Sustainable Value Chain｜LG Energy Solution

Sustainable Value Chain

Managing ESG Risks at Our Operating Sites

Operating Sites ESG Risk Management Framework

The company reviews risk status, response strategies, and improvement tasks across five key areas: environment, human rights and labor, health and safety, ethics, and supply chain management. The RBA VAP, which includes on-site audits, is conducted biennially, while the RBA SAQ (Self-Assessment Questionnaire) is carried out annually, ensuring proactive management of ESG risks at business sites. The results are disclosed transparently each year through the ESG Report

01 Key areas of ESG risk assessment - Environmental Impact, Human rights impacts, HR / labor policy and programs, Occupational safety and health, Responsible Sourcing, Ethics management. 02 Conducting ESG risk assessment at facility level - Self Assessment Questionnaire, Third-party on-site audit. 03 Identification and Planning of Corrective Actions. 04 Transparent disclosure of assessment result and corrective actions implement status.

Promoting Global Recognition

LG Energy Solution also works to ensure our policies, procedures, management systems and operations at both corporate and facility levels meet international standards in conjunction with internationally recognized certification process such as ISO.

Status of ESG-related Certifications Acquired (As of July 2025). ISO223301 Business continuity - Domestic sites (the headquarters and Ochang Energy Plant, Ochang Energy Plant2). ISO14001 Environmental - All global manufacturing subsidiaries and R&D campus. ISO37001 Anti-Corruption - HQ, Domestic operations / R&D Campus. ISO45001 Occupational health and safety - All global manufacturing subsidiaries and R&D Campuses. ISO50001 Energy - Ochang Energy Plant, Ochang Energy Plant2, subsidiary in China(NJ,NA,NB). ISO37301 Compliance - Domestic operations (incl. headquarters) and subsidiary in China(NJ,NA,NB) / R&D Campus. ISO27001 Information security - Domestic sites HQ, Ochang Energy Plant, Ochang Energy Plant2 R&D Campus Daejeon, R&D Campus Gwacheon. Poland subsidiary and Germany sales subsidiary obtained TISAX certification / Gwacheon R&D Campus obtained ISO 21434 certification.

Managing ESG Risks in Our Supply Chains

LG Energy Solution applies ethical and transparent supply chain operations as a fundamental prerequisite of its mid- to long-term business strategy. The company’s supply chain management system is established in accordance with international guidelines and principles, including the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas ↗ and the ‘UN Guiding Principles on Business and Human Rights’.

Supply Chain ESG Risk Management Framework

Responsible Sourcing Policy

LG Energy Solution has established and operates Responsible Sourcing Policy. The Policy is based on the relevant international guidelines, standards and frameworks, including those of OECD, UN and ILO and sets out fundamental principles for LG Energy Solution and its suppliers to minimize supply chain ESG risks in the areas of human rights, labor, ethics, occupational safety and health, environmental sustainability and responsible sourcing.

Further, the Policy stipulates the operation of grievance mechanism which enables stakeholders to report any issue or concern relevant to potential ESG risks along our supply chains anonymously and facilitates such issues are handled in a timely manner. Committed to managing supply chain ESG risks based on the Policy, LG Energy Solution aims to contribute to improving the sustainability of the battery supply chains, thereby to ensure responsible and sustainable business.

Responsible Sourcing Policy

Supplier Code of Conduct

Since 2016, LG Energy Solution has established and operated a Code of Conduct for Suppliers. The Code stipulates principles, standards and requirements that our suppliers must comply with in the areas including human rights, labor, ethics, occupational safety and health, environmental sustainability, responsible mineral sourcing, and grievance mechanism.

Based on the Code, LG Energy Solution verifies the adequacy of the supplier's supply chain management system from the stage of selecting new supplier and systematically manages ESG risks in the supply chain through regular ESG evaluations and monitoring of corrective action plans. All suppliers that carry out transactions with LG Energy Solution must agree to fully acquaint and comply with the Code, and the information on suppliers' informed consent is managed through the Singlex Purchasing System↗

Supplier Code of Conduct

Grievance and Remedy

Supplier Code of Conduct

LG Energy Solution operates a grievance mechanism where all stakeholders, including suppliers, service providers and contractors along its supply chains, can report any instance of violation in human rights, safety and health, environment, ethics or raise potential concerns.

All stakeholders have the right to report the violation occurring in LG Energy Solution’s premises and along its supply chains. Once the case is registered, the responsible department is identified to investigate, follow through and resolve the case. The informant will be provided with the result of investigation and relevant remediation measures.

The confidentiality, anonymity and security of the informant is rigorously safeguarded throughout the process of grievance and remedy. LG Energy Solution is committed to ensuring no retaliation or adverse consequences for reporting.

Step 01 Grievance Submission. Step 02 Reviewing in responsible department. Step 03 Content Verification and inspection conducted. Step 04 Processing completed and sharing a result to informant.

After submission, cases are transferred to the relevant department, and the feedback period may vary depending on the case.

Grievance Reporting

Monitoring ESG Risks in Our Supply Chain

ESG Evaluation for suppliers

LG Energy Solution evaluates new supplier candidates against 10 ESG risk indicators as part of the selection process. For the suppliers that are already in our supply chains, supplier ESG evaluations proceed in conjunction with regular purchase evaluations, with over 60 ESG risk indicators incorporated. Further, we require our suppliers to establish their own systems for supply chain transparency, risk identification, and third-party due diligence to avoid sourcing of raw materials from conflict-affected and high-risk areas; and to communicate the information on procedures and results of the implementation with us and other stakeholders.

With such assessment process, we evaluate our suppliers' compliance with our Supplier Code of Conduct, conduct on-site third-party audit on suppliers of high-risk group, identify and plan corrective actions, monitor their implementation, and disclose the information on procedures and outcomes of the evaluation in our annual ESG report.

Regular Evaluation
ESG evaluations proceed in conjunction with annual purchase evaluations, with over 60 ESG risk indicators including human and labor rights, ethics, responsible sourcing, environmental sustainability, OHS, etc.
New Supplier Evaluation
New supplier candidates are evaluated against 10 ESG risk indicators before the registration

Beyond Tier-1 Suppliers

To build a sustainable battery ecosystem, it is important to expand the scope of the supply chain that participates in ESG activities beyond our Tier-1 suppliers. LG Energy Solution seeks to drive greater transparency and traceability with the chain of custody through the operation of the Supplier Code of Conduct and the regular process of suppliers ESG evaluation. Taking a step further, we strive to enhance our upstream supply chain management by gradually expanding due diligence on major raw material supply chains and collaborating with other players along the supply chains to secure traceability.

Conflict Minerals Management

LG Energy Solution operates an IT system to track and monitor our suppliers and the composition of materials from the purchase stage. The system enables to identify suppliers that source any of conflict minerals (tin, tantalum, tungsten, and gold) and requires them to report through the Conflict Minerals Reporting Template (CMRT), developed by Responsible Minerals Initiative, on the use of conflict minerals, mineral country of origin and the smelters and refiners being utilized.

What are the “Conflict Minerals”?

'Conflict minerals' refer to four minerals (tin, tantalum, tungsten, and gold) mined in the Democratic Republic of Congo and the neighboring nations, including Sudan, Rwanda, Burundi, Uganda, Congo, Zambia, Angola, Tanzania, and the Central African Republic. These territories are currently controlled by militant groups of insurgents and conquering armies that mine and distribute minerals to secure funds. This practice continues to cause disputes and often results in casualties, human rights violations, and labor exploitation
In July 2010, the U.S. Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act which lay the foundation for legal restrictions on conflict minerals. Every company, listed in the U.S securities market, must fairly disclose and annually report the use of conflict minerals to the Securities and Exchange Commission(SEC) by May 31st. Some Korean companies with obligation are also influenced by this Act, as a supplier to the U.S firms.

Supply Chain Sustainability Report

LG Energy Solution will transparently disclose information on its supply chain ESG activities through the annual publication of the "Supply Chain Sustainability Report".
The report describes LG Energy Solution's supply chain management policies and processes, key activities and future plans to build a sustainable battery ecosystem.

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