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Sustainability

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Sustainability Management System

LG Hausys’ sustainability management takes the company’s vision, “creating human-friendly, eco-conscious living spaces”, as
its basis. We strive to fulfill our social responsibility while at the same time effectively controlling risks and providing peerless
value to stakeholders.

Annual
Review
  • Monitoring
  • Target selected
  • Self-diagnosis
  • On-site inspection
  • Solution

Risk Management

LG Hausys conduct thorough and effective risk management activities in order to early identify and solve any issues that arise. Nine areas are subject to review: Governance, Ethics management, Shared growth, Fair trade, Customer value, Social contribution, Labor conditions and Human rights, Safety and health, and Environmental management. Immediate action was taken to resolve any risks predicted and/or discerned through such inspections/diagnosis, and these areas are subject to regular monitoring to ensure the issues(s) have been effectively resolved.

Social Contribution

LG Hausys has carried out various CSR activities. We are acutely aware of the impact of our business activities on society and people and utilize our CSR activities to nurture our relationships with local communities.

Stakeholder Communication

LG Hausys communicates with its major stakeholders - customers, shareholders and investors, business partners, employees, and local communities –through tailored channels. We ensure transparency by making widely available literature on the activities and outcomes of our business and other activities (eg. Sustainability reports, Business reports, Environmental information reports). Such transparent information disclosure enables us to gain the trust and respect of our valued stakeholders, and promote our CSR activities and various training programs.

Sustainability Management Performance and Future Plans

LG Hausys’ roadmap for sustainability management guides our current efforts in this area and helps us set clear strategies for the future. In 2014, we added the “Major Issues about CSR Activity” to the board of directors (BOD) report, laying the foundation for future discussion of sustainability management-related topics at BOD meetings.

Revision of BOD regulations on CSR
LG Hausys added “Important Issues about CSR Activity” to the BOD report in 2014 to help build a deci-
sion-making process on sustainability management for the BOD and establish the grounds upon which
to report CSR activities to the BOD. Our aim here is to gradually facilitate discussions on sustainability
management at BOD meetings toward the establishment of the Sustainability Management Committee,
as part of the BOD, in the near future.
Current Status

“Important Issues about
CSR Activity”
added to BOD report

Goal: To build a decision-making process on
sustainability management for the BOD
  1. Opinion
    collection
  2. Suggestion
  3. Convocation
    of a BOD
    meeting
  4. Decision
    making

CSR Supplier Code of Conduct

  • CSR Supplier Code of Conduct

    The CSR Code of Conduct by LG Hausys is designed to present the requirements and standards that we expect our suppliers to participate in our social responsibility and efforts.

    a. We prohibit the employment of children under the minimum legal working age, and concerning youth workers, comply with relevant regulations governing the minimum legal working age, work hours and work conditions

    b. We prohibit forced labor, sweated labor and all other types of labor that go against the voluntary will of workers, and prepare labor contracts that clearly specify labor conditions.

    c. We prohibit any type of discrimination on the grounds of race, skin color, age, gender, origin, disabilities, pregnancy, religion, political preference, labor union membership, and marriage status in such employment practices as recruitment, promotion, compensation, and educational opportunities.

    d. We respect the dignity of workers, and create a work environment free from any inhumane treatment or threats ranging from sexual harassment, abuse, corporal punishment to psychological/physical coercion or verbal violence.

    e. We abide by relevant legal criteria set forth concerning maximum work hours/days, minimum wage, welfare and benefits, labor hours and compensation

    f. We acknowledge the freedom of association and the right to collective bargaining that are guaranteed by law, and create an environment where workers can communicate with the management on labor conditions without any fear on discrimination, retaliation, threat or harassment

    g. We bear the responsibility to ban any type of corruptive practices such as bribe-taking (including receiving gifts) and embezzlement through corporate policy, and to constantly monitor and crack down on such practices. Furthermore, we guarantee the protection and confidentiality of whistle-blowers

    h. We take legally-required actions to ensure that workers work and live (if residence is provided) in a safe and healthy environment, ranging from assessing and eliminating risk factors and offering continued training and emergency drills to providing personal protective equipment.

    i. We do our utmost to obtain and update necessary environmental approvals and to minimize any negative impact of our manufacturing process – hazardous materials, waste and wastewater, air pollution and the use of resources - on the environment and local communities.

Sustainability Disclosure

  • Sustainability Disclosure

    LG Hausys discloses ESG data based on stakeholder interests.

    ■ Median or Mean Compensation of all Employees & CEO Compensation

    (As of 2019)

    Category Median Employee Compensation Mean Employee Compensation Total CEO Compensation
    Annual compensation [Unit : KRW 1 million] 71 73 660
    CEO compensation divided by the mean or median employee compensation 9.30 9.04 -

    * Calculated with reference to LG Hausys Business Report 2019

  • ■ The Top Five Largest Contributions and Expenditures

    (As of 2019)

    Name of Organization Total Amount (KRW)
    The Korean Chamber of Commerce and Industry 157,559,000
    The Korea Enterprises Federation 33,200,000
    Korea Specialty Construction Association 28,019,900
    Korea Products Safety Association 12,000,000
    Korea Association for Exterior insulation 10,000,000
    Total contributions and other spending 329,765,220

    * LG Hausys does not contribute to political campaigns, political organizations, lobbyists or lobbying organizations.

    * LG Hausys pays association fees as a membership only and has no issues or topics to participate in or support its position.

  • ■ Trend of Employee Engagement (Results of the LG Way Survey)

    Category Unit 2016 2017 2018 2019 Target for 2019
    Employee engagement % of actively engaged employees 82 81 79 80 80
    Data coverage % of total employees 83.3% 82.5% 80.5% 83.8% -

    * The LG Way Index indicates the ratio of positive answers, tabulating the number of respondents that assigned a score of four or five on a scale of one to five (five being the most positive response).

  • ■ Social Contribution

    (As of 2019)

    (As of 2019)

    · CSR Activitie

    Category Description of alignment between activites and our business drivers Business Benefit KPI Social / Environmental Benefit KPI
    CSR activity related to business LG Hausys provides wallcoverings, flooring materials, windows, and supports construction, and utilizes our business capabilities and infrastructure to improve the living environment of the underprivileged (national merit, independent historic sites, impoverished children, etc.). 1. Public relations of products, construction, and design capabilities
    2. Increase in the number of customers and enhancement of consumer satisfaction
    Environmental improvement support for the neglected class of people, and improvement in the standard of living of community : Number of times of support (Support for 26 men of national merit, Support for 10 historic sites for independence, Support for 24 youth facilities)
    Education of children/adolescents LG Hausys contributes to the development of society by providing educational opportunities to young people about cultural heritage, and assisting them to proactively and voluntarily discover contents on cultural heritage conservation, public relations, and utilization. Enhancement of LG Hausys corporate brand Image 1. Increase in concern for cultural properties
    2. Discover contents on cultural heritage conservation, public relations, and utilization
    Social Value Creation LG Hausys is working with Ministry of Land, Infrastructure, and Transport and local governments to conduct a project to help residents improve their deteriorated residential environment (old buildings with low energy efficiency) at low cost. This not only helps in balancing the energy supply/demand, it also serves to reduce energy costs. LG Hausys provides high-insulation windows and other high energy-efficiency products to expand the cause of the project. Through this project, we are increasing sales of our products and profits as well. Customer Securing and Increase in Sales : Increase in the number of construction progress(6,200 cases in 2016, 6,800 cases in 2017, 7,200 cases in 2018, and 7,500 cases in 2019) Decrease in Building Energy Waste : Reduction of the maximum 40% in heating & cooling cost per household on an annual basis. (compared to 5th grade products)

    · Monetary Value of Contributions

    Type of Contribution Total amount
    Cash contributions KRW 1,102 million
    Time: employee volunteering during paid working hours 998 Hours
    In-kind giving: product or services donations, projects/partnerships or similar KRW 402 million
    Management overheads KRW 41 million
    The overall CSR activity costs KRW 1,545 million
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