Global warming caused by greenhouse gas emissions is taking a toll on the economies and societies across the globe. The widespread environmental impact on various industries has made enterprises realize the importance of ESG management which takes into account environmental stewardship, social responsibility, and transparent governance, etc. in their business operations.
LG Energy Solution is enhancing ESG management to respond to climate change. We are the first battery company in Korea to publicly declare our support for the Task Force on Climate-related Financial Disclosures (TCFD).
The TCFD disclosing transparent information on factors affecting climate change
The Task Force on Climate-related Financial Disclosures (TCFD) is an initiative established by the Financial Stability Board (FSB) in 2015, which involves participation from G20 member countries. The TCFD provides standards to help businesses recognize the issue of climate crisis and manage factors contributing to climate change. It also aims to play a role in assessing financial risks of companies that can arise in a transition to a carbon-neutral era.
The TCFD provides recommendations, based on which companies disclose information of their governance, strategy, risk and target management, etc. that can contribute to climate change. They are a set of standards for companies to follow in terms of the content of information and the method of provision to allow for easy access to and understanding of such information for stakeholders including customers and investors. This way, factors affecting climate change can be disclosed transparently. LG Energy Solution adheres to these recommendations, ensuring transparent communication of relevant details.
Eco-friendly policies are being implemented in major countries across North America and Europe, with stakeholders around the world increasingly highlighting the significance of ESG management activities for businesses. This has led numerous companies demonstrating their commitment to tackling climate change by endorsing the TCFD initiative.
About 4,200 major global companies declared their support for the framework at the end of 2022. Matters regarding climate-related disclosures, previously handled by the TCFD, are now managed by International Financial Reporting Standards (IFRS) since 2024.
LG Energy Solution’s goals and commitments to tackling climate change
In February 2023, LG Energy Solution declared support for the TCFD to strengthen its ESG management activities. As the first battery company in Korea to make this declaration, we actively engage with both internal and external stakeholders and rigorously manage factors related to climate change.
We have adopted the basic framework recommended by the TCFD for the public disclosure of financial information related to climate change and are disclosing information in accordance with the four thematic areas that represent the core elements of our organization’s operation: △Governance, △ Strategy, △ Risk management, and △Metrics and targets. Gaining momentum from our efforts to disclose climate-related information transparently, we will continue to participate in global initiatives that aim to address climate change.
LG Energy Solution aims to achieve carbon neutrality across its entire value chain by 2050 and ultimately realize carbon negative. Alongside our long-term goals, we have also set the intermediate targets that contribute to visualizing these long-term goals. We plan to achieve carbon neutrality in all our operations by 2040. Subsequently, we will extend these practices to attain carbon neutrality throughout the entire battery value chain by 2050.
We explored how LG Energy Solution is making effort to mitigate climate change as the first battery maker in Korea to declare its support for the TCFD initiative. Next time, we will delve into the details of what information LG Energy Solution discloses according to the TCFD recommendations.