Climate change response

LG H&H actively supports global ecosystem and deforestation prevention efforts in the era of the climate crisis and has established the ‘Biodiversity Protection and Deforestation Prevention Policy’. LG H&H does not conduct production activities near ‘biodiversity protection areas’ to preserve the surrounding areas’ biodiversity, including business sites and local communities. We also conduct environmental impact assessments under relevant laws and regulations in the areas of natural ecological environment, atmospheric environment, water environment, and soil environment to track changes in the ecological environment and implement conservation activities.

In addition, we will continue to promote projects based on the principles of the UN Forest Initiative to Prevent Deforestation and minimize negative environmental impacts through communication, education, and investment with relevant stakeholders. LG H&H reports its environmental risk reduction activities, including biodiversity and deforestation prevention activities, to the ESG Committee of the BOD and transparently discloses them through the ESG Report.

• LG H&H ‘Park of Bee’ tree planting event

We developed our biodiversity risk management process with reference to global assessment methodologies and frameworks, including the Taskforce on Nature-related Financial Disclosures(TNFD) guidelines and the Locate Evaluate Assess Prepare(LEAP) approach. We are operating it integrated into our Crisis & Risk Management process.
When assessing biodiversity risks, we consider and identify the full range of biodiversity risks related to dependencies and impacts and include various areas in the scope of the assessment, including not only our own business sites but also areas adjacent to our business sites, upstream and downstream.

• STEP 01 Business Location /
  Value Chain Analysis
• STEP 02 Dependency and
  influence
  mesurement
• STEP 03 Establishment,
  implementation, and
  disclosure of mitigation plans

Biodiversity Risk Areas

Source: W WF(World Wide Fund For Nature) Biodiversity Risk Filter 100

Biodiversity Risk Assessment
(based on domestic business sites)

Biodiversity Risk Assessment(based on domestic business sites)/caption>

Classification	Number of Business sites(pcs)	Area(㎡)
Business sites	19	1,831,724
Assessments conducted	3	154,018
Percentage of assessed workplaces compared to total workplaces(%)		8.4
Identification of risk exposure	1	21,744
Establishment and implementation of management plans	1	21,744
Percentage of sites with management plans developed and implemented(%)		100

* As of December 31, 2022
** Wildlife Reserves: Wolleung Spring Water business site / Ecological landscape conservation area: N/A

LG H&H is implementing various support activities in conjunction with its business sites nationwide to restore and preserve biodiversity. In 2022, we created a 15,537m2(4,700 pyeong) ‘Bee Park’ in cooperation with the Ulsan Forest of Life, an organization in Ulsan, and the local municipality, and we plan to create a ‘Birds Park’ in 2023. This is because the extinction of bees could lead to the loss of 70% of the top 100 crops grown by humans. As 40% of the world’s 10,000 bird species have seen their populations decline due to global warming, and 40% of insects are predicted to become extinct within a few decades, the issue of biodiversity is becoming essential for habitat preservation. Therefore, LG H&H plans to contribute to plants’ vitality and preserve biodiversity by planting trees that bear flowers and fruits in the city center and creating parks for insects and birds to engage in ecological activities actively. We also expect that we can play a role in absorbing carbon and reducing the generation of fine dust by creating an ‘urban forest.’

LG H&H is protecting natural ecosystems and preserving biodiversity by protecting the habitat of the Han River otter, a class 1 endangered wildlife species and Natural Monument No.330. To restore the otter’s habitat, we collaborated with the Social Cooperative Han River, a specialized organization, to build infrastructure in the Yeouisat River and Jungrangcheon River areas in downtown Seoul and raise awareness among citizens to preserve endangered animals. In particular, Jungrangcheon, the first tributary of the Han River, is home to a migratory bird sanctuary designated by the Seoul Metropolitan Government, Natural Monument No.327 Wonang(mandarin duck), and a variety of native fish such as stonefish and nabjalu, and otters, a top-level predator, have been observed as the river ecosystem has greatly stabilized over the past few years.
LG H&H plans to install otter playgrounds, create nurseries for endangered wildlife, and open an otter school for children and youth to promote their ecological importance and environmental value. We also plan to expand conservation activities with citizens by operating an otter journalist program to explore and promote habitats. LG H&H will continue to promote activities to conserve, restore, and expand biodiversity by synthesizing the natural history, cultural values, and educational significance of the natural areas around its sites and establish an active cooperation system with external organizations such as local communities and specialized institutions.

• An otter statue at the Saetgang Ecological Park in Yeouido, Seoul, South Korea
• Park of Bee in Ulsan

Terrestrial biodiversity, including the habitat and species richness of Korea’s native plants, is expected to continue declining due to artificial interference, such as using forests for other purposes and climate change. In response, LG H&H continues to carry out various activities to conserve and develop Korea’s native plants following the Nagoya Protocol to restore biodiversity and ecosystem functions. We categorize our activities into three areas: conservation, restoration, and expansion, where we secure resource specimens, extract libraries, video footage, and research to develop differentiated efficacy, concepts, and materials for our products. We operate our own native plant gardens in Cheongju and Ulleungdo. In 2023, we signed a contract with local farmers in Ulleungdo and Sejong City to cultivate a total of 11 types of native plants, including Jeonho, water thistle, Golden Rod, Lythrum salicaria, Inula japonica, Alfalfa, day lily, Milk Thistle, Potentilla chinensis, Caragana sinica, Vietnamese balm. In addition, we completed the launch of the “Beyond Phytoacua” line, which incorporates Inula japonica and Lythrum salicaria grown in Ulleungdo. The development of native plant resources contributes to creating sustainable communities and improving farmers’ incomes through contract cultivation with local farmers while creating social value by restoring ecosystem functions and securing product competitiveness. LG H&H plans to collect and multiply about 500species of native plants by 2028. We will also expand the number of national organizations with which we have signed business agreements from four to six and build genetic information on 200 species. Going forward, we will continue to conduct plant diversity surveys and monitor and expand various biodiversity activities, such as expanding local conservation, restoring and enhancing damaged forest ecosystems, and promoting the utilization of plant resources.