Social Contribution

Our supplier selection and registration process ensures transparency and fairness in selecting suppliers. In selecting new suppliers, application reviews and credit assessments are made in the 1st phase, which is followed by the 2nd phase assessment where candidates are assessed by our in-house assessment team, made up of at least three departments among purchasing, material management, quality, production, design, R&D and marketing departments. Such assessments target suppliers whose transaction period is more than 1 year and annual transactions amount to over KRW 100 million while assessment categories include quality, deadline, credit ratings, technology, and CSR. In 2012, sustainability management assessment categories was further segmented into 64 items in the seven areas of governance, Jeong-Do management, labor & human rights, environment, safety, consumers and local communities.

Pilot assessments were also made of six raw and subsidiary material suppliers and OEM companies. In 2013, our plan is to perform CSR assessments of 250 major suppliers to reflect the outcomes in our comprehensive purchasing assessments as well as incentive criteria covering the allocation of product volume, the selection of beneficiaries of the Growing Together fund and technological support.

We created “Open Space” within our convergent purchasing system to gather feedback from suppliers. Our supplier dialogue channels enable our suppliers to freely communicate their grievances and suggestions regarding business transactions to our purchasing employees.

Operation of Sangsaenggo and Open Space

LG H&H strives to select a business partner fairly and transparently through a business partner selection and registration process.To select a new business partner, we first conduct document examination and a credit test. We then conduct a due diligence test with a test team made up of the people in charge of purchase, materials, quality, production, design, the research center, and marketing. Our company reflects the ESR evaluation results to overall purchase assessment and uses these assessment results as criteria for giving incentives such as quantity allocation, the Win-win growth fund, and technical support.

LG H&H provides e-learning and correspondence learning programs to suppliers’ employees and their families. We also encourage their children to participate in the Borrowed Earth School conducted by LG H&H, where teenagers can learn eco-friendly habits.

We run the welfare mall, where employees of suppliers can purchase products under the same conditions as LG employees, while supporting expenses to expand staff lounges and other welfare facilities to companies that win prizes in the supplier innovation contest. We also give away sports game vouchers to suppliers.

Since 2015, we have carried out “Happy Together Campaign with LG H&H” to support the social contribution activities of suppliers for local communities. If our suppliers select particular welfare facilities in the region and conduct volunteer activities, we provide goods worth KRW 5 million, spreading the volunteering culture and supporting the expansion of communication channels with local communities.