LG Innotek (CEO Cheoldong Jeong) announced on the 12th of July that it had published ‘2021-2022 Sustainability Report‘ that contains its ESG (Environmental, Social, and Corporate Governance) management activities and performance for the year. This report summarizes the efforts that the company has made after announcing the year 2021 as the first year of ESG management and reveals its future strategies for the ESG management.
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According to the report, the company established the following three strategies and plans to carry out them faithfully: To give substantiality to the ESG management by linking it with its business strategies and performance; To carry out activities centered on its key ESG goals taking into account its resources and capacity; To reinforce its ability to execute its ESG plans by internalizing its organizational ESG culture.
LG Innotek established an ESG committee inside its board of directors last year and built a team dedicated to the ESG management this year. In addition to this, the company appointed Chang-Tae Kim, the chief financial officer, to the chairman of the ESG committee, reinforcing its ability to execute its ESG plans in cooperation with the departments that have expertise in their fields.
This report shows the company’s ESG performance, especially its noteworthy outcomes it has achieved in the environmental sector. The company declared a 2040 carbon neutrality goal last March, and, at the same time, established an RE100 plan to go 100% renewable for its electricity by 2030. To put the plan into practice as soon as possible, the company has also completed the procedure to join RE100 earlier this month.
LG Innotek also reaped some fruits in terms of resources recycling. Last year, the company recycled more than 88% of the wastes it had produced. Especially, its Gumi Factories 2 and 3 recycled 22,000 tons of wastes, reducing greenhouse gas emissions by almost 970 tons. As a result, the factories were granted Platinum grades by ZWTL (Zero Waste to Landfill) last year. Platinum grade is the highest grade a company can receive. The company plans to acquire the ZWTL certification in its entire business establishments in South Korea by the end of this year.
The company’s recycling rate of water resources 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 revenue (KRW 100 million), the resultant water usage rate decreased by 33.7% compared to the last year. To recognize this, the Carbon Disclosure Project (CDP), a climate change evaluation organization, A-listed LG Innotek in the field of water management, making the company a “Best Company in Water Management” for five consecutive years starting from 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 with its partner companies a ‘Supplier ESG Support Agreement’ earlier last month for the first time in the electrical and electronic industries, supporting the partner companies comprehensively through the development of ESG goals, trainings, competence diagnosis, consulting, etc. LG Innotek operates a mutual growth fund amounting to KRW 103 billion for the partner companies so that they can borrow money for their business management at an interest rate lower than the market interest rate. As a result of these activities, the company was selected as one of the most excellent for five consecutive years, and selected as Best Honorary Company in the Win-Win Growth Index operated by Korea Commission for Corporate Partnership.
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LG Innotek recognizes that the main agents of Customer Experience (CX) innovation are employees and has carried out PRIDE activities since 2020 to raise the pride of its employees. The PRIDE activities include various activities to change the types, systems, and ways of work drastically. In 2022, the company plans to intensify the PRIDE activities still further.
Last year, the company spent a total of KRW 4.17 billion for its corporate social responsibility activities. The money was spent on activities to promote the education and welfare of the youth and help underprivileged people to be financially independent. This year, the company plans to spend a total of KRW 63 billion.
In the governance sector, LG Innotek solidified the foundation to reinforce its transparency and establish sound governance. In March this year, the company separated the chairperson of the board of directors from the chief executive officer and appointed a female (Heejung Lee, professor of the School of Law of Korea University) to a new external director position to secure diversity. Three external directors were appointed to the audit committee under the board of directors in the general meeting of shareholders, reinforcing the independence of the audit committee.
The company has also actively carried out shareholder-friendly policies. Last year, its dividend for shareholders was KRW 71 billion, which amounts to four times the dividend of the previous year. The company also announced that it would maintain the dividend payout ratio of 10% or higher for the coming three years (2022-2024 fiscal years) based on the consolidated financial statements.
Cheoldong Jeong, the CEO, said, “The year 2021 was a tough year due to the unrelenting pandemic and the slowdown of global supply chains. Despite them, however, the company produced meaningful business outcomes.” He also added, “LG Innotek will strengthen the substantiality of its ESG management to continue to grow with its stakeholders including its customers, partner companies, and the society.”
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