SK E&C Corporate Social Responsibility Report 2015 · 2017. 9. 5. · > 01 > About Report "2015 SK Engineering & Construction CSR Report" is our company’s first CSR report to provide

SK E&C Corporate Social Responsibility Report 2015

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SK E&C CSR REPORT >

About Report"2015 SK Engineering & Construction CSR Report" is our company’s first CSR report to provide information on our consistent efforts and performance to contribute to the sustainable develop-ment of our society. This CSR Report aims at sharing our company’s social responsibility activities and performance with the public by transparently disclosing the information to the stakeholders including our shareholders, customers, and other members of the society. SK Engineering & Construction pursues to realize sustainable development and improve happiness for our society.

Reporting PeriodThis report largely covers our 2015 fiscal year, from January 1 to December 31, 2015. But it also includes significant activities in 2016 that is worth mentioning. Our major CSR performance over the last 3 years are also provided for identifying trends by year-to-year comparisons.

Reporting BoundaryData includes all of the activities of SK Engineering & Construction and SK TNS carried out by their headquarters and employees on the construction sites at home and abroad. Also included in the data are the achievements of SK TNS, a corporate spun off from the U-business division of SK E&C in September 2015.

Reporting StandardThis report includes standard disclosures based on the Global Reporting Initiative 4.0 Guide-lines.

Further InformationFurther information on SK Engineering & Construction’s CSR activities is available at: SK Engineering & Construction Sustainable Management Team Telephone: +82-2-3700-7567Email: [email protected]

CEO Message 2

INTRODUCTIONCorporate Overview 4

Management Philosophy 6

Governance 8

CSR OVERVIEWCSR System 10

CSR major activities and achievements

Value creation for shareholders

Pursue transparent corporate ethics through regulatory compliance and fair competition 14

Promise to customer satisfaction

Customer satisfaction through quality management 18

Corporate value protection through information security 22

Culture for work & life balance

Improve the quality of life by creating a desirable culture for safety and health 26

Create a strong corporate culture by learning and developing human resources

and Great Work Place 31

Responsibility for the sustainable society

Create eco-friendly values for the future generation 38

Build a healthy Win-Win culture through shared growth and cooperation 45

Build a happy sharing community through social contribution activities 51

APPENDIXCSR Performance 56

GRI Index 58

Memberships and awards 60

CONTENTS

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Dear, stakeholders

We want to show our deep gratitude for your warm support and encouragement to SK Engineering & Construction.

Guided by the corporate mission, “We build the Great, Great Life, Great World”, SK E&C actively seeks to effort on social responsibility for harmonious co-existence with all the people including our employees, customers, shareholders and other members of the society as well as the environment.

We seek to contribute to a more sustainable development of the society by enhancing the corporate values for our shareholders through practicing fair competition and compliance, and by satisfying our customers through quality management. Furthermore, our corporate wants to establish a culture that values safety and health of all people as well as the development of human resources to improve the quality of their lives. We are committed to creating new eco-friendly values and fulfilling our responsibilities in the estab-lishment of the sustainable win-win culture for the whole society through a variety of social contribution activities.

For the last year, we successfully conducted activities to promote corporate ethics, quality, safety, health, environment, human resources development, shared growth, social distribution and more in an effort to meet the expectations of the stakeholders and fulfill our social responsibilities even in such a difficult time as these days when the global economy was getting worse.

As a reward for our efforts, SK E&C awarded the highest “Star” grade from the Green and Gracious Builder Awards organized by Singapore Building and Construction Authority. The Turkey Eurasia Submarine Tunnel Project we carried out received the Social Environ-mental Best Practice Award from Europe Bank for Reconstruction and Development(EBRD) for our sustainable management.

In addition, the Wasit Gas Plant project we carried out upon an order from Saudi Arabia’s state-owned oil company called Aramco has exceeded 100 million accident-free man-hours. SK Engineering & Construction introduced a maternity protection program to help our female employees to balance work and family. The cooperation with our business partners brought us the best rating the first time in the construction sector in the Win-Win Index organized by Korea Commision for Corporate Partnership. The number of SK Engineering & Construction’s residential improvement activities carried out since 2006 has exceeded 400 times, contributing to improving a culture of coexistence with communities.

Not satisfied with this, SK Engineering & Construction will continue to create new corporate value by participating in worthwhile activities in a number of areas. We will not just respond passively to cope with external regulations, but ensure all our employees to recog-nize the importance of our Corporate’s social responsibility. We are confident that our employees have a sense of ownership to engage in socially responsible activities. We will listen to the voices of various stakeholders and actively reflect their opinions in what we do.

SK Engineering & Construction started to publish its first CSR Report to share our social responsibility activities, performance, and plans for sustainable management with the public as well as our stakeholders. In order to fulfill our responsibilities as a corporate citizen and our mission “We build the Great, Great Life, Great World” through our sustainability management, we will do our best and appreciate your continued support.

September 2016.

SK E&C President & CEOKwang-cheol Choi

SK E&C President & CEOKi-haeng Cho

CEO Message

> CEO Message

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Turkey | Istanbul Branch

Kuwait | Kuwait BranchKuwait | SBC General Trading & Contracting

Arab Emirates | CB&I Emiraties Pipes Manufacturing LLCSaudi Arabia | Al Khobar Branch

Thailand | Thai Woo Ree Engineering Co., Ltd.

Arab Emirates | Abu Dhabi Branch

China | Shanxi SK Guolin Hi-Tech Road Material Co, Ltd.

Canada | Sunlake Co., Ltd.

USA | Huston OfficeUSA | SK E&C BETEK corp.

Ecuador | SK E&C Consultones

Chile | Santiago Office

China | Nanjing Co., Ltd.

Hong Kong | Hong Kong Branch

Thailand | Bangkok BranchThailand | SKEC Thai

Vietnam | Hanoi Branch

Singapore | SK E&C Jurong Investment

Indonesia | Jakarta Branch

Laos | Xe-Pian Xe-Namnoy Power Company Limited.India | India Office

Turkey | Eurasia Tunnel

Corporation and BranchOverseas Subsidiaries

Turkey | SK E&C Anadolu LLC.,

> Power plantAs an independent power plant (IPP) operator working on a project for coal-fired, combined cycle, cogeneration, nuclear and renewable power plant engineering, procurement, and construction, SK Engineering & Construction provides the best quality and optimum service to our customers. Conducting the largest domestic coal-fired plant Goseong Green Power Project has also helped consolidate our position as IPP carrier. We are also successfully executing large power plant EPC projects in new overseas markets such as Turkey, Panama, and Chile. We will continue to make a great effort to explore new business opportunities and expand into the global market.

> Industrial plantSK E&C demonstrates its world-class capability to conduct business based on highly-skilled manpower, insightful know-how and abun-dant construction results through diverse experiences of project execution such as semiconductors, electric vehicle battery materials (LiBS; Lithium-ion Battery Separator), pharmaceutical production facilities and more. Also SK E&C has successfully completed a variety of industrial facility projects including SK Hynix M14 Ph-1 Project. The company will continue to explore future business opportunities to make the most of its accumulated knowledge and to bring satisfaction to its customers.

> InfrastructureSK E&C improves the quality of life for humanity by building civil infrastructures such as railways, roads, ports, underground (cavern/subway), industrial complexes, and water resource facilities. We have relentlessly pursued globalization and successfully entered into Asia and the Middle East further expanding our share in the world market. We are widening our value chains from project planning to operation based on construction and technology competencies and successfully conducting not only domestic projects but also overseas large development projects.

> ArchitectureDue to the latest construction methods and advanced system, SK E&C attracts attention as a leader in the intelligent building construc-tion industry. We have introduced unique architecture with functionality and aesthetics in great harmony to office buildings and facili-ties for educational, cultural and commercial purposes. SK VIEW is known as “a byword for Korea’s premium residential space” that satisfies clients by exceeding their expectations for design and quality. More importantly, SK VIEW never forgets to deliver the essential intrinsic value of “comfort” and “convenience.”

Since its foundation in 1977, SK Engineering & Construction has pursued continuous growth and stability and gained recognition for its best technology and construction capabilities in various fields including oil & gas and power, industrial plants, infrastructure and achitecture, etc. Our Corporate is constantly evolving and developing to "Build the Great, Great Life, Great World".

Corporate Overview

| Corporate Overview |

• Corporate Name : SK Engineering & Construction • Establishement : August 1, 1977 • CEO : Kwang-cheol Choi, Ki-haeng Cho• Headquarters : Jongno-7-ga 32, Insa-dong, Seoul, Repubilc of Korea • Number of employees : 6,165 (As of July, 2016)

| Major Business Areas |

> Oil & gas plantSK Engineering & Construction has established a various product portfolio from crude oil refining facilities including refineries, petro-chemicals, LNG storages and oil sands to petrochemical plants that produce chemical products. Based on its advanced engineering technology , project management competence and construction capability accumulated through domestic and international large-scale projects, our corporate has established a business model for the total solution provider. Recently, we are focusing on diversifying our product portfolio by expansion into the North American market through one of the world’s largest oil sands plants in Canada.

INTRODUCTION > Corporate Overview

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| The Principle for Sustainability Management |

Established in 1979, SKMS has provided the standards for the right decision making in the process of management and conducting business. SK Engineering & Construction strives to be “Super-Excellent(SUPEX)” based on our mission that is set out in SKMS: The cor-porate enterprise should achieve its ultimate goal of sustained progress by maintaining stability and growth. Furthermore, it should cre-ate value for its customers, people and shareholders, thereby contributing to social and economic development and human well-being.SK E&C pursues realizing “happiness of stakeholders." In order to meet this, we should foster the environment for our employees to be able to work voluntarily and willingly, satisfy customers consistently, create values for our shareholders through the transparent management, and contribute to the economic development of the society. This is our way to manage the sustainability of our company.

*Super-Excellent : the higest performance level humanly attainable

| Value Management System |

SK Engineering & Construction actively pursues “super-excellence” based on understanding and confidence in the SKMS; develop 'Caring Professional' defined as SK E&C People Model and keep growing based on our three innovative policies in order to achieve our mission and vision, thereby creating happiness for all the stakeholders.*6 Values : Passion & Love, Challenge & Innovation, Integrity & Accountability

SK E&C has relied on SK Management System. The SKMS(SK Management System) for all the affiliates in SK Group has been the primary principle on which we have depended for our sustainability and growth.

Management Philosophy

The corporate enterprise should achieve its ultimate goal of sustained progress by maintaining stability and growth. Furthermore, it should create value for its cus-tomers, people and shareholders, thereby contributing to social and economic development and human well-being.

Mission

The ultimate goal of our value is the happiness of stake-holders.

Our Value

Pursuing SUPEX via Human-Oriented Management

SK-Way to achieve Our Value

Establish a favorable environment to work voluntarily & willingly

Ptovide customer satisfaction

Creat value via transpar-ency and efficiency

Support with trust & choice

Invest

Contribute to the community, observe

business ethics

Contribute to corporate growth

Trust & support for business activities

SK People

Community

Corporate EnterpriseGrowth/stability,

sustained progress

Customers Shareholders

INTRODUCTION

| Mission & Vision |

Mission

We Build the Great Great Life, Great WorldSK Engineering & Construction seeks to contribute the sustainable development of the society by realizing happiness and better life for human beings

Vision

Global Top Tier City Developer & Infrastructure BuilderThe company whose main business is the global city development while planning/developing, working on composite EPC and providing solutions.

> Management Philosophy

(Management System) Pursuit of Super-Excellent

(Pursuit Value)The happiness of the stakeholders (Customers / Employees / Shareholders / Community)

- Customer-oriented management, quality, safety, learning & development, environment and social contribution

(To-Be-Goal) SKMS(Growth Story)

(Management Principle) three innovative policies

(Objective) five management challenges for 2016

(Core Value)

6 Value &caring professionals

NEW SKMS Happiness 6 Values Action Plan of SKMS

(Purpose)Mission / Vision

Basic philosophy of management Relationship with stakeholders, and the role

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Committee activities

Committee No. of meetings

No. of Agenda

ItemsDescription

Management committee 2 2

Appointing new representatives of office managers, the establishment of a corporation, etc.

Audit committee 1 2 financial statements and audit reports, etc.

outside directors' recommendation committee

1 1 recommendation of outside director condidates

Total 4 5 -

BOD activities

Classification No. of

Agenda Items

No. of Reports Description

For general meetings of shareholders, the board of directors, corporate governance

5 0

summoning a general meeting of shareholders, revision of the BOD provisions, and appointment of CEO

For investment and management planning 3 1 -

For accounting and financial management 9 4

approval of the financial statements, capping th debt guarantees, payment guarantee limits

For other management issues 7 20 major management issues

Workshop 0 1 -

Total 24 26 -

| Board of Directors |Currently, the Board of Directors of SK Engineering & Construction is composed of seven directors (four of them are outside directors). Their duty and responsibility include the supervision and support of the management activities of the CEO. SK Engineering & Construction estab-lished three committees under the BOD - Management Committee for effective decision-making with respect to management activities, Audit Committee for transparent accounting audit, and Outside Directors' Recommendation Committee for the nomination of candidates for outside directors to be appointed at a general meeting of Shareholders.

| Operation of the Board of Directors |In 2015, SK Engineering & Construction addressed fifty agenda items at a total of seven BOD meetings. The committees also addressed five agenda at a total of four meetings – two of the meetings by Management Committee, one by Audit Committee, and one by Outside Directors' Recommendation Committee.

We are committed to making the right decisions with respect to all of our management chal-lenges. Although SK Engineering & Construction is an unlisted company, we have improved the governance by filling the majority of the board of directors with outside directors, thus enhancing transparency and independence of the decision-making.

Governance

Board of Directors

CEO

· three directors (three outside directors)· The committee conducts auditing functions including auditing

the financial statements, submitting the audit reports, and evaluating the internal control over financial reporting(ICFR)

· three directors (two outside directors, one internal director)· The committee recommends candidates for outside directors

to be appointed by the General Meeting of Shareholders

· two directors (two internal directors)· The committee deliberates and decides agenda items delegated by the BOD

Outside Directors'Recommendation Committee Audit Committee Management Committee

BOD secretariat

INTRODUCTION

SK E&C wants to create a sustainable future where human beings are in harmony with society

and the environment. To this end, we have established CSR strategies for stakeholders and

seek to foster a culture to make effective use of the strategies. We will continue to communi-

cate with stakeholders through diverse channels, and make every effort to meet their needs to

contribute to their happiness.

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| Communication Channels for Stakeholders |

In order to achieve CSR mission, it is essential that we communicate and build trust with stakeholders. We use a variety of channels to encourage dialogue on core values of shareholders, customers, employees, and the society.

| Stakeholder Engagement and Materiality Test |

We have conducted a materiality test to identify issues of concern and importance to stakeholders. In the light of the results and the direction of our management strategy, we have decided key CSR issues and then generated a report about them in detail.

CSR System

| CSR Mission |

Based on SK E&C’s mission, "We Build the Great, Great Life, Great World", we strive to fulfill our social duties and responsibilities by adapting our roles to the changing world.

| CSR Strategy |SK E&C has established four key strategies - Strategic Management, Project-oriented Management, Talent Management, and Shared Growth Management. These four key strategies are divided by thirteen issues for ethical management, quality management, health and safety, envi-ronment management, shared growth, human resources development, information security, and social contribution. This is part of our effort to meet the needs of the changing business environment and stakeholders(shareholders, customers, employees, Biz Partners, local communities and future generations) and pursuing them actively. We implement these strategies actively with the sustainability management organiza-tions as the control tower. Our corporate is practicing various activities including optimizing in-house system and fostering a culture to fulfill a variety of CSR areas such as ethical management, quality management, safety and health, environment management, shared growth, human resources development, information security, and social contribution, and is enhancing the level of the activities.

01 Strategic managementWe relentlessly pursue innovation to create new values in the future. We should earn trust through transparent and ethical management. • Foster new growth business • Strategic risk management• Transparent and ethical management • Research & development

03 Talent managementSK E&C provides workplace where employees enjoy working and developing opportu-nities to employees based on strong corporate culture. • Strong corporate culture • Human resources development • Great Work Place

02 Project-oriented managementWe maximize customer satisfaction through the exceptional project management and overall optimization. • Customer-oriented management • Quality Management • Safety and Health Management • Environment Management

04 Social Sharing managementThrough collaboration with local communities, we seek to create an ecosystem that benefits all in the society. • Social Contribution • Shared growth

Base on our management philosophy pursuing the happiness of stakeholders, we seek to cre-ate sustainable future where humans, society and environment can co-exist in harmony.

After reviewing data in regards to the global stand-ards, domestic and overseas competitors and internal management-related materials, we have created a pool consisting 34 issues related to SK Engineering & Construction.

Global standards : Analyzed GRI G4, DJSI, ISO26000, and identified major trends in CSR activities. Domestic and overseas Competitors : Analyzed important CSR-related issues among domestic and overseas competitors and identified key issues in the construction market. Internal management-related materials : Analyzed internal materials and data, and identified environmental and social issues to meet the needs of our customers.

We have conducted a survey of internal/external stakeholders to identify their interests regarding the 34 issues.

Stakeholder survey- Survey Objectives: to identify main interests and concerns of various stakeholders - Survey Method: the Intranet, SK VIEW homepage, individual interviews, etc.- Use: to be used when reviewing CSR strategies and producing reports.

Step 2 Based on the results of the materiality test, we have examined the relevance and importance to the direction of our management strategies. We looked at the results of the materiality test to classify the issues into three-tier categories – fourteen first-tier core Issues, thirteen second-tier Important Issues, and nine General Issues depending on the relevance and importance. This report presents core issues for each of the four major categories of stakeholders. And it deals with important/general issues in a balanced manner.

Step 1 Collect issues Step 2 Materiality Test Step 3 Select key issues

34

3332

31

30

28

27

29

26

24

23

21

18

14

25

22

17

20 1516

19

11

13

8

9 10

4

3

2

1

5

7

612

external

internal

Stakeholders CSR issues

Shareholders 5 Ethics & Code compliance 16 Antitrust principles

Customers10 Quality of products

14 Customer relationship management 23 Information security management

Employees6 Safety and health

4 Recruiting and developing human resources 8 Work & Life balance 11 Corporate culture 13 Human rights

Society

12 Eco-friendly project management 15 Environmental compliance 17 Green culture 18 Eco-efficiency indicators 20 Coping strategies to climate change 22 Green products 24 Eco-friendly materials 26 Environmental management systems

7 Shared growth

2 Social contribution

* * This report only covers social and environmental issues, excluding those that are related to the economic aspects of CSR issues.

CSR OVERVIEW

EfficiencyValue PropositionSocial contributionFair & Shared growthSafety, health & equalityGrowth & Distribution Satisfaction

Implemeting green management practices

Performing stratigic CSR activities

Practicing fair competition and win-win partnerships

Establishing great workplaces

Tireless Innovation drives

Providing total solutionsValue

Increase eco-friendly value creation

Establishing a society filled with hope and

dreamsPursuing shared

growthIncrease the quality and competency of people's

careersIncrease corporate value continuously

Increase the overall value of customers and their

quality of lifeValue Proposition

Future GenerationsCommuties

Society

PartnersEmployeesShareholders Customers Stakeholders

MissionWe Build the Great, Great Life, Great World

> CSR system

societyemployeesShareholders customers

· Social contribution activities such as Happy Green School, Hope Maker

· “With Us” Biz Partner homepages, etc.

· Intranet, e-newsletters, GBS, Always Can Meeting, Management Development Council, etc.

· Public disclosure, general meetings of shareholders, annual report, etc.

· Call center, Website, Customer service centers, SK VIEW homepage, Press releases, etc.

Contribution to the sustainable development of societyEstablishing great workplacesTireless Innovation drives Providing total solutionsValues

Communication channels

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| CSR Activities |

> CSR mechanism

We have the following specific mechanism set out to conduct our CSR activities. First, establish the direction and goals by area before creating policies. Second, make a plan on specific activities to carry out and disseminate it to the employees involved. Third, check and evaluate the results of the activities to continuously improve the performance. Last, produce a detailed and transparent report on the activities and results to disclose to the stakeholders via the homepage. We also seek to join CSR-related global initiatives to express our strong willingness in corporate citizenship.

> S-Program (Sustainability Program)

Since 2016, SK E&C has operated S-Program to improve the awareness of CSR in all employees and promote the practice of CSR. The S-Point system has also been introduced to evaluate the performance of the S-Program. S-Program operates various awareness-raising activities including ethics training, sexual harassment prevention training, emergency drill, and social contribution activities, allowing people to easily understand and practice CSR activities. The S-Point is a tool that gives points to employees CSR activities, thus ena-bling quantifying the CSR performance and promote CSR activities.

> Communications with employees

We have provided all employees with online sustainability management education program since 2013. A total of 17,791 employees has completed the program so far. Since 2015, the program has been available for business partners. We publish a newsletter called SK Letter(Sustainability Knowledge Letter) every other week via company email. It provides information on SK Engineering & Construction’s sustainability management activities and other related external issues.

· Establish directions/goals by area

· Establish policy and system

· Develop activities and programs

· Disseminate to employees the related information including pledges, campaigns, and education plans, etc.

· Measure, analyze and evaluate the results and performance

· Report and publish on the website

· Join CSR-related global initiatives

Information releaseSystem Process Evaluation

[ Number of the compation of sustainability management education program ]

2013 2014 2015

6,067 5,896 5,828

SK LetterOnline Education for sustainability management

CSR OVERVIEW

CSR 주요 활동 및 성과

We pursue constant innovation and strive to earn trust from the shareholders and create new

values for the future through transparent and ethical management. To this end, we have estab-

lished a code of ethics and carried out a variety of activities such as promoting anti-corruption

practices, and providing ethical awareness-raising education programs. We also run Compli-

ance Program for overseas project to practice strong ethical management.

| Value creation for shareholders |

• Pursue transparent corporate ethics through regulatory compliance and fair competition

價

値

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Pursue transparent corporate ethics through regulatory compliance and fair competition

| Ethical Management System |

> Code of ethics We have established an ethical management system in order to integrate corporate ethics into corporate culture. In January 1998, we created the Code of Ethics and have complied with the val-ues and standards of behavior set out in the code. The Code of Ethics applies to all SK employees as well as employees of SK affiliates and business partners. It is reviewed and updated regularly.

> Elements of ethical management We make decisions following the 3Cs (Code, Compliance, and Consensus) to promote SK Engineer-ing & Construction’s sustainable growth in compliance with current trends and ethical standards.

> Practice of ethical management system To set the foundation for corporate-wide ethical management, we have established regulations and procedures; and to promote ethnical management, we carry out awareness-raising activities for employees and business partners.

| Awareness-Raising for Ethical Management |

> Code of ethics and the processSK E&C has implemented a Code of Ethics, internal audit regulations, whistleblower protection standards, and procedures. Our company categorically prohibits corruption and bribery in accord-ance with the Code of Ethics. We have available offline channels such as mail, telephone, and fax and online channels such as the Internet and e-mail for consultation or reporting of ethical issues. Stakeholders such as employees and business partners and customers can report unfair practices by SK E&C. The reports received are protected in accordance with the Whistleblower Protection Program.

> Raising awareness of ethical managementSK E&C is implementing the Compliance with Code of Ethics Pledge for all employees. Our company requires our employees to practice the Code of Ethics during holidays such as Lunar New Year's Day and Thanksgiving Day. We also provide a wide range of education for our employees at the headquarters and project sites. For instance, we carried out our “Ethical Management and Cases of Audit” education program for new/experienced employees, and the “Join Us in Practicing Ethical Management” education program on a face-to-face basis; in 2016, we opened an online education program for all employees across the SK group. Status of ethical management education

Name of program times number of people completed

Ethical management and cases of audit 9 610

Join Us in Practicing Ethical Management 13 411

> International compliance program for overseas projectsWe have established and carried out the International Compliance Program to eradicate illegal mis-conduct in the course of performing or promoting overseas projects; and to incorporate the compli-ance with regulations into our corporate culture. With the international compliance organization operating in accordance with the program, we are taking pre-emptive measures to prevent any legal or contract-based risks. Our company has established and implemented a number of schemes to spread an anti-corruption culture in the company. In particular, the international compliance depart-ment has created rules and regulations for anti-corruption and provided supervision over the compli-ance status of employees and Biz Partner. Furthermore, it provides legal advice with regard to the foreign corrupt practices act for all including the CEO, management, and other employees. International compliance activities

Name of activities description

Declaration of anti-corruption commitment by CEO

· CEO message to express commitment to foreign corrupt practices bylaws

Enact the foreign corrupt practices bylaws

· Enact regulations for compliance with foreign corrupt practices bylaws · Enacted joint venture rules for compliance with foreign corrupt practices bylaws · Enacted supplier rules for compliance with foreign corrupt practices bylaws

Inspection for business partners for their due diligence

· Inspection for business partners for their due diligence· Letter of commitment to compliance with foreign corrupt practices bylaws

Education programs· Regular foreign corrupt practices bylaws training· Differentiated customized training by business division/project /job position

Internal supervision system · Anonymous tip system for possible violations of international anti-corruption laws

We pursue happiness for all the stakeholders by practicing ethical management We embrace ethical management practices to create happiness for all stakeholders including customers, shareholders, business partners (Biz Partner), employees and society as a whole. We also foster corporate social responsibilities and healthy corporate culture.

Join us in practicing ethical management and resolution rally

Compliacne education for overseas projects

Compliance with code of ethics

> Pursue transparent corporate ethics through regulatory compliance and fair competition

1. Code of ethics and practice guidelinesDefining responsibilities for stakeholders on the basis of ethics and creating practice guidelines in written form for employees.

3. The consensusForming consensus among employees about the practice of ethical management through the campaign activities, CEO’s messages, and periodic training programs.

2. ComplianceEstablishing various programs, organizations dedicated to ethical practices, consultation, reporting, and auditing.

CO

DE

COM

PLIAN

CE

CONSENSUS

Three elements of ethical

management system (3C)

· Establishing a code of ethics and work process procedures

· Operating consultation/reporting channel

· Compliance with code of ethics pledge· Ethical management education

Foundation: regulations/process

Promotion: awareness-raising

VALUE

PROMISE CULTURE RESPONSIBILITY

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PROMISE CULTURE RESPONSIBILITY

| Fair Trade Compliance |

> Fair trade compliance program (CP)In 2008, we introduced a compliance program to voluntarily comply with fair trade laws and regulations. Following the CEO’s strong determination, we have established seven core ele-ments of our corporate compliance program. SK E&C is actively taking the initiative to en-sure fair competition; providing clear standards of behavior for compliance to the employees through the CP, thus preventing violations at an early stage. The CP applies not only to the employees but also to all affiliates and Biz Partners.

> Fair trade compliance organization For systematic and effective operation of the fair trade compliance program, we have formed a Compliance Secretariat with sub-divisions working in cooperation with each other.

> Fair Trade Compliance Program (CP) activitiesWith the introduction of the Fair Trade Compliance Program (CP), we have established Compliance Program Operating Regulations and are operating various programs for each key element. Every year we obtain fair trade compliance pledges from all employees. We also provided online/of-fline training sessions on strengthening fair trading capability for a total of 16 times between 2008 and 2015. In addition, we have established a compliance program bulletin board on the Company’s intranet to share recent news and information on fair trade compliance regulations. The online bulletin board also functions as an advising and reporting tool about violations of fair trade laws.

CP

Appoint compliance officers Appoint voluntary compliance executives with substantial responsibility and authority

Produce and disseminate compliance handbooksProduce project-oriented guidelines and examples

Operate education programsProvide each department with a customized training session lasting for more than 2 hours every six month

Build document management systemsAppoint CP-related document officers and provide them with accurate and up-to-date information

Proclaim CEO’s determination to compliance policiesCEO proclaims his/her commitment to compliance with fair trade laws and regulations

Establish internal monitoring systemBuild supervision system for prevention of any violation and generate reports to the board of directors

Impose sanctions on management and employees for violationsEstablish penalties in proportion to the degree of violation

Based on technology and experience accumulated on a number of projects in the global con-

struction market, SK E&C strives to satisfy customers by providing the optimized quality for

customers' requirements through quality management practices and culture. Also, we recog-

nize the importance of internal information assets and customers' private information; and will

strengthen information security to fulfill our social responsibility.

| Promise to customer satisfaction |

• Customer satisfaction through quality management

• Corporate value protection through information security

約

束

I vow to do my best to perform my services consistent with Fair Trade Compliance Program (CP) and establish and maintain a culture within our company that promotes fair trade compliance. As an employee or executive member, I will never engage in any kind of unfair trading activities or rigging, using my status in trade relations. I will comply with “fair trade compliance program rules and regulations” in regards to "law on the monopoly regulation and fair trade and subcon-tracting law on trade fairness” in good faith. I will never provide instructions, approvals or assistance for violations against fair trade. Lastly, I will immediately inform the compliance secretariat of potential violation of antitrust laws or bylaws.

Pledge to fair trade compliance by employees of SK Engineering & Construction

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| Quality Management Policy |

Guided by our quality mission “Achieving customer satisfaction by the stronger quality culture starting with me” we are constantly pursuing to improve the quality management system and culture to the world-class level.

> Quality management governanceWe run a variety of councils to discuss quality management-related issues involved with each division and periodically check how quality management is going. As for the quality manage-ment review meeting, the CEO hosts it with many executives are in attendance from each business divisions to check the status of corporate-wide quality management issues and how to solve problems.

Conference / council

configuration cycles details

Quality Management Review Meeting

CEO, director of division, EPC-related director / manager, quality manager

Bimonthly· Top-down quality awareness-raising · Strengthen management leadership practice

Division Quality Seminar

Project quality manager by sector

Quarterly

· Project quality improvement and empowerment of the quality manager

· Discuss quality issues and share the quality management status

Video ConferenceSectoral projects quality personnel, sectoral quality team

Once a month

· Quality risk prevention via lessons learned from different projects

· Build pre-emptive check system by sharing cases from outside agency

| Quality Management System |

Our company has continuously improved and upgraded our quality management system by annually assessing the effectiveness of 4,194 kinds of in-house standards such as manuals and procedures, thereby forming a virtuous cycle for work process optimization. In addition, we carry out periodic internal quality audits on domestic and overseas projects. This is to help our quality management system to improve continuously.

> Quality management systemWe are offering the reliability for the quality by obtaining and maintaining important quality certifications such as the quality management system international standard (ISO 9001), the electric power industry technology standard (KEPIC), the United States Society of Mechanical Engineers standards (ASME).

Certification of the quality management and technology

Certification contents of the certification certification authority

ISO 9001Quality management systems for the

construction industryLRQA Korea Ltd.

KEPIC Certification of technical standards for the

electric power industryKEA; Korea Electric Association

ASME Certification of technical standards of the United

States society of mechanics ASME; The American Society of Mechanical Engineers

| Quality Culture |

It is our everyday task to eliminate the root cause of quality failed to improve by establishing a quality-oriented culture in which the management and employees voluntarily participate in improving quality.

> Quality leadership We seek to help ensure that all employees are aware of the quality culture through the code of conduct that we have created.

Customer Satisfaction through Quality Management

SK E&C is practicing quality management under the strong leadership of the CEO in order to provide the optimized quality for customers' requirements

Achieving customer satisfaction by the stronger quality culture starting with me

Quality Mission

Global Top Tier Quality ProviderQuality Vision

Quality Management Review Meeting

> Customer Satisfaction through Quality Management

The Strong Quality Culture Starting with MeQuality Culture

Definition of quality leadership

Plan

Do

C h e ck

Ac t

Recognize basic principles of quality Minimizing the quality failure

Identify what to do to ensure continuous improvement and implement it. Find risks on an ongoing basis

· Quality value/ policy/ understanding and applications of the goal (quality policy / goals / standards / getting familiar to the procedures)

· Establish a quality risk prevention plan.

· Before performing work, check the quality procedures. (The identification of the personnel in charge must be clarified.)

· Run a preventive plan to achieve quality objectives. (Quality practice & requirement must be observed.)

· Best quality practice dissemination and continuous improvement. (Analyze the result and share excellent and non-conformity improved cases).

· Remove the root cause of non-conformity and take measures to prevent a recurrence. (Join the quality improvement council, and take measures to fix the non-conformity.)

· Find quality risks on an ongoing basis.· Find any non-conformity.

Self-Leadership

[ Proactive Quality Implementer ]

VALUE

PROMISE

CULTURE RESPONSIBILITY

2 0 > > 2 1

SK E&C CSR REPORT >

> Quality Best Practice Certification system To boost achievement of optimum quality and continuous improvement of quality, and foster “The stronger quality culture starting with me”, we have the Quality Best Practice Certification System. Employees are supposed to pass the screening process includes culture evaluation (1st round), performance evaluation (2nd round) to be qualified for this certification.

> Strengthening quality management capacity of employees As our business is growing, we have developed a variety of quality control education programs for employees working in different areas. We also provide effective training for the employees to recognize quality as our core value. In addition, we regularly open quality control seminars for employees to share their know-how gained in the course of business and develop each other.

| Company-wide Quality Management Activities |

We have established a quality control system in order to enhance the quality and minimize fail-ures. We are continuing to share and communicate with the employees to create tangible results.

> COPQ management process We are continuously improving the quality control process by counting and analyzing “cost of poor quality(COPQ)” in order to prevent cost from incurring as a result of a failure in the course of work.

• Cost of the quality control activities and the results -> Efficient budget management by removing the losses• Identify potential problems in quality -> Accurate business goal setting• Removing the root cause of COPQ -> Continuous quality improvement• Fostering a culture that minimizes failures -> Achieving business goals

Building COPQ management system

Management Item

Calculation R & R

calculation standards

Improvement Activities

COPQ management process

> Quality management IT systemWe will improve the efficiency of quality control services through the IT system utilization. This system enables all employees to participate in quality control work. We are constantly improving

the system according to the needs of changing business environment and employees.

e-QMS Quality Management System Lessons Learned Database Standard Management System

> Quality gate operation for Biz PartnersFrom the perspective that quality management capacity of our Biz Partners determines the quality of projects, we operate a system to verify and enhance their quality management ca-pabilities at each step of registering/bidding/ contracting/conducting process. In addition, we evaluate the construction quality of the Biz Partners on a regular basis and encourage them to actively participate in quality control activities.

| Project Quality Management Activities |

We operate a Quality Execution Plan, in which we create a list of expected risks to affect the quality of a project. Then, we analyze the quality risk tree and learn lessons. Based on those lessons, we minimize risks or quality failures. We believe this approach is very effective to secure the trust of our customers.

> Quality Execution Plan We strive to clarify what is important to the quality of the project. Then, we establish and manage a thorough action plan for quality control from the start to completion of the construction work.

> Activities to prevent quality riskWe identify and analyze potential risks affecting the quality of the project before execution of the project, and minimize failures.

> Quality improvement conferenceIn order to reduce the quality risk and spread the "The stronger quality culture starting with me", all employees and Biz Partners involved in a project meet together once a month to share their operational experience.

> Lessons Learned WorkshopBy building a database of lessons learned during the implementation of the project, and utiliz-ing this database for the project, we reduce costs, shorten the construction period, and mini-mize rework, thus pursuing customer satisfaction.

New registration/renewal assessment

Select companies to participate in the

bidding, and evaluate them.

Approve the project quality management

plan.

Assess the project quality management

performance

Gate 1 - Registration Gate 2 - tender Gate 3 - contract Gate 4 - performance

> Customer Satisfaction through Quality Management

Best quality practice certification award ceremony

Capacity building training for quality managers

Quality control seminar by division

VALUE

PROMISE


2 2 > > 2 3

SK E&C CSR REPORT >

| Information Security Management Systems |

SK E&C are aware of the importance of information assets and have operated a security team dedicat-ed to information security under the CSO since 2013. The security team establishes security policies; protects internal information, IT infrastructure and systems; and monitor security-related incidents. Through these activities, the company's assets are protected from security risks. In particular, by en-forcing media and distribution control policies for the protection of inside information such as trade secrets and personal information, we seek to minimize information leakage risks.

> Internal data protection via the media controlMedia control is divided into the control PC, software control, and storage medium control. Media control means to limit or block the use of fragile security features by media. We have imple-mented media control policy since 2015. This policy applies to employees at headquarters at home and abroad. This policy prohibits the use of unauthorized software and storage media. Also, it fundamentally blocks access to shared folders or unregistered device. We plan to expand this policy to apply to all of the sites at home and abroad starting from 2016.

> Internal data protection via distribution controlIn addition to media control policies, we have implemented a distribution control policy. Pursu-ant to this policy, we have been ensuring the safety and security of the 10 main routes that would disclose inside information. We will continue to review and improve this policy to pre-vent spills from occurring in the information distribution channels that are newly created with the development of IT technology.

> Customer and personal information management systemsWe fulfill our social responsibility to comply with the commitments with our customers to safely protect and manage their important personal information provided by them.We protect the information on the basis of the results of the risk assessment analysis of the operational status. This is part of our effort to systematically manage customers’ personal information let alone information with respect to projects such as information on accumulated construction technology and construction design drawings. In particular, in the case of housing projects, we collect personal information of customers in the process of pre-sale contracts or doing repairs. We collect only the minimum amount of information in accordance with the personal information management system and protect the system. And as soon as the purpose of information gathering is completed, we follow the principle of destroying the information. In this way, our customers' information is managed securely.

| Information Security Activities |

As a corporate that recognizes the importance of information assets, SK E&C is conducting a va-riety of information security activities to continuously enhance the level of information protection.

> Security Practice Group SystemSK E&C has a "security practice groups” organized by division. This is to comply with the se-curity policy and strengthen our security activities. The security personnel leading each of the security practice group checks the details of their security practices every Friday and encourage the other members to actively take part in security management activities.

Protect Corporate Value through Information Security

SK E&C aims to contribute to stable operation and goals of the company by minimizing the damage from security risks and preventing any loss or damage to the company.

Internal information control and media & distribution control

act

Align

Align

guide

company security policies

[ Protection ]

[ Protected ] internal information

media control / distribution control

Trade secrets privacy

Security assessment of the Unfair Competition Prevention

Law

corporate security diagnose framework

trade secret protection rules, information asset protection

rules

Privacy Act, Information and Communication Network Act

privacy policy & guidelines

privacy regulations

Legal basis

> Protect Corporate Value through Information Security

E-mail

Outlook

OWA(Outlook Web Application)

Commercial Portal email

Internet

Web Forum (cafes, blogs, etc.)

Internet apps (IM, the web hard, P2P, etc.)

Storage medium

Portable storage devices

(USB, external HDD, etc.)

CD-RW

Other storage devices

(PCMCIA, SD, CF card, etc.)

Information disclosure / control

Device

Smart phone / Pad

Printer

Output documents

2 7

3 8

1 6 9 104

5

Distribution channels

VALUE

PROMISE


2 4 > > 2 5

SK E&C CSR REPORT >

> Routine Security ChecksSK E&C conducts unannounced security checks throughout the year to encourage employees to have a sense of security in their daily lives at work. These security checks are conducted in all workplaces including headquarters, each project and branch office.

> Information Security PledgeTo protect internal information and customer information, SK E&C requires new employees to sign the agreement on a security pledge. In addition, every year we do the same for all employees. The main content of the pledge includes security management requirements that they must comply with. For instance, trade secrets of the corporate belong to the corporate. Employees cannot keep or use any information acquired at work. Employees must use the corporate's confidential information for business purposes only. And such information should not be leaked to any third party. Employees should not use the corporate's system for private purposes, and may not duplicate the system without official permission. Employees must return the trade secrets at retirement, and cannot leak corporate secrets after retirement.

> Privacy Protection Training for EmployeesSince 2013, SK E&C has conducted online privacy protection training for all the employees every year to raise awareness of information security. The main content of the training includes the necessity of security of the corporate, privacy, and how to practice security in daily life. In 2015, a total of 6041 employees completed this training.

Online privacy protection training

01. 기업보안 왜 필요한가?

Security Pledge

VALUE

PROMISE


SK E&C proclaims that safety is one of core values. Our corporate considers safety as the most

important element of corporate management and it is committed to fostering a culture that

prioritizes the safety of employees to ensure that all employees can work in a safe environ-

ment. In addition, we encourage our employees to develop their competence and receive a fair

evaluation and compensation. We strive to make our employees lead a happy and successful

career by achieving a balance between work and life.

| Culture for work & life balance |

• Improve the Quality of Life by Creating a Desirable Culture for Safety and Health

• Create a Strong Corporate Culture by Learning and Developing Human Resources and Great Work Place

文

化

6,2126,137

6,041

2013 2014 2015

Number of people completed online privacy protection training

On May 11, 2015, as a result of our effort to protect the privacy of our customers, SK E&C was among the first to acquire the domestic construction industry's privacy man-agement system certification called “Personal Information Management System (PIMS).” The PIMS is a certification given by Korea Communications Commission. This proves that SK E&C meets the legal standards for customer pri-vacy protection system, and it checks the system and takes protective measures in compliance with the PIMS. SK E&C checks the privacy status and continues to provide simu-lation training for all kinds of privacy accidents. Our cor-porate seeks to strengthen personal information security management system to cope with the changing trends.

Personal information management system certification (PIMS) acquired first among domestic construction companies

2 6 > > 2 7

SK E&C CSR REPORT >

| Safety and Health Policy |

Since 2010, SK E&C has emphasized safety and health as part of our culture. In July 2014, we declared that safety is core value for the happiness of our stakeholders. With respect to safety, we stipulated three basic principles that captured the philosophy of the CEO. All of our safety and health activities are conducted on the basis of it. Also, we have set up detailed criteria for our action to realize the value of safety.

* KOSHA (Korea Occupational Safety & Health Agency) 18001: A safety and health management system developed by Korea Occupational Safety and Health Agency. A certification given by the government in an attempt to establish voluntary safety and health management system to ensure voluntary safety and health for people in workplaces.

* OHSAS (Occupational Health & Safety Management System) 18001: International standards for health of organizations and safety management system established by the British Standards Institution (BSI).

> Safety and Health Management GovernanceSafety and Health OrganizationSK E&C HSE department is under corporate value mgmt. division and sets the overall direction of the health and safety policies, prepares specific strategies, and leads the task of managing the execution. We also have an HSE team operating separately for each division to strengthen the HSE’s expertise in different divisions such as infrastructure, architecture, and plant. Each division is strengthening their operational capability by providing support all projects. This systematic organization will help us spread a culture that prioritizes safety and health at all projects.

Safety committee hosted by CEOSince 2015, SK E&C has held safety committee hosted by the CEO, and bimonthly HSE Mgmt. meetings hosted by each division’s executives in order to take corporate-wide precautionary measures to cope with safety and health issues. Our corporate shares major health and safety issues with the management to help them make speedy decisions and take their responsibility

Safety and health leadership tourSK E&C operates a health and safety leadership tour where leaders of each division visit each project. Before starting the tour, we ask the projects to make a note of major project-specific health and safety risks. Then the leaders go visit and check the construction sites and hear opinions of the employees in the project. After that, we hold a workshop where we establish practical measures to eliminate the major health and safety risks and make decisions on such measures at the executive level.

> Safety and Health Management CertificationSK E&C operates a health and safety management systems in order to establish a solid safety and health management system for both domestic and international projects. In Korea, our corporate has received the certification of KOSHA 18001* system granted by the Korea Occupational Safety and Health Agency. Internationally, we are running OHSAS 18001* system.

Improve the Quality of Life by Creating a Desirable Culture for Safety and Health

As a corporate, we are committed to fulfilling corporate social responsibility by creating a safe and healthy workplace. We believe that it can bring happiness to the various stakehold-ers. We will continue our efforts to establish a culture where the precious value of safety and health is widely shared.

1 2 3We consider Safety as core value

& corporate culture

We value Safety with a strong belief that all accidents can be

presented

We ensure that Safety shall not be compromised at all times

Basic principles for safety

Code of conduct for safety

Activity involve in safety practicesProactive Performer

Develop each individual's capacity to practice safety.

Show the initiative with respect to safety.Passionate Builder

Promote safety practices to improve safety culture

Safety management by the leadershipVisionary Leader

Set the direction and show vision that can increase our competitiveness in safety management.

Safety committee hosted by CEO

Safety and health leadership tour

CEO

HSE Department

Corporate Value mgmt. Division

HSE team Infra HSE team Arch. & Housing HSE team Plant HSE team

EmployeesBiz Partners / other workers

Team LeaderProject manager and team

leader

Mgmt. Group

> Improve the Quality of Life by Creating a Desirable Culture for Safety and Health

VALUE PROMISE

CULTURE

RESPONSIBILITY

2 8 > > 2 9

SK E&C CSR REPORT >

> Accident Reporting SystemIn case an accident or emergency occurs on any projects, SK E&C operates a reporting system for the corporate and the SK group to be able to be provided the detail information and give rapid support. When an emergency occurs, we immediately start the chain of command to op-erate the collective response system. This system is intended to prevent the spread of damage or rectify the damage at an early stage. At each project, emergency drill is conducted at least once a month for all employees to enhance their ability so that they can respond promptly when an emergency occurs.

| Safety and Health Culture |

SK E&C is approaching safety and health in three respects - people, processes, and customers. We seek to change people. We make innovation in the process. Ultimately, we try to meet customers’ needs for safety and health. To this end, we are carrying out a variety of health and safety activities.

Emergency drill

Utilizing Safety Smart Learning

US Army Garrison(USAG) Humphreys Land Development Proejct

SK E&C provides customized health and safety services. To this end, we analyze the safety and health needs, build a response system, carry out the safety and health activities for the employees and workers, and spread the safety-oriented culture in the community.

Customer

SK E&C has expanded its health and safety management to cover not just the con-struction phase but also the design/purchasing/pilot operation phase. We have revo-lutionized the way we work with respect to health and safety.

Process

SK E&C uses two methods at the same time to spread a culture of health and safety - top down leadership and bottom-up followership. People

| Safety and Health Management Activities |

> Show Case CertificationIn 2015, SK E&C invited external experts to operate a certification system that award projects as “Show Case” for practicing best safety activities. The projects that receive the certification of Show Case are recognized as a role model for other projects. Showcase projects will play a role to raise the level of safety culture of the entire projects. There are four categories for showcase assessment - Safety Value, System & Process, Legal Requirement, and Physical Condition. The review process includes interviews, document check, and on-site inspections. In 2015, a total of 13 projects received a certificate of Show Case. Certification of Show Case is a unique culture of SK E&C.

> Construction Safety Evaluation CommitteeSK E&C has established a process for evaluating the technical risks in the design and construc-tion process at the headquarters and each project. The reason for doing this is to continue to ensure technological safety. The manager of each project makes a request for a review of the technical risks of their process. Then, the committee reviews the safety issues comprehen-sively and provides feedback to the project manager. After that, the feedback is applied to the project. Lastly, the result of their construction is documented and shared with the committee.

> Biz Partner Safety Gate SystemSK E&C implement “Safety Gate” in order to identify appropriate Biz Partners that manage safety excellently. The safety gate system gives additional points in the bidding phase to those companies with a culture of a higher level of safety. This is to raise the level of safety culture in our Biz Partners. In addition to the business partner safety gate system, we have a variety of support programs for our Biz Partners including the “safety partnership” and support for achiev-ing “KOSHA 18001 certification”. These are to strengthen the capacity and culture of our Biz Partners in promoting safety activities.

> Safety Smart LearningSK E&C has produced a role-playing video showing accidents and incidents that occurred on projects. The safety smart learning system increases the sensitivity of the safety of employees and helps them prevent similar accidents of the same kind. All videos are made by workers themselves. On-line system gives the user maximum accessibility and usability, and allows them to get a training without any restrictions of time and space. This enables real-time audio-visual training and toolbox talk at the scene, so it is actively utilized as a 'Risk Management Tool' to prevent accidents.

The main consideration element by division

Classification Main element for review

Infra- Construction shore- System support (5m or more in height)- Bearing power for heavy-equipment work

Architecture- Temporary erection scaffold (31m or more)- Waterproof method for excavation (more than 10m)

Plant - High-pressure Test- Heavy rigging ground subsidence

> Improve Quality of Life by Creating a Safety-Oriented Culture

Safety gate process

Evaluation for the status of safety

system operation run by the contractor’s

headquarters

Evaluation as to whether the plan meets the safety requirements

Interview with the project manager about

safety issues

Evaluation for practical implementation status in compliance with the

safety plan

Safety Gate 1

Partner registration stage evaluation

Safety Gate 2

Tender stage pre-screening

Safety Gate 3

Construction stage evaluation

Safety Gate 4

Evaluation in the middle of the construction process

Grant awards or impose penalty to Biz Partners based

on the annual assessment.

VALUE PROMISE

CULTURE

RESPONSIBILITY

3 0 > > 3 1

SK E&C CSR REPORT >

> Mandatory Safety Induction for Project PersonnelEmployees are required to complete mandatory safety induction program before being as-signed to projects. This is intended to settle the desired safety culture. The curriculum consists of the following - understanding the health and safety processes of SK E&C, finding risk factors and practicing to address them, and emergency response training. If an employee does not complete the training, he or she cannot be assigned to projects.

> Life Guard System (CPR trainings)SK E&C has conducted CPR training to employees since 2013. A total of 900 employees re-ceived training by 2015. In 2016, we began to place CPR and first aid experts on our projects and operate the Life Guard to deal with accidents. We plan to open a professional training course that teaches about CPR theories and use of automatic cardiac paddles (AED), and practi-cal tests. We plan to train 480 in-house experts through this system. In the future, we plan to provide first aid and CPR training to our Biz Partners as well as the families of our employees, thus fostering a safety culture.

No. of SK employees who completed mandatory safety induction

990 people completed(total of 46 training times)

Life keeper training for cardiopulmonary resuscitation| Human Resources Management Philosophy |

“Caring Professional” (People’s model) defines a mindset and key skills which is required by all members in SKE&C. It is comprised of 7 components, “Self Esteem”, “Teamwork”, “Mutual Consideration”, “Professional Knowledge”, “Setting SUPEX Goals”, “Thorough and Enthusi-astic Execution” and “Knowledge Sharing”. It clearly emphasizes SK E&C’s HR management philosophy, which not only skills but also mindset is important.

> Open and Transparent Recruiting Process with a Focus on the Practical Ability To secure competitive human resources that meet our view of corporate assets, SK E&C of-fers an open and transparent recruiting process focusing on the practical ability of candidates and provides an equal opportunity to everybody. In 2015, we employed 104 new employees, 36 socially disadvantaged including those with disabilities, and 139 experienced employees. We also run the "Employment Stepping Stone Program” in order to connect job seekers and Biz Partners. This program aims to enhance job seekers’ competitiveness by providing them with job training and internships while providing our Biz Partners with many competitive job applicants.

Create a Strong Corporate Culture by Learning and Developing Human Resources and Great Work Place

SK E&C provides variety of learning activities and customized welfare system in order to pursue a better work place.

“Caring Professional”Members of SK E&C are the people who share the mission to “Build the Great, Great Life, Great World”, visualize

the clear image of happiness and success, and carry out every job with passion and enthusiasm.

TeamworkSetting SUPEX

GoalsSelf-esteem

Professional Knowledge

Mutual Consideration

Thorough and Enthusiastic

Execution

Knowledge Sharing

‘Caring’ ‘Professional’

On August 5, 2015, SK E&C, achieved record-breaking 100 million ac-cident-free man-hours on the "Wasit gas plant project" that the Saudi Arabian state oil corporate, Aramco, placed an order for. Achieving this record required 1,000 employees to work for 10 hours every day for 27 years and 5 months. Up to 15,000 people were dispatched per day to the Wasit gas plant project, and more than 500 vehicles and equipment were operated at the same time. There was a high pos-sibility of accidents. Since the working environment was extremely poor due to the strong Middle Eastern desert sand, extreme heat over 50 degrees, and high humidity. Besides, we had to control local work-ers from 15 countries with different cultures and languages. If it had not been for the level of capacity to control safety, we would not have achieved the record.

100 million accident-free man-hours achieved

Every year a competition is held for presenting excellent safety activi-ties in the field of civil engineering & construction. In this competition, our “the road construction works for paengseong-oseong” project road won the grand prize. All the workers dispatched on the project success-fully practiced the “Happy 3-3-7 Cultures” with a belief that establish-ing the safety-oriented culture is critical for the workers’ happiness.

* Happy 3-3-7 Culture: refers to differentiated safety and health activities centered on 3 kinds of fundamental cultures, 3 kinds of health cultures, 7 kinds of safety cultures.

2015 Grand prize won for excellent safety and health activities in the field of civil engineering & construction

VALUE PROMISE

CULTURE

RESPONSIBILITY

SK E&C People Model

3 2 > > 3 3

SK E&C CSR REPORT >

> Women Human Resources Development SK E&C operates a “Women Workforce Mentoring Program” for the effective management of female employees. Also, we seek to promote networking between staff. It is to nurture and cultivate leadership in high-grade female employees so they can grow as the next leaders. The program offers a variety of leadership programs including book discussions on the themes such as leadership coaching, group mentoring, and lectures on business etiquette. It also provides a leadership program for women. This program is designed to develop a role-model of desirable women leaders within the organization.

> Training for Workforce in Charge of Essential Job Responsibilities SK E&C operates the best in-house education system called Project Management University (PMU) to enhance the overseas business performance and project management capability for our employees. This system provides our employees an opportunity to receive a systematic education for management capabilities and technical competencies for each job position. Our employees can attend the lectures freely. The purpose of this education system is to encour-age employees to be equipped with insight as site managers and strategic thinking skills. Not only SK E&C but also the whole SK Group is interested in these education programs to develop "prepared experts/professionals”

| Fair Evaluation and Rewards |

SK E&C offers employees a fair evaluation and compensation system.

> Evaluation SystemPerformance evaluation is conducted twice a year. Upon completing evaluation, each employ-ees are offered an ‘one-on-one feedback and coaching’ in order for them to improve/strengthen their performance level at work. Moreover, an additional HR Committee is conducted to make sure each employee is evaluated fairly.

> Compensation PackageSK E&C operates a payroll system and the incentive bonus scheme in which employees are subject to differentiated compensation according to their performance. Total annual Salary is divided into three components – One is the base pay, the other depending on each division’s performance and one depending on each individual’s performance. There is no discrimination depending on one’s age and/or gender.

| Human Resource Development |

Seeking to obtain a group of many experts and leaders, SK E&C is committed to nurturing human resources that meet our view of competent corporate assets and help us achieve our mission and vision. This way, we as a corporate can improve our competitiveness while our employees can grow to become competent professionals. Our corporate strives to raise its capacity further as a global leader in the construction industry.

Training mission Development of human resources that meet the goal of “caring professionals”

Philosophy

To achieve the corporate's mission and vision, our workforce development system:• provides infrastructure and learning contents that are suitable for each individual’s career

path and goal. • provides self-directed learning opportunities.

> Major Human Resources Development System SK E&C offers a variety of systems and institutions to develop our employees’ capabilities. For instance, we have introduced the “Individual Development Plan (IDP)” that helps employees develop their abilities following the standard career development (CDP) map. Employees can identify their strengths and weaknesses in the process of producing their IDP, and then can find a way to develop their skills in a customized way either through training or transfer to different positions at work. At the end of each year, they can check the results and receive a consultation from their leader.

Career Development Program (CDP)This is one of the programs to help our employees to find their career goal and path by provid-ing useful information and, sometimes, an opportunity to have a necessary work experience or transfer to other positions considering their aptitude and skills.

Individual Development Plan (IDP)This is a personal competency development plan that we offer to help the employees to set up and achieve their career goal that suits their circumstances.

Development of Human Resources through Work (Learning & Development) What our corporate emphasizes is that it is most important that employees can develop their skills in the course of performing their work. For example, getting practical experience may be a good way to develop problem-solving skills and the right attitude towards challenges to cope with. For this, not only the individual’s effort but also the support of a leader is necessary.

Individual development plan (IDP) Establishment

CDP Frame(CDP Map / Goal / Path)

Rotation Plan/support

Establishing education plan

Learning & Development (Training through work)

Others (mentoring, etc.)

IDP Guide

Human resources development system overview

PMU course graduation ceremony

> Create a Strong Corporate Culture by Learning and Developing Human Resources and Great Work Place

VALUE PROMISE

CULTURE

RESPONSIBILITY

3 4 > > 3 5

SK E&C CSR REPORT >

VALUE PROMISE

CULTURE

RESPONSIBILITY

> Always Can MeetingSK E&C’s employees conduct daily Always Can Meeting. This meeting, quite similar to that of SK Group, is our corporate's unique communication platform and management tools to solve problems that we face and fulfill our goals. Always Can Meeting is a unique culture to SK E&C. Through this meeting, we are building a culture to get the ideas and abilities of our employees together to achieve our goals.

> Leadership Innovation ProgramThe leaders of SK E&C must be those who fulfill the goals through a sense of vocation, servant leadership that accomplishes results. They also must take care of details, understand impor-tant values of our corporate, and know how to develop human resources. We have built a leadership development program for a virtuous circle in which our leaders can improve their leadership skills on an ongoing basis and play their roles effectively. This program allows the leaders to have an opportunity to receive useful feedback from various people such as their subordinates, peers, and bosses.

| Work & Life Balance |

SK E&C strives to create a corporate where all the employees can be happy with their work-life balance. By creating a pleasant workplace, we seek to improve the quality of working life of employees and promote their self-development.

> System that Respects Human Rights and Gender EqualityIn July 2015, SK E&C introduced a maternity program to help reduce the burden of childbirth/parenting of female employees, and to prevent their careers from being cut short. Basically, we comply with all the legal obligations with regard to maternity protection. Female employees with pregnancy within 12 weeks or after 36 weeks are allowed to shorten their working hours by two hours per day. They are not penalized for this during the performance evaluation. There-fore, women employees are free to take the parental leave or maternity leave as they want. In addition, we introduced infertility leave scheme so that employees who suffer from infertility are able to take leave. For all employees, we are providing a training program once a year to prevent sexual harassment. In 2015, a total of 5,450 employees took the training program. In addition, we have appointed a specific grievance committee for each business sector to deal with any of employees’ complaints of sexual harassment.

> Happy Wings Daycare CenterSK E&C operates a “Happy Wings Daycare Center” in the building to support and address the grievances of the employees' child care so that they can have a balanced life between work and life. This is also part of our effort to participate in solving the problem of low fertility in Korea. A total of 10 teachers including the president are taking care of 39 kindergarteners. Regarding the admission, we give priority to socially disadvantaged including single parent families and parents with disability, etc. If other conditions are the same, we give priority to female employees in accordance with the maternity rules. This is because we want to be sure that the employees who need the benefits get them first.

> Benefits for EmployeesFurthermore, SK E&C offers various benefits for its employees to improve their quality of life. For instance, our corporate supports the annual medical check for all employees. Based on the results of medical check, we support health promotion programs for our employees with any potential disease factors such as chronic disease (blood pressure, blood sugar, and tri-glycerides), overweight (obesity, abdominal obesity, and lack of exercise), and posture-related problems (neck, shoulder, and waist). In addition, we offer a psychological health care program to measure the psychological stress level of our employees. For people suffering from severe stress, we provide psychological counseling to help with their psychological healing. With regards to education for our employees’ children, we support them with their tuition for their middle school, high school, and college education. We also operate an in-house library called SKetch Book for our employees’ self-development. The library has a total of 6,200 books and 7,400 e-books.

| Strengthen Corporate Culture |

SK E&C pursues what is called SUPEX culture where its caring professionals create SUPEX results all together based on SK Group’s spirit that pursues SUPEX through humanity-oriented management. To this end, we pursues to innovating our work in a way that we can thoroughly accomplish our tasks by coming up with detailed and innovative methods and making through with them earnestly. So our corporate seeks to build a strong corporate culture where all em-ployees are united to have such professional spirits, strong capacities, strong management system, and a strong corporate culture.

SUPEX: the highest level of excellence human beings can achieve

• Goal sharing- Loyalty - Sacrificial spirit - Organization with uplifted spirit

• Great personality- Pride in work - A sense of community- Considerate of each other

• Creating extraordinary results- Value the work - Setting challenging goals- Thoroughly fulfilling objectives- Sharing knowledge to contribute to

optimizing things

Culture to Create SUPEX Results

One Team One Spirit Caring Professional

Happy Wings Daycare Center

Always Can Meeting

Leadership Development Program

Number of people on maternity protection program

1

Infertility leave

14

Vacation to carry forward

25

Application for maternity protection

20

Special holiday

75

Not subject to penalties

Classification Details

Employee health supportMedical check, health promotion program, health care centers, psychology check, eco-friendly agricultural products, affiliated dental clinic, fitness center, group accident insurance

Maternity / child care support Lactation room, women's lounge, daycare center

Self-development / support for children's education

Clubs, in-house library, a selective welfare point scheme, support for middle school/high school/university tuition

> Create a Strong Corporate Culture by Learning and Developing Human Resources and Great Work Place

3 6 > > 3 7

SK E&C CSR REPORT >

| Culture for Communication |

Recognizing that communication is the driving force of competitiveness, SK E&C seeks to em-pathize with employees through multiple outlets. The CEO regularly shares his letter to our employees and holds open dialogues with them, whenever necessary, to share the policies and keynotes of the top management. Our corporation operates a consulting body or a grievance committee to handle employees’ complaints and distress. The committee is comprised of em-ployees from each division, with the mission to receive and handle grievances online/offline. In addition, there is a bulletin board on the corporate intranet where employees can communicate freely with each other.

> Business Development CouncilThe Business Development Council, composed of representatives of the corporate office and employees, is designed to promote the growth of the firm through mutual understanding and cooperation between the top management and employees. Through quarterly meetings, par-ticipants discuss business plans, quarterly results, and improvement of employee welfare. Furthermore, they occasionally (usually once a month) hold the so-called “Conference for Sympathy” to hear organizational members’ voices and review their workplace environment. Numerous other efforts to communicate and interact with employees are made through vari-ous channels. In 2015, 6 conferences for sympathy and 4 regular meetings were held. The dis-cussions from the conferences for sympathy covered participants’ input pertaining to human resource policies, benefits, and security issues, all of which were submitted to the department in control. The regular meetings served to address key management issues and efforts to be made to create a desirable corporate culture.

> Our team, Our site "Our team, Our site" is an online bulletin board for employees to share information for their work and talk about their daily lives at home and abroad. Between October 2013 and 2015, there were a total of 37,753 posts; on average, 346 people visited per day; 46 posts were uploaded. So the channel attracted constant attention and participation of employees. Some important threads will sometimes be introduced in webzine and in-house broadcasting. Every month, we select some of the outstanding posts based on comprehensive assessment of the positive energy contained in them and their responses, etc. The team or site selected receives some snack to exchange words of encouragement.

Business Development Council

SK E&C is committed to contributing to the sustainable development of society by creating

environmentally-friendly value based on three pillars such as Green Culture, Green Process,

and Green Product. We strive to fair trade and cooperate with the Biz Partners for creating

Win-Win culture. Furthermore, based on social contribution mission, we concentrate on social

contribution to resolve social polarization problems and eliminate environmental problems.

| Responsibility for the Sustainable Society |

• Create Eco-friendly Value for the Future Generations

• Build a Healthy Win-Win Culture through Shared Growth and Cooperation

• Build a Happy Sharing Community through Social Contribution Activities

責

任

VALUE PROMISE

CULTURE

RESPONSIBILITY

Meeting with the CEO

SK E&C CSR REPORT >

3 8 >

| Environmental Management System ECO-2020 |

In 2009, SK E&C established an environmental management vision to contribute to the sus-tainable development of society through environmental management activities, and has been steadily promoting environmental management on three pillars such as Green Culture, Green Process, and Green Product. ECO-2020 is a long-term environmental management system of SK E&C. Through this system, we want to contribute to a low-carbon/resource recycling society to cope with major concerns of the world such as climate change and resource depletion. As for Green Culture, we aim to minimize environmental impact in all the business areas based on Green Culture built in the whole corporate. As for Green Process, we emphasize the process of pre-emptive prevention of environmental risks. And as for Green Product, we are committed to satisfy our customers and fulfill our social responsibility by supplying eco-friendly products and services.

> Environmental Management PolicySK E&C’s employees practice Green activities in compliance with the SK E&C Environmental Management Policy in all workplaces.

> Environmental Management SystemIn 1997, SK E&C obtained a certification to ISO 14001, an international environmental manage-ment standard and have it renewed annually. SK E&C also evaluates potential environmental risks and the state of the environmental management system of the entire corporate through its environmental evaluation of its construction sites and the headquarters.

| How to Cope with Climate Change |

SK E&C is systematically collecting and managing energy usage data and greenhouse gas emissions data on both the construction sites and headquarters. This is designed to respond actively to climate change. Based on the data, we seek to discover actionable energy/green-house gas reduction activities.

> Managing Greenhouse Gas EmissionsSK E&C keeps track of the energy consumption on all the domestic scenes and in the head-quarters every year. The amount of greenhouse gases that our corporate is emitting is less than 50,000 tCO2 per year. Our corporate is not on the target list that is subject to the mandatory energy and greenhouse gas management plan. However, we are voluntarily trying to reduce the greenhouse gas emissions and energy consumption on an ongoing basis.

> Greenhouse Gas Reduction ActivitiesSince 2011, SK E&C has conducted energy use and greenhouse gas emissions reduction activi-ties in all the sites in Korea. As a result, we have won a certain degree of performance. In 2015, we set a goal of reducing greenhouse gas emissions by 7%. Thanks to the active participation of all sites, we have reduced greenhouse gas emissions of approximately 16,000 tCO2. Our cor-porate’s greenhouse gases emissions and reduction of such gases are managed systematically and precisely through an integrated environmental information management system.

Create Eco-friendly Value for the Future Generations

SK E&C believes that providing green products and services in all business areas are our core value to pursue. And we are carrying out a variety of activities to achieve it. This effort of SK E&C will ultimately contribute to the sustainable development of mankind, and ensure a happy life for future generations.

[ Domestic greenhouse gas emissions ]

2012 2013 2014 2015

46,000 45,00042,000

38,000

VALUE PROMISE CULTURE

RESPONSIBILITY

[ Energy consumed in won (100 million won) ]

1.05

0.82 0.81

2013 2014 2015

[ Greenhouse gas emissions / GJ 100 million won ]

2013 2014 2015

42

27 27Environmental soundness

Economic profitability

Promotion system

VisionThink Green Build Green

SK E&C contributes to the sustainable development of society through its environmental management activities.

ECO-2020Value creation through our commitment to

environmental management

Establishing Green SiteOur holistic approach to environmental management

Green Culture

Decarbonizing Business PortfolioDeveloping Green Portfolio

Green Product

Minimizing Carbon FootprintingImplementing Toolkit for Risk Management

Green Process

1. SK E&C recognizes the importance of preserving the global environment, and all the employees and management actively cope with climate change and environmental issues in their lives.

2. SK E&C abides by national and international environmental laws and regulations and comply with the internal standards that are even more stringent. SK E&C reflects the Green elements in each process to minimize the environmental burden in the course of business, and seek to commercial-ize differentiated Green products.

3. SK E&C will continue to develop environmental technologies that address environmental issues.4. SK E&C consistently communicate about environmental issues with stakeholders including em-

ployees, customers, Biz Partners, and encourage them to participate together.

SK E&C Environmental Management Policy

> Create Eco-friendly Value for the Future Generations

Reduction factors

Direct savings Indirect savings Savings by Biz Partners

TotalStationary com-bustion Vehicles Construction

machinery Purchased power Materials Waste Other

greenhouse gas(ton CO2)

0.98 150.87 178.38 122.88 8,281.58 7.76 7,653.55 16,396

4 0 > > 4 1

SK E&C CSR REPORT >

| Efforts to Minimize Environmental Impact |

SK E&C pre-diagnoses whether there is any risk or environmental pollution to occur, and then establish our execution plan based on it. We have the work permit system in which we have to check before the construction starts whether the construction work is in compliance with legal requirements or it damages the environment. In addition, we must evaluate the construction site, office energy use, greenhouse gas emissions, and environmental accidents, etc. If there is any possibility of impact on the environment, we must start the emergency response system so that we can build and take the best measures to prevent damage from spreading.

Pollution Prevention and Execution PlanBefore the construction starts, SK E&C designs and operates facilities to prevent environmental pollution from occurring by running a simulation of the noise/wa-

ter/soil waste risks on the construction site, thus trying to reduce damage to be incurred to local residents.

Environmental pollution preventive process

Contract upon placement of order

ExcutionPlan

ConstructionInconvenience

caused to residentsAction to prevent

recurrence

NoiseCadna-A Ver. 4.5

Water Qual 2E/K(EPA)

Soil / WasteSurfer 12

Simulation program

Output

Functions

- Predict noise level to occur in the surrounding residential area

- Assess how effective the soundproofing should be

- Decide the noise level to be managed on the site

- Predict the fluctuation in the water quality in the ambient river

- Emergency response to spills of pollutants(DO/BOD/COD/N-h)

- Check the construction site for soil contamination

- Assess the scale of soil contamination

- Identify any legal responsibility for pollution prevention

Environmental preventive simulation program

Action

Plan Do

Check

Work Permit (Permit To Work)SK E&C Corporation selects five kinds of construction that can harm the local residents and the environment while the construction is in progress. One day before the work starts, the

Construction Manager must check whether the five kinds of constructions comply with all environmental regulations. Then, the personnel checks the whether the pollution prevention facilities installed are work-ing. This way, SK E&C is committed to preventing the discomfort of residents.

Action

Plan Do

Check

Work permit application process

Forcing Process

1. Work permit application review

3. Work permit operations flow

Concrete pumping

Construction generated soil processing

Building demolition

Piling work

Dredging

2. Work Permit Item 5 Kinds

Comprehensive Environmental Evaluation SystemComprehensive Environmental Assessment is a comprehensive evaluation index for sustainable environmental performance and the prevention of accidents. This

system evaluates the energy-saving, greenhouse gas emission reduction activities, the eco-nomic performance, and environmental incidents on the sites and in the offices in a compre-hensive way. We make efforts to further enhance the performance of the system through the site-specific assistance / inspection.

Rapid Response to Environmental Damage & Prior TrainingSK E&C has conducted emergency response training in preparation for the envi-ronmental damage caused via the emergency reporting and rapid response sys-

tem. This is to prevent the spread of contamination, remove contaminants, and quickly restore the environment. All members of the SK E&C take part in the training regularly with fire sta-tions, 119, and regional administrations involved.

> Project Environment ManagementSK E&C classifies the impact a construction will have on the surrounding environment into four groups such as water, noise & vibrations, waste, and soil, and management them. Our corporate has developed pollution prevention facility standards in order to minimize the impact.

Action

Plan Do

Check

Action

Plan Do

Check

Emergency response training relating to pollution


RESPONSIBILITY

Risk management


· Water curtain to suppress the arsenic acid dust from being spread out the tunnel.

· Wheel washer automatic interlocking switches

· Wheel washer frost-proof thermal system

· Standardized installation of arsenic acid dust suppression facilities and upgrading them.

Atmospheric management

· Water management· Build environmentally friendly boiling-point pollution-reduction facilities and wastewater treatment facilities

· Rainwater bank installation for recycling

Water management

· Take advantage of on-site waste resources to reduce the waste (by creating a rest area, for example.)

· Construction generated soil and asbestos handling process.

· Install waste storage with dedicated personnel deployed.

Waste management

· Created soil contamination prevention process

· Created procedures for field soil import/export

Soil management

· Establish and implement a comprehensive noise reduction measures through on-site noise prevention process

· Install and operate signage for the outdoor noise data

· Use low noise equipment during the foundation work

Noise and vibration management

4 2 > > 4 3

SK E&C CSR REPORT >

| Green Product |

> Green Building CertificationWith its green building technologies, SK E&C offers green buildings that save energy and mini-mize the environmental impact during the entire life cycle of the building and acquired a variety of certifications such as G-SEED Certification and Building Energy Efficiency Certification.

2015 Green building certification

Project Certification Grade

Siheung Baekug SK VIEW• G-SEED Certification• Building Energy Efficiency Certification

Green 22nd grade

New Dongtan SK VIEW Park I• G-SEED Certification• Building Energy Efficiency Certification

Green 31st grade

Suwon Youngtong SK VIEW • Building Energy Efficiency Certification 1st grade

Hwikyung zone2 Redevelopment • G-SEED pre-Certification Green 2

Incheon Bugaeseo elementary school north zone development

• G-SEED pre-Certification Green 2

Mapo-ro zone6 Redevelopment • G-SEED pre-Certification Green 2

Gwacheon jugong apartment 2 rebuilding• G-SEED pre-Certification• Building Energy Efficiency pre-Certification

Green 11st grade

Incheon Geomdan SK VIEW• G-SEED pre-Certification• Building Energy Efficiency pre-Certification

Green 22nd grade

ECO Hub• LEED• BREEAM

PlatinumVery Good Eco Hub

Siheung Baekug SK VIEW

Fort Hills Oil Sands Project

Turkey Eurasia Submarine Tunnel Project

> Green EnergyBoryeong LNG terminal project (2013.5 ~ 2016.12)This is the first LNG terminal EPC project associated with LNG which is eco-friendly, high-efficiency, and low-carbon fuel. We will accumulate further technology for the design and con-struction and strengthen our competitiveness to expand into overseas markets.

Fort Hills Oil Sands Project (2014.4~2017.6)This is the world's largest oil sands plant project in Western Canada consisting of a process of mining oil sands (non-traditional resources) and extracting the bitumen from the oil sands. Our method has been noted to greatly increase the efficiency more than the traditional one.

> Green InfrastructurePohang-Yeongil Bay Seawalls Construction (2013.3 ~ 2015.12)This is the most representative hydrophilic and eco-friendly multi-purpose seawall project that SK E&C carried out. Eco-friendly solar & wind power equipment and marine ecosystem restora-tion scheme were introduced for this “Green Port”.

Turkey Eurasia Submarine Tunnel Project (2013.4 - 2017.3)This is a road project linking Europe and Asia by building an undersea tunnel in the Bosporus Strait in Istanbul, Turkey. When completed, it will solve severe traffic congestion problem in Istanbul, contributing to reduced greenhouse gas emissions.

RESPONSIBILITY

| Green Culture |

> SK E&C’s Green Culture, "Happy Green US"SK E&C has been operating a "Happy Green Us" program in the second half of 2010 to build a corporate culture that employees unconsciously think and act in an eco-friendly way. We publish a magazine called “Environmental Knowledge Level Up” covering environmental issues biweekly. Since 2015, we have expanded the range of areas to include social and economic topics involved with sustainability management. We have environmental campaigns; one is called "Work for Green” discovering processes to improve environmentally in work and fixing them. Another environmental campaign called "Think Green" aims at improving our employees’ capability to practice eco-friendly behaviors. Our monthly newsletter “SKEYES” publishes fun and easy information on the environment to share with various stakeholders of ours.


· Environmental Knowledge Level Up· Online sustainability management education

· Think Green· Work for Green· Building energy reduction· No leftover

· Happy Green School

Green Lifestyle

Green Contribution

Green Mindset

Happy Green Usprograms

> Green Performance Index, "Happy Green Point"Since 2010, SK E&C has been operating Happy Green Point index to systematically pro-mote “Happy Green US”. Since 2016, SK E&C has expanded the Happy Green Point to S-Point(Sustainability-Point) to help all employees to practice sustainability in economic, social, and environmental fields.

> Three Major Green Life Practices

No Leftover No Disposables Power Saving Mode

SK E&C carries out various campaigns that encourage its employees to save energy in their daily lives by following three green life practice. Our corporate also conducts 10 campaign pro-grams to practice eco-friendly living such as "Keep the proper indoor temperatures," "Turn off the lights during lunch hours/after work,” and “Set the PC power on saving mode.” As a result in 2015, we were able to reduce the electricity consumption by more than 15% compared to 2014. We also have kept the amount of leftover to 72g per meal per person up until December 2015. We are going to keep up with this to maintain or reduce it even more.


“No Leftover” campaign

"Happy Green US" programs

4 4 > > 4 5

SK E&C CSR REPORT >

> Environmental Education for employeesSK E&C has developed and operated its own education courses as an effective means of communication on environment management. Since 2009, we have offered off-line education courses for new employees. In 2010, we included off-line education courses in each course for new employees, experienced employees, divisions, newly promoted, and each grade employ-ees. In addition, SK E&C’s online sustainability management education covers not just environ-mental subjects but also social and economic ones. Our employees, as well as Biz Partners, also take this course.

3,961 man·hours 2,948

man·hours

2013 2014 2015

2,914man·hours

RESPONSIBILITY

SK E&C’s Green Site is a unique Green Site that has integrated all aspects of our green commitment is a unique environmental model launched by SK E&C. It was created to meet the needs of domestic and international stakeholders. Green Site consists of a total of 24 items that are classified into three groups – the ecosystem for the community, clean energy recycling, and environmental risk prevention. We have built the virtuous cycle of resources via operating the Green Site, and reduced greenhouse gas emissions and prevented the depletion of natural resources. Utilizing rainwater, surface water, and waste water, etc., we manage water better. In addition, we want to build “energy self-sufficiency sites” using renewable energy such as solar, geothermal, and wind power. In early 2015, we started a pilot operation for 10 construction sites. After that, we expanded this operation for all the domestic con-struction sites. For the successful settlement of the Green Site, we reflect opinions from the sites to improve it. We will continue to respond to environmental regulations and improve our environmental management to the next level through the Green Site.

“Green Site”

Issue Management Process

Advanced pollution control facilities

Environmentally friendly equipment

registrationEnvironmental PTW Initial Risk

Management Process E-Keeper

[ Preventing environmental risks in advance ]

Wind energy Energy reduction during construction Rainwater bankSolar energy Green roof Re-treatment of water Eco-friendly air-heat

heat pumpWaste recycling

[ Clean energy recycling ]

Eco-friendly fence Caring 1 mountain, 1 creek, 1 road Eco-friendly gardenEnvironmental shelter Eco-friendly pond Eco-friendly flower

roadEnvironmental

laboratory

Happy Green School

Ecological corridor

Environment day

[ Efforts to care about community and communicate with it ]


| Shared Growth Strategy |

SK E&C uses the name of “Biz Partners” instead of the name "contractors". The reason for this is to grow and develop together with our Biz Partners. SK E&C has been practicing manage-ment for the shared growth through a variety of institutional support and training programs for its Biz Partners.

| Creating a Shared Growth Culture |

SK E&C has been striving to establish a fair trade culture with the Biz Partners. This is part of our effort to promote shared growth with them and secure a sustainable global competitiveness by improving the overall subcontracting system and SK E&C’s Biz Partner management capacity.

> Strict Compliance with Subcontracting Law SK E&C has introduced a standard field manual, standard subcontract agreements, and stand-ard work instruction to thoroughly comply with Article 3 of the Subcontracting Law. Our corpo-rate has established standardized field manual guidelines and uses standard work instructions to improve old field manual that contained obscure and unclear work and over-estimates. We banned all kinds of verbal order that used to be practiced in the past.

Build a Healthy Win-Win Culture through Shared Growth and Cooperation

SK E&C has promoted cooperation through a variety of institutional support program for Biz Partners and has continued to practice shared growth. Our corporate is also greatly contribut-ing to a fair competition by fixing several unfair trade practices with Biz Partners. Based on our philosophy that the competitiveness of our Biz Partners boosts SK E&C' competitiveness, we will consistently promote the shared growth and fair trade.

FundsTechnology support and protection

Market reclamation

support

Employment training and recruitment

support

Management support

“management for the shared growth”

4 6 > > 4 7

SK E&C CSR REPORT >

> Training and Internal PromotionTo practice shared growth and prevent the subcontracting law violations, SK E&C conducts an online/offline education and in-house promotional activities for employees such as disseminat-ing guidebooks about fair trade with Biz Partners and putting up publicity posters.

Subcontract Law TrainingWe have learning programs for our employees about our corporate’s Biz Partners policies, the major part of subcontract laws and regulations, and examples of subcontract law violations, etc. Since the second half of 2014, we have operated our own “online courses for subcon-tract law” for our employees the first time in the construction industry such as “Overview of subcontracting trading system,” “Mandatory requirements for Biz Partners”, and “What is prohibited to prime contractors.” It has achieved the effect of enhancing the understanding of the employees.

In-House Promotional ActivitiesHoping that the year 2015 would be the first year when the subcontracting fair trade culture is settled, we strengthened tashe in-house promotional activities to change the awareness of employees about fair trade and shared growth. Starting with the CEO messages, we have promoted public relations by deploying the Biz Partners Fair Trade Guidebook and putting up the promotional posters in the head office and all sites.

> Creating Fair Trade Environment SK E&C has been trying to establish a culture for fair trade with Biz Partners. To this end, we operate the Shared Growth Committee, check Biz Partners’ actual conditions, overhaul the internal regulations, and introduce a reward and punishment system.

Shared Growth CommitteeSK E&C operates an in-house Shared Growth Committee on a quarterly basis. The purpose of this committee is to establish corporate-wide subcontracting trade policies and foster a culture of fair trade and shared growth. The members of it are composed of directors of each division. The committee’s role includes sharing the trends of government policy and reviewing/making decision on subcontracting policies. The Shared Growth Committee has a subsidiary Shared Growth Working Committee comprised of executives of each business. The role of Shared Growth Working Committee includes reviewing subcontracts and checking the status of subcontracting improvement activities. Top management also calls for continued attention and action on these roles.

Subcontract Status CheckIn 2015, SK E&C put together a joint inspection group consisting of a business team, contract team, and shared growth team. The group checked the situation whether major projects adhere to subcontracting law/construction industry law. Through this check, we seek to raise aware-ness of legal problems that may occur frequently in the field, listen to difficulties and resolve them, and promote complying with the relevant laws and regulations. We will keep working to settle the culture of fair trade with the Biz Partners through constant inspections.

Subcontractor law training

In-House Promotional Poster

Shared Growth Committee


RESPONSIBILITY

| Shared Growth Activities |

> Transparent Selection of Biz PartnersSK E&C has been strictly practicing the four important principles in relation to the subcontract-ing transactions. Every year, we recruit new Biz Partners publicly through a fair judgment and constitute a Win-Win Cooperation Committee to deliberate on fairness and legitimacy of the pricing process. In addition, our corporate uses a standard subcontracting agreement in accord-ance with the subcontracting rules.

> Biz Partner Monitoring and EvaluationSK E&C has built and run the response system for Biz Partners insolvency coming from the long-term economic downturn largely in the construction industry. Utilizing credit rating agencies, we overhaul the Biz Partners with signs of any abnormality and manage risk proactively. We have also established proactive monitoring system using information on the Biz Partners’ finan-cial status. When a business partner goes bankrupt, we have deposit claims process to follow.

> Biz Partner Sustainability AssessmentSK E&C has developed the “business partner sustainability assessment indicators” and evaluate the sustainability of our Biz Partners. The subject of sustainability evaluation includes a) the eco-nomic factors such as technology, equipment status, quality, and capacity, etc., b) five areas such as labor, human rights, anti-corruption, health and safety, and the environment. And then we take appropriate steps for the Biz Partners with any risk. For instance, we can reconsider the transac-tions or offer competence enhancement training, depending on the level of risk.

> Communication with Biz PartnersSK E&C is aware of the need to have formal communication channels between SK E&C and our Biz Partners on a regular basis. In March 2011, SK E&C launched "Wings of Happiness Council” with the excellent Biz Partners participating and in March 2013 “Procurement Coun-cil”. This is to share information with Biz Partners and to build trust. Each Wing of Happiness Council operates a number of programs with SK E&C such as meetings, CEO’s visit to the Biz Partners, and walkathon in unison.Organization of Wings of Happiness Council for outsourcing and procurement

ClassificationWings of Happiness Council for

subcontractWings of Happiness Council for Procurement

Members 58 companies 49 companies

Subcommittee5 subcommittees in civil, construction, mechatronics,

plant, communicationMachine & inspection, electric field, plumbing, civil

engineering, large corporation BP (5 divisions)

[ Under Inspection Sites ]

11

21

2015 2016

> Building a Healthy Win-Win Culture through Shared Growth and Cooperation

Annual general meeting of the Wings of Happiness Council

4 8 > > 4 9

SK E&C CSR REPORT >

Main Program for Wings of Happiness CouncilSK E&C held New Year's meeting with the CEO to share New Year's greetings and the cor-porate's performance plan and CEO listens to suggestions on current issues. Through Annual general meeting and implementation of fair trade ceremony, we and Biz Partners sign on agree-ments for fair trade and exchange opinions. Also, we operate meetings by division to share difficulties in and propositions and discuss how to achieve rationally shared growth plans. In New Year's Eve events, we invite the major Biz Partners and reward outstanding Biz Partners.

> Funding & Improved Payment Terms for Biz PartnersSK E&C provides substantial economic assistance to Biz Partners by loaning on eased condi-tions required. Through this loan scheme for shared growth, we are loaning funds to our Biz Partners who need finance for their business operation and equipment at a lower rate than the standard rate. We even relieve them of the burden of having to pay the fee. In addition, through an agreement on loan network with financial institutions, we provide indirect support to our Biz Partners so they can receive loans from financial institutions based on their transaction per-formance. We have arranged so that they can receive additional benefits such as preferential interest rates and increased loan limits, etc. Through SK shared growth fund that SK E&C and SK Group affiliates have created with financial institutions, we loan money to our Biz Partners at a lower interest rates. Ten of our Biz Partners have received financing. We have gradually improved the payment conditions of Biz Partners so they can secure liquidity. We had raised the cash payment limit of Biz Partners from the existing 10 million won to 1 billion won. Our cor-porate has changed the Biz Partners’ payment due date from the 24th to 17th of every month. This is intended to be helpful for them to secure liquidity and increase their competitiveness.

> Business SupportSK E&C seeks to achieve shared growth with the Biz Partners by improving the competitive-ness and managerial capabilities of the Biz Partners. We constantly contemplate about direct or indirect support measures for our Biz Partners.Through a grievance counseling center, SK E&C actively listens to the voice of the Biz Partners about their difficulties and suggestions for management activities. We try to improve the sat-isfaction of Biz Partners.

Industry innovation movement 3.0SK E&C participates in the "Industry Innovation Movement 3.0" organized by Ministry of Trade, Industry, and Energy to utilize the funds provided by big corporations for our Biz Partners’ capital investment in management, production technology, etc., in an effort to support their

RESPONSIBILITY


voluntary innovations. This is to expand the benefits of growth to the secondary/tertiary Biz Partners and small and medium companies that are not associated with large companies, thus enhancing the competitiveness of the industry as a whole. For this, SK E&C will offer a total of 300 million won each year for five years and use the fund to support its Biz Partners with their investment in their facilities.

Pre-Bid Information ProvidedSK E&C considers securing the competitiveness of the Biz Partners as a key factor of shared growth. So we support Biz Partners’ sales growth through delivery volume expansion, domes-tic/overseas market reclamation and so on. We have also introduced a bidding system that provides information in advance on bidding schedule and volume, etc. so that the Biz Partners will be able to participate in the bid with enough information on hand.

Business Partners’ Employees Dispatched to Overseas ProjectsSK E&C has a policy that allows employees of the Biz Partners to be dispatched to its overseas projects. By doing so, we can help our Biz Partners to raise the capacity to carry out interna-tional projects. Thanks to this, we have successfully entered into the world market together. For a certain period of time, they are provided with a part of payroll, housing, and other fix-tures. From 2010 until now, many employees of our Biz Partners were dispatched on projects to countries such as in Saudi Arabia, UAE, and Laos. We are planning to expand the number of such personnel.

> Developments and Protection of TechnologySK E&C actively utilizes new technologies of our partners for new projects. In fact, we are developing new products and technologies through collaboration with our Biz Partners, and ap-plying them to projects. Also, we use escrow to prevent technology leakage of Biz Partners. In addition, we laid the foundation for shared growth with our Biz Partners through a Benefit Shar-ing for the results. The Benefit Sharing for results means we support our partners to achieve our common goals agreed upon in advance such as in R&D and share our achievements.

2015 Major achievements in joint R&D

Biz Partner Development Project

Dodam E & C Core technology for tunnel design & construction

Filetech Technology for super concrete materials and structures

Dispatch Biz Partners’ employees to overseas projects

Foster Biz Partners with global competitiveness Establish successful overseas foothold for Biz Partners looking to

enter into overseas market

Support Biz Partners

SK E&C overseas project

Let them acquire overseas project execution capabilities

Support a certain amount of payroll

> Building a Healthy Win-Win Culture through Shared Growth and Cooperation

Shared growth loan

Network loan

SK shared growth fund

Guarantee fund

[ Fund Amount (Unit: 100 million won) ]399

-

6 6

10

46 46

4

5 5325

176 178

233 236

2013 2014 2015

[ Results Benefit Sharing(Number of challenges/amount (won)) ]

3 / 99 million

1 / 16.5 million

1 / 16.5 million

2013 2014 2015

5 0 > > 5 1

SK E&C CSR REPORT >

> Training Support

SK E&C Shared Growth AcademySK E&C is providing training for our Biz Partners to develop human resources through the SK Shared Growth Academy, which aims at contributing to enhance the competitiveness of the Biz Partners. The Academy has a course called Shared Growth CEO Seminar to improve the man-agement capacity of the CEOs of the Biz Partners and Shared Growth MBA Course for middle-level managers of the Biz Partners. Shared Growth e-Learning is an Internet training program for all the executives and employees of our Biz Partners. It has more than 100 free courses to offer about general management, marketing, financial accounting, etc.

Classification CEO Seminar MBA e-Learning

Course for CEO of Biz Partners middle-level managers of Biz Partners all employees of Biz Partners

Contents Management, economic trends, leadership, etc Management EssentialOver 100 free courses including general

management and IT

Times 10 16 Every month

Class size 10 people 8 people 503 people

Overseas Site Manager Training ProgramThe Overseas Site Manager Training Program offers superior graduates of this to be employed by our Biz Partners and sent to foreign construction sites as administrators. This program is on the education support list of the Ministry of Employment and Labor. By 2015, the course have been conducted a total of four times. SK E&C support the cost of the training and offers a special lecture on Global Operation Intensive Training for employees who are selected to be dispatched to overseas sites.

Results of course for managers to be dispatched to overseas sites

Classification Term Certificate Employed employed by Biz Partners

Course 1 July 2013 - November 2013 19 14 Sung Dong ENG, Sebo MEC, and two others

Course 2 October 2013~March 2014 24 22 Sung Dong ENG, Geumyang Industrial Development 6 Biz P.

Course 3 November 2014~March 2015 20 18 Sung Dong ENG, Dongah-jijil, and 5 Biz P.

Course 4 August 2015~Febraury 2016 21 19 Sung Dong ENG, Daejeong Equipment, and 3 Biz P.

In June 2015, SK E&C earned the best-rating on the Win-Win Index assessment hosted by the Korea Commission for Corporate Partnership for the first time in the construction industry. Our corporate was also selected as the best practices of fair trade agreement implementation at the CEO meeting hosted by the Chairman of the Fair Trade Commission. This is a result of our corporate’s continuous effort to achieve shared growth through a variety of institutional support for our partners. This has contributed to strengthening confidence in our corporate among the partners and to enhance our corporate image.

Best-rating Achieved on the Win-Win Index First Time in the Construction Industry

RESPONSIBILITY


| Social Contribution System |

In order to fulfill our social responsibility and build a sustainable business ecosystem, SK E&C has set goals in three categories – Eco-friendliness, Social welfare, and Spread happiness. To achieve these goals, we engage in a lot of activities including environment purification activi-ties, education programs on environmental issues, participating in social contribution activities for the underprivileged, leading in fostering a culture of respectful corporates in the society. We ultimately seek to spread the culture of sharing for the happiness of stakeholders.

Build a Happy Sharing Community through Social Contribution Activities

SK E&C are actively engaged in social contribution activities under the philosophy of "Maxi-mize happiness” of SK Group. Our corporate is committed to its social responsibility by pro-viding opportunities to share happiness with the community with all employees of the head-quarters and projects participating in such fields as Eco-Friendliness, Social Welfare, and Spreading Happiness.

*SE stands for social enterprise which refers to companies that perform business activities while pursuing social objectives.

Environment-friendliness

Happy Green SchoolProvide education on environmental issues for elementary school students across the country (The instructor for our

employees participates.)

Social Contribution

Hope MakerSupport living / education expenses for children

from low-income families

Spread happiness

Supporting (happy town, Plato's Academy Foundation

SE* partnership / CSR)

- Volunteering by families of employees - Common activities for SK Group (SK happy-sharing Bazaar, kimchi sharing service, etc.)- Happiness Sharing "Can Meeting" voluntary service - Happiness Sharing fundraising for charity Other volunteer activities

- Social contributions near the overseas project - Social contributions using the internet postings (surgery cost for sick children, building soup kitchens, etc.)Global social contribution

- Regular visits to social welfare facilities - Meeting with the sponsored children in partnership

Professional service (housing improvements, SK pro bono, supporters on incentives)*Pro bono activities and being supporters on incentives are only for volunteers.

Major volunteering activities

- Caring 1 mountain, 1 river, 1 road. Visit community welfare facility and do voluntary work.

- Services for child safety traffic

Representative programs

We Build the GreatCorporate mission

Build a DreamSocial contribution mission

| Headquarters employees | | Project employees |

Overseas Site Manager Training Program

5 2 > > 5 3

SK E&C CSR REPORT >

> Social Contribution GovernanceSK E&C operates ‘Social Contribution Committee’ and ‘Social Contribution Practice Subcom-mittee’ to increase efficiency and transparency in the management of the social contribution activities. For the effective operation and management of the regular voluntary activities by our employees, our corporate appoints a coordinator by each division and department and coordinators manage the annual activities.

RESPONSIBILITY


> Happy Green SchoolHappy Green School is SK E&C’s one of the most representative social contribution activities in which our employee becomes one-day teacher teaching elementary school students about environment. The lesson will help students recognize how serious the climate change problem is and how important environmental technologies and eco-friendly practices are. While partici-pating in this program, SK E&C employees can also have the opportunity to recognize their re-sponsibility for environmental issues. From September 2009 until 2015, about 48,120 students in 1,604 classes attending a total of 484 schools nationwide participated in this program. Since 2013, the program has been expanded to overseas countries. For instance, there was a “Happy Green School” in Jaime Hurtado González elementary school in Esmeraldas, Ecuador. In the future, we will expand this to the foreign countries where SK E&C conduct business. And we will further expand our communication with the community.

Awards

2011Ministry of Land, Infrastructure and Transport,

Creative and Innovative Best Practice Competition Silver Award

2013 Ministry of Environment, Environmental Education Certification Program

2014 Ministry of Environment, Environmental Education Certification Program Encourage Prize

Happy Green School, which received the environmental education certificate of Ministry of Environ-ment, is a good practice of SK E&C’s proactive social contributions. Since employees of SK E&C participate directly as instructors of the classes, they can be more aware of important environmental issues. This, in return, can positively affect the results of their work. On the other hand, the classes can help students to be more interested in green technology. The environmental education programs offered by companies usually don’t last long. However, since those by SK E&C are kept developed and expanded, I look forward to the future of the program.

(National Environmental Education Center of Korea Environmental Preservation Association, Jina Park)

Interview

[ Number of accumulated students who participated in Happy Green School ]

36,150

42,360

48,120

2013 2014 2015

> Build a Happy Sharing Community through Social Contribution Activities

· Division/Departments 22 unit volunteer teams · LEADER : executive in charge · Coordinator

Headquarter

· Volunteer teams from each project unit · LEADER : executive in charge

Projects

Social Contribution Secretariat

Social Contribution Practice Subcommittee

Chairman of SK E&C social contribution

Social Contribution Committee

Thank you letter from a child sponsored Overseas Hope Comments Campaign Happy Green School (Domestic) Happy Green School (International)

| Social Contribution Program |

SK E&C are trying to maximize the happiness of communities through its social contribution activities utilizing the characteristics and capabilities of the corporate. To fulfill its corporate social responsibility, SK E&C founded a volunteer team made of our employees in 2004, and have carried out various social contribution activities.

> Hope MakerAll employees of SK E&C have set up a sisterhood relationship with 600 children and youth from low-income families living in 7 regions in Seoul and have supported them economically and emo-tionally. SK E&C’s employees gather regularly with them to enjoy sports games and other cultural events. Other than these, our corporate is engaged in a variety of activities including emergency medical care, talent contributions, etc. Through the Hope Comment Campaign, SK E&C also sup-ports children and youth at domestic and overseas who are in need of urgent help. A story of a child or youth in need of urgent help is posted every month on the intranet. If our employees post the hope comment to it, a 2,000 won donation per comment is made by the corporate matching funds. Through this campaign, we have made a lot of donations for urgent surgeries, treatment of incurable diseases, building a soup kitchen in Madagascar, Africa, and a water tank in Tanzania. [ 2011 ]

[ Present ]

600people

(Including those who graduated or cases

terminated: 900 people)

Candidates

(Excluding costs for events and presents)

Total donations

3,540 million won

Hope Maker support results

5 4 > > 5 5

SK E&C CSR REPORT >RESPONSIBILITY


附

錄

Employees’ Volunteer Activities Residential Environment Improvement Activities Global Social Contribution Activities

> Employee Volunteering Since 2004, SK E&C is conducting local community-based outreach. At the headquarters, there is a volunteer organization consisting of a total of 22 teams volunteering at 20 welfare centers. As for the employees in projects, they volunteered to do environmental cleaning or offer traffic safety activities and help at welfare centers near project, etc. The employees who don’t have enough time to spend with their family can participate in group outreach with their family four times a year to do conservation activities on Seoul Forests or share food for annual holidays. There were a total of 35 outreach conducted by 2015 with 3,975 people participating. SK E&C’s marathon club has held the "Happiness Sharing Charity Race' twice every year. The Happy Funds, donated by 16,910 employees so far, are providing support for welfare centers and low-income families

> Residential Improvement ActivitiesSince 2006, Architecture Division of SK E&C has implemented residential improvement activi-ties to improve the harsh conditions of low-income families. For the last 10 years, the activities have taken place for a total of 400 times. In recognition of this effort, SK E&C received awards from the Department of Health and Welfare and also selected as the best practice of social contribution by the Association for Construction. In cooperation with non-profit organizations, hospitals and the government agencies, our corporate conducted social contribution activities such as improving the environment utilizing eco-friendly materials so that it can help treat or prevent children from low-income families from developing eczema or other diseases.

> Global Social Contribution ActivitiesSK E&C began to be engaged in various social contribution activities in those countries we operate business. For instance, we help Jaime Hurtado González elementary school located in Esmeraldas, Ecuador in the South America renovate their facilities and provided IT equipment such as computers. We also supported the local low-income residents with medical checkup and medications. As for the Middle East, we have built and donated a "smart class" that utilizes IT technologies and internet facilities for an elementary school in Ahmadi, Kuwait. Also we have continued to support scholarships and educational materials for schools and communities in Asia such as India, Vietnam and Laos.

5 6 > > 5 7

SK E&C CSR REPORT >

| Social Performance |Classification Item Unit 2013 2014 2015

Status of employees

The total number of employees people 6,469 6,372 6,165

Male employees people 5,722 5,626 5,422

Female employees people 747 746 743

Officers people 105 95 91

Non Fixed-Term Workers people 4,833 4,852 4,722

Fixed-Term Workers (Project Based) people 866 797 820

Fixed-Term Workers (Site Based) people 110 97 58

Fixed-Term Workers (Foreigners) people 555 531 474

Disabled employees people 63 71 81

Foreign employees people 154 133 91

Human resource development Total training time Hours 447,847 306,925 296,258

Ethical managementEthics management education completed people - 1,625 1,021

Violation of ethical disciplinary Case 16 27 8

Maternity protection programTotal number of parental leave people 35 26 52

Rate of return after parental leave % 89 81 62

Social ContributionTotal number of employees involved in social contribution people 4,422 4,225 4,362

Social contribution hours per employee Hours 15.2 13.5 20.2

| Environmental Performance |Classification Item Unit 2013 2014 2015

Energy consumption

Total energy consumption GJ 1,819,366 1,388,697 1,299,853

Energy IntensityGJ/ 100 mil-

lion won42.1 27.0 27.5

Gasoline L 775,436 544,268 595,927

Diesel L 31,985,115 21,997,391 17,859,022

Kerosene L 435,839 1,223,630 2,850,841

LPG kg 68,655 49,302 194,215

LNG Nm³ 977,122 1,166,622 1,687,371

Lignite kg 492,010 480,180 210,817

Electricity kWh 52,497,653 45,473,674 43,519,803

| Environmental Performance |Classification Item Unit 2013 2014 2015

Resource consumption

Ready-mixed concrete m³ 2,012,434 2,205,056 1,102,437

Cement m³ 323,715 151,184 59,845

Aggregates m³ 905,008 700,087 602,715

Recycled aggregates m³ 153,847 37,369 41,514

Asphalt Concrete m³ 264,669 69,366 46,080

Reinforcing bar ton 1,949,182 3,229,405 1,993,703

Steel frame ton 39,844 37,234 34,766

Mold m² 4,355,927 5,955,447 5,481,520

Water Consumption

Total water consumption ton 882,826 594,820 362,263

Piped Water ton 697,719 320,608 233,772

River Water ton 116,046 226,626 88,054

Groundwater ton 44,050 44,017 18,823

Etc ton 25,011 3,569 21,614

Greenhouse gas emissions

Greenhouse gas emissions tCO2-eq 116,449 87,308 80,648

Greenhouse gas emissions IntensitytCO2-eq/hun-

dred million won

1.1 0.8 0.8

Fossil fuel emissions tCO2-eq 4,106 6,373 17,871

Electricity emissions tCO2-eq 24,477 21,216 20,291

Fuel for Vehicles emissions tCO2-eq 3,766 2,720 6,388

Fuel for Construction Machinery emissions tCO2-eq 84,100 11,265 42,486

Scope 1 tCO2-eq 20,724 20,324 17,871

Scope 2 tCO2-eq 24,477 21,243 20,291

Scope 3 tCO2-eq 71,248 45,741 42,486

Construction-generated Soil Emissions

Construction-generated Soil Emissions m³ 1,889,346 1,498,529 1,118,776

Waste generation

Construction Waste ton 419,745 1,175,429 455,541

Waste concrete ton 247,488 273,550 98,287

Waste Asphalt Concrete ton 62,990 28,752 28,550

Mixed waste ton 45,637 527,640 59,591

Construction wastes grit ton 17,256 253,660 48,694

Etc ton 46,374 91,827 220,419

Waste from Business Premises ton 3,328 3,672 1,908

Designated waste ton 212.9 36.7 8.8

Waste asbestos ton 118.5 35.4 8.8

Waste oil ton 94.4 1.3 -

Recycled ton 375,043 1,145,753 383,986

Incinerated ton 16,330 11,289 65,169

Landfilled ton 28,372 18,387 6,386

CSR Performance

APPENDIX > CSR Performance

> 5 9

SK E&C CSR REPORT >

| General Standard Disclosure |Classification Indicator Profile Page

Strategy and Analysis G4-1 Statement from the most senior decision-maker 2-3

Organizational Profile

G4-3 Name of the organization 4

G4-4 Primary brands, products and services 4-5

G4-5 Location of the organization’s headquarters 4

G4-6Number of countries where the organization operates and names of countries where either the organization has significant operations or that are specifically relevant to the sustainability topics in the report

4-5

G4-8 Markets served (including geographic breakdown, sectors served and types of customers and beneficiaries) 4-5

G4-9 Scale of the organization 4, 56

G4-10 Total workforce 56

G4-12 Organization’s supply chain 4-5, 45-50

G4-13 Significant changes during the reporting period regarding the organization’s size, structure, ownership or supply chain About Report

G4-15List externally developed economic, environmental and social charters, principal or other initiatives to which the organization subscribes or which it endorses

61

G4-16List memberships of associations (such as industry associations) and national or international advocacy organizations in which the organization

60

Identified Material Aspects and Boundaries

G4-18 The process for defining the report content and the Aspect Boundaries 10-11

G4-19 List all the material Aspects identified in the process for defining report content 11

G4-20 For each material Aspect, report the Aspect Boundary within the organization 11

G4-21 For each material Aspect, report the Aspect Boundary outside the organization 11

G4-22 Effect of any restatements of information provided in previous reports and the reasons for such restatements none

G4-23 Significant changes from previous reporting periods in the Scope and Aspect Boundaries none

Stakeholder Engagement

G4-24 List of stakeholder groups engaged by the organization 10-11

G4-25 Basis for identification and selection of stakeholders for engagement 10-11

G4-26 Approach to stakeholder engagement by type and stakeholder group 11

G4-27Key topics and concerns raised through stakeholder engagement and how the organization has responded to them, including through its reporting and the stakeholder groups that raised each of the key topics and concerns

11

Report Profile

G4-28 Reporting period (such as fiscal or calendar year) for information provided About Report

G4-29 Date of most recent previous report About Report

G4-31 Contact point for questions regarding the report of its content About Report

G4-32 GRI Index 58-59

Governance G4-34Governance structure of the organization including committees of the highest governance body and any committees respon-sible for decision-making on economic, environmental and social impacts

none

Ethics and Integrity G4-56 Organization’s values, principles, standards and norms of behavior such as codes of conduct and codes of ethics 16

| Specific Standard Disclosures |Classification Indicator Profile Page

DMA G4-DMAa. Report why the Aspect is materialb. Report how the organization manages the material Aspect or its impactsc. Report the evaluation of the management approach

14, 18, 22, 26, 31, 38, 45, 51

> 인권

Classification Indicator Profile Page

Investment HR2 Total hours of employee training on human rights policies or procedures concerning aspects of human rights that are relevant to operations, including the percentage of employees trained

34

Supplier Human Rights As-sessment

HR10 Percentage of new suppliers that were screened using human rights criteria 47

HR11 Significant actual and potential negative human rights impacts in the supply chain and actions taken 47

| Specific Standard Disclosures |> Environmental


MaterialsEN1 Materials used by weight or volume 57

EN2 Percentage of materials used that are recycled input materials 57

Energy

EN3 Energy consumption within the organization 56

EN5 Energy intensity 56

EN6 Reduction of energy consumption 39

Water EN8 Total water withdrawal by source 57

Emissions

EN15 Direct greenhouse gas (GHG) emissions (Scope 1) 57

EN16 Energy indirect greenhouse gas (GHG) emissions (Scope 2) 57

EN17 Other indirect greenhouse gas (GHG) emission (Scope 3) 57

EN18 Greenhouse gas (GHG) emissions intensity 57

EN19 Reduction of greenhouse gas (GHG) emissions 39

Effluents and WasteEN23 Total weight of waste by type and disposal method 49

EN24 Total number and volume of significant spills none

Product & Services EN27 Extent of impact mitigation of environmental impacts of products and services 39-42

> Labor Practices and Decent Work


Employment

LA1 Total number and rates of new employee hires and employee turnover by age group, gender and region 31

LA2Benefits provided to full-time employees that are not provided to temporary or part-time employees, by significant locations of operation

34, 35

LA3 Return to work and retention rates after parental leave, by gender 56

Occupational Health and Safety LA7 Workers with high incidence of high risk of diseases related to their occupation 34, 35

Training and EducationLA9 Average hours of training per year per employee by gender, and by employee category 56

LA11 Percentage of employees receiving regular performance and career development reviews, by gender and by employee category 33

Diversity and Equal Opportunity LA12Composition of governance bodies and breakdown of employees per employee category according to gender, age group, membership and other indicators of diversity

56

Equal Remuneration for Women and Men

LA13 Ratio of basic salary and remuneration of women to men by employee category, by significant location of operation 33

Supplier Assessment for Labor Practices

LA14 Percentage of new suppliers that were screened using labor practices criteria 47

LA15 Significant actual and potential negative impacts for labor practices in the supply chain and actions taken 47

> Society


Local Communities SO1 Percentage of operations with implemented local community engagement, impact assessments and development programs 52-54

Anti-corruption

SO3 Total number and percentage of operations assessed for risks related to corruption and the significant risks identified 47

SO4 Communication and training on anti-corruption policies and procedures 15-16, 45-46

SO5 Confirmed incidents of corruption and action taken 56

Supplier Assessment for Impacts on Society

SO9 Percentage of new suppliers that were screened using criteria for impacts on society 47

SO10 Significant actual and potential negative impacts on society in the supply chain and actions taken 47

> Product Responsibility


Customer Health and Safety PR1 Percentage of significant product and service categories for which health and safety impacts are assessed for improvement 28-29

Customer Privacy PR8 Total number of substantiated complaints regarding breaches of customer privacy and losses of customer data None

APPENDIX > GRI Index

GRI Index

6 0 > > 6 1

SK E&C CSR REPORT >

| Memberships |

Fair Competition Federation Korea Federation of Construction Contractors Korea Plant Industries Association

Seoul Chamber of Commerce and Industry Construction Safety Manager Committee Korea Geotechnical Society

The Federation of Korean Industries (FKI) Korea Environment Construction Association Architectural Institute of Korea

Korea Industrial Technology Association Korea National Committee on Large Dams Korea Institute of Building Construction

Korea Road Association Korean Railway Construction Association Construction Association of Korea For Construction Association

Korea Railway Association Korean Society of Civil Engineers International Contractors Association of Korea

* A total of 79 memberships joined.

| 2015 Awards |

Date Award Awarding institution

2015.1.06 Super Quality Excellence Project Bronze Award Korea Rail Network Authority

2015.5.15 2015 Sustainable Social/Environmental Sector Best Practice Award European Bank for Reconstruction and Development (EBRD)

2015.5.19 2015 Green and Gracious Builder Award Star Rating Singapore Building and Construction Authority

2015.7.03 2015 Republic of Korea Representative Apartments Customer Satisfaction Grand Prize Korea Business News

2015.7.08 Civil Construction Safety and Health Activities Best Practices Competition Grand Prize Ministry of Employment and Labor

2015.7.09 The First Construction Industry Health Management Best Practices Competition Grand Prize Korea Occupational Safety and Health Agency

2015.7.09 2015 Republic of Korea Win-Win Conference Construction Sector Excellent Win-Win Company Seoul Economic Daily, Fortune Korea

2015.7.23 2015 Eco-friendly Construction Industry Well-being Apartment Award Korea Joong Ang Daily

2015.7.30 The First Half of 2015 Good Workplace Implementing Retirement Deductions Construction Workers Mutual Aid Association

2015.8.26 The 4th Environmental Impact Assessment Follow-Up Best Practices Competition, Encourage Prize Ministry of Environment

2015.8.26 The 10th Asian Construction Mutual Growth, Grand Prize Asia Business Daily

2015.9.15 LTA Annual Safety Award Convention 2015 Excellence Singapore LTA (Land Transport Authority)

2015.10.22 2015 Aju Business Daily Construction Sector Symbiotic Development, Grand Prize Aju Business Daily

2015.10.29 The 7th Asia Today Green Construction Office Sector, Grand Prize Asia Today

2015.11.13 The 11th Construction Environmental Management Best Practices Award Ministry of Environment

2015.11.25 2015 Construction Site Clean Competition Grand Prize Ministry of Land, Infrastructure and Transport

2015.12.09 2015 Herald Business Green Residential Culture, Social Contribution Prize The Herald Business

2015.12.11 The first Environmental Conflict Resolution Best Practices, Excellence Award Office of National Environmental Conflict Resolution Commission

> UN Global CompactSK E&C has joined the UN Global Compact which is a voluntary corporate citizenship initiative that promotes corporate social responsibility, and supported the 10 principles for human rights, labor, environment and anti-corruption. SK E&C makes every effort to comply with them. The activities of SK E&C relating to the 10 principles of the UN Global Compact are shown in the following table.

Classification Principles Page

Human Rights1. Businesses should support and respect the protection of internationally proclaimed human rights.

34~36, 47, 612. Businesses should make sure that they are not complicit in human rights abuses.

Labor

3. Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining. 36

4. Businesses should uphold the elimination of all forms of forced and compulsory labor.34, 47

5. Businesses should uphold the effective abolition of child labor.

6. Businesses should uphold the elimination of discrimination in respect of employment and occupation. 31, 33, 34, 47

Environment

7. Businesses should support a precautionary approach to environmental challenges. 39~44

8. Businesses should undertake initiatives to promote greater environmental responsibility. 39~41, 43, 44

9. Businesses should encourage the development and diffusion of environmentally friendly technologies. 40, 42, 44

Anti-Corruption 10. Business should work against corruption in all its forms, including extortion and bribery. 39~41, 45~47

> UN Sustainable Development GoalsSK E&C is actively supporting the sustainable development goals (SDGs) that the UN officially adopted in September 2015 and the international community should achieve. Our corporate has published a variety of activities and performance with regard to those that are related to our business among the 17 goals included in the SDGs.

Classification Goal page Classification Goal page

Goal 3 Good Health and Well-being 30, 34 Goal 9 Industry, Innovation and Infrastructure 42, 61

Goal 4 Quality Education 32, 33, 50 Goal 11 Sustainable Cities and Communities 42, 44

Goal 5 Gender Equality 33, 34 Goal 13 Climate Action 39, 44

Goal 7 Affordable and Clean Energy 42, 44 Goal 16 Peace, Justice and Strong Institutions 14~16, 52, 54

Goal 8 Decent Work and Economic Growth 31, 50 Goal 17 Partnerships for the Goals 61

Memberships and Awards

APPENDIX

May 21, 2015, the Turkey Eurasia submarine tunnel project that SK E&C has carried out received the 2015 Sustainability Management Best Practices Award in social and environ-mental category given by European Bank for Reconstruction and Development (EBRD) first time among Korean construction companies. The project of the 5.4km double-deck tunnel called Turkey Eurasia Submarine Tunnel is the first undersea tunnel between Europe and Asia, crossing the Bosporus strait undersea. At the same time, this project is the first one that was to be constructed by a Korean construction corporate on a Build-Operate-Transfer basis. Since before 2013 when our corporate embarked on the Eurasia submarine tunnel, SK E&C has taken great care in the world cultural heritage of Istanbul as well as the artifacts and relics preserved on the seabed of the Bosporus. As a result of our continued sustainabil-ity management efforts in natural protection, noise and pollution reduction, traffic problem solving, etc., we have been recognized for our contributions. We have reported all of these to our investors and EBRD sincerely. Until April 2017 when the tunnel opens, SK E&C will consistently pay attention to social and environmental issues, and will endeavor to minimize any negative impact.

SK E&C's Turkey Eurasia Submarine Tunnel Project Receives Sustainability Management Best Practices Award in Social and Environmental Category

> Memberships and Awards

www.skec.com

Documents

SK E&C Corporate Social Responsibility Report 2015 · 2017. 9. 5. · > 01 > About Report "2015 SK Engineering & Construction CSR Report" is our company’s first CSR report to provide