Climate Change Data

Environmental Metrics

ESG Focus Areas

• Economic
• Environmental
• Social
• Governance

Environmental Achievements

• Reduced energy consumption
• Reduced water consumption
• Reduced greenhouse gas emissions
• Improved waste recycling and reuse
• Achieved ISO 50001 certification at the Yeosu plant (Korea)

Social Achievements

• Implemented various employee training programs (totaling 268,577 hours)
• Launched Dream Together program to support employee personal goals
• Consistently high employee localization rate (98.02% in 2013)
• Various community investment initiatives (e.g., school improvements, support for elderly and disabled)

Governance Achievements

• Established a comprehensive risk management system
• Implemented a comprehensive internal control system
• Signed the Responsible Care Beijing Declaration

Climate Goals & Targets

Environmental Challenges

• Rising global energy prices
• Increasing energy demand in emerging markets
• Stringent regulations on greenhouse gas emissions

Mitigation Strategies

• Implemented energy management system (EnMS)
• Implemented energy saving initiatives (e.g., contract energy management)
• Developed and implemented greenhouse gas reduction plans
• Developed and implemented waste reduction and recycling programs

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: ISO 26000, CASS-CSR3.0, GRI G4

Certifications: ISO 14001 (multiple locations), OHSAS 18001 (multiple locations), ISO 50001 (Yeosu plant, Korea)

Sustainable Products & Innovation

• LUPOY ER-1006FH WA070

Environmental Metrics

ESG Focus Areas

• Climate action
• Renewable energy transition
• Circular economy
• Environmental protection
• Responsible supply chain

Environmental Achievements

• Transitioned all battery materials plants in China to 100% renewable energy through PPAs
• Reduced carbon emissions by approximately 40,000 tons annually (equivalent to planting 2.8 million pine trees) through biomass fuel transition
• Reduced carbon emissions by about 140,000 tons per year (equivalent to planting around 1 million pine trees) through hydrogen production plant
• Acquired ISCC PLUS certifications for 41 bio-balanced products
• Achieved 85% reduction in gas emissions from battery cells using single crystal cathode materials

Social Achievements

• Held 74 “Speak-up Table” sessions with 1,500 employees over three years, resulting in improved workplace culture and employee welfare
• Launched the “Female Talent Development Program” to support female employees’ career growth
• Operated the “Global Mobility” program for career development of outstanding talents in overseas subsidiaries
• Launched the “RZ?” app, an ESG practice and donation challenge app, resulting in KRW 347 million in donations

Governance Achievements

• Established the ESG Committee in 2021
• Appointed two female outside directors in 2022, increasing female representation on the BOD to 29%
• Established the position of Chief Sustainability Officer (CSO) in December 2021

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to COVID-19 and climate regulations
• High cost of renewable energy in Korea
• ESG regulatory risks in the petrochemicals industry
• Need for more stringent carbon reduction measures to meet Net-Zero goal

Mitigation Strategies

• Investing KRW 10 trillion by 2025 in three next growth engines (sustainable & eco-friendly materials, battery materials, innovative new drugs)
• Developing and commercializing products that contribute to reducing waste and carbon emissions
• Expanding the use of renewable energy through PPAs and RECs
• Developing and implementing internal carbon pricing
• Collaborating with partners to develop and commercialize CCU technology

Supply Chain Management

Supplier Audits: 233 suppliers evaluated on sustainability in 2021

Responsible Procurement

• Responsible Sourcing Policy
• Code of Conduct for Suppliers
• ESG evaluation system for suppliers

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Increased regulatory costs
• Increased investment costs for renewable energy

Opportunities

• Increased customer demand for low-carbon products
• Development of CCU technology

Reporting Standards

Frameworks Used: GRI, SASB, TCFD, UNGC

Certifications: ISO 14001, ISO 45001, ISCC PLUS

Third-party Assurance: LRQA

UN Sustainable Development Goals

• Goal 7 (Affordable and Clean Energy)
• Goal 12 (Responsible Consumption and Production)
• Goal 13 (Climate Action)

Initiatives contribute to these goals through renewable energy transition, waste reduction and recycling, and carbon emissions reduction.

Sustainable Products & Innovation

• Bio-balanced products
• PCR plastics
• Bio-degradable plastics

Awards & Recognition

• Education Minister’s Commendation for continued contribution to the revitalization of educational donations

Environmental Metrics

ESG Focus Areas

• Climate action
• Renewable energy transition
• Circular economy
• Environmental protection
• Responsible supply chain
• Employee and process safety
• Diversity, equity, and inclusion
• Human rights and labor
• Product stewardship
• Business ethics

Environmental Achievements

• Largest renewable energy power purchase agreement in Korea (up to 615 GWh per year)
• 13% renewable energy transition rate across global operations with 100% renewable energy transition at 7 overseas operations
• Secured chemical recycling capacity with the construction of the first large-scale supercritical pyrolysis plant in Korea
• Number of Post-Consumer Recycled products increased to 120
• Obtained Zero Waste to Landfill certification at four sites
• Increased the seagrass habitat by 20,008m² and fixed 5.9 ton carbon by transplanting 50,000 seagrass
• Completed the assessment of Product Carbon Footprint for 100% of products

Social Achievements

• Zero cases of serious accidents
• 96% of suppliers signed a commitment to the revised Supplier Code of Conduct
• Conducted on-site ESG audits and monitored progress on corrective actions for six high-risk suppliers
• Provided KRW 206 billion win-win fund as financial support for supplier ESG management
• Provided ESG training to 40,000 youths in 505 schools and care facilities
• 5,500 employees participated in Career Week
• 35 policy and process improvements based on the Voice of Employee
• 3 sites conducted Human Rights Impact Assessment

Governance Achievements

• Four independent directors on the Board of Directors
• Board gender diversity of 29% with two female independent directors
• Certified compliance management systems (ISO 37301) and anti-bribery management systems certifications (ISO 37001)

Climate Goals & Targets

Environmental Challenges

• Increased Northeast Asian supply and a weakening global economy
• Difficulty in raising selling prices to offset rising production costs
• Metal price lags despite increased shipment
• Uncertain global economic outlook along with prolonged high interest rates
• Ongoing conflicts like the Russia-Ukraine war causing energy prices to rise
• Increase in energy prices driving up demand for fossil fuels
• Rising prices of traditional commodity resources raising costs
• Strengthening global carbon regulations and uncertainties surrounding the allocations of emission allowances under the Korea Emissions Trading Scheme (K-ETS)

Mitigation Strategies

• Reinforce high-value product portfolio and diversify markets
• Strengthen capabilities in sustainability areas like bioplastics, recycling, and carbon neutrality
• Accelerate the transition to a low-carbon business model
• Implemented an Internal Carbon Pricing (ICP) mechanism
• Developed the Net-Zero Portal
• Introduced the carbon reduction incentive scheme
• Expanding the use of renewable energy
• Investing in carbon offset projects
• Developing various plastic recycling technologies
• Expanding our portfolio of bio-based products
• Developing promising technologies based on our leading research capabilities for mid- to long-term carbon reduction
• Strengthening the internal drivers for carbon reduction
• Establishing a risk management system for our supply chain
• Conducting ESG training for suppliers and procurement practitioners
• Operating a hotline for suppliers to report any difficulties

Supply Chain Management

Supplier Audits: 6 high-risk suppliers audited in 2023

Responsible Procurement

• Supplier Code of Conduct
• Responsible Sourcing Policy
• ESG self-assessment
• ESG training for suppliers

Climate-Related Risks & Opportunities

Physical Risks

• Extreme temperature
• Pluvial flooding
• Drought
• Tropical cyclone

Transition Risks

• Stricter carbon emission regulations
• Adoption of low-carbon technologies
• Changing consumer perceptions
• Rising costs to respond to greenhouse gas regulations
• Increased investment in carbon reduction technologies
• Increased demand for green products and credentials
• Reduced ability to raise capital due to climate change inaction

Opportunities

• Development of energy-efficient products
• Development of low-carbon products
• New business opportunities in the evolving market dynamics of sustainability and ESG

Reporting Standards

Frameworks Used: GRI, SASB, TCFD

Certifications: ISO 14001, ISO 45001, ISO 37301, ISO 37001, ISCC Plus

Third-party Assurance: LRQA

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• PCR plastics
• BCB products
• Biodegradable plastics
• PEC (PolyEthylene Carbonate)
• Eco-friendly plasticizer

Awards & Recognition

• Not disclosed