NH Investment & Securities Co., Ltd.
Climate Impact & Sustainability Data (2021-2022, 2022, 2023)
Reporting Period: 2021-2022
Environmental Metrics
Climate Goals & Targets
Environmental Challenges
- Decreased demand and a rise in logistics/raw materials costs amid deterioration of the macro environment in 2022 for the HA division.
- Earnings deterioration amid sluggish demand and increased marketing spending for inventory adjustments in the HE division.
- Falling demand for automobiles affecting the VS division.
Mitigation Strategies
- Cost reduction and demand improvement for home appliances are expected to lead to an earnings recovery from 2023 for the HA division.
- Preemptive inventory adjustments made in 2H22 and anticipated stronger demand for TVs from 2H23 are expected to lead to earnings improvement in the HE division.
- Full-fledged earnings increase is anticipated on sales expansion for high-margin products such as center information displays (CIDs) and digital cockpits, as well as the strengthening presence of LG Magna e-Powertrain in the VS division.
Supply Chain Management
Climate-Related Risks & Opportunities
Reporting Period: 2022
Environmental Metrics
Climate Goals & Targets
Medium-term Goals:
- Benefit from virtuous cycle structure through multiple global hit titles, leading to higher profitability from second season dramas
- Operating synergies with indoor playground business
Short-term Goals:
- Earnings momentum from tentpole titles 'The Devil' and 'King the Land' airing in June
- Earnings momentum from 'The Roundup: No Way Out' release in early June
Environmental Challenges
- Repeated delivery gaps (captive channel and US subsidiary)
- Slow recovery in cinema demand
- Operating losses at subsidiaries due to delayed airing of TWHP (HBO)
- Burden of PPA amortization
- Sluggish box office results due to absence of blockbuster lineup
- Movie ticket price increases
- Unfixed airing schedules for dramas
Mitigation Strategies
- Anticipating operating synergies between cinema and indoor playground businesses (better space utilization efficiency)
- Securing orders for next seasons of successful dramas, leading to strengthened margins per project
Supply Chain Management
Climate-Related Risks & Opportunities
Reporting Period: 2023
Environmental Metrics
ESG Focus Areas
- Climate Change
Climate Goals & Targets
Environmental Challenges
- Significant gap between current global greenhouse gas emission reduction efforts and the goals set in the Paris Agreement.
- Insufficient efforts in adaptation to climate change.
- Need for increased public and private climate finance.
Mitigation Strategies
- Advocating for more aggressive emission reduction targets and actions.
- Promoting the expansion of renewable energy, phasing out fossil fuels, and halting deforestation.
- Calling for increased public finance to support climate action in developing countries.
- Emphasizing the need for alignment between domestic and international, public and private climate finance with greenhouse gas emission reduction and climate recovery pathways.