CJ Logistics

Governance for Climate Action

To enable integrated management of diverse ESG issues, including climate change and biodiversity, an ESG Committee was established under the Board in May 2021, laying the foundation for a high-level ESG decision-making system. This was followed by the formulation of the Environmental Management Policy in 2023. The committee consists of two internal directors and four external directors, assuming broad responsibilities for key environmental matters such as climate action and biodiversity preservation, along with other ESG-related topics. The CEO plays an overarching role in regularly monitoring ESG strategies and reviewing their progress, particularly in climate and biodiversity initiatives. The ESG Management Council is responsible for monitoring the implementation of climate change and biodiversity-related initiatives across divisions, based on relevant KPIs. It also examines outcomes from key on-site activities, including carbon emission management and public-private resource circulation projects. The ESG Team under the Financial Department within the Management Support Office, handles day-to-day responsibilities for company-wide climate action. Through the ESG Working Group, the team identifies climate-related issues and formulates appropriate countermeasures. It also leads biodiversity protection efforts, such as preserving ecosystems and creating habitats for native flora and fauna. In 2024, the ESG Committee discussed key agenda items, including the implementation of the climate action roadmap, carbon emissions performance, and the outcomes of a public-private resource circulation logistics project. Based on these findings, we laid the foundation for sustainable growth and strengthened our ESG management system to fulfill social responsibilities. Furthermore, "execution capabilities for net-zero and a reinforced management system" were added to the ESG Officer's KPIs for 2024. These KPIs are linked to performance evaluations and compensation for some C-level executives and employees in managerial positions.

In the coming years, we will define climate change and biodiversity within an integrated framework of “Climate & Biodiversity.” Under the ESG Working Group, we will separately operate the Working Council for Climate Change and the Working Council for Biodiversity to ensure more specialized, issue-specific responses. This dual structure will not only enhance professional focus on each topic but also strengthen our capacity for integrated management. Building on this, we will establish an information disclosure system aligned with TCFD (Taskforce on Climate-related Financial Disclosures) and TNFD (Taskforce on Nature-related Financial Disclosures) guidelines, while solidifying our organizational foundation and ensure that critical ESG issues, regardless of double materiality. are strategically prioritized and continuously addressed.

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Climate Action Strategy

Climate-related Risks and Opportunities(Physical Risks)

Physical risks stem from changes in the climate system, including rising average temperatures, shifting precipitation patterns, more frequent extreme weather events, and sea level rise. These risks directly affect the stability of logistics infrastructure operations and disrupt supply chain connectivity. In particular, the combined occurrence of long-term climate change and short-term natural disasters has a structural impact on the entire business, leading to reduced functionality of logistics hubs, transportation delays, and facility damage.

To efficiently respond to physical climate risks, CJ Logistics has categorized its assets into transportation assets and fixed assets for type-specific analysis. Using this classification, we identified key impact factors and risk exposure elements across business segments, including CL, parcel services, global forwarding, and construction, in a structured manner. Based on assessments of potential financial implications associated with asset damage under various climate scenarios, we have prioritized countermeasures focused on ensuring infrastructure operational stability and securing supply chain continuity. This has enabled us to sharpen and refine our resilience strategies.

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Climate-related Risks and Opportunities (Transition Risks)

Climate-related transition risks arise from rapid changes such as rising average temperatures, evolving policies and laws, technological advancements, increased social awareness, and intensified market competition. In particular, globally tightened carbon regulations, growing customer demand for ESG practices, and rising expectations for sustainable logistics are exerting pressure on strategic shifts from traditional operations. In response, we evaluate the scale, likelihood, characteristics, and time horizons of these risks to assess potential financial impacts. We also identify projected climate-related threats that could affect the company’s outlook in a rational manner.

The time horizons for climate impact are defined as follows: short-term refers to within one year, mid-term spans from one year to less than five years, and long-term extends beyond five years. The implications of identified climate-related risks are outlined below.

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Physical Risk Countermeasures for Climate Adaptation

In response to physical risks, CJ Logistics has conducted a quantitative analysis of potential damage to its tangible assets from various natural disasters (floods, heat waves, fires, and cold waves), using the IPCC’s Fifth Assessment Report (AR5) Representative Concentration Pathways (RCP) scenarios of 2°C (RCP2.6) and 4°C (RCP8.5) temperature rise. Based on the findings, we have calculated the associated costs of preemptive measures, thereby indirectly estimating their financial implications.
The results of scenario analysis have been incorporated into our risk countermeasures and infrastructure investment strategies across business segments. This integration has helped minimize the risks of operational disruptions and enabled structural refinement, thereby enhancing overall resilience. To prepare for growing climate system volatility, we are strengthening our integrated climate risk management system and proactively addressing physical risks, laying the foundation for a sustainable logistics network.

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Carbon Neutral Logistics Transition Strategy for Climate Action

Amid intensifying global discussions to achieve the 1.5°C climate target, CJ Logistics has been setting a strategic response system based on science-based transition scenarios to address growing uncertainty and volatility across carbon regulations, green technology development, market demand shifts, and rising societal expectations. In particular, we reference internationally recognized 1.5°C scenarios, such as the IEA Net Zero 2050 and IPCC SSP1-1.9 to identify both transition risks and emerging opportunities that may affect our logistics infrastructure and transport business models, followed by integrating these insights into our overarching business strategies. With the objective of achieving our long-term goal of carbon neutrality, we are implementing a three-phase strategy that spans our entire logistics value chain; the introduction of low-emission vehicles, the construction of energy-efficient logistics infrastructure, and the global expansion of low-carbon logistics services. Financial impacts of transition risks are currently considered indirectly, with plans to conduct quantitative analysis in the future. Taking into account the asset structure and risk exposure of each business, we are building a structured GHG mitigation strategy that manages both transport and fixed assets in an integrated manner. Through this, we are laying a foundation for enterprise-wide carbon neutrality

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Risk Management

CJ Logistics operates a systematic process for identifying, assessing, prioritizing, and monitoring climate-related risks and opportunities to systematically manage the impact of climate uncertainty across our business. This process is integrated into our enterprise risk management (ERM) framework and serves as a core foundation for sustainable business operations.

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Metrics and Targets

GHG Emissions Performance

In 2024, CJ Logistics recorded about 228,750 tCO₂eq of domestic GHG emissions, slightly surpassing the target of 228,494 tCO₂eq set for the year. Scope 2 emissions totaled 123,023 tCO₂eq, accounting for 52% of the total. Scope 2 emissions include stationary source emissions from facilities and buildings, as well as mobile source emissions from transportation vehicles. While electricity consumption from EVs significantly increased more than tenfold compared to the base year due to the shift to EVs in logistics operations, total Scope 1 emissions decreased by about 11% from the base year, reaching 105,745 tCO₂eq in 2024. As we continue to implement our carbon neutrality strategy and expand low-carbon logistics services, Scope 2 emissions are expected to increase due to rising electricity demand from EVs. However, as major countries increase the share of renewable energy in electricity generation, emissions from electricity consumption are projected to decline over time.
As we continue to advance our carbon neutrality strategy and expand low-carbon logistics services, we expect an increase in Scope 2 emissions driven by higher electricity consumption from EVs. Nevertheless, with the global shift toward renewable energy, we anticipate a gradual decline in emissions associated with electricity use over time.

[GHG Emissions Compared to Base Year]

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GHG intensity

We have executed our carbon neutrality strategy and delivering sustainable low-carbon logistics services in alignment with our three key directions and seven strategic themes. As a core performance indicator, we track our GHG emissions intensity relative to economic value to monitor our climate action and low-carbon transition progress across our domestic logistics, construction, and resort operations. In 2024, our GHG emissions per unit of revenue declined by approximately 6% compared to the base year. However, this reduction remains insufficient to meet our 2030 target of a 37% reduction from the BAU1) scenario. We continue to implement and manage our national carbon neutrality goals while expanding the scope of our global carbon neutrality strategy to support the global transition to low-carbon logistics services. In particular, we aim to extend our strategy to key international sites, such as those in India, and enhance the sophistication of our Scope 3 emissions calculation.

(Unit: tCO2eq / KRW 100 million)

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Advanced Calculation of Scope 3 Emissions - Category 9

CJ Logistics provides logistics services to its clients by utilizing third-party vehicles operated by contracted carriers, franchisees, and independent drivers. The ownership and fuel procurement for these vehicles are the responsibility of the third-party operators. These transportation activities involve the movement of our clients’ products to end consumers or distribution channels, during which we act as the service provider responsible for contracting and managing the transport. According to the GHG Protocol, when the transportation is outbound (toward customers or external parties) and is a core part of a company’s business operations, the associated emissions from third-party vehicles fall under Scope 3 - Category 9 (downstream transportation and distribution). In order to comprehensively account for GHG emissions across the entire logistics service value chain and enable data-driven climate impact management, we have refined our methodology to quantify emissions from third-party transportation used in the distribution of client products as part of our Scope 3 - Category 9 inventory.
As part of our transition toward low-carbon logistics through carbon neutrality implementation, we have improved and advanced the calculation of our Scope 3 baseline emissions. Company-owned and contracted vehicles are categorized under Scope 1, while franchise and other indirect contracts are classified under Scope 3 - Category 9. Based on the 2021 baseline year, total emissions from transportation activities required to deliver domestic logistics services (Scope 1, 2, and 3)1)were estimated at 1,019,648 tCO₂eq, of which 89% were classified under Scope 3 - Category 9. We are committed to supporting not only the carbon neutrality of our owned assets but also that of our partners, taking the lead in building a low-carbon, mutually beneficial logistics ecosystem.

1) Scope 1 Mobile combustion + Scope 2 Mobile combustion + Scope 3 (Category 9)

Scope 3 Emissions - Base Year (2021)

(Unit: tCO2eq)

Scope 3 Emissions - 2024

(Unit: tCO2eq)

Scope 3 Emissions Calculation Methodology

We manage our transport assets used in providing logistics services to clients based on load capacity type, fuel type, and ownership type in a systematic manner. However, actual fuel consumption data for all subcontracted vehicles is currently unavailable. Therefore, for calculating Scope 3 Category 9 (downstream transportation and distribution) emissions, we applied a coefficient-based estimation method using publicly available statistical data.

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The results of the reliability review showed that the projected emissions based on statistical methodology aligned with actual fuel consumption data at a 96% consistency level. This demonstrates that the methodology can serve as a representative and effective basis for calculating emissions. Going forward, we will continuously step up the accuracy and credibility of our emissions calculation system by incorporating more advanced data, including actual driving records and fuel transaction logs.

Total Absolute GHG Emissions

We calculated emissions from Category 9, which accounts for 89% of our base year Scope 3 emissions, using a coefficient-based approach grounded in public statistical data. In 2024, emissions from this category totaled approximately 965,827 tCO₂eq, representing around 90% of the total transport-related emissions (1,067,891 tCO₂eq) associated with domestic logistics services in the same year. The number of vehicles included in the Scope 3 calculation in 2024 increased by 5% compared to the base year, and total Category 9 emissions rose by 6.6%. This indicates a 2.4% increase in GHG emissions per vehicle. These figures were conservatively estimated under the assumption that all vehicles operate on diesel fuel. Meanwhile, of the 35,017 vehicles deployed for domestic logistics services in 2024, we transitioned 2,095 to EVs, achieving an EV conversion rate of approximately 6%, a stride toward decarbonizing our logistics fleet.

(Unit : tCO2eq)