For companies around the world, it has become important to incorporate environmental, social and governance (ESG) factors into business strategies. What’s more, it is even more imperative for companies to build a sustainable supply chain, one that fully integrates ethical and environmentally responsible practices.
As suppliers and partners fall beyond a company’s direct control, supply chains can open businesses to a wide array of risks. To reduce these risks, as a responsible corporate citizen, LG Electronics is actively offering increased support to its suppliers and partners, strengthening their ESG capabilities.
Photo credit: Societe Generale de Surveillance (SGS)
Beginning this year, the company is actively expanding the scope of support available for its suppliers – both those based in South Korea and in other countries – to pursue third-party ESG certification. The company plans to support 50 of its suppliers – including 22 Korea-based electronic components makers that supply parts to its Vietnam-based R&D subsidiary – to undergo evaluation by Societe Generale de Surveillance (SGS), a respected provider of verification, testing and certification, in order to assess ESG risks.
By expanding support, the company aims to preemptively respond to any potential ESG risks within its partners’ supply chains. ESG-related laws and regulations, such as supply chain due diligence acts, have been introduced and strengthened in several parts of the world, including EU countries, making responsible supply chain management a key area of focus for many corporations.
Photo credit: Responsible Business Alliance (RBA)
Once its suppliers have received ESG field inspections compliant with the Responsible Business Alliance (RBA) Code of Conduct, which outlines standards for business practices in areas including labor, environment, ethics as well as health and safety, LG will support them to find solutions to mitigate ESG risks. In the past two years, the company has assisted 100 suppliers in Korea seeking to obtain certification through the third-party-tested ESG Management Competency Assessment.
(From left to right) Kim Byoung-soo, head of the Shared Growth Division at LG’s Global Operation Center, and Park Chul-han, head of the FKI Center for Large and Small Business Cooperation
LG is also striving to strengthen its suppliers’ capabilities to internally audit their ESG management activities, policies and performance. On April 17, LG signed a business agreement for ESG management support and mutual growth with the Federation of Korean Industries’ (FKI) Center for Large and Small Business Cooperation. Through this agreement, LG and FKI will provide eligible partners with comprehensive consulting services concerning ESG self-assessment and overall ESG management. The ultimate goal is to empower suppliers to realize and maintain sustainable management.
The company aims to continuously explore various practical support measures to enhance the ESG management capabilities and competitiveness of partners, both in Korea and around the world.
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Source: LG Pressroom
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