Responsible Supply Chain
For companies conducting business globally, managing the supply chain doesn’t end with purchasing raw materials from proven suppliers. As diverse suppliers and stakeholders are connected in the supply chain, the increase in environmental and social risks require us to to comply with the laws and regulations of all regions where the supply chain is located. LG Chem’s suppliers shall also apply and manage the same strict sustainability standards as ours.

Responsible supply chain development and management

Our approach
Responsible Sourcing Policy
The issue of children’s labor in the cobalt supply chain, the raw material for cathodes, is difficult for LG Chem to solve on our own. LG Chem has participated in international initiatives such as the Responsible Minerals Initiative (RMI) in 2019 to cooperate proactively and share mutual sentiments in partnership with other companies in the supply chain.

LG Chem established responsible sourcing policy for raw materials procurement in 2020. This plicy specifies a variety of porcurement for raw materials suppliers. LG Chem complies with the ‘OECD Due Diligence Guidance for Responsible Supply Chains’. We are expanding our responsible sourcing system throughout our buying activities.

Due Diligence on Raw Materials Supply Chains
LG Chem is conducting due diligence for raw material suppliers in the supply chain to ensure transparency of our raw materials.
In 2017, we conducted a 3rd-party audit for cobalt smelting and precursor suppliers in China. In 2018, we performed due diligence in the small mines of the Democratic Republic of Congo, the largest producer of cobalt in the world, to inspect the conditions of children’s labor.
The results are transparently disclosed on our website. Risk in the supply chain of raw materials is rampant not only for cobalt but also for lithium, nickel, and other materials. LG Chem aims to source clean metals by comprehensively examining and solving various concerns existing within the supply chain.
Tightened Code of Conduct and Preventive Process
LG Chem has established and announced the Code of Conduct for suppliers since 2016. The Code of Conduct for suppliers consists of the following matters that the suppliers must adhere to: human rights, labor, ethical management, health, safety, environmental sustainability, responsible mineral procurement, and grievance syste.
LG Chem proactively validates the propriety of supply chain management systems from the selection of new suppliers based on the Supplier Code of Conduct and continuously manages the risk of supply chain through regular CSR evaluation and monitoring. The Code of Conduct for suppliers is diclosed via the LG Chem website and the procurement portal.
In addition to tichtening the Code of Conduct for suppliers, LG Chem is making efforts to establish a risk prevention process to find a variety of risk factors in the supply chain in advance. LG Chem made efforts to enhance the transparncy of the supply chain by establishing and applying blockchain based platform that can be neither manipulated nor hacked due to its distributed data storage. LG Chem will coplete automatic interworking between the blockchain and supply chain tracking data in order to prevent fundamentally a variety potential risks generated during production of raw materials.