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CSR in Supply Chain

To ensure sustainable competitiveness in the global market, LG Electronics is supporting its business partners to develop and improve the sustainable management systems. In particular, LG Electronics motivates its business partners to comply with Supplier Code of Conduct, which is based on EICC Code, and encourages them to analyze and improve their weak points through CSR risk management.

SYSTEMATIZING ACTIVITIES THROUGH EICC CODE

Based on Jeong-Do management, LGE fosters win-win growth by supporting its suppliers in building CSR management systems and helping them to succeed in global competition. To provide a systematized support program, LGE joined Electronic Industry Citizenship Coalition(EICC), a CSR consultative group founded in 2004 with global electronic companies. LGE has since actively participated in EICC’s regular meeting and its 6 working groups from 2010. In the future, we plan to conduct suppliers CSR risk management based on EICC Code, along with a training program to enhance supplier ability to conduct autonomous CSR risk management. Suppliers will be encouraged to conduct self-improvement programs to enhance their performance. We expect to improve and expand the overall supply chain’s CSR throughout the activity.

LGE Supplier Code of Conduct

Based on EICC Code, LGE established and declared its Supplier Code of Conduct in 2010 to assist its suppliers in fulfilling social responsibilities. We are providing Supplier Code of Conduct training programs to the suppliers in Korea as the initial step to obtain voluntary agreement on compliance with the Code of Conduct, and consequently expand CSR from LGE’s internal activity to overall supply chain management. Eventually, we plan to expand our activity globally to help every supplier fulfill its social responsibility and achieve long term competence.

*LGE’s Supplier Code of Conduct Download PDF

CSR RISK MANAGEMENT PROGRAM

LGE launched a comprehensive supply chain (production facility) risk management program based on the EICC process in 2011, and strengthened CSR competence of the suppliers located in Korea and in potential risk countries. The CSR risk management program to be conducted for around 4,000 manufacturing suppliers consists of four steps. The program (i) will be promoted in order to reach LGE’s all production sites and suppliers, and obtain consent on compliance with the Supplier Code of Conduct, (ii) evaluates the suppliers’ CSR risk, (iii) conducts diagnosis to the high-risk classified suppliers, and encourages improvement, and (iv) keeps monitoring to verify if the improvement is maintained at constant level, and support the suppliers to fulfill their social responsibilities.

Incorporation of CSR Issues into Supplier Selection Process & Regular Supplier Assessment

LG Electronics has in place a multi-dimensional process to screen suppliers who wish to conduct business with our company. In 2013, we introduced CSR aspects to our prospective supplier assessment process under the Management (M) category.
The strengthened screening process is designed to verify prospective suppliers’ compliance with key requirements in HR and ESH during the plant inspection, ensuring assessment of site conditions as well as required documentation. Through such measures, we require potential suppliers to comply with key CSR requirements, encourage them to establish a CSR framework, and strive to improve the working conditions of their employees. In 2014, we intend to introduce CSR performance indicators to our quarterly assessment of existing suppliers and to offer incentives to suppliers who have shown excellent performance in the CSR area.

Read more_ ‘CSR Risk Management for Supply Chain

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