South Korean oil refiner SK Innovation Co. secured an AA rating in the environmental, social, and governance (ESG) assessment by Morgan Stanley Capital International (MSCI), marking the first time a South Korean refining company has been classified as an ESG Leader.
The AA rating, announced by SK Innovation on Monday, places the company among industry leaders in managing ESG risks and opportunities, according to MSCI's annual evaluation methodology.
MSCI ESG Research, established in 2003, assigns ESG ratings to over 10,000 publicly traded companies globally, ranging from AAA to CCC.
These ratings significantly influence investment decisions, with over 1,700 institutional investors and 73% of ESG-linked exchange-traded funds (ETFs) utilizing MSCI's indices.
SK Innovation's climb from a BBB rating in 2020 to an A rating in 2021, and now to AA, positions it for potential inclusion in new MSCI ESG indices or increased weightings in existing ones, potentially attracting greater global investment.
The improved rating reflects SK Innovation's progress in reducing carbon emissions, hazardous material and waste management, implementing environmental management systems, and implementing corporate ethics.
Notably, all SK Innovation subsidiaries hold ISO 14001 certification, the international standard for environmental management systems, for their domestic operations.
The company also credits establishing an ESG data platform in 2022 for improved information transparency, contributing to the positive assessment.