Climate Change Data

Environmental Metrics

ESG Focus Areas

• Safety and environment management
• Shared growth with suppliers
• Ethical management
• Employee welfare
• Contribution to local community

Environmental Achievements

• Reduced GHG emissions significantly in 2018 due to the development of new ultra-high voltage products that eliminated the use of SF6 gas.
• Maintained hazardous factor levels below 50% of legal requirements (except for noise).

Social Achievements

• Established the corporation for Joint Work Welfare Fund for Suppliers to provide welfare benefits to suppliers’ employees.
• Conducted various programs to promote shared growth with suppliers, including financial support, shared-growth payment system, and training.
• Implemented various social contribution activities, including donations, volunteer work, and community support programs.

Governance Achievements

• Established and implemented challenging goals, resulting in record performance despite global economic recession.
• Strengthened ethical management through the Ethics Committee, Code of Ethics and Conduct, and training programs.
• Implemented an integrated risk management system.

Climate Goals & Targets

Environmental Challenges

• Increasing amounts of electric power and LNG used for production processes despite efforts for decreasing the usage.
• Tightening of domestic and international regulations on safety, health, and environment.

Mitigation Strategies

• Continued investment in energy conservation and risk elimination measures.
• Implemented a process-based safety and environment management system.
• Developed and produced Solid Insulated Switchgear (SIS) and Dry Air Insulated Switchgear (DAIS), which do not use SF6 gas.

Supply Chain Management

Responsible Procurement

• Basic Subcontracting Contract and Subcontracting Fair Trade Agreement
• Shared-growth payment system
• ACE Club

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Standards, UN Global Compact

Certifications: ISO 14001, OHSAS 18001

Third-party Assurance: Korea Management Registrar

UN Sustainable Development Goals

• Goal 7
• Goal 8
• Goal 9
• Goal 11
• Goal 13
• Goal 17

LSIS's business and service areas contribute to Goals 7 and 11. Talent policy and business growth align with Goal 8. Activities for management improvement relate to Goal 9. Social contribution activities by region align with Goal 11. Measures for climate change address Goal 13. Shared growth with suppliers supports Goal 17.

Sustainable Products & Innovation

• Solid Insulated Switchgear (SIS)
• Dry Air Insulated Switchgear (DAIS)

Awards & Recognition

• Top 100 Global Innovators (Clarivate Analytics)
• IDC Digital Transformation (DX) Award
• 10th Power Demand Management Award
• 2018 Korea Technology Award
• 2018 Industry Award

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Reduced carbon emissions by 18% compared to 2020
• Achieved over 84.7% waste recycling rate
• Invested ₩19.32 billion in environmental initiatives

Social Achievements

• Industrial accident rate of 0.01%
• ₩69 billion in support for partners
• 1,471 people benefited from social contribution activities

Governance Achievements

• Established an ESG committee under the board of directors
• 100% resolution rate for ethical management violation reports
• 6 board meetings held

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to the prolonged pandemic and the war in Ukraine

Mitigation Strategies

• Developed alternative sourcing strategies
• Strengthened global business competitiveness through product quality and delivery

Supply Chain Management

Supplier Audits: 470 partners signed basic contracts in 2021

Responsible Procurement

• Code of conduct
• Supplier sustainability requirements
• Conflict minerals management system

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products
• Expansion of renewable energy business

Reporting Standards

Frameworks Used: GRI Standards (Core Option), UN SDGs, TCFD, SASB

Certifications: ISO 14001, ISO 27001

Third-party Assurance: Korea Management Certification Institute (KMR)

Sustainable Products & Innovation

• Eco-friendly transformer oil
• Dry air insulated switchgear
• High-efficiency inverters

Awards & Recognition

• Global Top 100 Innovators (2021)
• UNGC Korea Association Award for Anti-Corruption (2021)
• World Economic Forum Lighthouse Factory (2021)

Environmental Metrics

ESG Focus Areas

• Eco-friendly management for carbon neutrality
• Creating a safe and happy working environment
• Ethical, transparent, and responsible management

Environmental Achievements

• Developed the world’s first eco-friendly 170kV 50kA Gas Insulated Switchgear (GIS), reducing GHG emissions by over 98%
• Reduced energy consumption by about 6.7% at the Cheongju worksite through the construction of the ‘GridSol CUBE Station’
• Achieved a 97% waste recycling rate in 2023 at the Cheongju worksite

Social Achievements

• Launched the “Green Voice” choir, employing eight new artists with developmental disabilities
• Increased the duration of parental leave from one year to two years
• Achieved 94.4% employee participation in human rights training

Governance Achievements

• Established the ESG Committee under the BOD to deliberate on key ESG-related policies and strategies
• Joined the Global RE100 initiative
• Maintained a dividend payout ratio of at least 40% of the current net profits

Climate Goals & Targets

Environmental Challenges

• Climate change risks (natural disasters, temperature rise, stricter regulations)
• Transition risks (ESG disclosure obligations, carbon and GHG emission regulations, product/service regulations)
• Market risks (rising energy prices, increased renewable energy demand)

Mitigation Strategies

• Established an emergency response system
• Enhanced energy efficiency through investments in building insulation and upgrading facilities
• Developed and incorporated eco-friendly materials
• Expanded renewable energy use through self-generation and PPAs

Supply Chain Management

Supplier Audits: Annual assessments for existing suppliers; unscheduled assessments for new suppliers.

Responsible Procurement

• LS ELECTRIC Supplier Code of Conduct
• Quality, cost, delivery (QCD) and competency assessment of suppliers
• Environmental and safety assessment criteria for parts with hazardous substance management

Climate-Related Risks & Opportunities

Physical Risks

• Natural disasters
• Average temperature rise

Transition Risks

• ESG disclosure obligations
• Enhanced carbon and GHG emission regulations
• Enhanced product/service regulations

Opportunities

• Expanding the use of eco-friendly energy sources
• Boost in profits from increasing sales of eco-friendly, low-carbon products
• Increase in power demand according to electrification

Reporting Standards

Frameworks Used: GRI Standards 2021, UN Sustainable Development Goals (SDGs), TCFD, SASB

Certifications: ISO 14001, ISO 45001, ISO 27001

Third-party Assurance: Korean Foundation for Quality

UN Sustainable Development Goals

• Goal 1
• Goal 3
• Goal 4
• Goal 7
• Goal 8
• Goal 12
• Goal 13
• Goal 16
• Goal 17

LS ELECTRIC's initiatives contribute to these goals through various social contribution activities, employee well-being programs, sustainable product development, and commitment to carbon neutrality.

Sustainable Products & Innovation

• Eco-friendly 170kV 50kA Gas Insulated Switchgear (GIS)
• Cd-free electrical switch contact material

Awards & Recognition

• 2023 JoongAng ESG Awards (Industry and capital goods category)
• 2023 Export Tower Award (700 million dollars)