Sustainability Management Strategy

Vision

A planet borrowed for all of us
Through our ESG activities, to hand over a healthy and beautiful planet to our future generation, we will fulfill all our responsibilities
as a true successor.

ESG

ESG
Management
Direction

  • For Healthy Products
    Development of
    sustainable and
    user friendly products
    • Safety-assured products
    • Biodegradable materials
    • Clean beauty raw materials
  • For the Beautiful Planet
    Reduce environmental
    impact through
    eco-friendly products and recycling
    • Reduce greenhouse gas
    • Preserve water resources
    • Reduce waste
  • For Refreshing Society
    Strengthen social
    responsibility throughout
    company’s value chain
    • Protect labor rights
    • Prohibit discrimination
    • Strengthen work-life balance

Our Goals

  • Manage product safety & risk
    Enhance quality
    assurance system,
    manage emerging risks
  • Promote material recycling
    Introduce environment
    friendly packaging,
    More recycling thru collection
  • Increased CSR activities
    Strengthen programs for
    women and children

  • Portfolio diversification
    Expand new and
    overseas businesses

  • Lead climate change initiatives
    RE100 & carbon neutrality,
    increased energy efficiency,
    minimize carbon footprint across supply chain.
  • Build sustainable value chain
    Strengthen ESG capabilities of
    partner companies,
    expand RSPO
  • Increase products with social
    and environmental benefits
    Boost open innovation,
    engage in long-term projects for
    reducing environmental impact
  • More eco-friendly products
    More green products, more water
    saving products, more replacement
    of harmful chemicals
  • Improve working conditions
    Greater employee commitment,
    worker rights assessment

ESG Governance System

In 2021, company established ESG committee to strengthen its ESG capabilities by reflecting non-financial factors, e.g., environmental safety, customer value and governance in its management.. ESG committee, under BOD, is comprised of the CEO and all external members of the BOD. It is the highest body overseeing company’s sustainability activities. It will lead companywide ESG initiatives thru collaboration with the management and its staff members.

  • LG H&H BOD

  • ESG Committee
    (Biannually,Hold an extraordinary meeting if necessary)

    • Establish underlying policies and strategy for
      ESG management
    • Establish long-tern ESG goals
    • Monitor and review ESG activities

  • Secretariat : ESG Team

  • ESG Working Group
    (Quarterly)

    • Coordinate inter-departmental ESG issues and
      action plans
    • Regular reporting on major ESG issues
    • Identify and execute ESG projects.
    • External
      Cooperation Division
    • Environmental
      Safety Division
    • Packaging
      Development Division
    • Customer
      Value Division
    • Ethical(Jeong-Do)
      Management Division
    • Purchasing/Partner
      Support Division

Promise of LGH&H

  • Transparent information sharing and exemplary
    operation of BOD
  • Pursue happiness of all people and be a responsible
    corporate citizen
  • Assemble resources to achieve carbon neutrality
    by 2050
  • Develop, produce and market only safe and eco-
    friendly products
  • Operate sites under the principle of zero defect
    and zero hazard
  • Assist and seek joint growth with partner companies

Mid-term Roadmap

지속가능경영 로드맵
Category Key Performance Indicators 2020 Performance Relevant SDGs
Governance Organize and operate the ESG committee
Strengthen the diversity and expertise of internal and external directors 		- Step-by-step preparation for the organization and operation of the ESG committee
- Established the ESG committee (April 2021) 		sdg01
Products Select mid- and long-term challenges and conduct research to reduce the company’s impact on the environment and enhance the safety and health of customers (by 2025) - Launched the “Hempharmx” brand with clean beauty ingredients that are attracting attention in the global market (low irritation, vegan certification, increased ease of recycling)
- Acquisition and product extension of “Physiogel,” which is free from synthetic fragrances or artificial colors with biomimetic technology 		sdg02
Develop leading technologies and products through open innovation, including cooperation with other organizations and local communities (by 2025) - Explored beauty tips inherited from the Chinese imperial family through analysis of ancient Chinese (Tang) literature in collaboration with the Cosmetics Research Center at Beijing Technology and Business University
- Signed an agreement for R&D with European royal herb experts for the brand globalization, explored 80 beauty tips from the West
Operate and establish a process of Customer Value Innovation based on the Reliable Quality Management (RQM) system for each product life-cycle (Design, mass production, distribution, and response to consumers by 2022)
Secure world-class evaluation capabilities and build reliable operation in relation to safety verification (by 2022)
Establish a supply chain operating system that responds to the future of Informatization, Intelligence, and Automation based on the customer-centric PEOS1) platform (by 2023)
Secure global business capabilities of LG H&H’s Zero-Defect Safety Quality Certification (by 2024) 		- Reflected “Good Distribution Practice (GDP)” in the Agreement and established quality inspection process to improve distribution quality, targeting beverage business partners
- Achieved the approval of KOLAS and review the expansion of evaluation items
- Established a design, development, and additional operation plan for PEOS Platform at Cheongju Beauty/TP factory
- Conducted a Safety Quality Diagnosis for 14 business sites 		sdg03
Achieve KRW 2.63 trillion in sales through continuous expansion of overseas business (by 2023) Achieved KRW 2.31 trillion in overseas sales
Society Achieve cumulative 280 beneficiaries of social advancement such as job creation for women (by 2025) Selected 35 people for the 3rd term of Natural Beauty Creator2) (accumulated 101) sdg04
Constantly increase values through the post-management of program participant Opened an online caf? for the 1st/2nd term of Nabeauties3)
As a habit improvement convergence education program for teenagers, the Borrowed Earth School education channel diversified and a total 100,400 beneficiaries4) targeted (by 2025) - The Borrowed Earth School YouTube live streaming opened as a new online education channel
- 54,902 cumulative participants in 2020 (10,222 participants in 2020 alone)
Shiny PERIOE, a health musical for children, expanded across the country with 242,290 beneficiaries5) targeted (by 2025) 227,291 cumulative participants in 2020 (2,301 participants in 2020 alone)
Achieve a higher grade of the Safe Quality Certification6) with cumulative 660 suppliers (by 2025) - Achieved cumulative results of 176 cases in 2020 (84 results in 2020 alone)
- Specified the Safe Quality Certification with suppliers (Issuance of certificates and incentives in categories such as Safe Surprise/Safe Satisfaction/Safe Practice) 		sdg05
Provide suppliers with technical support6) (1,811 cases, cumulative, by 2025) Achieved cumulative results of 756 cases in 2020 (199 results in 2020 alone)
Provide suppliers with financial support6) (KRW 310.2 billion, cumulative, by 2025) Achieved cumulative results of KRW 140.09 billion in 2020 (KRW 40.88 billion in 2020 alone)
Minimize risks by enhancing suppliers’ capabilities for CSR Identified CSR risks for suppliers and conducted consulting for the suppliers (outsourced external consulting firms) and improvement progress monitoring
Provide consultation service to bolster overseas suppliers and explore potential suppliers Established the safe quality assessment system for new overseas partners (outsourced diagnosis company), plan to conduct assessment from 2021
Expand the purchase of sustainable palm oil (RSPO) - Set up purchasing policy for the purchase of sustainable raw materials
- Gradually strengthened the percentage of sustainable palm oil purchases
Enhance employee engagement (by 2025) Achieved an average of 72 points in employee engagement assessment7) sdg06
Establish a global training framework (by 2025) - 1:1 English Coaching Class with a native teacher: 41 participants
- GEC (Global Expertise Course) designed to enhance employees’ capabilities for global business: 16 participants
- GECC (Global Expertise Course China) designed to enhance employees’ capabilities for Chinese business: 13 participants
- Global MBA: 3 participants
Build global leadership (by 2025) LG H&H Global Internship Program (N-Task) participants: 5 people / Period: September 2020 to present
Achieve 28% of female managers (by 2023) Achieved 26.1% of female managers (up 1.1% over 2019)
Environment Achieve KRW 510.0 billion in sales of green products with the use of eco-labeling (by 2025) - Achieved KRW 454.3 billion in sales of green products
- 208 eco-labeling (194 environmental labels, 7 low-carbon products, 7 carbon footprints) 		sdg07
Achieve 200 tons of recycled plastics (by 2025) - Achieved 50 tons of recycled plastics (PCR PET)
- Gradually increased the use of recycled plastics step-by-step
Achieve 50% clean beauty products among new clean beauty brands (by 2025) Strengthened clean beauty elements (tips, container, ethical factors) of clean beauty products such as Physiogel, Belif, Beyond and The Face Shop
Achieve 1.46 tons/product-ton of water intensity (by 2025) 1.50 tons/product-ton
50% reduction of restricted substances8) (by 2025) - Reduced the use of restricted substances by 4.5%
- No use of restricted substances in new cleansing products (makeup remover, shampoo, conditioner, foam, etc.)
Achieve 0.069 tCO2e/product-ton of GHG emissions intensity (by 2025) Achieved 0.065 tCO2e/product-ton sdg08
Prepare for a carbon-neutral future Review application plans for utilization of renewable energy (hydrogen, solar power)
Improve energy efficiency with constant investment, including the improvement of facilities in business sites and replacement of deteriorating equipment Invested KRW 391 million
1) PEOS: Paperless Enterprise Operation System
2) Natural Beauty Creator: A beauty creator training program for women on a career break
3) Nabeauties: Beauty creator alumni
4) Borrowed Earth School: cumulative data since 2014
5) Shiny PERIOE: cumulative data since 2004
6) The safe quality assessment for suppliers consists of cumulative data from 2019. The technical/financial support goals and achievements are cumulative data from 2017
7) Advancement of the method of calculating employee engagement
8) Decamethylcyclopentasiloxane(D5), Dodecamethylcyclohexasiloxane(D6) in the Annex XVII of REACH Regulation