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

id-term Roadmap
Classification Tasks Key Performance Indicators(KPIs) 2022 Performance Relevant SDGs
Economics and
Governance		 Creation of Social and
Environmental Benefits

Select and execute mid- to long-term tasks to reduce environmental impacts and promote customer safety and health(~2025)

Refined the ESG-based Clean Beauty Inside(CBI) built in 2021 and applied it to Belif, Beyond, and TFS new products in 2022, achieving the targeted average CBI index score of 8 in 2022.


[Representative Products]

Belif Super Drops: Efficacy quality/scientific trust

Beyond Angel Aqua Line: Contains extracts from farm-to-skin farming/Eco-friendly package/Vegan formula

TFS The Therapy Vegan Line: Eco-friendly package/Vegan/24 additive-free formulas

Applied eco-friendly recycled plastic containers made from 100% pure waste plastic and waste vinyl pyrolysis oil for the first time in the domestic cosmetics industry.
(Beyond Angel Aqua Moisture Soothing Cream) to promote circular resource utilization and reduce greenhouse gas emissions.

 sdg02
Enhancement of product safety

Advance effective prevention activities and operate quality planning(~2024)

Advanced quality diagnosis process Expand the scope of quality accident diagnosis and strengthen the reporting process Establish and settle quality management indicators such as quality cost Improve quality issues and proactive management system

Systematize and globalize prevention activities(~2026)

Operate a unified customer management system based on global business standards Operate a global consulting capability organization for safe quality certification Establish a preventive management system that warns of quality risks through data analysis

Operated a safety quality certification system across design, mass production, and distribution: Completed a pilot diagnosis for 10 departments in the design area, completed a safety quality diagnosis for 19 production sites, and completed a safety quality diagnosis for 64 logistics sites.

(2022.10): Awarded excellent workplace plaques to 4 production sites and 4 logistics sites

 sdg03
Portfolio Diversification

Achieve KRW 3.17 trillion in sales by continuously expanding overseas businesses(~2025)

Achieved KRW 2 trillion in overseas sales

  
ESG governance establishment

Organize and operate the ESG Committee

Produce an ESG Council operational outcome

Enhance the diversity and expertise of internal and external directors

Operated the ESG Committee(2 times/year), but in 2022, it was held 3 times in February, May, and November.

ESG Council(held quarterly)

Appointed a new female outside director(2022)

 sdg01
Social Enhance social contribution
activities

Expand the number of the beneficiaries of social advancement such as job creation for women
(280 people cumulatively selected by 2025)

Natural Beauty Live Creator1) 5th Term, selected 35 people(171 cumulative participants)

 sdg09

Continuous value-up through follow-up management of existing personnel

Added live commerce training and access to expert mentors and hands-on opportunities

Diversify education channels of ‘Borrowed Earth School,’ habit improvement convergence education program for teenagers and2) and achieve a cumulative total of 100,400 beneficiaries(by 2025)

2022: Establishment of a “Borrowed Earth World” metaverse for national school participation

Cumulative participation in 2022: 73,215(2022 alone: 7,500)

Expand the regions for a health musical for children, Twinkle Twinkle Perio, and3) achieve a cumulative total of 242,290 beneficiaries(by 2025).

234,706 participants in 2022(3,049 in 2022 alone)
Build a sustainable
supply chain

Improve reliable quality level for suppliers4) with a cumulative total of 660 companies(by 2025)

300 cumulative cases in 2022(60 cases in 2022 alone)

Issued certificates to 9 domestic suppliers of the reliable quality level

 sdg05

Provide Technical support for business partners with a cumulative total of 1,811 cases(by 2025)

2022 alone: 204 cases

Cumulative from 2017 to 2022: 1,153 cases

Provide financial support for business partners with a cumulative total of KRW 310.2 billion(by 2025)

2022 alone: KRW 39.8 billion

Cumulative from 2017 to 2022: KRW 218.6 billion

Minimize risks by enhancing the ESG capabilities of suppliers

Conducting written investigations, due diligence(audit), and progress monitoring(for ‘Significant suppliers’ among all suppliers)

30 suppliers to be consulted(utilizing external consulting firms)

Operate advanced consulting for overseas partners and discover and nurture new overseas partners

Completed diagnosis of 16 existing overseas suppliers(conducted by an external specialized organization)

Completed diagnosis of 9 new overseas suppliers(opened trading codes for 3 companies)

Sustainable Palm Oil(RSPO) Purchasing Ratio Target(64.9%, by 2025)5)

Achieved 61.5% of sustainable palm oil(RSPO) purchases
Create a good working
environment

Improve employee engagement(85 points, by 2025)

Employee engagement score average of 82 points

 sdg06

Establish a global education system
(a cumulative total of 750 who will have completed the course by 2025)

1:1 English coaching classes with native speakers: 59 people

Global Expertise Course(GEC), an English-speaking business capacity building program: 13 people

Global MBA: 3 people

Japanese/Chinese Basic Business Conversation Course: 117 students(target of 750 students by 25 years by maintaining some 150 students per year)

Build Global Leadership(by 2025)

LG H&H Global Internship Program: 9 Participants in 2022 / Period: As of December 2022

Achieve 28.5% of female managers(by 2023)

28.3% of female managers(up 1.3% compared to 2021)
Environmental Promote resource
circulation

Achieve KRW 550 billion in sales of green products through eco-labeling(by 2025)

Achieved KRW 476.8 billion in sales of green products

Eco-labelings(183 environmental-labels, 2 for low-carbon products, 10 for carbon footprints)

 sdg10

200 tons of recycled plastic used(by 2025)

Recycled plastic use of 180 tons(PCR PET/PCR LLDPE)

Achieve 50% of clean beauty products among clean beauty-focused brand new products(by 2025)

Achieve an average Clean Beauty Inside Index of 13 for new products(~2030)

Operated LG H&H clean beauty new product guide, “Clean Beauty Inside”(2022)

Achieved 25% of clean beauty products among new products from clean beauty focused brands

Measured the Clean Beauty Inside index of launched products(2022)

Average Clean Beauty Inside Index of 8.37 for new clean beauty products in 2022(target of 8)

Achieve 1.46 tons/product-ton of water intensity(by 2025)

1.95 tons/product-ton

Reduce restricted substances in use by 50%(by 2025)

Managed about 3,500 banned ingredients of Clean Beauty Inside No Harmful Ingredients(Human Safety) Step 3(2022)

Achieved 82.5% exclusion rate of D5 and D6 among Clean Beauty new leave-on products(2022)
Lead climate change
response

Cumulative Greenhouse Gas Emission Reductions 25,870 ton CO2eq(by 2025)

7,223ton CO2eq(cumulative)

 sdg08

Carbon Neutrality Response Activities and Performance

Established a carbon-neutral mid- to long-term strategy

Invested KRW 200 billion in 84 core technologies, reducing carbon emissions by 45%(~2030)

Achieved Net Zero(~2050)

Invest continuously to improve energy efficiencies, such as facility improvement at business sites and replacement of old equipment

Invested KRW 8.6 billion
1) Natural Beauty Creator: A beauty creator training program for women with career breaks
2) Borrowed Earth School: Cumulative data since 2014
3) Twinkle Twinkle Perio: Cumulative data since 2004
4) Cumulative data since 2019 for the reliable quality rating evaluation for partner companies/Cumulative data since 2017 for the goals and performance related to technical support and financial support for partner companies
5) Target % is annual sustainable palm oil purchases/annual total palm oil purchases