Climate Change

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Samsung Electro-Mechanics aims to become carbon neutral by 2050 by recognizing and responding to the climate crisis.

Climate Change Response Strategy

Samsung Electro-Mechanics is committed to participating in efforts to address the climate change crisis facing humanity, while understanding and responding to its impact on us.

Key activities

Samsung Electro-Mechanics has made it a priority to achieve carbon neutrality by 2050 and is participating in efforts to combat climate change through greenhouse gas reduction activities.

    • We established an energy management system (ISO50001) and are managing energy reduction activities at all domestic and overseas business sites.
    • We analyze energy increase and decrease factors each year and set targets to carry out reduction activities.
    • We included energy use management in management evaluation items to internalize energy reduction efforts within the organization.
    • We operate an Energy Reduction Task Force, which is organized with members from various departments, including development, manufacturing, and infrastructure.
    • Starting at the manufacturing sites, we work to streamline the operation of facilities related to production volume, manage the use of sleep mode, and identify energy-saving initiatives.
    • Bimonthly meetings organized by the CSO are held to review energy consumption and the status of energy reduction tasks at each business site.
    • We analyze critical utility facility loads to increase energy efficiency through consolidated/differential supply.
    • We utilize waste heat generated during the operation of utility facilities to reduce energy consumption through heating only.
    • We increase energy efficiency by managing the status of idle equipment and supplemental operations in response to changes in daily production.
    • We joined RE100 in 2022 to achieve carbon neutrality and are working towards RE100 in 2050.
    • We are considering introducing a direct renewable energy Power Purchase Agreement (PPA) business using underutilized land at our business sites.
    • We aim to convert 100% of our car fleet to electric vehicles by 2030.
    • We are creating an environment where employees can use electric vehicles more conveniently by building electric vehicle charging infrastructure in parking lots at domestic business sites.
    • We are responding to climate change by focusing on investments and operations in the environmental energy sector, including the conversion of high-efficiency facilities to reduce electricity consumption and the introduction of process gas reduction facilities to reduce greenhouse gases.
    • We provide training on performance analysis and efficient operation of pure water, boilers, chillers, etc. to help operators improve their basic energy efficiency skills and provide training for energy managers in each department on calculating the effectiveness of energy saving projects.

Risk and opportunity analysis

Samsung Electro-Mechanics selected key factors and assessed their materiality in order to identify climate-related risks and opportunities that could affect the Company's outlook. For physical risks, we assessed impacts across different time horizons using various methods, including peer and industry analysis, stakeholder surveys, and roundtable discussions, and determined the expected timing of each risk and opportunity.

Samsung Electro-Mechanics recognizes the impact of climate change on its business and considers climate-related risks and opportunities in its decision-making processes, thereby strengthening the linkage between climate-related impacts and strategic decision-making, and plans to continue building out its climate-change response framework going forward.

Risk and opportunity analysis - Risks and Opportunities, Description, Impact and Expected Timeframe
Risks and Opportunities Description Impact and Expected Timeframe1）
Physical Risk Acute Typhoons, floods Risk of product and facility damage, loss from flooding, and power outages due to natural disasters - 2）
Chronic Drought Increased operating costs due to rising potential water prices
Transition Risk Policy and Legal Rising carbon credit prices Increased purchasing costs due to rising carbon credit prices and expanded paid allocations driven by stricter global carbon regulations Short-term, Mid-term, Long-term
Stricter GHG emission reporting obligations Fines for non-compliance with the Enforcement Decree of the Act on the Allocation and Trading of Greenhouse-Gas Emission Permits Mid-term, Long-term
Technology Low-carbon product development
  • Increased R&D costs for low-carbon product development
  • Increased investment and operating costs due to new line expansion
 Mid-term, Long-term
Transition to low-carbon production processes Increased investment costs for low-carbon production facilities Short-term, Mid-term, Long-term
Market Increased production costs due to fuel and electricity price fluctuations Increased purchasing costs due to unit price fluctuations of non-renewable energy sources(electricity, natural gas, crude oil, etc.) Short-term, Mid-term, Long-term
Opportunities Resource efficiency Use of low-carbon production processes and logistics systems
  • Cost reduction through manufacturing process improvements and efficiency gains
  • Reduced greenhouse gas emission-related costs and operating expenses by decreasing electricity and fuel consumption
 Mid-term, Long-term
Energy sources Use of low-carbon and renewable energy Decrease in production costs due to lower renewable energy purchase costs and reduced non-renewable energy purchases Mid-term, Long-term
Products Increase in sales of low-carbon and existing products Increase in sales driven by growing demand for low-carbon products and services Short-term, Mid-term, Long-term

1）short-term: within 1 year (2026), Medium-term: 1 to 5 years (2027-2030), Long-term: Over 5 years (2031-)

2）For physical risks, the expected financial impact of a disaster was calculated over the entire analysis perlod, without identifying the expected time of actual occurrence.

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Risk management process

Samsung Electro-Mechanics identifies and assesses climate change risks at all of its business sites by conducting financial impact surveys based on physical risk factors at each site, analyzing policy trends, and analyzing peer companies. It also identifies climate change risks that may occur at the operational level through emission projections that reflect expansion lines and future production. The company-wide GHG emissions status is reported to senior management once a year, and through the company-wide Energy Council, we share energy consumption and reduction projects by site and check implementation to promote GHG reduction activities.

A process for integrated, enterprise-wide opportunity and risk management
Risk identification
  • Identify physical, policy, and regulatory risk factors
  • Understand the level of risk and financial impact
Risk assessment
  • Survey the financial impact of physical risk factors
  • Perform risk assessments based on policy trends and peer analysis
Risk management
  • Plan and implement GHG reduction activities
  • Monitor the occurrence of natural disasters at key logistics hubs (ports, airports, production/sales entities)
  • Forecast emissions intensity to reflect on expansion lines and future production
Follow-up actions
  • Integrate company-wide climate change risk management based on energy management system
  • Operate a company-wide climate strategy committee (once a quarter)
  • Manage risks through ESG committee reporting on major climate change risks
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Indicators and reduction targets

Climate change response management indicators

Samsung Electro-Mechanics manages indicators such as greenhouse gas emissions (GHG), greenhouse gas emission intensity, energy consumption, waste generation, and water consumption to respond to climate change. To internalize climate change risk management, both management and employees are actively considering safe environment related elements across the business, including safe environment-related items in the regular performance evaluation system for executives. Samsung Electro-Mechanics will continue to develop environment-related performance indicators and supplement the evaluation compensation system in the future.

Greenhouse gas and energy reduction goals

Samsung Electro-Mechanics aims to achieve carbon neutrality by 2050 by reducing overall greenhouse gas emissions. To this end, despite internal changes such as the establishment of new business units and the expansion of factories in overseas subsidiaries, and market variables such as the increasing demand for automotive and electronic components, we have been reducing emissions by continuously implementing energy-saving projects each year. In addition, Samsung Electro-Mechanics strives to achieve its GHG reduction targets by streamlining production and utility operations each year and replacing equipment with high-efficiency equipment at major facilities. In 2022, Samsung Electro-Mechanics joined RE100 and is working to transition to 100% renewable energy by 2050. In addition, we are working to reduce Scope 3 emissions by reducing business travel and promoting remote video conferencing.

Disclosure of Scope 3 GHG Emissions

Samsung Electro-Mechanics transparently discloses data on Scope 3 GHG emissions generated throughout its operations to manage GHG emissions across the value chain. We also strive to improve data reliability through third-party verification.

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