Innovation

- Compliance with product social responsibiity

LG Chem manages conflict mineral supply to comply with product social responsibility. The conflict minerals are mined in the conflict zone, such as the Democratic Republic of the Congo.

The company is endorsing the prohibition policy on the use of conflict mineral and striving to comply with the policy. First, the company collects and manages information on the use of conflict minerals and the smelters for partner companies using the minerals. Second, the corporation monitors the ingredient information of suppliers through IT systems. Lastly, the company distributed environment-friendly supply chain management guidelines to LG’s suppliers to prohibit the use of conflict minerals. In other words, LG Chem has established a responsible supply system to protect the environment and human rights of conflict areas. Therefore, this can support to achieve #12 goal in SDGs.

-Social contribution through education

LG is raising the effect of continuous social contribution through education rather than one-time donation. A representative educational CSR activity is the program named ‘Borrowing Earth School’ of LG Household & Health care.

Through ‘Borrowing Earth School’ program, LG provides a fusion-type habits education that enables young people to learn the right eco-friendly lifestyle habits and to think about their careers together. In particular, ‘Borrowing earth schools’ provide continuing education for middle schools in rural areas.

LG guarantees equal educational opportunities for underprivileged students through this program. In addition, ‘Borrowing earth school’ is developing sustainable talent that can coexist with the global ecosystem by providing high quality eco-friendly fusion education. Because this program can help equality education to increase, this activity is linked to #4 of SDGs.

-Warm technology

LG Electrics is carrying out a program called 'Warm Technology' that develops and disseminates products and technologies to solve various problems around the world. Ethiopia LG Hope Community is a representative example of this warm technology. There are 4 main projects in LG Hope Community.

First is LG Hope village. Because Ethiopia has a food self-sufficiency rate of around 10%, there is a shortage of food every year. In order to solve this problem, LG created a demonstration farm where residents can receive training and practice on new agriculture. LG has also nurtured 50 rural leaders in 2016.

Second, in 2014, LG Electronics established LG-KOICA Hope TVET College in Ethiopia. The school provides technical training for young people to grow into skilled workers. Hope TVET College also provides classes that convey the LG’s management philosophy and entrepreneurial spirit.

Third project is LG Hope Vaccination. Since 2010, LG Electronics has launched an Ethiopian cholera vaccination program with IVI (International Vaccine Institution). LG also collaborated with EPHI (Ethiopia Public Health Institution) to promote vaccination campaigns and local health workforce training.

LG is also carrying out LG Hope Decedents project. Ethiopia was the only African country to send combat soldiers during the Korean War. In return for their help, LG is providing scholarships to descendants of Korean War veterans.

Inspiration

Nowadays, sustainable growth is a hot topic for every company. This is because the interest in environmental and social problems has spread to society as a whole, and the demand for social responsibility has increased sharply with the economic growth of enterprises. Therefore, they have created a dedicated organization for sustainability management. Also, by publishing a sustainability report, they have been actively engaged in communication on stakeholder about social responsibility and role of corporation.

In particular, about 80 percent of total sales of LG Electronics, which is one of the most representative subsidiaries of LG, come from overseas. It is a global company, therefore, which means that it is natural to contribute to local sustainable development as it receives much love from overseas, and to support emergency relief activities in the event of a disaster. Rather than merely returning the benefits, we think that we should help the community as a member of society.

"The ultimate goal of the CSR team is to eliminate the CSR team." The concept of CSR is not limited to a part of management activities but a way of thinking that can be projected into the overall management activities of the company. What I mean is that if the CSR mindset is embedded in each area of the company, the CSR team will not be needed. I think the goal of corporate CSR team is to establish the foundations for mindset.

Overall impact

1) Overall impact supported UN Global goals

-> LG has signed a partnership MOU with UN GLOBAL COMPACT to achieve Sustainable Development Goals, since 2014. After signing a MOU, the company shares their experiences and knowledge about social contribution activities supported by developing countries with UN GLOBAL COMPACT. LG is also taking SDGs and making it the goal and the ideology of its business activities. So, LG is carrying out activities that will minimize the negative impact and increase the positive impact on each community. In addition, the company is striving to broaden the spectrum of this activities.

2) Stakeholders & organisational impact on them

-> LG has secured the social justification of profit making and is being supported by the relevant stakeholders, because the company is conducting a lot of CSR activities. In other words, LG is promoting the health of the market ecosystem in all its business activities, including products and services. For example, LG looks back at the communities they belong to and help the underprivileged become self-reliant. The company is also communicating with various stakeholders continuously and establishing the trust relationship.

Business benefit

• Enterprise value can be created and improved through CSR activities. LG is constantly communicating with various stakeholders and building trusted relationship. In addition, it is forming consensuses and strengthening cooperation with its stakeholders.

• There are tax credits that can be earned through CSR activities or eco-friendly efforts, as well as income tax deductions that can be earned by donating cash.

• As a result of its CSR activities, it can have opportunities to promote the company without costs. If the activities of the company are known through local newspapers or broadcasting media, the advertisement of the company could be done without additional advertising costs.

• When the impression of corporation improves with CSR activities, the quantity and quality of the employment increase. Also, the satisfaction rate of the employees who are already working can be enhanced and the turnover rate can be decreased.

• CSR can help it to maintain its legitimacy and enable it to take advantage of a favorable position in the process of acquiring resources in the future.

• The company can expect to be connected with active CSR activities and consumer purchases. Because CSR activities plays a very important role in purchasing decision process due to recent changes in perceptions of buyers and customers. In addition, by company, customers are directly involved in CSR activities.

Social and environmental benefit

• LG U+ has developed and produced ‘Smart Green’ which is M2M service of food waste collection, since 2010. It is Installation and control service of RFID-based individual weighing device for food garbage dispensing system. Because this service can be accurately quantified and charged for food waste, the amount of food waste discharged by the local governments adopting the service is reduced by 20 ~ 30%.

• ‘Beyond’ which is beauty brand in LG has carried out various ‘animal protection campaign’. From 2012, ‘Beyond’ has conducted a ‘1milion signing campaign’ to oppose cosmetic animal experiments and founded ‘Save us fund’ for protecting animal. In addition, the company expanded funding and protecting activities. As a result, the participation of many companies and customers about animal protection is increasing continuously.

• LG Chem is protecting the environment and human rights in war areas by restricting the use of conflict minerals. The conflict minerals mean four minerals (tin, tantalum, tungsten, gold) that are mined in the conflict zone, the Democratic Republic of the Congo and the surrounding countries. As part of the ban on using conflict minerals, the company collects and manages information on the use of conflict minerals and the smelters of the minerals for partner companies using the four minerals. The corporation also monitors the ingredient information of suppliers from purchase stage through IT system. Since the company has complied with the social responsibilities of their products, LG Chem is contributing to prevent environmental pollution, labor exploitation and human rights violations in conflict zone.

• In order to improve the power environment of the Public Health Center emergency room in the Pakistan where frequent power outages are taking place, LG Electrics installed the "Twinkle Twinkle Hospital" that uses LG Photovoltaic with World Vision and conducted a free medical care camp. The activities of LG Electrics have helped meet the need of Pakistan’s electricity supply. In addition, this enhances the developed countries' access to renewable energy.

• LG Yonam Foundation actively supports adolescent education. For instance, it has held ‘Young Maker Program’ which is composed of academies and festivals. The ‘Young Maker Program’ is a project to present the future of youth science education and to contribute to the popularization of science and culture. The festival runs experiential booths that combine science, culture and art, including workshops, play experiences, and exhibitions and its core value is cooperation and sharing. Through this program, LG Yonam Foundation spread the creative culture and contribute to the national industry and economic development.

Interview

Chanhun Jeon, Corporate Social Responsibility