ESG Performance Data
Overview of ESG Key Indicators
In 2019, LG Chem established its sustainability vision and strategy and selected nine core focus areas. In 2020, the company publicly announced its mid‑ to long‑term goals, including “Carbon‑neutral Growth,” prioritizing five top tasks among these nine areas, and communicated them both internally and externally. In 2021, to communicate more proactively with a wide range of stakeholders and strengthen business competitiveness, LG Chem identified key indicators for priority management across environmental, social, governance, and growth dimensions. This selection was based on the stakeholder capitalism concept proposed by the World Economic Forum (WEF).
Stakeholder Interest Analysis
LG Chem defines its key stakeholders as customers, employees, shareholders and investors, suppliers/partners, local communities, and governments—those who have a significant impact on or are significantly affected by its business activities. The company operates diverse communication channels to identify the needs of each stakeholder group annually. Feedback gathered from stakeholders is shared with senior management and the Board of Directors, serving as a basis for deriving priority initiatives and improvement areas that are integrated into management activities. These initiatives are subject to continuous monitoring and feedback. Through ongoing engagement, LG Chem aims to respond swiftly to changes in the business environment and enhance its sustainability performance, thereby creating differentiated value for stakeholders.
Materiality Assessment Process
Since 2023, LG Chem has applied the concept of Double Materiality to determine the content of its sustainability reports and to identify and select sustainability issues requiring prioritized management. Building on its existing methodology, the company utilizes a materiality matrix consisting of “Environmental & Social Impact” (representing LG Chem’s impact on the surrounding environment and society) and “Financial Impact” (representing the impact of external factors on the company) as key axes for evaluating materiality.
Reporting Scope
This report covers LG Chem’s headquarters, sales offices, 31 domestic and overseas production sites, and R&D campuses, as of 2024. Data from LG Energy Solution and Farm Hannong Co., Ltd. are excluded. Certain financial information is presented based on the consolidated financial statements prepared in accordance with K‑IFRS. Where the reporting scope differs, this is explicitly indicated.
ESG Key Indicators
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High Impact
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Medium Impact
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Low Impact
| Category | Key ESG Indicators | Financial Materiality | Impact Materiality |
|---|---|---|---|
Environmental
|
Greenhouse Gas Emissions | ||
| Energy Consumption | |||
| Water Withdrawal, Consumption, and Discharge | |||
| Water Pollutants Discharge | |||
| Air Pollutant Emissions | |||
| Waste Disposal and Recycling | |||
| Product Responsibility and Chemical Stewardship | |||
| Material Reuse and Recycle | |||
Social
|
Employee and Process EH&S | ||
| Diversity, Equity, and Inclusion | |||
| Talent Attraction, Training, and Employee Engagement | |||
| Labor and Human Rights | |||
| Supply Chain Sustainability | |||
| Community Engagement | |||
Governance
|
Corporate Governance | ||
| Corporate Behavior and Ethics | |||
| Information Security and Cybersecurity | |||
| Public Policy and Regulation | |||
Growth
|
Sustainable Solutions | ||
| Customer Satisfaction |
Environmental
Greenhouse Gas Emissions
We seek to reduce and manage our scope 1, 2, and 3 GHG emissions by setting reduction targets and proactively identifying the risks and opportunities arising from our emissions.
1) Figures for Scope 1 and Scope 2 emissions in Korea for 2023 have been adjusted based on the verification results of the Ministry of Environment’s GHG statements.
2) Figures for Scope 1 and Scope 2 emissions in Korea for 2024 are based on values as of the submission to the Ministry of Environment’s GHG statements. These figures are subject to revision depending on the verification results.
3) Emission Intensity = Global GHG emissions / Revenues excluding LG Energy Solution and common and other segments.
4) Starting this year, Scope 2 GHG emissions are disclosed separately as market-based and location-based; however, total global emissions are aggregated based on market-based data. Market-based Scope 2 emissions are calculated from location-based emissions by subtracting reductions from REC purchases and Green Premium payments.
5) Calculation of Scope 3 emissions has been limited to select categories under the Greenhouse Gas (GHG) Protocol's Corporate Value Chain (Scope 3) Accounting and Reporting Standard (2011). Categories 5, 6, 7, 9, 11, 12, and 15 have been newly set under this standard and calculated from 2024.
6) The increase in Category 3-1 carbon emissions in 2024 is mainly due to increased naphtha purchases following the normal operation of Yeosu 2NCC (which was shut down in 2023).
LG Chem's Scope 3 Emissions Reporting
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With the increasing importance of Scope 3 carbon emissions management and growing sustainability disclosure and stakeholder demands, LG Chem reviewed global standards and the scope of calculations for Scope 3 carbon emissions. Based on this review, the company established its own calculation standards and applied them to estimate emissions for 11 categories at its domestic business sites.
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The calculation is based on the GHG Protocol's Corporate Value Chain (Scope 3) Accounting and Reporting Standard (2011), using highly reliable databases to calculate emissions by category (Figures for 2022 and 2023 emissions calculations remain unchanged from last year and were not revised).
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The calculation is based on the GHG Protocol's Corporate Value Chain (Scope 3) Accounting and Reporting Standard (2011), using highly reliable databases to calculate emissions by category (Figures for 2022 and 2023 emissions calculations remain unchanged from last year and were not revised).
- Category 1: Calculated emissions based on the purchase statements of key material inputs (raw materials, products, semi-finished products, goods, etc.) of Petrochemicals and Advanced Materials businesses.
- Category 2: Calculated emissions based on asset statements of acquired goods (buildings, structures, machinery, vehicles, tools, equipment, and fixtures).
- Category 3: Calculated emissions based on external fuel and energy purchases on the Statement of Greenhouse Gas Emissions.
- Category 4: Transport-related emissions based on raw materials purchased by business sites (excluding emissions from warehouses and distribution centers during transportation).
- Category 5: Emissions from the treatment and disposal of waste generated at business sites in facilities owned by third parties.
- Category 6: Emissions from transportation and accommodations during business trips by employees.
- Category 7: Emissions from transportation used by employees for commuting (using statistical data related to commuting patterns).
- Category 9: Transport-related emissions from products exported overseas from business sites (excluding emissions from warehouses and distribution centers during transportation).
- Category 11: Emissions from sold products that are used as fuel and directly released into the atmosphere.
- Category 12: Emissions from the waste treatment process at the end-of-life stage of sold products (utilizing statistical data on disposal scenarios).
- Category 15: Emissions from business activities of investees (affiliates, joint ventures) excluding subsidiaries among companies in the consolidated financial statements of the business report.
Energy Consumption
We aim to improve energy efficiency throughout our operations to reduce energy consumption, and actively source renewable energy to achieve 100% renewable energy use.
1) Domestic energy consumption for 2022 has been partially revised based on the verification results from the Ministry of Environment.
2) Domestic energy consumption for 2024 (including renewable energy) is subject to revision based on the verification results of the Ministry of Environment’s specifications.
3) Energy consumption figures exclude on-site self-generated renewable energy used for own consumption. Such self-consumed solar power is reported separately.
4) Energy Intensity = (Global energy consumption) ÷ (Revenue excluding LG Energy Solution’s common and other business segments).
5) Indirect energy consumption is reported excluding renewable energy consumption.
6) Renewable energy consumption includes purchases of Renewable Energy Certificates (RECs – solar and wind) and the Green Premium program. Figures for 2022–2023 have been revised to reflect partial business divestitures and changes in the calculation boundary (excluding on-site solar power for own use).
7) As of 2024, the Company owns a total of 4.8 MW of on-site solar power generation facilities for own use (1.9 MW domestic and 2.9 MW overseas). In the past, the designed capacity of these facilities was included in renewable energy consumption. To provide more accurate data on actual renewable energy use, on-site solar power for own use is excluded from the total and reported separately.
Water Withdrawal, Consumption, and Discharge
We closely monitor and manage water usage at our sites every step of the way, from water withdrawal, through the manufacturing stage, which includes raw material processing and cooling, to the discharge of properly treated wastewater. As the importance of water management continues to increase due to growing water scarcity, we aim to identify and minimize water withdrawal and consumption in water-stressed areas, in particular.
1) Other water sources include rainwater harvested and stored.
2) Water-stressed areas: (Domestic) Iksan, Magok; (Overseas) Tianjin and Wuxi, China.
3) The water reuse rate calculation includes both in-house water reused and externally sourced reclaimed water.
1) The Yeosu and Daesan plants source 100% of their water withdrawal from the municipal water supply (including industrial water).
Water Pollutants Discharge
To return the water used during the manufacturing process back into the aquatic ecosystem, we track the sources and impacts of water pollutants and conduct regular inspections of wastewater discharge facilities.
1) In accordance with the Water Environment Conservation Act, the transition of the measurement indicator for organic substances in water pollutants from Chemical Oxygen Demand (COD) to Total Organic Carbon (TOC) is being progressively reflected.
Air Pollutant Emissions
We strictly comply with the emission standards for air pollutants emitted during the manufacturing process and conduct regular inspections of emission facilities to minimize air pollutant emissions.
Waste Disposal and Recycling
We catalogue and manage the disposal of general waste and hazardous waste, and consider ways to minimize waste generation and maximize recycling by analyzing incineration and landfill wastes.
1) Yeosu (Hwachi), Gimcheon, Cheongju (Separator), Guangzhou, Quzhou, and Tianjin sites.
Product Responsibility and Chemical Stewardship
We evaluate risks that may arise during the use, storage, and transportation of hazardous chemical substances, and continue our efforts to reduce the use of hazardous substances in our products. We also conduct Life Cycle Assessments (LCAs) to analyze the environmental impact of our products and identify areas for improvement.
1) Calculated as the proportion of products containing each substance to total products sold annually.
2) Following the addition in 2023 of new restricted substances under REACH Annex 17 (41 types), SVHCs (45 types), and CMR (10 types), data for 2022–2023 were recalculated based on the latest criteria.
3) REACH: Registration, Evaluation, Authorization and Restriction of Chemicals; an EU regulation concerning the registration, evaluation, authorization, and restriction of chemical substances.
4) SVHC: Substances of Very High Concern; includes those on the SVHC Candidate List.
5) CMR: Carcinogenic, Mutagenic and Reprotoxic chemicals; substances with carcinogenic, mutagenic, or reproductive toxicity.
6) Hazardousness-related risk assessment ratio: proportion of constituent substances in sold products that have completed or are exempt from substance registration.
Material Reuse and Recycle
We are developing various plastic recycling technologies, both mechanical and chemical, and plan to expand the production of recycled plastics.
Social
Employee and Process EH&S
As chemical manufacturing is exposed to heavy equipment, hazardous substances, and high temperatures and pressures, employee and process safety is of paramount importance. We have expanded the scope of our EH&S management to include not only our employees, but also in-house subcontractors, and have established an accident prevention system that goes above and beyond legal standards.
1) Since 2022, the accident rate has been calculated using actual working hours.
2) Fatality Rate: Total number of fatalities × 200,000 / total hours worked.
3) TRIR (Total Recordable Incident Rate): Total number of recordable incidents × 200,000 / total hours worked.
4) LTIR (Lost Time Incident Rate): Total number of lost time incidents × 200,000 / total hours worked.
5) Calculations for process safety events are based on an internal comprehensive accident index that considers injuries, fires, leaks and spills, and monetary loss.
6) PSE: Process Safety Events.
7) PSER (Process Safety Event Rate): Number of process safety events × 200,000 / total hours worked.
Diversity, Equity, and Inclusion
We identify the diversity of our employees by gender, age, and region in each job group and career level, and monitor the equity of remuneration. We also operate various training and mentoring programs designed to develop a culture that embraces gender, generational, cultural, and cognitive diversity.
1) Calculated based on the number of employees as of the end of the fourth quarter of each year.
2) Executives refer to executive officers at the Vice President level or above, including executive directors.
3) Revenue‑related departments refer to departments directly involved in the provision of products and services, such as production and sales.
4) “Managerial position holders” refer to employees at the team leader level or above, excluding executives.
5) R&D‑related departments include research, development, and technology functions.
6) The ratio of average female pay to average male pay is calculated by dividing the average pay of all female employees in the respective position level by the average pay of all male employees in the same level. No gender‑based discrimination exists; differences are attributable to factors such as length of service.
7) “Managerial positions” refer to employees at the Manager or Senior Manager level or above, excluding executives.
Talent Attraction, Training, and Employee Engagement
We recruit talented individuals from diverse backgrounds, based on their abilities and competencies. We provide everyone with a variety of growth opportunities to help them enhance their global competencies and leadership capabilities.
1) Corrected the error in the 2023 average training cost per employee.
Labor and Human Rights
In line with the <LG Chem Global Human Rights & Labor Policy>, we conduct self-assessments and on-site inspections into workplace human rights impacts. To mitigate potential and actual human rights impacts, we continue to revise human rights policies and improve business processes.
Supply Chain Sustainability
To enhance supply chain sustainability, we conduct periodic risk assessments and provide capacity-building opportunities for our suppliers. We assess potential risk factors such as human rights, EH&S, and ethics through supplier self-assessments and on-site audits, and offer programs to suppliers to help improve ESG competencies
1) “Suppliers” refer to domestic and overseas regular trading companies with an annual purchase amount of KRW 100 million or more and at least three purchase orders (POs) issued per year.
2) “Key suppliers” refer to those that together account for the top 90% of total purchase amount, regardless of company size.
3) “High-risk suppliers” refer to those categorized as high-risk due to the discovery of major non-conformities or those classified as “High Risk” based on self-assessment results.
4) The number of non-conformities increased from 2023 following the commencement of inspections and management after the supplier training/support period (~2022).
5) It was confirmed that 2023 data had been undercounted due to being compiled only for suppliers that met both of the following conditions: ① High-risk group, and ② classified as “High Risk” in self-assessment results.
Community Engagement
We strive to take care of the environment and safety around our operations, provide employment and local development opportunities to the community, and operate partnership programs to develop close relationships with the community.
Governance
Corporate Governance
We uphold the fundamental values of expertise, independence, and transparency in the operations of the Board of Directors, and practice board-centered responsible management to ensure efficient and proactive governance.
Corporate Behavior and Ethics
We conduct regular inspections on corruption and bribery, and handle identified cases through internal disciplinary or legal procedures. We also provide training on ethics and fair trade practices to raise employee awareness and proactively manage risks.
1) Includes topics related to Jeong-Do Management and the Code of Ethics.
2) Includes topics related to subcontractor/agency collusion and compliance.
Information Security and Cybersecurity
We conduct information security risk assessments based on our enterprise risk management and provide awareness-raising campaigns and training on information security and cybersecurity, to ensure the safe collection, use, and management of all information related to corporate operations.
Government Policy and Regulatory Response
We actively seek out public-private partnerships by identifying policy issues and regulations that may affect our business. We pursue government proposals and participate in policy-making through our local and overseas public affairs networks.
Tax Strategy
We recognize that observing the tax laws of each country in which we operate and fulfilling our duty to pay taxes faithfully as a taxpayer maximizes shareholder value and contributes to national finance. We comply with the following tax policies and extensively manage tax risks for sustainable management.
Tax Policy
LG Chem has established and operates the following tax-related principles and regulations:
- Faithfully fulfill tax reporting and payment obligations in compliance with relevant laws and regulations of each country.
- Maintain a transparent relationship with tax authorities and fully comply with the obligation to submit information requested by them.
- Establish and implement a reasonable transfer pricing policy in accordance with applicable tax laws and the OECD Transfer Pricing Guidelines for international transactions with overseas affiliates.
- Develop an efficient tax management system, including the calculation of effective tax rates and identification of taxpayers in each country, in response to the introduction of digital taxes.
- Prohibit the transfer of income to tax havens for the purpose of tax avoidance.
- Disclose transparent tax information annually through the audit report and the electronic disclosure system.
Tax Risk Management
LG Chem has established the following processes to manage and respond to tax risks:
- Assess tax risks, based on advice from external experts and tax authorities, when making major business decisions.
- Report matters to executives depending on the type and materiality of the tax, and clearly define responsibilities and tasks related to tax reporting and payment.
- In the event of tax risks such as uncertainties in tax laws, address such risks in cooperation with external experts.
1) Corporate income tax is based on the consolidated financial statements for FY2024.
Growth
Sustainable Solutions
To provide superior social and environmental value in terms of sustainability, we have established the Sustainable Solution as an internal standard to check the sustainability contributions of our products and technologies based on six values: climate change, circular economy, water resources, product toxicity, biodiversity, and social value. By collating this information with stakeholder demands, we identify priority areas and increase investment to secure sustainability competitiveness at the product level.
1) Revenue is based on the consolidated financial statements for FY2024.
2) Represents simple deductions of revenues of LG Energy Solution and Common and others from the total; Common and others include revenues of FarmHannong. This figure has been used to calculate the intensity of environmental performance data. For details, please refer to the notes to the consolidated financial statements.
3) Includes expenses for projects in the areas of bio materials, recycling, and carbon neutrality.
Customer Satisfaction
We prioritize customer-centric thinking across all our processes and deliver exceptional value to our customers, by enhancing customer satisfaction and integrating customer grievance management within our internal operations.
1) Refers to the proportion of business units company-wide that conduct customer satisfaction surveys.
2) No customer satisfaction survey was conducted in 2024; it is scheduled to resume in the second half of 2025 following review.
