Double Materiality Assessment


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  • Overview
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  • ESG Management
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  • Double Materiality Assessment

LX Semicon yearly conducts materiality assessments to identify material issues that affect corporate sustainability. In 2019, the EU introduced the concept of double materiality through the Corporate Sustainability Reporting Directive (CSRD, a revised one from NFRD), which consists of the financial materiality affecting companies and how the companies are exposed to the outside world and impact materiality, which are environmental and social impacts. We seek to continue sustainable management by identifying internal and external risks and opportunities that affect the company and applying core issues to business activities.

Double Materiality Assessment Process
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Double Materiality Assessment Results
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Management Target Approach
Topic Selection background Our response
hexagon icon R&D investment and technological innovation

Semiconductors are becoming increasingly important in the 4th industrial revolution as technology advances and our way of life changes. The semiconductor industry should prioritize innovation and quality control to keep up with the rapidly changing industrial environment. This is crucial for the industry to remain competitive in the current industrial environment.

Keeping pace with the change of the times where the center of change is connected to semiconductors, LX Semicon has secured technology that can be linked with various products through continuous R&D investment. Based on this, we will contribute to the growth of the semiconductor industry while discovering new growth engines.

hexagon icon Information security

Risks involving information security is one of the issues that can potentially cause significant losses for companies. Due to the rapidly digitized and highly connected nature of modern society, the importance of cyber security is growing. Hence, companies need to respond promptly. Against this backdrop, companies must prepare and reinforce the protection system for their important information assets through information security activities.

We have established an information security policy to protect core semiconductor design technologies. In addition, we appointed a Chief Information Security Officer (CISO) to manage data securityrelated risks and issues. Besides, the Information Security Council is operated under the CEO to rigorously manage and monitor company-wide information security. We also provide training in relation to information protection on a regular basis to raise security awareness on the area.

hexagon icon Transparent governance

Governance is a crucial decision-making system to operate a company transparently. Based on a transparent governance, companies are required to carry out balanced management activities by considering the interests of all stakeholders, including shareholders. The management is expected to increase corporate value based on transparent governance and responsible management.

We have structured our BOD and committees in accordance with all relevant laws and articles of incorporation. Our appointment of directors is based on their independence, diversity, and expertise. The BOD is responsible for deliberating and deciding on matters entrusted from the general shareholders' meeting, corporate management policies, and important business execution matters. Issues related to business execution that are not stipulated in the board operation regulations are delegated to the representative director. The management team prioritizes rational decision-making that considers the interests of stakeholders, including shareholders and investors. We have fully embraced the ESG culture to establish a transparent and sound governance structure.

hexagon icon Sustainable supply chain management

Sustainability management and monitoring for suppliers is emerging as a significant issue due to the EU’s announcement of supply chain due diligence regulation and labor and human rights issues such as conflict minerals. In business operations, supply chain management is a vital element directly related to corporate competitiveness, so managing and preventing partner risks is essential.

We seek sustainable and harmonious growth with our partner companies, striving to build a stable supply chain. We have established the ‘Supplier Code of Conduct’ with an aim to prevent supplier risks in advance and continuously manage them. We present details that partner companies should adhere to from an ESG perspective. In addition, we conduct ESG evaluation of our partner companies to identify their sustainability and manage human rights and labor risks within the supply chain based on the conflict minerals policy.

hexagon icon Action on Climate Change

The Paris Agreement of 2015 requires all nations to develop individual strategies to combat climate change based on their unique circumstances. As a result, addressing climate change has become a crucial responsibility for governments and businesses to ensure sustainable economic growth and development. Effective management of GHG emissions and the pursuit of carbon neutrality are not only vital to corporate sustainability but also essential for creating a sustainable society on a national scale.

We are actively responding to climate change in line with changes in the business environment at home and abroad and striving to achieve carbon neutrality. After disclosing the ‘2050 Carbon Neutral Goal’ through the 2022 ESG vision proclamation ceremony, we are preparing in earnest by advancing strategies and implementation plans to replace 100% of electricity use with renewable energy. In addition, related information is disclosed in accordance with the TCFD information disclosure recommendation. After the strategy and implementation plan are upgraded, the scope of disclosure will be expanded, and our carbon neutral implementation efforts and achievements will be disclosed through participation in environmental initiatives.

hexagon icon Jeong-Do Management

Ethical management is a vital factor that companies must consider for their survival and continuity. In particular, through fair and transparent corporate management, the trust of all stakeholders, including investors and customers, must be enhanced and ultimately corporate value should be improved. To realize this, companies should establish ethical standards or rules and provide related training to strengthen the ethical awareness of corporate leaders (management and executives) as well as members of the company.

Aiming to implement transparent and ethical corporate management, LX Semicon established Jeong-Do Management principles. We also make our employees pledge to practice Jeong-Do Management and comply with anticorruption laws every year in order to reinforce the understanding and willingness of all members to practice Jeong-Do Management. In order to carry out human rights management, we established our human rights and labor policies based on the Universal Declaration of Human Rights and the ILO labor and human rights norms. In addition, we joined the ‘anticorruption pledge’ at the ‘2022 Business Integrity Society (BIS) Summit,’ which is jointly operated by the United Nations Global Compact (UNGC) Korea and the Korea Sustainability Investing Forum, expressing our willingness to participate in creating an anticorruption environment.

hexagon icon Securing and nurturing talent

A company’s competitiveness is directly related to securing competent human resources. Hence, it is essential to strengthen and maintain the core competencies of talented people who have the ability to respond promptly to the current situation of the company and unlimited potential. Therefore, companies should endeavor to establish a sound organizational culture and secure a quality working environment.

We are dedicated to supporting the growth of individual members and fostering future key talents under the belief that the competence of its members is the company’s competitiveness and social value. In addition, we operate semiconductor design-related job training and global talent development programs so that employees, who are the subject of technological innovation, can develop into semiconductor design experts.

hexagon icon Energy management

Energy is a resource that must be indispensably managed in the semiconductor industry. Electricity consumption in the production process accounts for a substantial portion of operating costs, and power outages during plant operation can lead to significant losses for industries and businesses. Therefore, it is required to make effort to efficiently control energy and enhance process efficiency and sustainability.

We acquired ‘ISO 50001,’ an internation-al standard for energy management systems, in June 2023. In accordance with the energy management system standards established by the International Organization for Standardization (ISO), we established our energy consumption reduction and efficiency improvement plans, followed by obtaining the certification on the sustainability of our energy management system. Based on this, we will endeavor to increase the resilience of companies to energy costs and availability and promote energy efficiency improvement activities in an integrated and systematic manner.

hexagon icon Occupational safety and health

Infectious diseases and major disasters, such as the COVID-19 pandemic, are issues that have a significant impact on corporate management. Therefore, companies need to create an environment where members can work safely and comfortably, and continue to make efforts to internalize safety culture and establish a management system to prevent accidents for employees, who are the key in the corporate competitiveness.

We implement a safe workplace based on the safety management policy, while undertaking various efforts to ensure that employees adhere to it. We conduct safety culture campaigns to spread and establish a safety culture and regularly provide safety and health training. In addition, to strengthen safety and health management for our employees and partner companies, we devise related plans and safety manuals to enhance the safety and health management system. We have also organized and are operating a relevant TF, aiming to prevent the occurrence of serious accidents and establish a management system.

hexagon icon Expanding diversity and inclusion

Ensuring diversity and inclusion involves offering equal opportunities and resources to all individuals and acknowledging and respecting unique differences, regardless of race, ethnicity, gender, age, religion, geographic location, education, sexual orientation, or cultural background. Companies prioritize diversity and inclusion due to their impact on sustainability and competitiveness. By fostering diversity and inclusion, organizations can adopt a comprehensive approach to address specific issues, avoid decision-making mistakes, and enhance the diversity and inclusion of their workforce. Therefore, companies should strive to promote and enhance the diversity and inclusion of their employees.

We endeavor to establish an organizational culture in which diversity and inclusion are internalized. In particular, we are striving to improve the system so that female members can demonstrate their capabilities and grow as leaders. We provide various support to prevent interruptions in their careers due to pregnancy, childbirth, and childcare. In addition, by establishing a policy to embrace diversity, we strive to create a corporate culture that respects the differences of members with diverse backgrounds and experiences.