Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Not disclosed

Social Achievements

• Not disclosed

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Global economic downturn affecting steel demand.
• Natural calamities (earthquakes, tsunamis, floods, pandemics) impacting operations and supply chains.
• Deteriorating economic conditions in Korea, the company's most important market.
• Increased competition in steel, trading, and construction industries.
• Execution of diversification strategy.
• International expansion challenges.
• Limited insurance coverage.
• Trade remedy proceedings (anti-dumping, safeguard, countervailing duties).
• Risks associated with overseas natural resource projects.
• Problems with joint ventures.
• Cyclical fluctuations in the construction industry.
• Environmental regulations.
• Information security breaches.
• Intellectual property protection.
• Potential claims for unpaid wages.
• Escalations in tensions with North Korea.
• Benchmark regulation reforms.
• Passive Foreign Investment Company (PFIC) classification for U.S. investors.

Mitigation Strategies

• Adjusted crude steel production and sales prices in response to demand.
• Implemented remote work arrangements, minimized travel, and assisted employees with quarantine measures during the COVID-19 pandemic.
• Investing in innovative products and manufacturing technologies.
• Diversification into new businesses.
• Hedging foreign exchange risks through derivative contracts.
• Maintaining long-term supply contracts for raw materials with periodic price adjustments.
• Actively participating in trade remedy proceedings.
• Careful pursuit of overseas natural resources projects.
• Mitigation strategies for non-climate risks (details not specified).
• Maintaining property insurance.
• Implementing information security measures.
• Obtaining patents and monitoring intellectual property rights.
• Compliance with Korean Supreme Court's interpretation of ordinary wages (details not specified).

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: IFRS

Certifications: ISO 14001

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Environmental Achievements

• Announced plan to work towards carbon neutrality by 2050.
• Pollution control levels higher than mandated by Government standards.
• Established an online environmental monitoring system.

Social Achievements

• Satisfactory workforce relations; no work stoppages or strikes.
• Wages among the highest of manufacturing companies in Korea.
• Wide range of employee benefits (housing, loans, hospitals, schools, pension program, welfare fund, insurance, facilities).

Governance Achievements

• Majority of board of directors is independent.
• Established ESG Committee, Director Candidate Recommendation Committee, Evaluation and Compensation Committee, Finance Committee, and Audit Committee.
• Adopted a Code of Ethics for all directors, officers, and employees.

Climate Goals & Targets

Environmental Challenges

• Global economic downturn affecting market demand for steel products.
• Earthquakes, tsunamis, floods, and severe health epidemics (including COVID-19) could materially adversely affect business.
• Dependence on export sales and imported raw materials.
• Intense competition in steel, trading, and construction industries.
• Expansion of operations abroad entails risks (distance, language, culture, regulations, political instability).
• Potential liabilities from environmental regulations and information security breaches.
• Risks related to intellectual property protection and joint ventures.
• Potential claims for unpaid wages.
• Escalations in tensions with North Korea.
• U.S. investors may have difficulty enforcing civil liabilities.
• Operations and investments in countries targeted by economic sanctions.

Mitigation Strategies

• Adjusted crude steel production levels and sales prices in response to sluggish demand.
• Implemented remote work arrangements, minimized business travel, and assisted employees with quarantine measures during COVID-19.
• Long-term supply contracts for raw materials with periodic price adjustments.
• Strategies to mitigate foreign exchange risks (matching receivables and payables, derivative contracts).
• Investments in developing innovative products and manufacturing technologies.
• Active participation in trade remedy proceedings.
• Diversification strategy to secure new growth engines.
• Property insurance for property, plant, and equipment.
• Periodic environmental inspections and supplier certification program.
• Vigorous defense against claims in legal proceedings.

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• Earthquakes
• Tsunamis
• Floods

Transition Risks

• Increased costs for reducing greenhouse gas emissions
• Changes in investor preferences and sentiments

Reporting Standards

Frameworks Used: IFRS

Certifications: ISO 14001

Third-party Assurance: KPMG Samjong Accounting Corp.

Environmental Metrics

ESG Focus Areas

• eco-friendly leadership
• sustainable social communities
• governance enhancements

Environmental Achievements

• POSCO declared the 2050 Carbon Neutrality Roadmap by setting targets for a 30% carbon emissions reduction by 2035, 50% by 2040, and Net Zero emissions by 2050.

Social Achievements

• As United Nations Global Compact members, POSCO HOLDINGS, POSCO, POSCO International and POSCO E&C, advocate for management based on human rights, diversity and inclusion policies.
• Our human rights policy covers protections for POSCO Group employees and staffs of our suppliers and labor union rights, encompassing human rights, grievance handling and victim relief.

Governance Achievements

• A group-level ESG risk response system has been established to address internal and external risks effectively, with significant ESG-related decisions made through the board of directors, discussions on key ESG issues by the POSCO Group’s ESG Council led by top management and the ESG Session involving all directors who are our executive officers (“Inside Directors”) and directors who are outside directors (“Outside Directors”).

Climate Goals & Targets

Environmental Challenges

• Global economic downturn
• Highly cyclical market demand for steel products
• Intense global competition in steel industry
• Depreciation of the Won against the U.S. dollar
• Increased prices of key raw materials
• Natural calamities (e.g., Typhoon Hinnamnor)
• Environmental regulations
• Cybersecurity threats
• Labor laws and legal disputes related to contract-based workers

Mitigation Strategies

• Adjusting crude steel production levels and sales prices
• Investing in innovative products and manufacturing technologies
• Hedging foreign exchange risks through derivative contracts
• Long-term supply contracts for raw materials
• Investing in overseas resources development projects
• Implementing cost reduction measures
• Strengthening cybersecurity risk management processes
• Hiring dispatched workers as full-time employees

Supply Chain Management

Responsible Procurement

• POSCO procures all tin, tantalum, tungsten and gold minerals from refineries in conflict-affected and high-risk areas that have obtained Responsible Minerals Assurance Process (“RMAP”) certification.
• POSCO Future M procures tungsten and cobalt for its rechargeable battery business by ensuring sourcing from RMAP-compliant smelters.

Climate-Related Risks & Opportunities

Physical Risks

• Earthquakes, tsunamis, floods

Transition Risks

• Increased pressure to reduce emission of carbon dioxide

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: IFRS

Certifications: ISO 14001