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
CSR in labor agency as a supplier
LG Electronics consider labor agency as one of major supplier. In 2015 for all Chinese subsidiaries there was CSR survey on labor agency. And some of them were interviewed with document review to identify potential CSR risk during dispatch worker management from hiring to resignation. Also with help from Chinese legal office, standard contract for labor agency to reflect CSR criteria was made in August 2015.
Outsources supplier CSR management
LG electronics has assessed CSR risk in major outsourced suppliers since 2014. In 2015 30 facilities from 22 outsourced suppliers did EICC Self-assessment and CSR team will do onsite check for 4 facilities identified as high risk in September 2015.
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.
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