###### Board's oversight of climate-related issues
LG H&H has a governance structure centered on the board of directors and pursues responsible management. The board of directors consists of two executive directors, one non-executive director, and four independent directors. For transparency and independence of the board, the positions of the CEO and the chairman of the board of directors are separated. The board of directors is responsible for making final decisions on overall management issues of the company. Within the board of directors, there are four committees: the Audit Committee, the Internal Transactions Committee, the Nomination Committee, and the ESG Committee, which deliberate on issues and oversee related activities in each area to enhance the expertise and efficiency of decision-making. Each committee regularly reports its operational status to the board of directors.
ESG Committee
The ESG committee was established in 2021 to internalize non-financial factors such as responses to climate change and biodiversity into the decision-making process and to strengthen ESG execution capabilities. The committee consists of one executive director and four independent directors, holding at least two meetings each year.
The ESG committee establishes a company-wide climate strategy and regularly monitors the implementation of related activities. As a core part of enterprise-wide ESG governance, the committee facilitates the implementation of climate change response activities at the company level and enables close inter-departmental collaboration to effectively respond to climate change.
Climate change issues managed and supervised by the ESG committee include activities of associations for carbon neutrality, and through these activities we support and contribute to the Paris Agreement and the 2050 carbon neutrality goal at the national level as part of global efforts to limit global warming to within 1.5°C. The scope of the associations' activities for carbon neutrality cover all jurisdictions in which the company operates its business, and the committee monitors not only own operations' activities but also the participating associations' activities related to climate change on the same level to prevent any conflicts of interest on climate change issues. [...] ###### Management's role on climate-related issues
LG H&H has established an institutional foundation for systematic climate change response. In addition, we have assigned C-level executives to key governance organization established for sustainable management, giving them shared responsibility for climate change issues. As a member of the ESG committee under the board of directors, the CEO holds the final decision-making authority on the company's climate change response activities, while the CFO chairs the ESG Committee and shares the company's climate change response direction with all members. The CRO also chairs the Crisis Management Committee and the Green Product Review Council to strengthen the climate change risk mitigation activities from a company-wide integrated perspective and improve the transition to product packaging using recycled raw materials to promote circular economy.
Furthermore, to strengthen the motivation of the executives and employees for implementing environmental management, the major environmental management indicators such as the sales of the products with reduced environmental impact, enhancement of product's resource circularity and development of recycled packaging, etc. are linked to the performance evaluation of C-level management. In addition, we operate a climate change-related incentive system such as monetary rewards or awards based on evaluation of KPIs such as GHG emission reduction and energy saving performance for division heads, team leaders, and employees.
ESG Council
The ESG Council, held quarterly, is an organization that discusses ESG issues from an integrated company-wide perspective and reports the results to the ESG Committee to support related decision-making. The main functions of the council related to climate change include establishing a climate change response plan and monitoring and evaluating the implementation status of climate change strategic tasks. [...] ESG Team
The ESG Team, which is the secretariat of the ESG Committee, plans and selects climate change strategic tasks in collaboration with relevant business units and provides support to business units in the process of implementing strategic tasks. The team also monitors company-wide GHG emission performance on a quarterly basis and reports to the ESG Committee. In addition, as part of our shared growth activities with suppliers, we provide consulting services for establishing GHG inventories and reducing GHG emissions. We have supported 13 suppliers in 2022 and 40 suppliers in 2023 in calculating their Scope 1 and 2 GHG emissions, enabling them to voluntarily manage their GHG emissions. In the future, LG H&H will expand its support for all suppliers to build their GHG inventories. [...] Green Management Part
The Green Management Part calculates domestic and overseas GHG emissions(Scope1, 2 and 3) and strives to achieve GHG reduction targets. Through regular meetings, the part monitor trends in GHG reduction-related policies, technologies, and research, and collaborate with relevant departments to support implementation of reduction tasks and discovery of new tasks. In addition, the part calculates carbon footprint through life cycle evaluation of major products and prepares to obtain environmental certificates. Furthermore, the part is responsible for responding to climate-related domestic and global initiatives, such as CDP Climate Change, and domestic GHG reduction systems. [...] Carbon Neutrality Working Council(climate change managers at operation sites)
From production, facilities, logistics, and environmental parts from each operations from LG H&H, Coca-Cola Beverage, and Haitai htb, climate change managers are appointed to manage basic data such as energy use and production level and develop and implement GHG reduction tasks for each site/production line. Through this, we are contributing to the carbon neutrality target by managing the reduction amount every year in accordance with the GHG reduction goals for all operations.