In order for LG Electronics to earn the trust of stakeholders and achieve sustainable growth, it first must become a healthy organism in the market ecosystem and assume a proactive role in making the system healthier throughout its business activities, including products and services. Additionally, we need to take care of our communities, help those in need become self-reliant, interface and communicate with a variety of stakeholders throughout this process, and form a trust-based relationship with them.
To meet this goal, LGE established and is implementing four strategic tasks: CSR Change Management, CSR Risk Management, Stakeholder Engagement and Strategic Social Contribution. From product R&D through purchasing, production, sales and after sales service, LGE is striving to improve its CSR execution while strengthening its efforts to build consensus and partnership with stakeholders.
Since April 2010, LG Electronics has held a semiannual Stakeholder Consultation to build consensus with its major stakeholders(customers, suppliers, the government, and investors, etc.) and to seek their opinions on our CSR activities. As part of our efforts to expand contact points with global stakeholders, we plan to host Stakeholder Consultation at overseas locations in 2013.
LGE also actively accommodates stakeholders (buyer, NGO, etc.) inquiries and interview requests on CSR issues (a total of 62 cases in 2012). In addition to regular engagement and cooperation with academia, industry peers, and consulting agencies, we always welcome opportunities to share our CSR efforts and experience in diverse CSR events such as conferences, seminars and forums. In recognition of our commitment and ongoing efforts towards corporate social responsibility at home and abroad, LGE was included in the World Index of the Dow Jones Sustainability Indexes (DJSI ) 2012/2013. LGE was also listed in the DJSI Asia-Pacific Index for three consecutive years and the DJSI Korea Index for four straight years. Going forward, LG Electronics will continue to pay close attention to external assessments and feedback from internal/external experts to manage risk factors and monitor our progress.
To facilitate continual value creation and to build strong fundamentals, LGE established the CSR Committee comprised of top executives, including the CEO and
the Global CSR Council (a corporate-wide working level staff council). The CSR Committee makes executive decisions concerning the company’s CSR directions and strategies, while the Global CSR Council formulates specific plans and action plans based on executive decisions, translating them into corporate-wide CSR activities. The CSR Council is supported by the three working-level subcommittees, each responsible for social contribution (Korea and Overseas), and risk management. Working-level committees host workshops twice a year. In April 2012, CSR activities were presented at the Board of Directors (BOD) meeting and the BOD bylaws were amended to include CSR in its official agenda.
Since we joined the United Nations Global Compact (UNGC) and the Electronic Industry Citizenship Coalition (EI CC), we have been strengthening our compliance management for all Korean and overseas production sites and suppliers, while requiring new recruits (entry-level/with experience), sojourning employees and subsidiary president candidates to undergo CSR training to raise employee awareness. From 2012, the training program was extended to specialists such as procurement managers, and in 2013, we also plan to further expand the program to marketing managers and establish online courses to provide employees easy access to CSR information.
UNGC (United Nations Global Compact)
In December 2009, LG Electronics became the first Korean corporation in the electronics industry to join the UN Global Compact. As a leading global corporation with social responsibilities, LG Electronics has announced its will to actively participate in solving global societal problems such as labor, human rights, environment, and anti-corruption.
The ten principals of UN Global Compact – established to call upon corporations worldwide to support and carry out social responsibilities – can be categorized into human rights, labor, environment, and anti-corruption. The main point is to protect international human rights and make efforts not to violate those rights, uphold freedom of association, guarantee the right to collective bargaining, and abolish all forms of forced labor, child labor, and labor discriminations. It also contains responsibilities of making efforts to prevent various environmental problems, develop green technology, and abolish all forms of corrupt activities such as extortion and bribery.
LG Electronics, which has already been carrying out various social contributions in the areas of human rights, labor, environment, and anti-corruption, has taken this opportunity of joining the UNGC to internalize corporate responsibilities in conducting business operations and at the same time, is planning to accelerate the establishment of a CSR (Corporate Social Responsibility) Change Management System. And to this end, LG Electronics is planning and implementing programs to organize internal procedures based on global CSR standards, establish a CSR risk management system, create a corporate-wide CSR Council, declare a charter for USR(Jan. 2010), enact a Global Labor Policy(Jul. 2010), create an agenda for CSR related tasks, and encourage employees to donate and participate in volunteer works.
EICC (Electronic Industry Citizenship Coalition)
In August 2010, LG Electronics joined the Electronic Industry Citizenship Coalition (EICC), which has high standards regarding working conditions, ethics of the business, safe and health of workers, and the environment that can be implemented across whole supply chain.
LG Electronics has already implemented a range of measures to improve its CSR management systems at home and abroad in order to bring its global practices in line with the EICC Code of Conduct which focuses significantly on issues related to labor, health and safety, environment, management systems and ethics.
However, EICC involvement is another example of LG Electronics putting into practice its philosophy of Jeong-do Management, our unique code-of-conduct system for conducting business in a transparent and honest manner
For the purpose, LG Electronics introduced a Supplier Code of Conduct consistent with EICC standards for its suppliers to follow if they wish to continue their business relationship with LG Electronics in September 2010. In 2011, LG Electronics will also offer its contractors training and consulting as they move to adopt management practices consistent with EICC guidelines. As part of EICC recommendations, LG Electronics will play an even greater role in the operations of its suppliers by sharing best practices, promoting CSR initiatives and helping to develop social responsibility strategies.
To comply with the international standards and requirements prescribed by the EI CC for its members (EICC Code of Conduct). LG Electronics implements a CSR risk management program at production sites (Korea and overseas) to assess our conformance in the areas of labor rights, ethics, the environment, health & safety, and management systems, and makes improvements to address the issues identified in the process. In the first half of 2012, we required 37 production sites(Korea and overseas), including new sites, to perform self-assessment(the EICC Self-Assessment Questionnaire). Based on the assessment results, we conducted onsite CSR consulting for 12 production sites and required the rest to implement self-improvement measures. In the second half of the year, we performed reassessment to monitor the progress, and identified improvement points for our 2013 plans. We have also asked suppliers to perform the self-assessment (the EICC Self-Assessment Questionnaire for major suppliers and simplified survey for the rest), and risk factors identified in the process will be managed systematically in association with the Win-Win Growth Team at the Procurement Center.
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LG Electronics makes social contributions based on the LG Way, the guiding principle for thinking and action for LG employees, to contribute to the sustainable development of the humanity. The strategic focus of our social contribution efforts is to achieve the United Nations Millennium Development Goals, particularly on resolving environmental, social and economic issues with our core capabilities such as technologies, products and employee participation. LGE’s efforts were fully represented in many of our cooperative initiatives: sponsorship of UNEP’s(the United Nations Environment Programme) Champions of the Earth Awards, partnership with the UNWFP (the UN World Food Programme) for famine relief efforts in Africa and Asia, and cooperation with the International Vaccine Institute (the IVI) in providing vaccines to Ethiopians. LGE also provides financial and management supports (i.e. productivity improvement consulting and management training) to social enterprise start-ups in the environmental area and contributes to creating green jobs. LGE also utilizes its technology and products to resolve social issues.
In 2012, we developed our 5th edition of a mobile phone that reads books and distributed them to the visually impaired free of charge. We are also actively participating in increasing global awareness of issues such as poverty and environment by utilizing our marketing infrastructure(i.e. New York Times Square digital billboard) and offering education programs such as the Mobile Science Class. Moreover, the increasing participation of employees in LGE’s social contribution efforts was evidenced by the “Life’s Good” volunteers who share their knowledge and talent to realize the vision of “LG, Supporting Youthful Dreams.” LGE employees also actively participate in donation initiatives such as the “Life’s Good Day” event (employees opt for simpler meals and volunteers to pass on savings in the form of donations), Salary Rounding Fund and Executive Contribution Fund. From 2013, we introduced a workday volunteer program to strengthen our support to employees’ social contribution efforts
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