steadily increasing direct investment as well as indirect investment in both target business areas for competitiveness in the market, e.g., smart factory and carbon credits, or future growth opportunities, e.g., new energy and materials. S-OIL has made direct investment in six start-ups in four areas including chemical materials, smart factories, batteries, and GHG emissions. S-OIL intends to make active investment to stay ahead in the fast paced world in the view of the 4th Industrial Revolution and ESG (Environmental, Social & Governance) management.

Financial Soundness / Transparent Disclosure of Management Information

S-OIL maintains a stable financial structure through efficient financial management and optimized financing in response to rapid changes in its business environment. S-OIL is protecting investors and contributing to the national economy through balanced performance distribution, responsible tax compliance, and transparent management information disclosure.

Establishment of Financial Soundness and Efficient Financial Management

S-OIL closely tracks key indicators of financial soundness, and establishes and implements measures as necessary to maintain a stable financial structure even amidst a rapidly changing business environment. S-OIL periodically forecasts future cash flows to procure necessary funding while minimizing unnecessary borrowing. In 2020, with the destabilizing effects of COVID-19 on the domestic and global economy, the financing market shrunk as well. However, S-OIL could maintain financial health with an adequate level of liquidity through implementing detailed company-wide countermeasures, making timely decisions on working capital reduction, and tightening investment and expenses. In addition, S-OIL maintains superior credit rating, and actively communicates with domestic and overseas credit rating agencies so that its excellent financial flexibility, potential financial support from parent company, Saudi Aramco, and strategic importance of the Company can be reflected in its credit ratings.

Optimized Financing

In 2020, S-OIL issued corporate bonds worth KRW 1,100 billion on two competitive terms thanks to its superior credit ratings and proactive IR activities despite the shrunken financing market affected by COVID-19. Noticeably, KRW 680 billion issued in March was the largest amount at the lowest interest rate among S-OIL's corporate bonds, and this optimal financing resulted in lowering the average borrowing rate of corporate bonds. Going forward, S-OIL will carefully consider various financing vehicles and develop an optimal financing plan prior to the final investment decision on the Shaheen project for securing future growth engines.

Budget Management for Efficient Resource Allocation

In order to efficiently use limited resources in an uncertain business environment, S-OIL sets and executes its budget carefully to examine all budget items and minimize expense increase. S-OIL strives to prevent unnecessary items being budgeted and to draw up a budget organically linked to its management policy and strategy, and budget execution is also subject to a thorough review by the budget control team. In 2020, S-OIL reduced expenses by minimizing unnecessary budget execution through company-wide efforts for cost reduction to cope with the unprecedented market crash. Going forward, S-OIL will improve resource allocation efficiency and budget management through systematic and objective budgeting using the Zero Base Budgeting (ZBB) approach and strengthening feasibility analysis for operating expense and capital expenditures.

Balanced Performance Sharing

In consideration of financial soundness, reserves for securing future growth engines, and ability to pay debt, S-OIL strives to grow with shareholders by returning profits created to them in a balanced manner. To this end, S-OIL seeks a balanced dividend policy where profits are allocated in a reasonable and balanced manner to internal reserves for investments, financial soundness and the return of shareholder profits. Along with such dividend policy, S-OIL protects investors through disclosing more detailed dividend guidelines so that investors can predict dividend payment levels for their investment decision making. In 2020, S-OIL did not pay out dividends for common stock in consideration of financial soundness, but paid a dividend of KRW 25 for preferred stock in accordance with the Articles of Incorporation.
Dividend Policy
Cash dividends shall be paid to shareholders from distributable retained earnings with the aim of achieving a balanced capital structure after setting aside annual net profits for the amounts to support reasonable capital needs and other expenditures as agreed by the Board of Directors.

Sincere Tax Payment

S-OIL takes it as an important responsibility as a respected corporate citizen to contribute to the national economy and social development through faithful tax payments. In accordance with its own tax policy, S-OIL observes the regulations, maintains an honest and transparent relationship with the taxation authorities, and dutifully pays taxes. In addition, corporate tax, deferred tax and effective tax rates are reported in detail through an audit report of independent auditors, and disclosed to the public through the electronic disclosure system of the Financial Supervisory Service.
Tax Policy
S-OIL adheres to the following tax policies, recognizing that contributing to the national economy and social development through sincere tax payment is an important responsibility of corporate citizens.
  1. The Company shall strictly comply with the tax-related policies, laws, and international standards (OECD Guidelines, etc.) of the country or region where the Company operates its business.
  2. The Company shall not violate tax laws or conduct inappropriate tax accounting activities for the purpose of tax avoidance.
  3. The Company shall not use haven countries for offshore tax evasion or inappropriate tax reduction.
  4. The Company shall not engage in any transactions related to transferring income between countries by trading transparently and fairly in foreign transactions.
  5. The Company shall apply objective and reasonable transfer prices for transactions with specially related parties in accordance with the arm's length principle.

Full Compliance with Disclosure Regulations

In order to uplift investor confidence and comply with disclosure regulations, S-OIL closely monitors the enactment and amendment of relevant regulations, and provides public disclosure training to employees once a year, taking extra care to prevent any omissions or delay in disclosure. In addition, S-OIL distributes new and revised regulations, and a reference material that classifies important disclosure items to all employees, and faithfully completes the annual training required of employees who are accountable and responsible for disclosures. Through the stringent compliance with disclosure rules, S-OIL provided its management information transparently to shareholders and investors by making a total of 49 public disclosures, including voluntary disclosures, with no disclosure breach in 2020. Going forward, S-OIL will provide public disclosure training for employees to have the public disclosure mindset, and continue to make legitimate disclosures in a timely manner.

IR Activities to Enhance Corporate Value

S-OIL actively engages in investor relations activities to provide shareholders and investors with management information in a transparent manner and enhance corporate value. Every year, S-OIL surveys analysts about their satisfaction on its IR activities and then incorporates their feedback to improve the quality of IR activities. In 2020, S-OIL held 4 earnings release conference calls and 4 non-deal roadshows for domestic and foreign investors and participated in 11 large investor conferences. Through these active IR activities using non-face-to-face methods, etc. even in the difficult situations due to COVID-19, S-OIL delivered management information transparently. Going forward, S-OIL will continue to make utmost efforts to communicate with shareholders and investors its vision and commitments to overcoming the evolving business environment and preparing for sustainable growth beyond COVID-19.

Management of Sustainability in Supply Chain

S-OIL strives to open up new business opportunities for co-prosperity with suppliers as well as to minimize risks associated with the supply chain by helping suppliers secure competitiveness.

Procurement Process Improvement

Since 2013, S-OIL has introduced advanced purchasing processes such as auto-invitation and blind-bidding to dramatically improve the transparency, objectivity and fairness of its purchases. Procurement of goods and services is initiated through automatically inviting all suppliers who joined each sourcing group after preliminary reviews of the Contracting Committee (CC) in accordance with the auto-invitation procedure. Then S-OIL selects contractors through Blind-Bidding, where the e-Procurement system automatically carries out the quotation process. Through the advanced purchasing process, S-OIL operates the process of selecting contractors more transparently and fairly, and upgrades its procurement process through continuous communication with suppliers.
Critical Supplier : 39 companies
Selection Standards
  1. Large quantity of products and services suppliers
  2. Irreplaceable suppliers
  3. Long-term stable suppliers of products and services
  4. Essential suppliers for operation of main processes

Improvement of SRM System

S-OIL has been operating the Supplier Relationship Management (SRM) system since 2010 with the goal to select suppliers based on transparent procedures and fair evaluation. S-OIL secures objectivity and reliability of the SRM system by conducting a comprehensive evaluation on the basis of the Korea Enterprise Data's (KED) credit ratings and performance assessment on suppliers. In particular, S-OIL seeks a long-term win-win relationship with suppliers by selecting outstanding suppliers in 9 categories (6 in materials, 3 in services) based on the results of its annual comprehensive evaluation.

Systematic Supplier Sustainability Management

S-OIL has set ethics management and zero safety & environment accidents as its goal of supply chain sustainability management, and systemically manages its suppliers. S-OIL evaluates not only suppliers' basic competence, such as financial stability and technological prowess but also their sustainability competence encompassing business ethics, conflicts of interest, safety, and the environment. Bidding opportunities are given to only suppliers who pass the evaluation process, and all suppliers are required to be reevaluated annually. When there is necessity to conduct an in-depth evaluation, S-OIL conducts in-depth evaluations through the CC consisting of professionals in the fields of compliance, technology, and management. In 2020, a total of 515 suppliers were evaluated by the CC. In addition, in 2020, S-OIL visited business sites of 40 suppliers for sustainability risk assessment, and supported improvement activities of all 33 companies that were found to have risks. Moreover, suppliers of S-OIL are required to submit and practice a pledge on complying with its Ethics Code. S-OIL has invited suppliers for training on its procurement system and Ethics Code and checking their compliance every year since 2013. In 2020, the supplier invitation programs were replaced with non-face-to-face methods due to COVID-19, and S-OIL created a presentation pack consisting of procurement process, e-Procurement System user manual, and Ethics Code, and distributed it to suppliers.
Ethics Policy for Suppliers

S-OIL's suppliers shall comply with the S-OIL Supplier Ethics Policy as stated below and shall make efforts to build sustainable supply chains.

  1. We comply with international ethics-related regulations as well as anti-corruption and anti-bribery regulations as a member of the nation and local communities.
  2. We do not carry out any illegal act such as bid rigging that affects cost estimates.
  3. We do not provide or promise to give valuables or entertainment to project owners.
  4. We eliminate discrimination in terms of gender, race, nationality, disability, religion, and union activity.
  5. We respect business partners and their employees, and do not have an impersonal manner. We do not restrain employees' physical and psychological freedom illegally, and we do not force people to work against their will.
  6. We comply with the working hour requirement and the minimum wage as determined by labor-related laws and regulations.
  7. We prohibit employment of minors under the age of 15, and exclude employees under the age of 18 from work with higher potential health and safety risks.
  8. We guarantee the freedom of association, and prohibit any disadvantage from it.
  9. We comply with labor conditions determined by labor-related laws and regulations in each country and region.
  10. We provide employees and relevant staff with a safe and healthy work environment, and take proper action to prevent them from being exposed to potential safety risks.
  11. We comply with environmental laws and regulations, and recognize that environmental protection is our basic social responsibility.
  12. We strive for continuous job creation, and implement social contribution activities for the development of local communities and the national economy.
  13. We have S-OIL level or higher ethical procurement policy for our suppliers.
Direction of Supply Chain Sustainability Management
  • Enhancement of fairness and transparency in the selection of bidders by systematically improving the supplier evaluation process
  • Procurement of high quality products at reasonable price through the differentiated selection of suppliers
  • Integration of procurement processes & enhancement of interactive information sharing with the suppliers
  • Enhancement of collaboration with outstanding suppliers
  • Analysis of information for effective purchasing

Response to Climate Change

S-OIL recognizes the issue of climate change as an immediate challenge and takes into account the internal and external uncertainties associated with climate change in investment and facility operations, while developing a mid- to long-term response strategy. The establishment of the company-wide carbon management system enabled S-OIL to implement cost-effective solutions to its GHG reduction obligations and make rational investment decisions considering carbon costs. S-OIL is also actively participating in global efforts to reduce GHG emissions through fuel switch on a large scale and in the government's policy on climate change.

Advanced Carbon Managements System (SDGs #13)

S-OIL operates an IT-based carbon inventory system to identify, record, calculate and report GHG emitted by its business activities for systematic GHG management. New and revised regulations of the government are frequently reflected in the system to maintain the accuracy and reliability of data through internal verification and independent external assessment. S-OIL also regularly maintains and calibrates the measurement and analysis equipment to maintain the highest level of GHG monitoring in the industry. Management Committee is held to revamp internal procedures on carbon management and expand GHG cost estimation scope to small-medium-sized process improvements and energy savings in all business areas and investment projects, as well as large-scale new investments, thereby reinforcing the rationality of investment decision making. S-OIL is incentivizing employees to actively participate in energy and GHG reduction efforts by returning some of the economic benefits from excellent proposals to them. In the meantime, S-OIL is in the process of establishing a comprehensive emission allowances management plan in line with its mid- to long-term operational plans and national emissions reduction roadmaps by predicting future emissions and emission allowances allocations.

GHG Reduction Performance (SDGs #13)

Tapping onto the Energy Conservation & Operation System (ECOS), S-OIL performs energy diagnosis activities to discover improvement areas and apply them to the process to reduce actual energy consumption and GHG emissions. In 2020, despite the increase in crude oil throughput compared to the previous year, GHG emissions worth 140,000 tons were reduced through active energy efficiency improvements. S-OIL consumed less fuel and heat and reduced GHG emissions by about 110,000 tons through specific efforts, including implementing process improvements to optimize operating conditions. Furthermore, S-OIL is making concerted efforts to cut GHG emissions across the board such as the replacement of high-efficiency equipment, improvement of the process control system, and re-use of waste heat generated from near companies. S-OIL has also expanded the use of low-carbon LNG, which is known to be the surest and most effective solution for reducing GHG emissions. S-OIL is strengthening monitoring on indirect emissions from supply chains including crude oil procurement and product distribution. In particular, Saudi Arabian crude oil, which S-OIL imports, is known to have the lowest GHG emissions in the world.

GHG Reduction Initiatives (SDGs #7)

To raise awareness and build consensus on GHG reduction among consumers, S-OIL conducts Eco Campaign every year, which captures drivers’ interest with novel ideas, including No Idling and Car Diet. In 2015, S-OIL established an initiative to boost energy efficiency by 15 percent by 2030 in collaboration with Korea’s leading companies and is making relentless efforts to meet the target. S-OIL also sets GHG reduction as one of its strategic targets in response to the global trend of carbon neutrality and the government’s 2050 carbon neutrality declaration. For reducing direct GHG emissions, S-OIL implemented a cogeneration plant project in collaboration with KD Powertech since 2016. This is to generate 16.4 MW of electricity by recycling waste heat and to sell it to KEPCO, which contributes to reducing GHG by 61,000 tons every year. Since 2016, S-OIL also started a CO2 capture project together with Dongkwang Chemical and succeeded in reducing 100,000 tons of GHG emissions annually. The reduction volume is projected to double from the end of 2022 as the business extends.
Not only reducing direct GHG emissions, S-OIL also strives to keep pace with global efforts to tackle climate change through participating in the Clean Development Mechanism (CDM), a global GHG reduction project led by developed and developing countries alike. In order to improve the quality of life for the people of Myanmar suffering from repeated droughts, floods, typhoons and severe air pollution that lead to many deaths each year, S-OIL launched a CDM project to provide high-efficiency cookstoves for free in 2019. In 2020, S-OIL participated in another CDM project in Bangladesh to build drinking water facilities to ensure safe drinking water for the villagers who had to burn trees to boil water due to lack of public waterworks infrastructure. S-OIL expects participation in overseas CDM projects to promote the human rights and health of women and children, as well as cutting GHG emissions by decreasing timber usage and conserving forest.

Business Diversification to Meet Changes in Demand

Global efforts to tackle climate change can have an impact on the demand for oil and petrochemical products in the mid- to long-term. Recognizing the importance of proactive response to the change, S-OIL is striving to raise petrochemical portion in its business portfolio, and diversify its business by investing in the fuel cell industry in preparation for the hydrogen economy, one of the government's major directions for Green New Deal. Furthermore, S-OIL plans to explore other opportunities to create synergy with existing businesses and foray into new business areas by carefully analyzing the impact of climate change on business environment.

Systematic Response to Climate Change reflecting TCFD Framework

S-OIL preemptively responses to climate change and participates in global efforts to reduce GHG emissions through systematic risk management integrating recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) under the Financial Stability Board (FSB).
Recommendations of TCFD
Recommendations of TCFD
Governance Disclose the organization's governance around climate-related risks and opportunities.
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.
Risk Management Disclose how the organization identifies, assesses, and manages climate-related risks.
Metrics and Targets Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities where such information is material.
Governance
S-OIL set response to climate change as one of strategic goals to achieve its Vision 2030 and its top decision-making body, the BOD, checks its progress and outcomes every quarter. The BOD determines specific action tasks, which are incorporated into the Company's ESG management system and mid- and long-term management plans and budgets. S-OIL inspects and analyzes differences between climate change goals and actual performance periodically, thereby establishing detailed measures to meet the goals. In 2020, S-OIL held three workshops for executives to enhance its climate change response and ESG management systems. In 2021, S-OIL installed the ESG committee for a more systematic integrated response to climate change and ESG management. The ESG committee consists of executives from each organization of the Company, including production, marketing, finance, planning, HR, and compliance. It holds regular meetings every quarter to review, evaluate, and deliberate the Company's ESG management activities, including response to climate change. Also, important issues identified at the ESG committee are reported to the BOD.
Strategy

S-OIL runs the Enterprise Risk Management (ERM) system to conduct a systematic and periodic analysis of countless potential risks in the fast-changing business environment and discovers risks related to climate change using ERM analysis tools.

Short-term risk (1~2 years): Occurrence of abnormal climate due to rising temperatures on the Korean Peninsula

According to the Korea Meteorological Administration, Korea's annual average temperature rose by 1.2℃ over the past 30 years. If GHG emissions continue at this rate just as shown in the RCP 8.5 scenario, the speed at which temperatures rise is expected to increase 1.6 times. Precipitation is also projected to triple compared to the global average. In particular, Ulsan where S-OIL's refinery is located is forecast to see a surge in rainfall intensity and the number of heavy precipitation days, which directly affect refinery operations, even in the RCP 6.0 scenario. If global warming persists, there is a high likelihood that super-strong typhoons could occur due to a spike in the sea surface temperature. Heavy rain or typhoons that are beyond a predictable scope can disrupt crude oil supply and refinery operations, and a temperature rise in summer could lead to a delay in T&I, causing massive losses. As such, S-OIL beefed up its risk response manual in preparation for typhoons and heavy rain, designed new facilities in a way that production will continue uninterrupted in spite of precipitation exceeding the highest level since observations first began, and overhauled the sewage discharge system of the Refinery in 2019. Also, S-OIL installed an additional Single Point Mooring (SPM) in 2020, a facility for unloading crude oil, to ensure a prompt response when crude oil unloading can be impeded for a long period due to a typhoon, etc. Other than the above, S-OIL set up facilities to prevent health risks for outside workers and work speed slowdowns under scorching heat in summer.

Mid-term risks (3~5 years): Rising GHG emission allowance price and growing pressure of GHG reductions

The emission allowances allotted by the government are expected to decrease down the road in line with Korea's Nationally Determined Contribution (NDC) and the GHG reduction roadmap. The resulting growing GHG reduction pressure and an increase in GHG emission allowance price will lead to a spike in raw material prices and an increase in production costs, ultimately eroding the Company's profitability. Conversely, the sale of spare GHG emission allowances created by its direct GHG reduction efforts can present opportunities to S-OIL.

Long-term risk (6~10 years) : Decrease in fuel demand resulting from an energy paradigm shift

Global efforts to combat climate change are expected to bring change to the energy paradigm and, in the long term, cause a sharp decline in fuel demand. On the other hand, endeavors to develop and expand low-carbon products in preparation for such change can create new business opportunities.

S-OIL looked into various scenarios on climate change when establishing mid- and long-term strategies, and put primary consideration on Korea's NDC scenario aimed at limiting global warming to 2℃ above pre-industrial levels. Based on this, S-OIL predicted mid- and long-term emissions and required emission reductions and devised and are implementing a comprehensive operational plan that includes cost-effective countermeasures. Furthermore, S-OIL is developing business models that can become its new growth models while at the same time remedying environmental problems through its mid- and long-term investment roadmap to bring emissions to net zero.

Risk Management
S-OIL has integrated climate change risk identification and assessment processes into the ERM system for systematic management. ERM environmental change analysis tools are made up of political, economic, market, technological, social, and legal items, and the relative importance of risk is assessed based on the Risk Assessment Matrix, which has been drawn up according to the possibility of the occurrence of each item and its impact. In 2020, S-OIL upgraded the importance of climate change risk by reflecting the globally accelerating carbon neutrality trend and established more rigorous risk identification, assessment, monitoring, and response processes. The Sustainability Management Team, the risk owner of climate change, conducts quantitative assessments of climate change issues every quarter. S-OIL built a process within the ERM that enables prompt and effective control activity to mitigate risk at the corporate level when a risk with a critical impact on the Company arises. In addition, the ERM Committee, comprised of top management, including the CEO, conducts the final review of activities to control risk that includes climate change every quarter, prepares necessary response activities, and makes decisions on corporate-wide risk control policy.
Metrics and Targets
S-OIL uses as indicators energy usage and GHG emissions calculated according to the Guidelines for Reporting and Certification of Emissions of Emission Trading Scheme in order to assess climate change risk and opportunity, and discloses such along with water usage and waste discharge volumes. In parallel, S-OIL developed as a KPI carbon intensity where climate change performance is quantified and incorporated it into each organization's performance management programs to effectively manage climate change efforts, thereby bolstering management's accountability. S-OIL discloses Scope I, II, and III GHG emissions every year, and it set the goal of achieving net zero emissions by 2050 in 2020.

Environment Management

Based on its strong commitment to environmental preservation and green management, S-OIL is actively carrying out eco-friendly policies and continuous environmental investment as well as complying with environmental laws. The Government Affairs Team at the Head Office and the Environment Team at the Refinery, which are dedicated to environmental tasks, operate a systematic environment management system, aiming to minimize pollutant discharges and adverse impact on the environment. S-OIL also produces environmentally friendly products through continuous improvement of processes and environmental facilities and manages environmental pollutants at a significantly lower level than the legal threshold.

Environmental Management Systems

S-OIL has set the establishment of proactive green management as the top priority of its first environmental policy, and is not only producing high-quality eco-friendly products by continuously revamping production processes and introducing new technologies, but also securing environmental impact reduction facilities such as desulfurization, denitrification, wastewater treatment, and dust collection facilities. Since 1996, S-OIL has steadily implemented the highest level of environmental management by acquiring ISO 14001 environmental management system certification and renewing it 8 times. ISO 14001 has been adopted to all production processes and terminals step by step. In 2020, S-OIL successfully renewed ISO 14001:2015 certification by thoroughly analyzing environmental aspects, identifying environmental risks, establishing and implementing environment management plans, setting effective environmental goals, and thoroughly managing environmental performance standards. In addition, S-OIL also provided environmental training for about 1,800 employees in 2020 as part of its effort to internalize environmental laws, and its environmental management strategy and system
ISO 14001 Certification
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Environmental Policy

S-OIL has established and operates an advanced environmental management system under the principle of preventive green management that prevents environmental hazards and risk factors at every stage of business operation. In addition, the Company complies with the following environmental policies with the cooperation of stakeholders such as customers, suppliers and employees.

  1. The Company shall comply with the environmental laws and regulations of the region in which the Company operates its business, establish strict internal standards that are above legal standards, and adhere to the standards.
  2. The Company shall minimize the environmental pollutants created in the production processes or business facilities through the improvement of efficiency, etc. and prevent potential environmental accidents.
  3. The Company shall develop, manufacture and sell highly efficient products that minimize environmental impact on consumers.
  4. The Company shall minimize greenhouse gas emissions from the distribution process through efficient logistics system operation and prevent environmental accidents such as leakage.
  5. The Company shall treat wastes safely and environmentally, and improve waste reuse.
  6. The Company shall consider environmental factors when selecting suppliers and do not receive products and services from suppliers that can cause serious environmental pollution while expanding green purchasing.
  7. The Company shall improve the environmental performance of affiliated companies such as JVs and subsidiaries, and also consider environmental factors in capital investments such as mergers and acquisitions.
  8. The Company shall actively support and participate in environmental protection activities such as biodiversity conservation.

Environmental Pollutant Emissions Control (SDGs #14, #15)

S-OIL has in place stricter in-house emissions standards than legally required in order to improve the atmospheric environment. S-OIL replaces boiler fuel with LNG to minimize emissions of fine dust and SOx in the air. S-OIL operates electric precipitators efficiently, and makes steady investment in environmental facilities such as Ultra Low NOx Burner (ULNB) and Selective Catalytic Reduction (SCR). In addition, Leak Detection & Repair (LDAR) is in operation to systemically control the fugitive emission of hazardous air pollutants (HAPs), which may be produced during product storage, shipment, and processing, into the air without being filtered by vents. In 2020, thanks to the continued strict leakage control, the leakage rate remained only at 0.04% (when S-OIL's internal leakage standard of 500 ppm is applied). Meanwhile, S-OIL has completed the improvement of related facilities in response to the Clean Air Conservation Act, which was amended for tightened fugitive emissions of HAPs. S-OIL has consistently reduced environmental pollutants with the efficient operation of pollution prevention facilities, environmental investments including renovation of facilities for improved energy efficiency and a transition into eco-friendly fuel to cut pollutant emissions. S-OIL has also signed a voluntary environmental management agreement with the government to reduce its emissions of air pollutants, including fine dust, by 40 percent from the 2014 levels by 2022, and established detailed targets and action plans. Thanks to continuous environmental investment and eco-friendly fuel conversion, S-OIL achieved the emissions reduction target set for 2020 under the voluntary environmental management agreement, and is on track to meet the final reduction target by 2022. Regarding the new regulation on the air pollutions total quantity control system that went into effect in 2020, S-OIL managed its emissions under the quota in 2020 allowed by the Ministry of Environment (MOE), through stable operation, close monitoring, and continuous environmental investments. S-OIL will remain in full compliance with the system by managing emissions below the annual quota until 2024.
S-OIL operates a wastewater treatment plant in a stable manner in order to minimize the impact of its business operation on the nearby sea. The plant treats wastewater using physical, chemical, and biological methods to ensure pollutants are effectively removed. S-OIL transmits data on water quality to administrative agencies in real time through the Tele-Metering System (TMS), and complies with water pollutant discharge standards. S-OIL also expanded rainfall storage tank capacity for the heavy rainy season and strengthened monitoring of 32 kinds of specific substances harmful to water quality such as Cu, Pb, and As, contributing to improving water quality.
S-OIL periodically carries out self-checks as well as legally mandatory inspections to prevent soil pollution in the Refinery and terminals, including oil storage facilities. S-OIL also continues to improve facilities in a systematic manner by laying pipes on the ground instead of underground, replacing old hume pipes to steel pipes and installing vibration detectors in storage tanks. Signing the Voluntary Agreement on Soil Environmental Protection with the MOE, S-OIL conducts not only self-inspections for soil pollution but also voluntarily initiates soil restoration activities upon discovering soil pollution. To fulfill the agreement, S-OIL conducts legal inspections as necessary to monitor soil pollution while carrying out self-inspections every two years to prevent soil pollution. Moreover, S-OIL's new and remodeled S/Ss are built with the concept of Clean S/S. Clean S/Ss are environmentally-friendly facilities as they prevent leakage of pollutants with double-layered tanks and pipelines. Even if pollutants are leaked, leakage sensors and alarms go off instantly, stopping spread of pollution in a swift manner.
S-OIL complies with the standards for hazardous chemicals handling and associated facilities in accordance with the Chemicals Control Act, and improves its response capability in the event of an accident involving chemical substances through regular emergency drills. In addition, S-OIL prepares accident scenarios for hazardous chemicals the Company handles, estimates the scope of impact, and develops a summary of chemical accident risk and emergency response information, through the over-the-counter impact assessment and risk management planning. The summary is then notified to local communities once a year to ensure thorough accident prevention and response activities. In 2021, S-OIL plans to prepare a chemical accident prevention and management plan, and get it approved by the MOE in accordance with the revised Chemical Control Act. Combining both the offsite risk assessment and risk management plan, the new plan will be followed through to strengthen the organizational capability to prevent and respond to chemical accidents.
To create a virtuous circle of eco-friendly resources, S-OIL has steadily reduced waste discharge and increased waste recycling by strictly practicing separate waste collection. In order to preclude any possible fire accidents and contamination in the waste storage process, S-OIL also installed fire detectors and water spray sprinklers in the waste and waste catalyst storage facilities.
S-OIL has systematic response procedures to prevent leakage of oil and hazardous chemicals in the Refinery and systematically respond to accidents. S-OIL regularly inspects facilities and conducts emergency response training to enhance its emergency preparedness. S-OIL has installed 32 oil detectors and block valves in major areas of the Refinery to further strengthen its capability to carry out first response and to contain any oil spill. In addition, S-OIL conducts regular emergency drills based on hazardous chemicals and oil leakage scenarios every year.
To prevent marine pollution accidents, S-OIL has in place work standards and procedures and is strengthening on-site monitoring and conducting emergency response drills and training on a regular basis. In particular, S-OIL places its focus on enabling timely response to any crisis or emergency by offering accident prevention training on a quarterly basis based on various marine pollution scenarios. In order to prevent marine oil spills caused by vessels transporting its products, S-OIL not only maintains its port facilities but also operates the vetting system that fundamentally blocks vessels that fall short of strict safety standards from entering and leaving port facilities, by proactively assessing the risks of all vessels beforehand. In addition, for Single Point Mooring (SPM), an onshore logistics facility for very large crude oil carriers that can cause significant damage from marine pollution in the event of an accident, S-OIL also has a protection system consisting of radar, tidal current measurement, and mooring tension measurement systems, as well as the Automatic Identification System (AIS) that prevents dock crashes. In 2020, S-OIL deployed multiple offshore crude oil unloading facilities with the completion of No. 2 SPM, which enabled more safe and stable operation and significantly reduced the possibility of environmental problems caused by marine facilities. S-OIL has installed CCTVs in buoys, one of the main components of SPM, to reinforce remote monitoring function.

Environmental Impact Evaluation and Response to Environmental Regulations

S-OIL has been recognized as an eco-friendly company that faithfully complies with the Environmental Impact Assessment Act and fully considers possible environmental impact on neighboring areas. In case of new projects or large-scale construction, S-OIL evaluates the impact on the environment, reflects the pollution reduction plan in the project design, and executes periodic measurements of air, water, the ecosystem, and soil quality. The results of environmental impact evaluation are submitted to administrative agencies before the project, and follow-up environmental impact assessment is carried out legitimately during and after the project to minimize any environmental impact.
S-OIL proactively responds to environmental policies and regulations in accordance with its environmental policy of Proactive Green Management. From the initial stage of plant construction, S-OIL took into account environmental management by introducing optimized pollution prevention facilities, and has made efforts to minimize environmental impact through strict compliance with regulations and in-house standards. S-OIL conducts daily self-inspections and remedies any unsatisfactory items immediately to further solidify the autonomous environment management system. S-OIL also copes with the government's environmental policy in a positive manner by reviewing changes in environmental regulations and reflecting them in its management strategies. Particularly, relevant teams convene a monthly meeting to review environmental regulations, report the results to the management, and share those with production teams. Legal Compliance System enables information sharing on revisions to environmental regulations and self-assessments on a periodic basis against the environmental regulation compliance checklist. Compliance status is also checked during internal audits for the purpose of practicing compliances management.
S-OIL has established a set of rigorous standards, based on which eco-friendly management is pursued. S-OIL gathers and analyzes global environmental management trends and changes in relevant regulations at home and abroad through continued communication with various stakeholders including local communities, the government, the media and academia, and reflects those data in the company-wide environmental management system. S-OIL shares its environmental management information with local communities, relevant institutions, and other stakeholders, and reflects their opinions to improve its environmental management activities. S-OIL actively participates in diverse environmental events in local communities to practice environmental protection and forms close ties with those communities, and contributes to the improvement of the environment of local communities by supporting environmental training materials for business partners and providing environmental management consulting for small businesses in local areas.

Biodiversity Policy

S-OIL recognizes the critical importance of preserving biodiversity and is committed to minimizing our impact on the environment and biodiversity. We aim to achieve Net Positive Impact (NPI) on biodiversity by 2050 and have developed the following commitments to guide our efforts:
  1. Net Positive Impact by 2050
    S-OIL is dedicated to achieving Net Positive Impact (NPI) on biodiversity by the year 2050. We will implement actions that go beyond mitigating negative impacts, actively contributing to the restoration and enhancement of biodiversity.
  2. Priority Area Targets
    S-OIL is committed to avoiding potential adverse impacts on sites containing globally or nationally important biodiversity. We will exercise precautionary measures and refrain from conducting operational activities in proximity to such areas to prevent any potential harm.
  3. Value Chain Responsibility
    S-OIL will hold ourselves and our value chain partners accountable for minimizing biodiversity impacts. We will actively engage with our partners, encouraging them to avoid operational activities near sites with significant biodiversity value.
  4. Mitigation Hierarchy
    S-OIL strictly follows a mitigation hierarchy to manage our biodiversity impact effectively:
    Avoidance
    We will prioritize avoiding impacts on nature and biodiversity whenever possible in our operations and projects.
    Reduction
    In cases where avoidance is not feasible, we will take all necessary measures to limit and reduce our impact on ecosystems and biodiversity.
    Restoration
    We are committed to restoring areas and ecosystems adversely impacted by our business operations, fostering their recovery and resilience.
    Offset and Compensation
    As a last resort, if any residual, adverse impacts remain after full implementation of the mitigation hierarchy, we will explore offsetting and compensatory measures to balance the biodiversity loss.
  5. Biodiversity Risk Assessment
    S-OIL will conduct comprehensive biodiversity risk assessments for our projects. These assessments enable us to identify potential impacts on biodiversity and implement appropriate measures to prevent or mitigate such impacts.
  6. Stakeholder Engagement
    S-OIL actively engages with stakeholders to foster collaboration and collective action for biodiversity conservation. We believe that collaboration is essential to address biodiversity challenges effectively.

No-deforestation Policy

S-OIL will take the lead in preventing forest destruction to protect forests, which are part of the environment and the home of life, and will continue to promote policies to protect forests and the earth by reducing industrial waste and expanding investment in greenhouse gas emission reduction.
S-OIL will not create a business site that destroys forests in the future, and try to restore the forests when the company withdraw from the existing business sites.
S-OIL will establish procedures to check the risk of forest destruction in the supply chain such as suppliers, and will make efforts to manage supplier ESG management and prevent forest destruction through an eco-friendly management system.
Through sustainable environmental policies, S-OIL intends to implement "Zero Net Deforestation" by 2050, a promise of compensation through reforestation.
  • Within the workplace, S-OIL will reduce emissions and expand investment in reducing greenhouse gas emissions through industrial waste recycling.
  • S-OIL will make efforts to create forests and green areas in cooperation with related organizations near the workplace.
  • Through the inspection of forest destruction risk of subcontractors and the eco-friendly management system, S-OIL will make efforts to expand forest creation and greening activities to subcontractors.
Policy Compliance
  • S-OIL prepares internal procedures to check the risk of forest destruction when reviewing the expansion of business establishments and the operation of new business establishments.
  • S-OIL secures a budget for cooperation with related agencies and strengthens its internal capabilities.
  • S-OIL will make efforts to establish an evaluation process and conduct improvement activities to prevent environmental risks such as forest destruction of suppliers.

Social Contribution Activities / Contribution to Local Communities

S-OIL strives to fulfill its social responsibilities and practice its core value, sharing. Under the CSR vision of Sunshine Sharing, S-OIL identifies expectations of stakeholders and implements systematic and differentiated social contribution activities through selection and concentration. S-OIL also reinforces the efforts to develop CSV programs aligned with its business. In particular, S-OIL carries out various support activities such as the Cultural Arts & Sharing campaign for co-prosperity with local communities where worksites are located. S-OIL is also committed to solve grievances of local communities such as revitalization of economy, job creation, etc.

For Local Communities (SDGs #3, #4)

S-OIL carries out various social contribution activities for the development of local communities and the improvement of the quality of life of local residents where worksites are located such as Ulsan, Mapo and Magok, and the Company's sustainable growth is grounded upon local communities' strong support. Those activities include the Cultural Arts & Sharing campaign, the support for local communities near to terminals and TS&D Center, the operation of GooDoil Café, the establishment and operation of the S-OIL Ulsan Welfare Foundation, the sponsorship for cultural arts events at Taewha Pavilion in Ulsan, the support for welfare centers in Ulsan, and the sponsorship for the Mapo Scholarship Foundation and the Gangseo Scholarship Foundation, etc. S-OIL donated KRW 500 million as well to help neighbors hit hard financially due to COVID-19.

For the Environment (SDGs #14, #15)

S-OIL is implementing various activities in order to protect endangered natural treasures and preserve nature and ecosystem diversity for future generations. S-OIL sponsors the research and protection activities of professional organizations dedicated to protecting natural treasures such as otters, red-crowned cranes, Korean spotted barbels (Eoreumchi) and long-horned beetles. Also, S-OIL runs natural treasure classes for children, operates a university student natural treasure protection corps, and carries out various volunteer activities which employees and customers participate in. In addition, S-OIL regularly conducts environmental clean-up activities around Mokdo Island, which is a natural monument adjacent to the Refinery, and is expanding green procurement to further contribute to environmental protection. In particular, S-OIL is restoring part of the environmental impact caused by its business activities through environmental protection activities while at the same time vigorously communicating with stakeholders regarding its endeavors to promote environmental protection and to minimize pollutant emissions.

For Needy People (SDGs #1, #2)

S-OIL is engaged in many programs to help alienated neighbors stand on their own and contribute to society as healthy citizens amid the continuous interest and support of society. For example, S-OIL sponsors scholarships for youths living in or discharged from orphanages and the Sunshine Sharing Camp for children with rare diseases, provides customized learning assisting devices to youths with disabilities, and sponsors the Heart-to-Heart Orchestra consisting of youth with developmental disabilities. In addition, S-OIL provides heating fuel to energy-poor households and aides in restoration of fire-damaged houses for low-income families, helps female immigrants and their children suffering from domestic violence, holds the Sharing campaign with service stations, sponsors the participation of the disabled in overseas marathon races, and supports many other charity programs for the needy. In particular, S-OIL is communicating with its stakeholders on its efforts to fulfil social responsibilities through the support of needy neighbors. At the same time, it is handing out its fuel products for free to needy neighbors, which generated the effect of giving a warm image to its fuel products that are not well differentiated from other brands.

For Heroes (SDGs Target #3 )

In order to support the righteous people in our society, S-OIL supports the Hero Firefighters who commit themselves to saving lives despite tough working conditions, Hero Maritime Policemen who are at the forefront of maritime crime control and sea-rescue operations and Hero Citizens who selflessly help neighbors in danger with the spirit of sacrifice. These programs are contributing to building a brighter and healthier society. Also, S-OIL provides financial aid and scholarships to the surviving families of firefighters or maritime policemen who have passed away in the line of duty, as well as medical expense support to those who have been injured during work. Furthermore, firefighters or maritime policemen can participate in the healing camp program, and S-OIL selects and awards Hero Firefighters, Hero Maritime Policemen and Hero Citizens every year.

Sunshine Sharing Public Service Corps

S-OIL has been executing an array of social contribution activities including sharing of Tteokguk (rice-cake soup), Songpyeon (rice cakes), Kimchi, and coal briquettes to low-income families in local communities where the Company operates, since the launch of the Sunshine Sharing Public Service Corps in 2007. S-OIL's employees also engage in voluntary donation activities through the Sunshine Sharing Campaign, such as wage tail-cut contribution to help children suffering from biliary atresia and 1 person-1 donation account to support children raised by grandparents. Since 2009, 132 children suffering from biliary atresia have undergone surgery through wage tail-cut contribution.

Social Contribution Activities reflecting Stakeholder Opinions

In accordance with its three key CSR principles (impact, timing, and beneficiary), S-OIL continues to develop various social contribution programs that are based on stakeholders' engagement such as a charity program idea contest and relevant to its business, and bring out a productive and positive effect on society. And, S-OIL conducts social contribution workshop every year with the aim to encourage employees to voluntarily take part in its social contribution programs. For example, incorporating stakeholder feedback, S-OIL grants the S-OIL Dream Scholarship to adolescents who should be discharged from orphanages due to age restrictions, helping them continue their studies and grow into responsible members of society. S-OIL started providing scholarships to college students discharged from orphanages in 2016 and expanded the scholarship program to cover high school students who live in orphanages, helping them acquire diverse licenses and developing their self-reliance even after being discharged from orphanages. In addition, since 2019, S-OIL has supported the Regional Trauma Center of Ulsan University Hospital with the operation of the Doctor Car, which was on the verge of discontinuing the operation due to lack of budget, causing much worry about a medical service vacuum in the heavily industrialized city of Ulsan with many heavy and chemical businesses that have higher risk of accidents.

CSR Strategy Aligned with Business

The CSR strategy of S-OIL has been established in consideration of the nature of its business so that its CSR activities can maximize social and environmental benefits and create positive results in its business. S-OIL's CSR activities contribute to creating positive brand values that fulfill its social responsibilities while also promoting sales of products through donations of its products. It is also the result of CSR activities as a medium to form constructive and cooperative relationships with local communities and to convey S-OIL's commitment to environmental protection to stakeholders. Since 2018, S-OIL has supported food trucks in connection with its service station business to help young entrepreneurs manage their businesses, and ease unemployment and create jobs for the youth. In addition, the Company has established the S-OIL Science Prodigy and Culture Foundation to develop talented people in the science and technology fields.

Expansion of Base for Local Culture and Arts (SDGs #3)

S-OIL supports local cultural events in areas where it does business as a way to build a better quality of life including cultural exposure to local communities and to patronize artists. Since 2011, S-OIL has been promoting the Cultural Arts & Sharing campaign in Mapo, Seoul, where its Head Office is located. Diverse cultural arts events are held at the auditorium every month, inviting local residents to enjoy high-quality cultural arts performances for free. The family-oriented performances in a wide range of genres are received very well and enjoyed by more than 3,000 people every year. Local residents who enjoyed the cultural arts performances saw their participation in cultural and artistic activities increase more than twice a year, demonstrating that S-OIL is contributing greatly to the revitalization of local communities' culture and arts. In addition, S-OIL supports the Mapo Ferry Salted Shrimp Festival, which is a traditional cultural event in the Mapo area, serving the role as guardian of local culture.
To expand the base of culture and arts in Ulsan, where the Refinery is located, S-OIL carries out various activities. It established one of Korea's most prestigious literary awards, the Oh Young-soo Literary Prize, in 1993 in honor of the talented short story writer from the region. Additionally, S-OIL has been holding the Beautiful Eyes Art Festival since 1996, an arts event that mainly invites amateur artists from the region. Furthermore, S-OIL donated the total budget required for the Taewha Pavilion restoration project, boosting the pride of Ulsan citizens while giving them access to a comfortable public rest area. This restoration project was completed in 2014 and since then, S-OIL has supported cultural arts events held at the historic site. In 2020, S-OIL participated in the 40km Bamboo Forest Creation project by the Taehwa River, planting bamboo trees and setting up a rest area for citizens visiting Taewha Pavilion. In addition, S-OIL has supported various culture events including the Cheoyong Cultural Festival and the Kyungsang Ilbo Awards for Young Writers.

Efforts for Handling Grievances of Local Communities (SDGs #2, #3, #4, #8)

S-OIL has been expanding its purchases of local products and services to invigorate the local economy in the Ulsan area. Particularly, in order to help local farmers who are suffering from the opening of the agricultural market, S-OIL purchases rice and pear produced in local communities around the Refinery and donates them as part of its social contribution activities. S-OIL also supports farmers adopting the organic farming through growing snails in rice paddles so as to increase the competitiveness of local farmhouses and to protect the environment. Moreover, S-OIL has continuously employed local talent to secure future growth engines, thus contributing to the increase in local job creation. In order to improve the educational environment for children in the local community, S-OIL has provided various support, including contributions to school development funds, scholarships, and donations of books to seven elementary, middle and high schools and nine local children centers in Ulsan. Since 2017, S-OIL has been sponsoring the Mapo Scholarship Foundation as well. S-OIL also installed a GooDoil Café (vending machine) in front of the Head Office in Seoul for all citizens to enjoy free water in summer and hot tea in winter.
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