Framework & Initiative

We’ve mapped existing ESG disclosures across metrics outlines in the Global Reporting Initiative (GRI), Sustainable Accounting Standards Board (SASB) and the Task Force on Climate-Related Financial Disclosures (TCFD) voluntary disclosure frameworks


GRI
GRI
  • Universal Standards

Horizontal Table
Disclosures 102-01
Title Name of the Organization
Page* 10
Note
Disclosures 102-02
Title Activities, brands, products and services
Page* 12-15
Note
Disclosures 102-03
Title Location of headquarters
Page* 10
Note
Disclosures 102-04
Title Location of operations
Page* 10-11
Note
Disclosures 102-05
Title Ownership and legal form
Page* 10-11
Note
Disclosures 102-06
Title Markets served
Page* 11
Note Annual Report
Disclosures 102-07
Title Scale of the organization
Page* 10-11
Note
Disclosures 102-08
Title Information on employees and other workers
Page* 10-11, 101-102
Note
Disclosures 102-09
Title Supply chain
Page* 10-11, 44-47, 77-78
Note
Disclosures 102-10
Title Significant changes to the organization and its supply chain
Page* -
Note Withdrawal of MC Company
Disclosures 102-11
Title Precautionary Principle or approach
Page* 46-47, 67-72
Note
Disclosures 102-12
Title External initiatives
Page* 108, 114-120
Note
Horizontal Table
102-13
Membership of associations
108
102-14
Membership of associations
6-7
102-16
Values, principles, standards, and norms of behavior
4-5, 67-69
102-18
Governance structure
64-66
102-19
Delegating authority
64-66
102-40
List of stakeholder groups
109-110
102-41
Collective bargaining agreements
89
102-42
Identifying and selecting stakeholders
109-110
102-43
Approach to stakeholder engagement
109-110
102-44
Key topics and concerns raised
109-110
102-45
Entities included in the consolidated financial statements
95-96
Annual report
Horizontal Table
102-46
Defining report content and topic Boundaries
Report Overview
102-47
List of material topics
109-110
102-48
Restatements of information
-
No restatements
102-49
Changes in reporting
-
Withdrawal of MC Company
102-50
Reporting period
Report Overview
102-51
Date of most recent report
-
LGE website*
102-52
Reporting cycle
Report Overview
102-53
Contact point for questions regarding the report
125
102-54
Claims of reporting in accordance with the GRI Standards
Report Overview
102-55
GRI content index
111-113
102-56
External assurance
122-123
Annual report
*https://www.lg.com/global/sustainability-reports-communications
*More information for ESG Data can be found on Sustainability report.
  • Topic Specific Standards

Horizontal Table
Topic Economic Performance
Disclosures 201-1
Title Direct economic value generated and distributed
Page* 95
Note
Topic Economic Performance
Disclosures 201-2
Title Financial implications and other risks and opportunities due to climate change
Page* 115-120
Note
Topic Economic Performance
Disclosures 201-3
Title Defined benefit plan obligations and other retirement plans
Page* 97
Note
Topic Economic Performance
Disclosures 201-4
Title Financial assistance received from government
Page* 97
Note
Topic Market Presence
Disclosures 202-1
Title Ratios of standard entry level wage by gender compared to local minimum wage
Page* 97
Note
Topic Market Presence
Disclosures 202-2
Title Proportion of senior management hired from the local community
Page* 106
Note
Topic Procurement Practices
Disclosures 204-1
Title Proportion of spending on local suppliers
Page* 97
Note
Topic Anti-corruption
Disclosures 205-1
Title Operations assessed for risks related to corruption
Page* 104
Note
Topic Anti-corruption
Disclosures 205-2
Title Communication and training about anti-corruption policies and procedures
Page* 104
Note
Topic Anti-corruption
Disclosures 205-3
Title Confirmed incidents of corruption and actions taken
Page* 104
Note
Topic Anti-Competitive Behavior
Disclosures 206-1
Title Legal actions for anti-competitive behavior, anti-trust, and monopoly practices
Page* 67-69, 73
Note Annual report
Topic Materials
Disclosures 103
Title Management Approach
Page* 33-34
Note
Topic Materials
Disclosures 301-3
Title Reclaimed products and their packaging materials
Page* 33-34
Note
Horizontal Table
Energy
103
Management Approach
25, 28
Energy
302-1
Energy consumption within the organization
98
Water and Effluents
303-1
Interactions with water as a shared resource
100
Water and Effluents
303-3
Water recycled and reused
100
Emissions
103
Management Approach
25
Emissions
305-1
Direct (Scope 1) GHG emissions
25
Emissions
305-2
Energy indirect (Scope 2) GHG emissions
98
Emissions
305-3
Other indirect (Scope 3) GHG emissions
98
Emissions
305-4
GHG emissions intensity
98
Emissions
305-7
Nitrogen oxides (NOx), sulfur oxides (SOx), and other significant air emissions
99
Effluents and Waste
103
Management Approach
35-37
Effluents and Waste
306-3
Waste Generated
99
Effluents and Waste
306-4
Waste diverted from disposal
99
Horizontal Table
Environmental Compliance
307-1
Non-compliances with environmental laws and regulations
99
Employment
401-1
New employee hires and employee turnover
101
Employment
401-2
Benefits provided to full-time employees that are not provided to temporary or part-time employees
90-91
Employment
401-3
Parental leave
102
Occupational Health and Safety
103
Management Approach
43
Occupational Health and Safety
403-1
Workers representation in formal joint management–worker health and safety committees
74-76
Occupational Health and Safety
403-2
Types of injury and rates of injury, occupational diseases, lost days, and absenteeism, and number of work related fatalities
106
Occupational Health and Safety
403-4
Health and safety topics covered in formal agreements with trade unions
74-76
Training and Education
103
Management Approach
88
Training and Education
404-1
Average hours of training per year per employee
103
Training and Education
404-2
Programs for upgrading employee skills and transition assistance programs
92-93
Training and Education
404-3
Percentage of employees receiving regular performance and career development reviews
105
Horizontal Table
Diversity and Equal Opportunity
405-1
Diversity of governance bodies and employees
102
Diversity and Equal Opportunity
405-2
Ratio of basic salary and remuneration of women to men
-
Annual report
Non-discrimination
406-1
Incidents of discrimination and corrective actions taken
104
Child Labor
408-1
Operations and suppliers at significant risk for incidents of child labor
44-47
Forced or Compulsory Labor
409-1
Operations and suppliers at significant risk for incidents of forced or compulsory labor
44-47
Security Practices
410-1
Security personnel trained in human rights policies or procedures
104
Rights of Indigenous Peoples
411-1
Incidents of violations involving rights of indigenous peoples
104
Human Rights Assessment
103
Management Approach
104
Human Rights Assessment
412-1
Operations that have been subject to human rights reviews or impact assessments
104
Human Rights Assessment
412-2
Employee training on human rights policies or procedures
104
Local Communities
103
Management Approach
55
Local Communities
413-1
Operations with local community engagement, impact assessments, and development programs
105
Local Communities
413-2
Operations with significant actual and potential negative impacts on local communities
105
Horizontal Table
Supplier Social Assessment
103
Management Approach
44-47
Supplier Social Assessment
414-1
New suppliers that were screened using social criteria
105
Annual report
Supplier Social Assessment
414-2
Negative social impacts in the supply chain and actions taken
106
Customer Health and Safety
416-1
Assessment of the health and safety impacts of product and service categories
105
Customer Health and Safety
416-2
Incidents of non-compliance concerning the health and safety impacts of products and services
105
Marketing and Labeling
417-2
Incidents of non-compliance concerning product and service information and labeling
105
None incident occurred in 2020 (see Annual report)
Marketing and Labeling
417-3
Incidents of non-compliance concerning marketing communications
105
None incident occurred in 2020 (see Annual report)
Information Protection
103
Management Approach
84-87
Information Protection
418-1
Substantiated complaints concerning breaches of customer privacy and losses of customer data
105
Socioeconomic Compliance
419-1
Non-compliance with laws and regulations in the social and economic area
105
*https://www.lg.com/global/sustainability-reports-communications
*More information for ESG Data can be found on Sustainability report
  • SASB(Sustainability Accounting Standards Board)

    The SASB (Sustainability Accounting Standards Board) Standard is an industry-specific sustainability accounting standard established by the US Sustainability Accounting Standards Boards in 2011. For the first time in the industry, the standard categorized sustainability information with a high level of financial importance into 77 industries in 11 areas in accordance with the “SICS (Sustainable Industry Classification System)”, taking into account the specificity of each industry. LGE has been actively supporting the implementation of the SASB standards by disclosing, since 2020, sustainability-related information corresponding to the Hardware industry group within the Technology and Communications sector, which has high potential to have a significant financial impact on our business.

Horizontal Table
Topic Product Security
Accounting Metric Approach to identify and address data security risks in products
Classification Discussion & Analysis
Unit n/a
Code TC-HW-230a.1
Cross Reference Privacy Protection and Product Security
Page* 84-87
Topic Employee Diversity & Inclusion
Accounting Metric Percentage of gender and ratio
Classification ethnicity in (1) executive officers, (2) engineers, and (3) others
Unit %
Code TC-HW-330a.1
Cross Reference Sustainability Performance Data
Page* 101-102
Topic Product Lifecycle Management
Accounting Metric Percentage of the sales of products containing IEC 62474 flammable substances
Classification Quantitative Indicator
Unit %
Code TC-HW-410a.1
Cross Reference -
Page* -
Topic Product Lifecycle Management
Accounting Metric Percentage of the sales of products containing IEC 62474 flammable substances
Classification Quantitative Indicator
Unit %
Code TC-HW-410a.2
Cross Reference Product for the Next Generation
Page* 34
Topic Product Lifecycle Management
Accounting Metric Percentage of the sales of products that meet ENERGY STAR standards
Classification Quantitative Indicator
Unit %
Code TC-HW-410a.3
Cross Reference Product for the Next Generation
Page* 34
Topic Product Lifecycle Management
Accounting Metric Weight of take back and recyclability of expired products and electronic wastes
Classification Quantitative Indicator
Unit Ton, %
Code TC-HW-410a.4
Cross Reference Product for the Next Generation
Page* 31-33, 35-37
Topic Supply Chain Management
Accounting Metric Percentage of 1st-tier supplier facilities audited in (a) all facilities and (b) RBA VAP (Validated Audit Process) as high-risk facilities or equivalent
Classification Quantitative Indicator
Unit %
Code TC-HW-430a.1
Cross Reference Sustainable Workplace for All
Page* 46-47
Topic Supply Chain Management
Accounting Metric Percentage of 1st-tier supplier’s (1) RBA VAP (Validated Audit Process) or non-conformity with other companies and (2) (a) priority non-conformities and (b) other corrective actions for non-conformities
Classification Quantitative Indicator
Unit %
Code TC-HW-430a.2
Cross Reference Sustainable Workplace for All
Page* 46-47
Topic Materials Sourcing
Accounting Metric Description of risk management related to the use of important raw materials
Classification Discussion & Analysis
Unit n/a
Code TC-HW-440a.1
Cross Reference Sustainable Workplace for All
Page* 44-46, 79-80
  • Climate-Related Issues and the Role of the International Community

    As the intensity and frequencies of extreme weather events caused by global warming increase, climate change is increasingly being perceived as a major threat to society. Through its Global Risk Report 2021, the World Economic Forum selected climate related issues such as extreme weather or failure to take action on climate change, along with the ongoing COVID-19 pandemic, as the most threatening global issues facing the world in 2021.
    Following the signing of the climate change agreement at the 1992 summit in Rio de Janeiro by various heads of state, the international community has continued to have discussions and reach agreements on climate change over the past few decades while emphasizing the importance of the agreement itself. Through the Paris Agreement adopted in December 2015 at the United Nations Climate Change Conference, specific reduction targets were established aimed at keeping the global average temperature rise to below 2℃, and preferably to 1.5℃, compared to pre-industrial levels. The Intergovernmental Panel on Climate Change (IPCC), an intergovernmental consultative body related to climate change, published a study through its 5th assessment report suggesting that 40-70% of global greenhouse gas emissions must be reduced by 2050 in order to keep the global average temperature rise below 2℃.
    Accordingly, climate-related issues that the international community is currently attempting to respond to are not only causing extreme weather phenomena, but also causing major changes in the overall global economy and social structures, such as society’s energy use, industrial production, and transportation methods. In order to respond to these changes and overcome the climate change crisis, governments around the world are introducing various policies and systems. In line with this, companies are continuing efforts to respond to changes to social, economic, and trade structures, such as reducing carbon emissions, using renewable energy, and developing and investing in low-carbon green technologies.
    Here at LGE, we recognize that climate change is a major issue that we, not anyone else, must take responsibility for and address, and we are thus striving to do so through the establishment of strategic directions. Starting in 2021, we disclosed climate-related information that meets the TCFD1) guidelines in accordance with the demands of the international community through our sustainability report, and we plan to continuously supplement this information and transparently disclose it.

  • *TCFD (Task Force on Climate-related Financial Disclosures)

    The TCFD is a task force established by the Financial Stability Board, as mandated by the G20 finance ministers and central bank governors, for the purpose of requesting voluntary and consistent disclosure of climate-related information. TCFD published their ‘Recommendations on Disclosure of Climate-related Financial Impacts’ in 2017. These recommendations demand that the risks and opportunities that organizations face in relation to climate change be identified, and that the processes, indicators, and goals for managing these risks and opportunities be disclosed in detaill.

ESG Committee / Board of Directors / Company-wide management meeting / Stakeholder Advisory Group/Company-wide management meeting / CFO / ESG Consultative Group / Company / Division

1. Governance

In April 2021, we established an ESG Committee which operates under the BOD with a view to supervising and reviewing overall ESG management activities and the direction of strategies, including those related to climate change.
  • BOD Oversight of Climate-Related Risks and Opportunities

    The ESG Committee is responsible for reviewing and making decisions about the overall direction of environmental, social, and corporate governance, including climate change, and other related goals. The ESG Committee, which consists of four outside directors and one executive director, handles issues related to the environment and safety, including our response to climate change, as one of its key areas. Regular meetings are held once every six months, with extraordinary meetings being convened if and when necessary, and the outcome of discussions will be reported to the BOD regularly. Going forward, the committee will continue to manage and supervise ESG management activities carried out by the executive.

  • The Role of Top-Tier Management in Assessing and Managing Climate-Related Risks and Opportunities

    Our senior management recognizes that climate change is an important issue that can affect the international community and overall management of our company, and, accordingly, is constantly reviewing risks and opportunities related to climate change. In particular, the CFO reviews the safety environment and climate change issues of the company through the ESG Council and reports them to the company-wide management meeting and ESG Committee. In addition, the committee inspects and reviews on major climate-related issues, such as establishing mid- to long-term greenhouse gas reduction targets and making investment decisions for major large-scale emission reduction projects. Decisions made through the company-wide management meeting of reviewed matters and the ESG Committee reporting are reflected in and implemented as corporate policies.

  • 2. Strategy

    We divide the impact of climate change into business impact, and reputational impact in terms of social awareness. Business impact is defined as the risk that climate change may financially impact our company such that projects are disrupted. We manage these risks by establishing a proactive response strategy for different scenarios such as possible financial loss and human casualties. Reputational risk is defined as the risk of financial loss caused by damage to the image of a company and by legal sanctions and conflicts related to climate change. Here at LGE, as a company specializing in consumer goods, we regard reputational risk as a major issue because corporate image tarnished by legal sanctions or disputes can lead to sluggish or dwindling sales.

To understand the potential impact that climate change-related risks may have on LG Electronics, we have analyzed two different global warming scenarios, to limit global warming to 2°C or 4°C respectively by 2100 and have established strategies to respond appropriately to each scenario.
  • 2°C Scenario

    | Details |
    This scenario limits atmospheric CO2 concentrations arising from humanity’s use of fossil fuels to 450ppm by the year 2100 (IEA 450 scenario). In order to reduce the rise in global temperaturesto below 2℃, the IEA1) is proposing that the international community adopts prompt and innovative reduction methods. From a regulatory perspective, emissions trading has been introduced for OECD countries including South Korea, with the expectation that other key countries outside of the OECD will also join this scheme. Further, investment in carbon reduction is expected to increase across a wide range of sectors, and the availability of power generation sources that can replace fossil fuel energy is predicted to continuously expand.

    | LGElectronics Impact & Response |
    - Regulatory risks facing LG Electronics’ production sites, located globally across 15 countries, are expected to increase (e.g. carbon tax, carbon border adjustment mechanism, emissions trading system, etc.)
    - Risk of an increase in the price of raw materials used in LG Electronics’ products, which are manufactured through a global supply chain, is expected to arise.
    - With an increasing need for energy efficiency, continuous investment in R&D and new product launches are necessary to ensure the competitiveness of LG Electronics’ home appliances.
    - Seize the opportunity to boost LG Electronics’ solar cell business as demand for renewable energy increases.
    - By 2030, LG Electronics shall achieve our target of reducing GHG emissions by 50%, and we expect to confirm whether this goal is aligned with the IEA 450 scenario through a review by the SBTi2)

  • 4°C Scenario

    | Details |
    This scenario predicts the catastrophic consequences that are expected to occur as a result of global warming if current policies and efforts to respond to climate change are insufficient, and if prompt and ambitious targets and strategies are not implemented. In particular, the 4°C scenario focuses on the material risks arising as a result of global warming, and thoroughly and preemptively reviews the potential impact on global producers and suppliers, including damage to businesses in coastal regions that will occur due to rising sea levels, depletion of water resources in different regions, and major storms and floods. The enhancement of capabilities will require significant commitment of resources

    | LGElectronics Impact & Response |
    - Review of our business portfolio and changes to business strategy for improved response to environmental changes, and to ensure the sustainability of our global production sites and supply chain.
    - Increase investment to improve capability of responding material risks arising from major environmental disasters.
    - Additional efforts necessary beyond Net Zero by 2030 (target by LG Electronics)
    - Enhance external communication that can contribute to social change, such as changes to policy and improvements to customer awareness.

1) IEA: International Energy Agency
2) SBTi: Science Based Targets initiative

  • 3. Risk Management

    Our climate-related risks are identified through top-down and bottom-up approaches under the supervision of the corporate-level Safety & ESG Council and are integrally managed by the corporate-level risk management process.

  • Top-Down Risk Identification and Assessment

    ESG identifies and evaluates short-term risks related to climate change once a quarter, and long-term risks via a 10-year analysis. For example, our CEO and chief executives discussed the results of an analysis of the compliance risks and financial risks in terms of the Korea ETS1), and discussed risk mitigation measures according to the proposed report. In order to establish a more systematic and sustainable strategy, the council established a mid-to long-term strategy aimed at reducing greenhouse gas emissions from 2018 to 2030. Major issues discussed by the Council are reported to the CEO and the Chief Executives for further guidance and final decision-making.

  • Bottom-Up Risk Identification and Assessment

    We conduct monthly inspections at each of our production sites in order to identify and evaluate climate-related risks at the asset level. The energy environment management teams for each department, in order to achieve their ultimate goals, establish annual goals related to energy use reduction and greenhouse gas emissions in accordance with internal safety and environmental standards. Monthly energy consumption and emissions are calculated, and performance evaluation is conducted through target review and implementation results

1) ETS: Emissions Trading Systems
  • 4. Metrics and Targets

    In response to climate change, we continuously manage energy consumption and greenhouse gas emissions. Moreover, we set mid-to long-term goals and strive to achieve them.

  • | Energy Consumption |

Horizontal Table
Classification Non-renewable fuel
Classification LNG city gas (Korea)
2018 1,243
2019 827
2020 879
Classification Non-renewable fuel
Classification LNG city gas (overseas)
2018 538
2019 772
2020 741
Classification Non-renewable fuel
Classification Coal (Korea)
2018 0
2019 0
2020 0
Classification Non-renewable fuel
Classification Coal (overseas)
2018 0
2019 0
2020 0
Classification Non-renewable fuel
Classification Other (Korea)
2018 117
2019 72
2020 74
Classification Non-renewable fuel
Classification Other (overseas)
2018 117
2019 534
2020 658
Classification Non-renewable fuel
Classification Subtotal
2018 2,339
2019 2,205
2020 2,352
Classification Renewable energy
Classification Solar power
2018 0.7
2019 5.4
2020 5.5
Classification Renewable energy
Classification Wind power
2018 0
2019 0
2020 0
Classification Renewable energy
Classification Biomass
2018 0
2019 0
2020 0
Classification Renewable energy
Classification Other
2018 16.7
2019 62
2020 79
Classification Renewable energy
Classification Subtotal
2018 17.5
2019 67.4
2020 84.5
Horizontal Table
Energy purchase
Electricity (Korea)
3,902
2,946
3,239
Energy purchase
Electricity (overseas)
2,315
2,664
2,643
Energy purchase
Steam (Korea)
450
395
394
Energy purchase
Steam (overseas)
35
6
3
*Business Sites Subject to Verification
- Korea: Business sites in South Korea under our operational control
- Overseas: Our overseas production sites (30)
*Energy subject to verification: Use of combustion facilities and use of externally supplied power and heat at business sites
* Calculation of energy consumption: Based on net calorific value, steam includes steam consumption through waste heat recovery in Korea
*Verification Status: Third-party verification completed (excluding fugitive emissions from refrigeration)
*Disclosing correction of confirmed 2019 overseas data in 2021 due to delay in verification
  • Greenhouse Gas Emissions (Scopes 1 and 2)

(Unit : 1,000tCO2eq)
Horizontal Table
Classification Direct GHG emissions(Scope1)
Classification Korea
2018 650
2019 466
2020 220
Classification Direct GHG emissions(Scope1)
Classification Overseas
2018 135
2019 137
2020 294
Classification Direct GHG emissions(Scope2)
Classification Korea
2018 391
2019 385
2020 382
Classification Direct GHG emissions(Scope2)
Classification Overseas
2018 461
2019 481
2020 472
Classification Total (Scope 1 + Scope 2)
Classification
2018 1,637
2019 1,469
2020 1,294
Classification GHG emissions intensity (USD)
Classification
2018 3.16
2019 2.50
2020 2.42
*Business Sites Subject to Verification
- Business Sites Subject to Verification
- Overseas: Our overseas production sites (30)
*Verification Principles and Standards
- Korea: Guidelines for Emission Reporting and Certification of Greenhouse Gas Emission Trading System, Verification Guidelines for Greenhouse Gas Trading System Operation
- Overseas: ISO 14064-3:2006 (Greenhouse Gas - Part 3: Rules and Usage Guidelines for Feasibility Assessment and Verification of Greenhouse Gas Declaration)
*Verification Method
- Korea: LG Electronics GHG Emissions and Energy Consumption Statement, LG Electronics GHG Data Management and Collection, Emission Calculation and Reporting Process
- Overseas: LG Electronics Greenhouse Gas Emission Report, LG Electronics Greenhouse Gas Data Management and Collection, Emission Calculation and Reporting Process
*Disclosing corrections of the original unit due to data revisions in 2019 third-party overseas emission verification process
  • Greenhouse Gas Emissions (Scopes 3)

(Unit : tCO2eq)
Horizontal Table
Classification Other indirect GHG emisions (Scope3)
Classification Business trip
2018 60,853
2019 58,337
2020 20,692
Classification Other indirect GHG emisions (Scope3)
Classification Use of sold products
2018 36,185,980
2019 33,290,000
2020 58,976,000
Classification Other indirect GHG emisions (Scope3)
Classification Internal suppliers (Korea)
2018 6,319
2019 9,137
2020 5,067
*Verification status: Third-party assurance was completed on emissions from business trips by employees.
*Reasons for removing emissions from rental buildings: Excluded from CDP verification items