LG : Chem Publishes Sustainable Management Report Containing Information for Achieving Net-Zero

■ Publication of 16th sustainable management report... Contains detailed action plans for achieving net-zero
□ Implementing renewable energy in earnest and reaching 85% waste recycling rate
□ Newly established the ESG Committee and continuing sustainable supply chain management

■ Chief Executive Officer Hak Cheol Shin,
"LG Chem will transition from a traditional chemical company to a science company based on sustainability"

"Now, customers are requesting the use of renewable energy. We are also quickly upward adjusting our goals."
"Our goal is to enhance the ESG capacities of partners to build a win-win supply chain."

On the 11th, LG Chem announced that it issued a sustainable management report containing the results of implementing sustainable management and ESG (environmental, social, governance). This is the 16th year for this report and it focuses on detailed practices for achieving 2050 Net-Zero. It contains the voices of members who are acting out the sustainability goals within LG Chem.

Last year, LG Chem increased implementation of renewable energy in the environment sector, while increasing the waste recycling rate. The renewable energy usage rate of LG Chem in 2021 was 344,528MWh (megawatt/hour, energy unit), which is equivalent to the amount that can be used by about 260,000 people for an entire year* Up until last year, LG Chem used only 1,760MWh of renewable energy, and then began to implement renewable energy in earnest from 2021. In particular, it entered a renewable power purchase agreement (PPA) in China and it is currently operating the entire value chain for battery materials in China with renewable energy.
*IEA (International Energy Agency) 2019 household electricity usage per person by nation, Korea 1,303kWh

LG Chem is raising its waste recycling rate every year for the sake of resource circulation and in 2021, it raised its waste recycling rate by 7%P compared to the previous year to reach 85%. As there has been an increase in customers directly requesting eco-friendly management, LG Chem is building up a resource circulating structure, and it plans to convert electricity used by all of its workplaces worldwide to renewable energy by 2050.

There was also a big jump in investments for safety and health for the social sector. The amount of investments in environmental safety in 2021 by LG Chem was 292.7 billion KRW, which is a 62.3% increase compare to the previous year that was at 180.4 billion KRW. LG Chem completed precision diagnosis of high-risk processes and facilities for its 37 workplaces worldwide from 2020 and it is continuing ▲investments for safety diagnosis and making improvements to outdated high-risk processes and facilities ▲and facility investments for compliance to environmental laws and regulations.

In order to construct a sustainable supply chain, LG Chem plans to conduct LCA (life cycle assessment) on the environmental impact of all processes ranging from production to indirect areas (Scope 3) that includes partners, logistics systems, disposal, etc. Last year, it revised the ESG assessment method of partners based on practice and completed the construction of a proprietary supply chain assessment of greenhouse gas emissions, energy reduction, safety and health, human rights, ethical management, etc. Based on the assessment results, it plans to provide support for facilities and systems, safety and health, etc. of partners to strengthen the overall supply chain ESG capacities.

In terms of governance, LG Chem newly organized the ESG Committee to provide the platform for long-term ESG management, and also installed an internal trading committee to ensure fairness of transactions and management transparency. The Board of Directors also appointed two female outside directors this year as part of its efforts to enhance diversity of its members.

Furthermore, LG Chem also included its ESG activities of last year such as ▲carbon emissions reduction strategies ▲construction of a circulating economy system ▲converting to a sustainable portfolio ▲expansion of the supply chain management scope in its sustainability report.

LG Chem Chief Executive Officer Hak Cheol Shin commented, "Last year, we declared that we would invest 10 trillion KRW by 2025 in the three growth engines of eco-friendly materials, battery materials, and global innovative new drugs," while adding, "LG Chem will develop and transition from a traditional chemical company to a science company based on sustainability."