SK Telecom, South Korea - Telecommunications
SK Telecom, South Korea – Telecommunications
Republic of Korea, Telecommunications
What SK Telecom says about its journey towards <IR>
In 2014, SK Telecom merged its separate Sustainability and Annual reports into one integrated report in order to disclose information more efficiently and provide integrated investor-oriented information.
SK Telecom’s integrated report, which reports its annual performance to investors and stakeholders, contains the company’s comprehensive value creation story that includes not only its financial results, but also non-financial results, future outlook, and efforts to improve corporate value.
In July 2017, SK Telecom published its fourth integrated annual report, the ‘SK Telecom Annual Report 2016,’ following the review and approval of the Board of Directors.
The report also shows how the company has been able to create future value through efforts to link governance, strategy, its business model, financial performance and non-financial performance. Ultimately, the integrated report serves the role as a ‘dialogue platform that contributes to the improvement of corporate value’.
SK Telecom also recognises that integrated thinking across a company’s entire management activities is necessary to deliver corporate value through Integrated Reporting <IR>. The company analyzes risk and opportunity factors in the changing management environment to apply and understand integrated thinking and is disclosing its performance indicators and goals as well as management performance and information with a focus on the material issues that have been determined for SK Telecom.
SK Telecom defined the diverse and wide-ranging activities that the company undertakes in terms of the International <IR> Framework’s capitals. Specifically, it has assessed the short, mid, and long-term financial risks and impacts for activities linked with material issues and determined the connection with strategy and business models. Furthermore, in terms of goals and performance management, SK Telecom has sought to improve its management of long-term quantitative goals and performance level through company-wide consensus. From the perspective of an ‘integrated mindset,’ SK Telecom has conducted case studies of social/environmental value improvement activities’ linkage with financial results and has implemented an impact valuation of reducing expenses and creating financial value in the business value chain in terms of the social/environmental aspects. Through these efforts, SK Telecom has endeavored to undertake meaningful activities from an integrated perspective.
In addition to collecting the diverse opinions offered by stakeholders regarding potential issues during its annual materiality assessment, SK Telecom has reorganized its ‘integrated report materiality assessment framework’ to reflect the kind of financial impact that each issue may have from the perspectives of reducing expenses, increasing revenue, and the company’s operational risk.
SK Telecom defines this framework as having two parts: 1) a relevance analysis, from the perspective of business and stakeholder impact, and 2) an annual assessment of material issues through a process of evaluating the level of actual impact on the company’s ability to create sustainable value.
The company includes economic, environmental, and social issues derived from major concerns of stakeholders, such as shareholders and investors, business partners, employees, customers, and regulatory agencies, as well as potential issues and externalities such as global economic trends, regulations, and guidelines.
SK Telecom reports material issues, based on the materiality assessment process, to the Corporate Citizenship Committee of its Board of Directors every year. The company continues to advance its integrated report materiality assessment framework through global best practices and a gap analysis in terms of the integrated report materiality assessment.
This process enables: 1) the Board of Directors, the highest decision-making body, to focus on the company’s material issues, 2) extensive engagement and communication with stakeholders, and 3) the company to be responsive to broad social and environmental problems linked to the increase of corporate value and directly reflect them in business decisions.
“Above all, during the past four years that SK Telecom has published integrated reports, we have become confident that rethinking the company’s strategies, business models, capital, and performance from the perspective of ‘integrated thinking’ and discovering the integrated links between all management activities and financial results has resulted in a process of change and innovation that gives us the ability to sustain our value creation model. Through the long journey of discussing ‘integrated reporting’, I hope that more companies, accounting institutions, and investors will come to voluntarily participate. I look forward to seeing a greater consensus regarding the direction of integrated reporting and more organisations sharing about the resulting change and innovation they experience.”
Jack Choi, IRO of SK Telecom
About SK Telecom
SK Telecom is South Korea’s largest mobile telecommunications company, with 29.59 million subscribers as at the end of 2016. They lead the country’s information and communications technology (ICT) networks and have helped develop the global mobile telecommunication industry. This in turn has helped them evolve into a global ICT leader over the past 30 years.
SK Telecom has pioneered Korea’s mobile telecommunications industry with unprecedented services and advanced technology and is preparing for a new evolution with an innovative business portfolio that includes Artificial Intelligence (AI), media, and Internet of Things (IoT) based on the company’s mobile telecommunications services.
In addition, SK Telecom has been praised for its management activities, as demonstrated by its efforts as a UN Global Compact (UNGC) LEAD company; its status as the first Asian telecommunications company to be included in the Dow Jones Sustainability Indices (DJSI) World for the ninth consecutive year; maintenance of the highest possible grade of “Excellent” in the Win-Win Index for the fourth consecutive year; and its first-place ranking in the National Customer Satisfaction Index (NCSI) for two decades (as of 2017).