NO.1 TECHNOLOGY IN YOUR MIND Global Power Plant Solution Provider KEPCO KPS Sustainability Report 2017-2018 About This Report Contents About This Report INTRODUCTION Sustainability Management Mission Statement 04 This report is the seventh sustainability report of the KEPCO Plant Service CEO Message 06 & Engineering Co., Ltd. (hereinafter referred to as “KEPCO KPS”). KEPCO Introduction of KEPCO KPS 08 KPS publishes a sustainability report on a biennial basis, with the aim of Business Overview 10 describing our performance in terms of economy, environment and social Sustainability Highlight 14 responsibilities. We would also like to facilitate good understanding of our sustainability management efforts for our stakeholders. Reporting Principles SOCIAL VALUE Social Value Creation with KEPCO KPS 18 This report has been prepared in accordance with the Core option of the CREATION Social Value Creation Cases 20 Global Reporting Initiative’s (GRI) Sustainability Reporting Standards and reflects the ISO 26000 and the ten principles of the UN Global Compact (UNGC). The financial information included in this report has been MATERIAL ISSUES Sustainable Growth 24 prepared in accordance with the Korean International Financial Reporting Standards (K-IFRS), and financial performance is reported based on Strengthening the Competitiveness of Core Businesses 26 consolidated financial statements. Securing Engines for Future Growth 30 Reporting Period and Scope Responsible Management 34 Ethical Management 36 The reporting period is from January 1, 2017 to December 31, 2018. In terms of quantitative performance, data from the past three years have Strengthening Shared Growth 38 been provided in this report to show yearly trends, while data from the Strategic Social Contribution Activities 42 first half of 2019 have been included for certain qualitative performance. Eco-friendly Management 46 This report covers economic, social, and environmental activities and performances of KEPCO KPS headquarters, its 59 business sites in Korea Environmental Management Activities 48 and 14 overseas sites and offices. Responding to Climate Change 50 Assurance Integrity Management 52 Talent-centered Management 54 The financial information included in this report has been audited by an independent auditing company. In order to ensure objectivity, fairness and Safety-first Management 58 reliability, the contents of this report have been verified by an independent certification body, Korea Management Registrar, a third party organization with no ties to KEPCO KPS. SUSTAINABILITY Sustainability Management Strategies 62 MANAGEMENT Management Performance 64 Inquiries Governance 66 This report is published in Korean and English, both available on the Risk Management 68 KEPCO KPS website as well as the websites of GRI and UNGC. We listen to the voices of our stakeholders via our website, email, and various other Information Protection 70 channels. Stakeholder Engagement 72 Materiality Analysis 74 Website www.kps.co.kr Address (58326) KEPCO KPS, 211 Munhwa-ro, Naju-si, Jeollanam-do, APPENDIX Quantitative Performance Data 77 Republic of Korea Human Right Management 85 Tel +82-61-345-0114 GRI Standards Index 86 Fax +82-61-345-0115 Independent Assurance Statement 88 E-mail [email protected] UN Global Compact Principles 90 Awards and Associations 91 Glossary 92 KEPCO KPS Sustainability Report 2017-2018 INTRODUCTION 04 / 05 SOCIAL VALUE CREATION MATERIAL ISSUES SUSTAINABILITY MANAGEMENT APPENDIX Economy: Sustainable Growth We pledge to ‌enhance the company’s profitability by discovering new growth engines and corporate value by establishing a sound financial structure. Sustainability Management We pledge to‌ lead the development of maintenance engineering technologies through continued technological innovations. We pledge to ‌improve management efficiency and secure competitive edge through constant and self-initiated Mission Statement management innovations. All employees of KEPCO KPS hereby pledge to Society: Integrity Management fulfill the company’s social responsibilities as a We pledge to ‌enhance transparency in our conduct of business through stringent work processes and disclosure in accordance with ethical management principles. global solution provider for power plants, We pledge to fulfill our corporate social responsibilities by actively implementing compassionate management. We pledge to strengthen our partnership with all stakeholders to promote mutual values. contribute to the sustainable growth of society, nation and mankind Environment: Eco-friendliness by implementing sustainability management that We pledge to apply environmentally-conscious technologies to make our maintenance services eco-friendly. values all stakeholders We pledge to contribute to solving future energy issues by developing renewable energy technologies. We pledge to ‌preserve the environment by addressing climate change issues in cooperation with KEPCO-affiliated with respect to economy, environment, society companies. and human race, and People: People-oriented achieve continued growth toward becoming a global top-tier service provider for power plants. We pledge to foster globally competent talents with creative and professional minds. We pledge to ‌enhance the quality of life for employees by establishing a mutually beneficial labor-management culture and promoting employee welfare. We pledge to ‌implement human rights management by preventing accidents, improving employee health as well as the treatment of social minorities, and complying with various anti-discrimination principles. KEPCO KPS Sustainability Report 2017-2018 INTRODUCTION 06 / 07 SOCIAL VALUE CREATION MATERIAL ISSUES SUSTAINABILITY MANAGEMENT APPENDIX CEO Message Dear valued customers, KEPCO KPS employees, partners and Overseas, our nuclear power plant maintenance project in We are becoming a public enterprise trusted by Korean other stakeholders, I would like to take this opportunity to the United Arab Emirates (UAE), the first contract in Korea people by actively engaging in activities generating not only convey my sincere gratitude for your continued support and to export its nuclear power plant, is being executed in a economic but social values. interest in KEPCO KPS. stable manner, while our thermal power plant O&M business in India, Pakistan, Jordan and other parts of the world are In 2018, we accomplished meaningful social achievements Since its foundation in 1984, KEPCO KPS has played a yielding successful results. We partner with domestic small- through a wide range of social value generation activities pivotal role in securing the safety of the power industry and and medium-sized enterprises (SMEs) for overseas projects in economic, social, and environmental areas. These enhancing the reliability of power generation facilities. By to facilitate their entry into the global market and create jobs. achievements included being selected as a sector leader enabling a stable power supply across the country through by DJSI (Dow Jones Sustainability Indices) Korea for ten professional maintenance services for Korea’s core thermal, Following the expansion of energy conversion and eco- consecutive years, winning the Korea Financial Management nuclear and hydro power generation facilities, as well as friendly power generation, we are trying to gain the upper Grand Prix for four consecutive years, maintaining our status transmission and substation facilities, we have contributed to hand in the nuclear decommissioning business by developing as a certified family-friendly workplace for three consecutive national economic development and enhanced the quality of the necessary technologies, cooperating with advanced years, and becoming certified as a public sector leader in people’s lives. companies, and fostering talent. Furthermore, we are human resource development. investing our efforts in developing a profit-sharing business In the aftermath of the recent global economic downturn, model to promote the renewable energy industry. In particular, we are engaged in efforts to actively participate the power industry is continuing to experience low in government policies to generate social values. We have growth. Uncertainties in the market are also increasing Meanwhile, as it becomes more difficult to construct new established a transparent response scheme based on our due to paradigm shifts in the energy industry, such as power plants, the importance of improving the performance anti-bribery management system in order to ensure that energy conversion and digital transformation. Despite such of aging power generation facilities and environmental transparent and ethical management takes root. Also, we difficulties in our internal and external business environment, facilities is being emphasized. In this regard, we are focusing actively take part in creating quality jobs by transitioning our sales have continuously grown since reaching KRW 1 on developing the business of improving the performance of contingent workers to permanent employees and expanding trillion in 2012. In 2018, our sales and operating income aging thermal power plants as our next-generation business the hiring of local labor force. Furthermore, we play a leading reached KRW 1.2425 trillion and KRW 191.5 billion, by utilizing our competencies in facility diagnostics, while role in creating a sound industrial ecosystem built on sharing respectively. contributing to generating customer values as an effect of and co-existence to achieve shared growth