2019 Samsung Engineering Sustainability Report Contents About this Report Samsung Engineering has published annual sustainability reports to transparently disclose our sustainability management 50-year Sustainability History Sustainability strategies, major activities and performance and to actively Facts & Figures communicate with stakeholders. This is our ninth sustainability 08 48 report. Reporting Period This report covers Samsung Engineering’s performance and activities from January to December 2019. As for some topics of significance, this report includes data as recent as May 2020. When necessary, it also provides trends in time series utilizing data from the three most recent fiscal years (from January 2017 to December 2019). Reporting Boundary and Scope In principle, we aimed to report on all aspects of Samsung Engineering’s domestic and overseas business areas (including project sites) as well as those of our subsidiaries in accordance with the GRI (Global Reporting Initiative) standards for the reporting boundary and scope. Supplier performance data was also included for some data, which is separately stated. 16 Sustainability Values Reporting Content This report is written in accordance with the sustainability management framework pursued by Samsung Engineering. It is structured in two parts: “Sustainability Values” mainly describes our new corporate culture’s core values, which are the foundation of our business operation; “Sustainability Facts & Figures” contains our pledges to the stakeholders and major Overview Sustainability Sustainability Appendix performance in each sector, governance, ethics & compliance, Values Facts & Figures risk management, employees, local community, supply chain and environment. 02 Message from the CEO 18 Sustainability Management 50 Governance 76 Impact Valuation Reporting Principles and Credibility 04 Samsung Engineering Framework 54 Ethics & Compliance 78 Financial Performance We comply with the core options of GRI Standards 100-400. at a Glance 20 Accountability 58 Risk Management 79 External Evaluation and Awards Also, the transparency and objectivity of the contents were 06 Business Value Creation 28 Expertise 61 Employees 80 Associations assured by a third party that has no vested interest in the company (Refer to Third Party’s Assurance Statement, p.82-83). 08 50-year Sustainability History 34 Teamwork 64 Local Community 81 GHG Verification Statement Innovation 14 2019 Sustainability Highlights 42 68 Supply Chain 82 Third Party’s Assurance Statement 70 Environment 84 GRI Standards Index Compass This report is produced in interactive PDF format, and you can move to relevant pages within this report or go to related web pages. Website Link Message from the CEO Dear valued stakeholders, I would like to express my deepest gratitude for your unwavering support and encouragement towards Samsung Engineering. In 2019, we enhanced our competitiveness and laid the foundation for a stable business operation. The hydrocarbon sector’s operating profit is in the black for the first time in seven years. The industrial and environmental sector achieved its business goals through relentless effort to enhance productivity and innovate. th As we mark our 50 anniversary this year, With the stable financial foundation, we have recovered our credit rating and enhanced our standing in the market. we aim to transform our company to become However, our external environment is expected to become more unfavorable to us due to the global economic a top EPC service provider with the world’s best technology. recession after COVID-19. This year, Samsung Engineering is determined to turn the crisis into opportunity and We wish to further grow as a company to serve grow into a global top EPC company by enhancing our basic engineering capability, engaging in technological another half-century and beyond by drawing on our strength innovation and making the EPC (Engineering, Procurement and Construction) business resemble the manufacturing business. and experience from overcoming challenges and crises. In this process, we will focus on transparency and integrity By receiving EPC projects from our FEED (Front End Engineering Design) projects and continuing to win projects from our clients, we will do our best to achieve this year’s business goals. In addition, we will focus on digital in our interaction and communication with our stakeholders. transformation to fundamentally enhance our competitiveness. We will question all our work methods and apply new digital technologies to dramatically improve our productivity and efficiency. Also, we will make the EPC business resemble the manufacturing business and establish a stable project execution system. Above all, based on our belief, “Safety is our top priority, and quality is our promise to the clients,” we will give the highest priority to safety and quality while implementing all our strategies and operating our business. As a global corporate citizen, Samsung Engineering strives to realize not only economic value from our business activities but also social value for co-prosperity. In 2015, the UN SDGs (Sustainable Development Goals) were introduced to provide a guideline for growing together with the stakeholders in the long term. Accordingly, under the new social contribution vision of “Together for Tomorrow! Enabling People!” we are engaging in diverse social contribution programs including adolescent education programs like Eco-generation and Junior Engineering Academy, Global Hope Library program in regions where we execute our projects and other scholarship programs. Also, we operate our business based on respect for human rights by introducing pledges to implement a culture of mutual respect and continuously checking the well-being and safety of our site employees, and provide financial and non-financial support to our suppliers to share growth with them. Moreover, we are well aware of the hazards of climate change that the world faces and are making various efforts into strengthening our eco-friendly business model and reducing our sites’ impact on the environment. As we mark our 50th anniversary this year, we aim to transform our company to become a top EPC service provider with the world’s best technology. We wish to further grow as a company to serve another half-century and beyond by drawing on our strength and experience from overcoming challenges and crises. In this process, we will focus on transparency and integrity in our interaction and communication with our stakeholders. I would like to kindly ask for your continued support. Thank you. Sung An Choi President & CEO 02 2019 Samsung Engineering Sustainability Report Overview 03 Samsung Engineering at a Glance Samsung Engineering is an EPC company providing Company In 2019, Samsung Engineering declared a new corporate culture value system. Under our vision and slogan, Overview Samsung Engineering, Co., Ltd. Corporate comprehensive solutions in all sectors of the plant business Name we introduced four core values and eight practices and are engaging in phase-by-phase activities to spread the Culture based on accumulated technological competence, ample Year of value system. 1970 experience and talented employees. For half a century, we Foundation have successfully executed over 1,000 projects around the CEO Sung An Choi world including the Middle East, Asia, Americas and Europe No. of Samsung Engineering 5,789 with our exceptional services and are recognized as a Employees Corporate Culture Value System competent company in the world through relentless effort to 26, Sangil-ro 6-gil, Gangdong-gu, Location enhance client value and achieve perfect quality. Seoul, Korea Vision Philosophy Human resources, technology and contribution to a better global society are Samsung’s raison d'être and Global Top Engineering-based ultimate goals. We are determined to devote our human resources and technology to create superior products and services and contribute to a better global society. Project Management Company We will devote our human resources and technology to create superior products and services, thereby contributing to Samsung Philosophy a better global society. Slogan Samsung Values Samsung Business Principles People Co-prosperity Core Values 01 05 Accountability Expertise Teamwork Innovation We comply with laws and We are a socially responsible ethical standards. corporate citizen. Directions Excellence Integrity Culture based on Culture based on Culture based on respect Culture leading adherence to the basics technological competence and collaboration innovation Change Safety is the first principle We build capabilities to win We respect each We think out of the box to of management the competition other foster new approaches 02 04 Practices We maintain a clean We care for the environment, organizational culture. health and safety. 03 We deliver perfect quality We solve problems with We produce greater result We put our words We respect customers, to clients technological competence through collaboration into action shareholders and employees. 04 2019 Samsung Engineering Sustainability Report Overview 05 Business Value Creation Business Samsung Engineering is expanding business across the engineering industry from refinery, gas, petrochemicals Financial In 2019, Samsung Engineering recorded KRW 7 trillion in new orders, KRW 6,368 billion in revenue and KRW and upstream to power, industrial and environmental facilities. In addition, we are providing optimized services 386 billion in operating