The company published the “Sustainability Report 2021-2022” which contains its ESG performance.
– The company declares carbon neutrality 2040 and joins RE100.
– “The main agents of ‘CX Innovation’ are the employees.” The company plans to intensify its PRIDE activities.
– The company separates the chairman of the board of directors and the general manager and appoints a woman to her new position as external director, establishing sound governance.
■ Cheoldong Jeong, CEO, says: “The company will continue to reinforce the importance of its ESG management.
LG Innotek (CEO Cheoldong Jeong) announced on July 12 that it had released the “Sustainability Report 2021-2022” which contains its ESG (environment, social and corporate governance) management activities and performance for the year. This report summarizes the efforts the company has made after announcing 2021 as the first year of ESG management and reveals its future strategies for ESG management.
According to the report, the company has established the following three strategies and plans to implement them faithfully: ▲ Give substance to ESG management by linking it to its business strategies and performance ▲ Conduct activities focused on its main ESG objectives taking into account its resources and capacities ▲ Strengthen its ability to execute its ESG plans by internalizing its organizational ESG culture.
LG Innotek set up an ESG committee within its board of directors last year and formed a dedicated ESG management team this year. In addition to this, the company appointed Chang-Tae Kim, the Chief Financial Officer, to chair the ESG committee, strengthening its ability to execute its ESG plans in cooperation with departments that have expertise in their areas.
This report shows the company’s ESG performance, in particular its outstanding results in the environmental sector. The company declared a goal of carbon neutrality by 2040 last March and, at the same time, has put in place a RE100 plan to switch to 100% renewable energy for its electricity by 2030. For put this plan into practice as soon as possible, the company also completed procedure to join RE100 earlier this month.
LG Innotek has also reaped some rewards in terms of resource recycling. Last year, the company recycled more than 88% of the waste it produced. Above all, its Gumi 2 and 3 factories recycled 22,000 tonnes of waste, reducing greenhouse gas emissions by almost 970 tonnes. As a result, the mills were awarded a Platinum rating by ZWTL (Zero Waste to Landfill) last year. A platinum rating is the highest rating a company can receive. The company plans to acquire ZWTL certification in all of its business establishments in South Korea by the end of this year.
The company’s water resource recycling rate for the year 2021 was 53.4%, which is comparable to that of the year 2020. But when the amount (ton) of water resources it had used was divided by its turnover (KRW 100 million), the resulting water usage rate decreased by 33.7% compared to last year. To recognize this, the Carbon Disclosure Project (CDP), a climate change assessment organization, ranked LG Innotek in the area of water management, making the company a “Best Company in Water Management”. ‘water’ for five consecutive years starting in 2017.
The report summarized in the social sector various activities that LG Innotek had carried out for mutual growth with its partner companies. The company signed a “Supplier ESG Support Agreement” with its partner companies early last month for the first time in the electrical and electronics industries, supporting partner companies comprehensively through the development of ESG objectives, training, skills assessments, advice, etc. LG Innotek operates a growth pool fund of KRW 103 billion for partner companies so that they can borrow money for running their business at an interest rate lower than the interest rate of the market. As a result of these activities, the company has been selected as one of the most excellent for five consecutive years and selected as the best honorary company in the win-win growth index managed by the Korea Commission for Enterprise Partnership.
LG Innotek recognizes that the main agents of customer experience (CX) innovation are employees and has conducted PRIDE activities since 2020 to increase employee pride. PRIDE activities include various activities aimed at radically changing the types, systems and methods of work. In 2022, the company plans to further intensify PRIDE activities.
Last year, the company spent a total of KRW 4.17 billion on its corporate social responsibility activities. The money was spent on activities to promote the education and welfare of young people and to help disadvantaged people to be financially independent. This year, the company plans to spend a total of KRW 63 billion.
In the area of governance, LG Innotek has solidified the foundations to enhance its transparency and establish sound governance. In March this year, the company separated the chairman of the board from the general manager and appointed a woman (Heejung Lee, a professor at Korea University Law School) to a new position as an external director for ensure diversity. Three external directors were appointed to the audit committee at the board of directors’ general meeting of shareholders, strengthening the independence of the audit committee.
The company has also actively pursued shareholder-friendly policies. Last year, its dividend to shareholders was KRW 71 billion, four times the previous year’s dividend. The company also announced that it will maintain the dividend payout ratio of 10% or higher for the next three years (fiscal years 2022-2024) based on the consolidated financial statements.
Cheoldong Jeong, CEO, said, “2021 has been a challenging year due to the ongoing pandemic and slowing global supply chains. Despite this, however, the company produced significant business results. He also added, “LG Innotek will strengthen the strength of its ESG management to continue to grow together with its stakeholders, including its customers, business partners and society.”
The sustainability report can be viewed on the LG Innotek website (www.lginnotek.com).