Sustainability Report and ESG Performance Data
LG Chem pursues sustainable innovation based on 『Sustainability Vision』, which includes customer, environment and social value throughout its business activities.
Key Indicator Development

Sustainability is one of the core values in achieving LG Chem’s vision, “We connect science to life for a better future.” LG Chem has selected key ESG indicators to strengthen company-wide ESG implementation, and is actively introducing them into corporate management. Through the analysis of indicators from ESG reporting frameworks, ESG rating agencies, and peer industry, we consolidated 20 indicators that are most material to corporate sustainability. Based on the concept of “stakeholder capitalism” proposed by the WEF, our key ESG indicators are classified into four categories: Environment, Social, Governance (ESG), and Growth. Furthermore, LG Chem seeks to align ESG performance disclosure to global sustainability disclosure standards by keeping a list of indicators that may arise as potential issues in the global sustainability arena. We will continue to practice Sustainability for the environment, society, and customers sincerely, and promote transparent communication of its progress.

ESG Performance Disclosure

To keep pace with the rapidly evolving global regulatory landscape of ESG disclosures, LG Chem strives to disclose ESG Performance Data with consistency and integrity. In this regard, we comply with the general principles of ESG disclosure (Accuracy, Clarity, Comparability, Balance, Verifiability, and Timeliness) set out in the ESG Information Disclosure Guidance proposed by Korea Exchange. We disclose our ESG Performance Data by adopting the “Reporting on enterprise value - illustrated with a prototype climate-related financial disclosure standard” methodology developed by five leading sustainability and integrated reporting organizations—Carbon Disclosure Project (CDP), Climate Disclosure Standards Board, Global Reporting Initiative (GRI), International Integrated Reporting Council (IIRC), and Sustainability Accounting Standards Board (SASB)—based on the Task Force on Climate-related Financial Disclosures (TCFD) recommendations.

Reporting Scope and Boundaries

This report covers LG Chem’s performance data in FY 2021 collected from headquarters and sales offices, 35 domestic and global production sites, and R&D campuses. Data of LG Energy Solution and FarmHannong have been excluded from the report since 2019. * Financial statements have been written in accordance with the K-IFRS Consolidated Financial Statement Standards. Statements with different reporting scopes have been expressly stated otherwise.

Metrics and Targets

Summary and target for each metric reflects the definition of ESG indicator as described by the CDP, GRI, SASB, TCFD, and S&P Global Corporate Sustainability Assessment.

Key ESG Indicators
"Category, Key ESG Indicators"
Category Key ESG Indicators
Environment
Greenhouse Gas Emissions Reduction
Energy Consumption Reduction
Water Withdrawal, Consumption and Discharge
Water Pollutants Reduction
Air Pollutants Reduction
Waste Discharge and Recycling
Product Responsibility and Chemical Stewardship
Reused and Recycled Materials
Society
Employee and Process EH&S
Employee Diversity, Equity and Inclusion
Talent Attraction, Training and Employee Engagement
Human and Labor Rights
Supply Chain Sustainability
Community Engagement
Government
Corporate Governance
Corporate Behavior and Ethics
Cybersecurity and Information Security
Public Policy and Regulation
Growth
Sustainable Solutions
Customer Satisfaction
Greenhouse Gas Emissions Reduction

Chemical company’s greenhouse gas (GHG) emissions are classified into three scopes: direct emissions that occur from sources that are controlled or owned by an organization (Scope 1); indirect emissions associated with the purchase of electricity, steam, heat, or cooling (Scope 2); and other indirect emissions from assets not owned or controlled by the reporting organization (Scope 3). We plan to manage and reduce Scope 1, 2, and 3 emissions through preemptive identification of risks and opportunities associated with GHG emissions and setting reduction target.

Greenhouse Gas Emissions
"Category, Unit, Scope, 2019, 2020, 2021"
Category Unit Scope 2019 2020 2021
GHG Emissions (Scope 1 + Scope 2) tCO2e Global 9,510,011 9,532,948 10,339,725
Korea 8,140,033 8,071,712 8,841,025
excl. Korea 1,369,978 1,461,236 1,498,700
GHG Emissions Intenstiy (Scope 1 + Scope 2) tCO2e/KRW 1M Global 0.5187 0.5536 0.4296
Scope 1 Emissions tCO2e Global 5,405,608 5,395,112 5,856,588
Korea 5,260,041 5,199,836 5,707,208
excl. Korea 145,567 195,276 149,380
Scope 1 Emissions Intensity tCO2e/KRW 1M Global 0.2948 0.3133 0.2433
Scope 2 Emissions tCO2e Global 4,104,403 4,137,836 4,483,137
Korea 2,879,992 2,871,876 3,133,817
excl. Korea 1,224,411 1,265,960 1,349,320
Scope 2 Emissions Intensity tCO2e/KRW 1M Global 0.2238 0.2403 0.1863
Scope 3 Emissions1) tCO2e Korea 1,081,852 1,209,828 1,320,247
- Purchased Goods & Services 494,538 517,985 571,164
- Capital Goods 54 14 56
- Fuel- and Energy-related Activities 122,922 121,904 175,732
- Upstream Transportation 151,406 318,438 197,919
- Waste 19,113 19,679 28,925
- Business Travel 2,767 2,265 970
- Employee Commuting 7,987 4,737 7,488
- Investments 276,686 219,190 322,438
- Other Upstream 6,379 5,616 15,555

1) Scope 3 emissions have been calculated for operations within Korea, on relevant categories of GHG Protocol’s Corporate Value Chain (Scope 3) Accounting and Reporting Standard (2011)

* Scope 1 and Scope 2 emissions in Korea in 2020 have been revised in accordance with the verification outcomes of the Ministry of Environment

* Scope 1 and Scope 2 emissions in Korea in 2021 have been reported in accordance with the GHG Statements submitted to the Ministry of Environment; the data is subject to change depending on the verification outcomes

* Emissions calculations for some Scope 3 categories have been adjusted based on updated methodology

Energy Consumption Reduction

Total energy consumption includes both direct energy (energy consumption during operation) and indirect energy (energy purchased or acquired), and renewable energy includes self-generated renewable energy and purchased renewable energy. We will strive to actively reduce energy consumption by improving energy efficiency in all manufacturing processes and increasing the proportion of renewable energy.

Energy Consumption
"Category , Unit, Scope, 2019, 2020, 2021"
Category Unit Scope 2019 2020 2021
Total Energy Consumption TJ Global 168,090 162,234 178,426
Korea 159,327 152,411 169,105
excl. Korea 8,763 9,823 9,321
Total Energy Consumption Intensity TJ/KRW 1M Global 0.0092 0.0094 0.0074
Direct Energy Consumption TJ Global 99,496 98,532 109,049
Korea 96,964 95,049 106,349
excl. Korea 2,532 3,483 2,700
Direct Energy Consumption Intensity TJ/KRW 1M Global 0.0054 0.0057 0.0045
Indirect Energy Consumption TJ Global 68,594 63,702 69,377
Korea 62,363 57,362 62,756
excl. Korea 6,231 6,340 6,621
Indirect Energy Use Intensity TJ/KRW 1M Global 0.0037 0.0037 0.0029
Total Renewable Electricity Consumption MWh Global 1,426 1,760 344,528

* Direct and indirect energy consumption in Korea in 2020 have been revised in accordance with the verification outcomes of the Ministry of Environment

* Indirect energy consumption overseas in 2019 and 2020 have been revised to reflect updated data from production sites

Water Withdrawal, Consumption and Discharge

As water scarcity aggravates, the importance of water resource management continues to rise. In this regard, we manage the amount of withdrawal, consumption, and discharge of water used in cooling, steam generation, and raw material processing during the manufacturing process. Furthermore, we intend to identify and minimize withdrawal from water-stressed areas.

Water
"Category , Unit, Scope, 2019, 2020, 2021"
Category Unit Scope 2019 2020 2021
Water Withdrawal m3 Global 69,559,329 61,207,704 66,881,345
- Groundwater 548,051 501,077 431,327
- Surface water 609,695 - -
- Industrial Water 61,379,578 52,917,433 59,128,641
- Municipal Water 6,947,778 7,773,729 7,307,267
- Rainwater 12,857 8,714 6,467
- Other 61,370 6,751 7,643
Water Withdrawal Intensity m3/KRW 1M 3.7936 3.3381 3.6475
Water Consumption m3 50,070,305 41,252,742 45,309,082
Water Consumption Intensity m3/KRW 1M 2.7307 2.2498 2.4710
Water Discharge m3 19,489,024 19,954,962 21,572,263
Water Discharge Intensity m3/KRW 1M 1.0629 1.0883 1.1765
Wastewater Recycling m3 1,770,024 1,869,328 2,135,019
Wastewater Recycling Rate % 8.33 8.57 9.01

* Data of 2019 and 2020 have been revised due to changes in data coverage (includes data from water and wastewater not subject to legal reporting)

Water Pollutants Reduction

In order to return the water used during the manufacturing process to the aquatic ecosystem, we strictly comply with permissible limits of water pollutants discharge and tightly monitor effluent water quality. We intend to minimize the discharges of water pollutants into aquatic ecosystems by measuring the discharges of chemical oxygen demand (COD), total nitrogen (TN), total phosphorus (TP), and suspended solids (SS); tracing the cause and the related impacts of discharge; and conducting regular inspections on wastewater discharge facilities.

Water Pollutants
"Category, Unit, Scope, 2019, 2020, 2021 "
Category Unit Scope 2019 2020 2021
COD Metric tons Global 883 738 734
COD Intensity kg/KRW 1M 0.0482 0.0429 0.0305
TN Metric tons 316 276 308
TN Intensity kg/KRW 1M 0.0172 0.0160 0.0128
TP Metric tons 57 41 49
TP Intensity kg/KRW 1M 0.0031 0.0024 0.0020
SS Metric tons 344 366 301
SS Intensity kg/KRW 1M 0.0188 0.0213 0.0125

* Data of 2019 and 2020 have been revised due to changes in data coverage (includes data from water and wastewater not subject to legal reporting)

Air Pollutants Reduction

Air pollutants generated through fuel combustion during the manufacturing process can impact our health and environment, hence we strictly comply with permissible limits of air pollutants emissions and tightly monitor air quality standards. We intend to lessen the emissions of air pollutants into the air by measuring the emissions of dust, NOx, SOx, hazardous air pollutants (HAPs), and volatile organic compounds (VOCs); tracing the cause and the related impacts of emissions; and conducting regular inspections on emission facilities.

Air Pollutants
"Category, Unit, Scope, 2019, 2020, 2021"
Category Unit Scope 2019 2020 2021
Dust Metric tons Global 164 123 168
Dust Intensity kg/KRW 1M 0.0089 0.0071 0.0070
NOx Metric tons 998 876 4,144
NOx Intensity kg/KRW 1M 0.0544 0.0509 0.1722
SOx Metric tons 172 142 181
SOx Intensity kg/KRW 1M 0.0094 0.0082 0.0075
HAPs Metric tons 99 238 274
HAPs Intensity kg/KRW 1M 0.0054 0.0138 0.0114
VOCs Metric tons 278 580 956
VOCs Intensity kg/KRW 1M 0.02 0.0337 0.0397

* Data of 2019 and 2020 have been revised due to changes in data collection methodology (based on actual emissions)

* Reported data of some air pollutants have increased in 2021 due to new factories and the revision of the Clean Air Conservation Act

Waste Discharge and Recycling

Wastes generated from business sites include general (nonhazardous) waste and designated (hazardous) waste. In addition to disposing wastes through legitimate means, we manage wastes based on different methods of treatment to reduce waste generation and increase the recycling rate. Waste treatment is classified into four types: recycling, incineration with heat recovery, incineration, and landfill. We analyze wastes directed to incineration and landfills, and strive to maximize the amount of waste recycled.

Waste
"Category, Unit, Scope, 2019, 2020, 2021"
Category Unit Scope 2019 2020 2021
Total Waste Generated Metric tons Global 253,127 227,152 266,065
Total Waste Intensity kg/KRW 1M 0.0138 0.0132 0.0111
Nonhazardous Waste Metric tons 129,697 109,393 144,390
- Recycling 82,446 76,118 106,420
- Incineration with Heat Recovery 9,230 7,753 14,242
- Incineration 17,321 16,505 12,797
- Landfill 20,700 9,017 10,931
Hazardous Waste 123,430 117,759 121,675
- Recycling 68,270 62,914 70,672
- Incineration with Heat Recovery 27,362 31,160 33,529
- Incineration 25,772 22,691 16,321
- Landfill 2,026 995 1,153
Waste Reycling Rate (excl. incineration with heat recovery) % 60 61 67
Waste Reycling Rate (incl. incineration with heat recovery) 74 78 85

* Data of 2019 and 2020 have been revised due to changes in data coverage (includes data from wastes not subject to legal reporting)

Product Responsibility and Chemical Stewardship

Since chemical substances may pose risks during use, storage, and transportation, we evaluate risks that may arise from hazardous chemical substances, and maintain a database of products containing hazardous substances. We are continuing our efforts to reduce the use of hazardous substances or replace them with less hazardous chemicals. We actively carry out LCAs to analyze our products’ environmental impacts and identify areas for improvement.

Hazardous Substances
"Category, Unit, Scope, 2019, 2020, 2021"
Category Unit Scope 2019 2020 2021
REACH1) Annex 17 Substances % Global 17.74 29.80 16.10
REACH SVHCs2) 8.40 2.39 1.57
CMR3) Substances 15.89 5.99 2.71
Hazardous Substances Risk Assessment4) 5.92 13.59 25.09

1) Registration, Evaluation, Authorisation and Restriction of Chemicals

2) Substances of very high concern

3) Carcinogenic, mutagenic and reprotoxic chemicals

4) Percentage of substances registered amon chemical substances in sales products

Reused and Recycled Materials

In accordance with the obligation to reduce and recycle waste, we continuously monitor the input of reused and recycled raw materials processed by mechanical and chemical recycling, as well as the volume of products based on reused and recycled materials. We plan to actively expand the input of reused and recycled raw materials, and thereby increase the production volume of products based on them.

Reused/Recycled Materials
"Category, Unit, Scope, 2019, 2020, 2021"
Category Unit Scope 2019 2020 2021
Products based on reused/recycled materials1) Metric tons Global 10.602 13.411 14.668
Reused/recycled materials input2) 2.746 4.175 4.841

1) LUPOY PCR PC products

2) PCR PC

Employee and Process EH&S

As chemical manufacturing is exposed to heavy equipment, hazardous substances, and high temperatures and high pressure, employee and process safety is of paramount importance. We have expanded the scope of EH&S management not only to employees but also to include employees of our in-house subcontractors. We operate EH&S policy and conduct regular facility inspections to prevent safety incidents. In the event of unforeseen incidents, we transparently disclose the number of EH&S incidents occurred.

Employee and Process EH&S
"Category, Unit, Scope, 2019, 2020, 2021"
Category Unit Scope 2019 2020 2021
Employees
- Fatality rate1) Rate Global - 0.0115 0.0056
- TRIR2) 0.4725 0.6506 0.7642
- LTIR3) 0.1501 0.2476 0.2454
Subcontractors
- Fatality rate Rate Global - 0.0051 -
- TRIR 0.3065 0.3345 0.5078
- LTIR 0.1591 0.1774 0.2132
Process Safety Events
- PSE4) Case Global 1 5 -
- PSER5) Rate 0.0029 0.0135 -
Transport Incidents Case 2 2 1
- Road 2 1 1
- Rail - - -
- Ship - 1 -

1) Total fatality cases * 200,000 / Total working hours

2) Total recordable incident rate: Total recordable incidents * 200,000 / Total working hours

3) Lost time incident rate: Total lost time incidents * 200,000 / Total working hours

4) Process safety events

5) Process safety event rate: Total process safety events * 200,000 / Total working hours

* Total working hours refer to 8 hours a day for 300 days for full-time employees; Process safety events are reported based on the internal standards set in Accident Index which includes injuries, fire, leakages, amount of loss, etc.

* Fatality rate, TRIR, LTIR, and PSER of 2019 and 2020 have been revised due to the correction of the number of employees

Employee Diversity, Equity and Inclusion

We can promote work efficiency and improve job performance through fair treatment and inclusion of employees with diverse backgrounds and perspectives. We identify the diversity of domestic and global employees by gender, region, age, and job groups, as well as the ratio of management and executive positions in consideration of diversity. We monitor as well the equity of remuneration.

Employees
"Category, Unit, Scope, 2019, 2020, 2021"
Category Unit Scope 2019 2020 2021
Total No. of Employees Person Global 19,025 18,243 18,841
- Korea 13,567 12,551 13,955
- China 4,177 4,394 3,564
- Asia-Pacific (excl. China) 694 706 627
- Europe 315 318 419
- Americas 272 274 276
Total No. of Employees in Leadership Levels1) 4,905 4,635 5,082
- Korea 4,681 4,389 4,936
- China 162 181 101
- Asia-Pacific (excl. China) 36 38 31
- Europe 17 15 5
- Americas 9 12 9
No. of Employees by Age Group Person Korea 13,567 12,551 13,955
- Under 30 2,930 2,407 2,521
- 30 to 49 8,297 7,731 8,671
- 50 or above 2,340 2,413 2,763
No. of Employees by Gender Person 13,567 12,551 13,955
- Male 11,633 10,825 11,985
- Female 1,934 1,726 1,970
- Ratio of Female Employees % 14 14 14
No. of Employees in Revenue Generating Positions (Sales, Production, R&D) by Gender Person 3,486 3,224 3,521
- Management Level2)(Male) 2,883 2,670 2,923
- Management Level (Female) 603 554 598
- Ratio of Female Managemet Level % 17 17 17
No. of Employees in Leadership Levels by Gender Person 4,681 4,389 4,936
- Management Level (Male) 3,833 3,577 4,031
- Management Level (Female) 763 717 808
- Ratio of Female Management Level % 17 17 17
- Executive Level (Male) Person 78 88 89
- Executive Level (Female) 7 7 8
- Ratio of Female Executives % 8 7 8
Ratio of Average Female Salary to Average Male Salary
- Non-management Level (Base salary only) % Korea 76 77 77
- Management Level (Base salary only) 92 93 94
- Management Level (Base salary + other cash incentives) 91 94 94
- Executive Level (Base salary only) 92 90 93
Social Minorities
- Persons with Disabilities3) Person Korea 311 330 323
- National Veterans 280 276 270

1) Leadership level refers to all positions from professionals/senior managers and above

2) Management level refers to all positions from professionals/senior managers and above excluding executive level positions

3) Number of persons with disabilities hired in 2019 and 2020 have been corrected to the numbers reported to Korea Employment Agency for Persons with Disabilities

Talent Attraction, Training and Employee Engagement

To attract and develop talents of diverse backgrounds, we monitor the employee hires and turnover by age and gender, and provide leadership and job training in addition to statutory training. Going forward, we plan to expand the development and implementation of various programs in an effort to secure and nurture human resources and enhance employee engagement, and thus advance our competitive edge.

Parental Leaves
"Category, Unit, Scope, 20119, 2020, 2021"
Category Unit Scope 2019 2020 2021
No. of Employees on Maternity Leave Person Korea 89 119 107
No. of Employees on Childcare Leave 128 148 161
No. of Employees on Childcare Leave (Female) 98 108 110
No. of Employees on Childcare Leave (Male) 30 40 51
Employee Hires
"Category, Unit, Scope, 20119, 2020, 2021"
Category Unit Scope 2019 2020 2021
Total New Hires Person Korea 1,497 402 1,560
- Male 1,246 320 1,255
- Female 251 82 305
- Under 30 1,126 187 759
- 30 to 49 302 144 635
- 50 or above 69 71 166
Total Local Hires Global 995 764 1,580
Total No. of Senior Management Level from Local Hires1) 10 15 17

1) Senior Management level refers to all positions from department leaders/executives and above

Employee Turnover
"Category, Unit, Scope, 20119, 2020, 2021"
Category Unit Scope 2019 2020 2021
Total No. of Employee Turnover Person Korea 562 575 642
- Male 483 490 556
- Female 79 85 86
Total No. of Voluntary Employee Turnover 317 284 341
- Male 248 223 276
- Female 69 61 65
Employee Training
"Category, Unit, Scope, 20119, 2020, 2021"
Category Unit Scope 2019 2020 2021
Total Training Hours Hour Korea 491,626 428,997 577,372
Training Hours per Employee 36 34 41
Total Costs Spent on Training KRW 100M 183 125 156
Training Costs per Employee KRW 10K 135 92 115
Human and Labor Rights

We conduct risk assessments for labor and human rights, such as prohibition of child labor and protection of minors, voluntary employment and labor, freedom of association and collective bargaining, non-discrimination and respect for diversity, compliance with working hours, and fair remuneration. We plan to expand training on labor rights to raise employee awareness on the topic.

Labor Rights
"Category, Unit, Scope, 2019, 2020, 2021"
Category Unit Scope 2019 2020 2021
No. of Employees Participating in Labor Union Person Korea 5,177 5,075 5,436
No. of Employees Eligible to Join Labor Union 7,303 6,745 7,337
Ratio of Employees Participating in Labor Union % 71 75 74
% of Employees Covered by Collective Bargaining Agreements 100 100 100
Supply Chain Sustainability

Issues arising in the supply chain, including but not limited to labor rights, resource depletion and anti-corruption, are regarded as shared responsibility of all companies in the supply chain, hence identifying and improving such issues has become a competitive advantage for companies. We plan to reinforce our supply chain sustainability and partnership with suppliers through ESG assessments and on-site inspections.

Supply Chain
"Category, Unit, Scope, 2019, 2020, 2021"
Category Unit Scope 2019 2020 2021
No. of Regular Suppliers1) Company Global 968 1,064 1,132
- No. of Suppliers Subject to Sustainability Assessment 292 291 472
- No. of Suppliers Evaluated on Sustainability 239 191 233
- High-risk Suppliers2) 33 8 -
- On-site Audits3) 13 - -

1) Regular suppliers, based on internal management standards, exclude suppliers with less than 3 orders and purchase value of less than KRW 300 million (KRW 100 million for suppliers in life sciences)

2) High-risk suppliers refer to suppliers that scored below 65 for Supplier CSR Assessment results

3) On-site audits have been suspended from 2020 due to COVID-19, and have been replaced with an operational guide

Community Engagement

We engage with local communities through employment opportunities and regional development, as well as employee volunteering and partnership programs. We intend to reinforce our environmental and safety management, pursue active interaction with the local community, and continue to uphold our responsibilities as a community member.

Community Engagement
"Category, Unit, Scope, 2019, 2020, 2021"
Category Unit Scope 2019 2020 2021
Total Contributions to Local Communities1) KRW 100M Global 171 156 163
Employee Volunteer Hours2) Hour 13,665 4,879 4,965

1) Total contributions to local communities in 2019 and 2020 include contributions of LG Energy Solution; Contributions made by LG Energy Solution (KRW 2.6 B) and FarmHannong (KRW 10 M) have been excluded from 2021

2) Employee volunteer hours reduced significantly since 2020 due to COVID-19

Corporate Governance

A board of directors with independence, expertise, and diversity is essential to ensure effective and active corporate governance. Since the BOD is responsible for corporate policies and overall performance, we plan to establish a global governance system and internalize a BOD-centered management system through empowerment and capacity building.

Corporate Behavior and Ethics

We conduct regular inspections on corruption and bribery, and handle identified cases through disciplinary actions and/or legal procedures. Furthermore, we provide training on corporate ethics and fair trade to raise awareness and prevent recurrence. We plan to devise policies and strategies for corporate and employee behavior and ethics, and extend them to all business sites.

Corporate Behavior and Ethics
"Category, Unit, Scope, 2019, 2020, 2021"
Category Unit Scope 2019 2020 2021
No. of Investigations on Corruption Case Global 13 5 7
No. of Corruption Cases Handled 9 2 3
No. of Employees Participating in Anti-corruption Training1) Person Korea 13,567 12,511 13,431
No. of Employees Participating in Fair Trade Training2) 430 14,444 14,413

1) Anti-corruption training covers trainings on “Jeong-Do Management” and the Code of Ethics

2) Fair trade training covers trainings on subcontractors and compliance

Cybersecurity and Information Security

We conduct risk assessments on cybersecurity and information security, and raise employee awareness through information security training. Information leakage occurs in various forms, such as leakage of core assets of a company as well as customer data. In this regard, we plan to establish a company-wide management system to securely collect, use, and manage information relevant to corporate processes.

Cybersecurity
"Category, Unit, Scope, 2019, 2020, 2021"
Category Unit Scope 2019 2020 2021
ISO 27001 Certified Business Sites Site Korea 4 4 4
Cybersecurity Awareness Activities Case 12 12 12
Cybersecurity Training Hours Per Employee Minute 20 30 30

* 회계감사, 모의해킹, 자체진단 등을 통해 정보보안 Risk 평가를 수행하고 있으며 2020년의 경우 청주 사업장과 본사 관련 부서에 대해 자체 진단을 수행하였음

Public Policy and Regulation

Changes in public policy and regulation greatly influence corporate business, hence we report related issues and measures to the management on a regular basis. We continue to seek public-private partnerships by identifying policy support and promoting government proposals.

Public Policy and Regulation
"Category, Unit, Scope, 2019, 2020, 2021"
Category Unit Scope 2019 2020 2021
Contributions to Trade Associations1) KRW 1K Korea 2,311,660 2,090,714 2,222,895
Contributions to Political Campains 2) - - -

1) Contributions have been made to the following top 5 organizations in 2021:

- Korea Enterprises Federation: KRW 321,450,000

- Korea PC/BPA Council: KRW 221,672,000

- WEF: KRW 221,618,000

- Korea Petrochemical Industry Association: KRW 213,780,000

- Korea Vinyl Environmental Council: KRW 202,500,000

2) Companies are prohibited to sponsor political groups, in accordance with the Political Funds Act

Tax Strategy

LG Chem recognizes that observing the tax laws of each country in which it operates and fulfilling its duty to pay taxes faithfully as a taxpayer are maximizing shareholder value and are important contributions to national finance. For sustainable management, we comply with the following tax policies and manage tax risks extensively.

Tax Policy

LG Chem observes the following tax-related principles and regulations.

Fulfill tax reporting and payment obligations faithfully in accordance with the relevant local laws

Maintain a transparent relationship with the tax authorities and faithfully observe the obligation to submit data requested by the local tax authorities

Implement a reasonable transfer pricing policy in line with tax laws and OECD transfer pricing guidelines for international transactions with overseas corporations

Establish an efficient tax management system that calculates the effective tax rate and identifies the taxpayer in each country following the introduction of digital tax

Prohibit the transfer of income to a tax haven for the purpose of tax evasion

Release the annual audit report and other information on the electronic disclosure system to provide transparent tax information

Tax Risk Management

LG Chem is responding to tax risks through the following tax management process.

When making important business decisions, assess tax risks based on advice from external experts and tax authorities

Report to the executives depending on the type and amount of the tax, and clearly define responsibilities and tasks related to tax reporting and payment

In the event of tax risks such as tax law-related uncertainties, resolve the risks through collaborating with external experts

Tax Strategies
"Category, Unit, Scope, 2019, 2020, 2021"
Category Unit Scope 2019 2020 2021
Total Reported Taxes1) KRW 1M Global 169,180 367,839 1,235,790
- Korea 100,760 692,538 672,683
- Asia 108,503 290,065 565,833
- Europe 4,747 6,800 61,505
- Americas 18,847 53,112 2,421
- Others 149 141 39
- Consolidated Adjustments 26,131 674,817 56,319
Cash Payment of Corporate Tax 576,713 513,128 1,281,796

1) Reported taxes are based on consolidated financial statements of FY 2021

Sustainable Solutions

We established Sustainable Solutions as internal standards of classifying products with distinguished social and environmental values in terms of sustainability. We not only consider product characteristics such as bio materials and recycled materials, but also the social and environmental characteristics throughout the value chain, such as water consumption during manufacturing. We will continue to expand R&D investment and achieve sustainability competitiveness.

Other Economic Performances
"Category, Unit, Scope, 2019, 2020, 2021"
Category Unit Scope 2019 2020 2021
Total Revenues1) KRW 1M Global 27,331,968 30,058,872 42,654,722
- Revenues excluding LG Energy Solution, and Common and others2) 18,335,975 17,221,356 24,068,819
R&D Expenses 718,600 719,300 710,100

1) Based on consolidated financial statements of FY 2021

2) Represents simple deductions of revenues of LG Energy Solution and Common and others from Total; used for normalizing environmental data.

Common and others includes the revenues of FarmHannong, please refer to notes on consolidated audit report of FY 2021 for details

Customer Satisfaction

We reflect a customer-centered approach as a top priority across all our business processes, and identify improvement tasks through a customer satisfaction survey. We intend to foster a customer/market-oriented culture by monitoring customer pain points, and to meet customer expectations through active communication with customers.

Customer Satisfaction
"Category, Unit, Scope, 2019, 2020, 2021"
Category Unit Scope 2019 2020 2021
Customer Satisfaction Survey Scope1) % Global 94 100 100
Customer Satisfaction Survey Score Score 66.1 79.9 78.7

1) % of business areas (petrochemicals, advanced materials, life sciences) that conducted customer satisfaction surveys; Surveys have been conducted for all business areas since 2020 under the supervision of the Customer Value Innovation Team