■ Addressed ESG achievement and vision including joining of RE100 and responsible management of supply chain
■ Expressed its strong will for ESG in making the report with the use of recycled paper and soy ink
■ Jong-hyun Kim President and CEO of LG Energy Solutions, said
“with a mindset of considering this year as the first year of pursuing ESG, we will enhance our competitiveness in ESG, exceeding the market and customer expectation.”
LG Energy Solution released the first Environmental, Social and Governance (ESG) report since its establishment.
The report describes ESG performances and visions including the joining of Renewable Energy 100(RE100), responsible management of supply chain, and others as a leading battery manufacturer.
To convey its strong will for ESG management, it particularly used recycled papers and soy ink in creating the report. The title is characterized with an eco-friendly image by using colorful colors as a minimum.
The total 114-page report includes ▲greetings of the management and introduction of ESG activities, ▲ESG visions, key eight core areas and top four enablers* (foundation to pursue major ESG areas) ▲organization of the board of directors, investment in R&D, information security, “Jeong-Do” management (being successful through fair management practice while constantly developing business skills), and risk management.
Most of all, it incorporated various index and global standards to improve the reliability of the report.
Besides sustainable management reporting standard of Global Reporting Initiative (GRI) Standards, it described its practices related to UN SDGs* indicators as well as public guidelines of global ESG information including VRF SASB* Standards and TCFD*. Moreover, it intended to secure objectivity and transparency being verified by a third party independent organization by following an internationally recognized standard, the AA1000 Assurance Standard (AA1000AS v3).
In his preface, President and CEO Jong-hyun Kim of LG Energy Solution expressed, “we are planning to pursue ESG management to last long in the market as a ‘valuable company’ in the rapidly changing global business environment” and added “with a mindset of considering this year as the first year of pursuing ESG, we will increase our competitiveness in ESG, exceeding the market and customer expectation.”
LG Energy Solution previously declared top seven core projects including ESG vision of ‘We CHARGE toward a better future,’ ▲Carbon-neutral Growth 2050 ▲ the promotion of RE100 at all global business sites in 2030 ▲ and the building of a closed loop for waste plastic resources in 2025 with its determination to offer sustainable and better future as a world’s leading battery maker in the industry.
Business achievements in each of the ESG areas and details of the vision
Environmental (E): Concerning a major achievement in environment, as a preeminent eco-friendly company, it aims at manufacturing products using 100% renewable energy in 2030. This goal is getting two decade ahead of that of the global RE100 campaign.
To this end, it has simultaneously joined two environmental initiatives RE100 and Electricity vehicle 100 (EV100) in 2021 and is practicing activities responding to climate change including energy efficiency and saving. As of the year of 2020, more than 30% of renewable energy is used in the total amount of electricity used domestic and overseas.
Furthermore, in Poland and U.S. business sites, it used 100% of renewable energy in manufacturing products by purchasing Green Pricing and Renewable Energy Certificate (REC) and is also seeking to promote RE100 to other domestic and Chinese sites. The Ochang business site in Korea is operating a 1.2MW solar power plant.
In response to growing demand for battery and issues for treating used batteries, LG Energy Solution is planning to complete forming a closed loop recycling framework in all global business sites from raw material, manufacturing, consumption, to disposal in 2025.
It also implements Chemical Assurance and Regulation Management System (CHARMS), a chemicals management system of preventing environment and safety accident, and observes compliance in all the process from purchase, warehousing, use, delivery, to disposal in order to provide customers with eco-friendly batteries. It is planning to achieve 100% greenness for battery materials and products in 2022 and 2023, respectively.
Social (S): LG Energy Solution is actively initiating the management of supply chain by forming the Responsible Sourcing policy as sustainable business achievement for the society. Prior to this, it has run the Code of Conduct for Suppliers since 2016.
This Code of Conduct contains regulations partner companies must observe in the fields of human rights · labor · ethical management · health · safety · environment · sustainability · purchase of ethically reliable minerals. The company annually evaluates whether their partners observe compliance and thoroughly monitors the implementation results through onsite inspection.
Moreover, it applied a blockchain-based platform in the supply chain of cobalt, one of the key raw materials in battery making. With the aim of enhancing transparency in the supply chain, it stores distributed data in the chain by making random manipulation and hacking difficult. It deployed a system automatically interfacing the data of each process with the platform from receiving of raw material to making & shipping of products in 2020.
Corporate Governance (G): Above all, LG Energy Solution formed the highest review body, ESG Committee on June 15th to establish ESG centric management strategy. The Committee is to undertake enacting basic policy and strategy and making deliberation and decision on operation.
Particularly, it gained public attention by appointing a female chairman of ESG Committee. In her welcoming speech, Chairman Shin Mi-nam said, “we will thoroughly monitor whether all ESG tasks are implemented and systematically managed in terms of strategy to enable us to fulfill the needs of the times and improve our competitiveness. We will do our utmost to support all the tasks to be implemented in time.”
Explanations on acronyms
* VRF SASB: Value Reporting Foundation Sustainability Accounting Standards Board
* TCFD: Task Force on Climate related Financial Disclosure
* UN SDGs: Sustainable Development Goals of the United Nations