Identification of Material Topics

Process for Identifying Material Topics

SKM adopted the latest version of the GRI guidelines and identified material topics through processes such as making changes to sustainability issues, defining impacts, assessing impacts, analyzing impacts, and ranking sustainability issues.

Steps for Identifying Material Topics Description
Adjustment of Sustainability Issues and
Impact List		 Based on the 16 sustainability topics from 2023 and recommendations from external sustainability consultants, SKM maintained the same number of sustainability issues in 2024. However, after analyzing the situation of industry peers, one new negative impact was added:“Improper Management of Mall and Public Safety,” and one negative impact was revised: “Unclear Event and Advertising Signage”was renamed “Improper Management of Event and Advertising Content.” In addition, one new positive impact was added: “Green Transportation and Logistics Management.” All impact descriptions were reviewed and adjusted to confirm their relevance to external impacts.
Defining Impacts & Survey Design SKM reviewed and adjusted the definitions of its 11 positive impacts and 11 negative impacts based on the potential economic, environmental, and social impacts of the 16 sustainability topics. The negative impacts were then used as the basis for designing a due diligence questionnaire.
Issuing Surveys & Impact Assessment
  • To re-examine annual changes in impacts, SKM distributed the negative impact due diligence questionnaire (covering due diligence channels, performance indicators, and trend changes) to internal stakeholders, including headquarters, 15 branch stores, SKM Park, and Fayaque, to collect opinions on the impact topics, including level of impact and likelihood of occurrence. The results were analyzed and used as a basis for calibrating the impact topics for the year.
  • In addition, corresponding positive impacts were analyzed based on the due diligence results. For example, the sustainability topic “Customer Relationship Management” includes the positive impact “Maintaining Strong Customer Relationships” and the negative impact “Customer Complaints and Disputes.” The level of the positive impact was evaluated by referencing survey opinions regarding the corresponding negative impact.
Impact Analysis
  • A total of 38 negative impact due diligence questionnaires were distributed to internal stakeholders, including headquarters, 15 department stores, SKM Park, and Fayaque. Based on the due diligence results, the 2024 impact level scores were calculated, converted into percentages, and compared with the baseline year. Changes in the percentage scores between the two years were used to adjust the impact levels and materiality rankings.
Ranking & Disclosing Sustainability Issues
  • Based on the adjusted impact levels and materiality rankings, SKM updated the ranking and materiality levels of the material topics. The 2024 ranking and materiality levels of sustainability topics remained unchanged from the previous year, resulting in eight key topics, five secondary topics, and three miscellaneous topics. The sustainability report highlight management mechanisms and the corresponding GRI indicators for the key topics..

Results from Material Topic Identification

16 Sustainability Issues Positive Impact Negative Impact Materiality in 2024* Materiality in 2023*
Talent cultivation and development Robust talent cultivation and development system - Key Topics Key Topics
Talent attraction and retention Attracts and retains outstanding talents - Key Topics Key Topics
Product quality and responsibility Outstanding product quality and safety assurance Unclear labels or signs for events and ads; Improper product quality management Key Topics Key Topics
Operational performance and innovative stategies Protects and safeguards shareholder rights - Key Topics Key Topics
Corporate governance and ethical management - Poor corporate governance Key Topics Key Topics
Information security and privacy protection - Company and customer data leaks Key Topics Key Topics
Customer relationship management Excellent customer relationship management Customer reports, complaints, and disputes Key Topics Key Topics
Circular economy and waste management Promotes the circular economy Waste pollution Key Topics Key Topics
Innovative digital services Enhances customer's digital shopping experience - Secondary Topics Secondary Topics
Fair and healthy workplace - Violations of workplace safety and labor rights Secondary Topics Secondary Topics
Social Good and Arts & Culture Promotion Promotes the arts, culture, and community development - Secondary Topics Secondary Topics
Risk Management - Poor risk management Secondary Topics Secondary Topics
Sustainable consumption initiatives Raises the industry's awareness of sustainability - Secondary Topics Secondary Topics
Water Management - Water consumption Miscellaneous Topics Miscellaneous Topics
Low-carbon Energy Management - Energy consumption & GHG emissions Miscellaneous Topics Miscellaneous Topics
Sustainable supply chain Shared prosperity and sustainable development with suppliers - Miscellaneous Topics Miscellaneous Topics
  • Note:
    1. The materiality of each sustainability issue in the current year remains unchanged from the previous year, and the materiality of each positive impact also remains the same. However, the materiality levels of the negative impacts “Customer reports, complaints, and disputes” and “Improper Management of Event and Advertising Content” have changed. The adjustment for “Customer reports, complaints, and disputes” was mainly due to the consideration that although SKM has obtained ISO 10002 certification and continues to manage customer complaints and grievance handling, a comprehensive evaluation of relevant indicators (such as customer satisfaction with grievance handling) shows room for further improvement. There were also rare incidents, such as omissions in providing receipts, which had not occurred before. As a result, it was elevated from an important negative impact to a critical negative impact. The adjustment for “Improper Management of Event and Advertising Content” was based on the due diligence results, which indicated a continuous decrease in consumer dispute cases with proper resolution, and no upward trend in complaints or disputes in recent years. Therefore, it was downgraded from a critical negative impact to an important negative impact, while remaining under ongoing monitoring.
    2. Key topics, related management measures, and related GRI disclosures are disclosed in this report.