Climate Change Data

Environmental Metrics

ESG Focus Areas

• Corporate Governance
• Social
• Environment

Environmental Achievements

• Certified as Green Logistics Company
• Launched Green Store, the first urban style eco-friendly convenience store in the industry
• Reduced carbon emissions by shortened delivery distances through the completion of the Central Distribution Center (CDC)

Social Achievements

• Acquired CCM certification for customer-centered management
• Launched various PB products to satisfy customer needs
• Implemented various family-friendly systems to increase employee satisfaction
• Selected as a “community contribution company” by the Ministry of Health and Welfare and the Korea Social Welfare Council

Governance Achievements

• Established the Audit Committee in 2019
• More than half of the BOD are comprised of outside directors
• Implemented a whistleblower system called “Clean Line”

Climate Goals & Targets

Environmental Challenges

• Rising global uncertainty and slowdown of the domestic economy
• Air pollution and fine dust
• Food waste from convenience stores

Mitigation Strategies

• Preemptive risk management system
• Built Green Store with air purifiers and low-chemical finishing materials
• Introduced food waste disposers in Green Stores

Supply Chain Management

Responsible Procurement

• Ethical Management and Fair Trade supplier Code of Conduct

Climate-Related Risks & Opportunities

Sustainable Products & Innovation

• Green Store products
• Vegan products
• Soft Food products

Awards & Recognition

• Minister’s Commendation (Ministry of the Interior and Safety)
• Grand Prize in Corporate Social Contribution Category (Presidential Award)
• 1st Place in CVS Sector of 2019 Korean Service Quality Index
• The 3rd Korea Crime Prevention Awards
• Minister’s Commendation (Ministry of Agriculture Food and Rural Affairs)
• Grand Prize (24th Korea Distribution Awards)
• 1st Place in CVS Sector of 2019 Brand Power
• President's Commendation for promoting recruitment of the disabled

Environmental Metrics

ESG Focus Areas

• Environmentally Friendly Management
• Realizing a Society Where We Live Together
• Creating a Symbiotic Industrial Ecosystem
• Building a Fun Organizational Culture

Environmental Achievements

• Introduced eco-friendly poly bags
• Introduced eco-friendly containers and packaging for PB products
• Expanded introduction of eco-friendly products
• Opened eco-friendly convenience stores ('Green Stores')
• Launched industry's first eco-friendly delivery service ('The Green Delivery')
• Planted trees in the Kubuqi Desert as part of a carbon offsetting program
• Changed coffee beans used in 'CaféGET' to Rainforest Alliance certified beans
• Replaced plastic straws with paper straws in 'Dellafe' iced coffee

Social Achievements

• Achieved record-high sales and significant growth in store numbers and operating profit despite challenging economic conditions
• Awarded the Presidential Award at the 24th Korea Distribution Awards for contributions to regional economic development and job creation
• Established the Child Safety Citizen Award in collaboration with the National Police Agency
• Launched the 'CU Together' program for employing people with developmental disabilities
• Operated the 'CU Sprout Store' program to support the self-reliance of vulnerable groups
• Supported the elderly through the 'Senior Staff' program
• Supported children in developing countries through the 'CU Library' project
• Expanded the child safety net through the 'iCU' platform

Governance Achievements

• Strengthened board diversity, expertise, and independence
• Implemented a robust internal control system
• Established an ethics management hotline and Clean Line internal reporting system
• Obtained ISMS certification for information security management
• Implemented a compliance program (CP)

Climate Goals & Targets

Environmental Challenges

• Economic downturn and low growth
• Minimum wage increase
• Various regulations
• COVID-19 pandemic
• Supply chain disruptions

Mitigation Strategies

• Focused on internal management
• Combined core business strengths with new and dynamic initiatives
• Strengthened internal control systems
• Developed alternative sourcing strategies
• Implemented business continuity planning (BCP)

Supply Chain Management

Responsible Procurement

• Fair trade practices
• Support for SMEs
• Focus on domestic products

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Standards, UN Global Compact 10 Principles

Certifications: ISMS, Green Logistics

UN Sustainable Development Goals

• Goal 4
• Goal 8
• Goal 10
• Goal 11
• Goal 12
• Goal 14
• Goal 15
• Goal 16
• Goal 17

Various initiatives contribute to these goals through job creation, community development, environmental protection, and ethical business practices.

Sustainable Products & Innovation

• Eco-friendly packaging
• Eco-friendly delivery service
• Green Stores

Awards & Recognition

• iF Design Award
• German Design Award
• Korea Distribution Awards
• Presidential Award for Disability Employment Promotion

Environmental Metrics

ESG Focus Areas

• Establishing Eco-Friendly Value Chain (PLANET)
• Creating Ecosystem for Shared Growth (PARTNER)
• Supporting Happy and Healthy Life (PEOPLE)

Environmental Achievements

• Reduced greenhouse gas emissions by 651 tCO2-eq/year through solar power generation.
• Achieved 92.5% application rate of PL product recycling.
• Converted all 3 items of PL bottled water into No Label packages, reducing plastic waste.

Social Achievements

• Created 712 jobs for vulnerable groups.
• Safely handed over 112 children, dementia patients, and intellectually disabled people to their guardians through the "i-CU" program.
• Achieved an "Excellent" grade in the evaluation of shared growth index.

Governance Achievements

• Received an overall 'A' rating from the Korea Corporate Governance Service (KCGS) for two consecutive years.
• Maintained a 62.5% proportion of Non-executive Directors on the board.
• Implemented the Fair Trade Autonomous Compliance Program (CP).

Climate Goals & Targets

Environmental Challenges

• Climate change risks such as extreme weather events impacting logistics and store operations.
• Supply chain disruptions due to various factors.
• Maintaining fair trade practices within the franchise model.

Mitigation Strategies

• Established emergency scenarios and crisis management systems.
• Implemented a supply chain ESG management process including due diligence.
• Developed industry-leading win-win models for franchisees and signed fair trade compliance agreements with SME partners.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• ESG checklists for new partners, focusing on environment, labor, human rights, safety, health, consumer, and community participation.
• HACCP certification for food suppliers.
• Fair trade compliance agreements with SME partners.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events impacting logistics and store operations.

Transition Risks

• Changes in environmental regulations, consumer preferences for sustainable products.

Opportunities

• Expansion of renewable energy generation, development of sustainable products.

Reporting Standards

Frameworks Used: GRI Standards, UN SDGs, SASB

Certifications: ISO 14001, ISMS, CCM

Third-party Assurance: DNV Business Assurance Korea, Ltd.

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 12 (Responsible consumption and production)
• Goal 13 (Climate action)
• Goal 8 (Decent work and economic growth)
• Goal 11 (Sustainable cities and communities)
• Goal 17 (Partnerships for the goals)

BGF Retail's ESG management goals are interconnected with the UN SDGs, and the company continues to find and proceed with social contributions to realize SDGs.

Sustainable Products & Innovation

• No Label PL bottled water
• PLA packaging materials
• Recycled coffee grounds deck
• Vegetarian convenience foods
• Vegan cola

Awards & Recognition

• Ministerial Commendation on Missing Children's Day
• Korea's Top 100 Franchise
• Excellent corporation for disclosure of corporate governance
• 2021 National Brand Competitiveness Index
• Commendation of the highest grade in the implementation evaluation of the member field of the 2021 Fair Trade Agreement
• Cash use option guarantee citation
• 28th Presidential Award for Corporate Innovation

Environmental Metrics

ESG Focus Areas

• Climate Change
• Resource Use and Environmental Impact
• Supply Chain Management
• Partner Growth and Symbiosis
• Community Contribution
• Human Rights
• Occupational Health and Safety
• Providing Healthy and Correct Food
• Customer Value
• Data Protection and Information Security

Environmental Achievements

• Reduced waste by 60.8 tons through recycling in 2023
• Achieved a 15.1% reduction in carbon emissions in two automotive parts through LCA assessment
• Conversion of diesel forklifts to electric forklifts
• Introduction of low-power hybrid injection molding machines
• Replacement of NOx burners in boilers

Social Achievements

• Launched various employee well-being programs including health checkups, group accident and disease insurance, and influenza vaccinations
• Operates an employee assistance program (EAP)
• Maintained a 100% rate of employee participation in the labor-management council
• Conducted various safety and health training programs for employees
• Maintained zero industrial accidents in 2023

Governance Achievements

• Established an ESG Management Committee
• Implemented an electronic voting system for the general meeting of shareholders
• Established an internal transaction committee and a nomination committee for outside directors
• Conducted an ESG-related education program for outside directors
• Maintained zero compliance incidents in 2023

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to climate events
• Global regulatory and disclosure requirements for ESG management

Mitigation Strategies

• Developed alternative sourcing strategies
• Actively discussing and managing ESG management tasks with major affiliates, including BGF Retail

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Regular inspections of partner companies
• Conclusion of inspection agreements for all items and monitoring of CoA (Certificate of Analysis)

Climate-Related Risks & Opportunities

Physical Risks

• Climate change

Transition Risks

• Regulatory changes

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI Standards 2021, ISO 26000, UN SDGs, UNGC

Certifications: ISO 14001, IATF 16949, GRS

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Bio-degradable compounds
• PCR materials

Awards & Recognition

• President's Award at the 28th Korea Distribution Awards (2023)
• iF Design Award (2023)
• 2023 YouTube Works Awards (3 awards)
• Minister of Trade, Industry and Energy Award at the Korea Design Awards (2023)