Dear esteemed stakeholders of LG H&H,

Recent corporate ESG management activities have become essential, necessitating the rapid establishment of various response strategies. The movement towards ESG legislation in the US and EU is evolving from simple declarations to binding norms, demonstrating a new ESG paradigm. In this environment, LG H&H seeks to proactively explore effective ESG response strategies as indicators of management innovation rather than mere regulatory compliance.

We are proud to publish the fifteenth issue of our ESG report, which communicates the present and future of LG H&H’s ESG management. As a global leader in ESG management and the leading consumer goods company, LG H&H actively adheres to The Ten Principles of the UN Global Compact and is committed to achieving the Sustainable Development Goals. We will also continue our efforts to provide policy and institutional support to create more carbon-neutral and innovative eco-friendly product ideas. Specifically, we aim to address these challenges with new insights into developing products that generate social and environmental value desired by consumers, leveraging our research and technology R&D. In particular, LG H&H seeks to explore solutions based on this new foundation for business innovation. We will focus on sustainable growth to advance our vision of becoming a leading global Beauty and Personal Care (BPC) company.

1. We will lead the way in sustainable management, including responding to the climate crisis.
LG H&H has been dedicated to carbon-neutral operations through the 2050 Carbon Neutrality Plan initiated in 2022, aiming to reduce our actual carbon emissions to zero. Last year, we expanded our carbon-neutral efforts across the entire value chain and implemented various initiatives to reduce carbon emissions at our business sites. To contribute to the transition to a low-carbon economy, we supported the establishment of greenhouse gas inventories for key suppliers. Additionally, we provided energy-saving consulting and shared various technologies and know-how to reduce greenhouse gases. LG H&H is also committed to minimizing environmental impact by improving the environmental performance of packaging materials and expanding activities to reduce plastic usage. We will continue to promote the transition to a circular economy.

2. We will dedicate ourselves to delivering distinctive customer value.
LG H&H is committed to delivering distinctive customer value by keenly understanding changes in customers and the market. We will deeply consider how these changes connect to our work and business and will immerse ourselves in rigorous practice. We will stay alert to the domestic and international business environment, think from the customer's perspective, plan meticulously, and execute thoroughly to provide customers with unprecedentedly moving experiences. To achieve this, we will change the way we work and our attitudes, ensuring that all our efforts and considerations are customer-centric.

3. We will accelerate our efforts to enhance our capabilities for developing global bestsellers and brands.
To strengthen our product planning capabilities, we will reorganize our structure and establish agile project teams to develop and nurture innovative products that propose new values. We will also intensify our efforts to monitor our brand’s image and standing in the minds of customers and actively manage brand health. We will firmly establish a close collaboration system between domestic and international subsidiaries and actively promote efforts to secure talent by cultivating regional and functional experts. Through these measures, we will develop globally successful products and bolster our expansion into global markets.

For the matters that I have mentioned to be executed with persistence and to lead to meaningful results and internalized capabilities, we all need to do a lot more, deep thinking, unhesitating communication, and fierce collaboration from a customer value perspective - not just across business units and overseas subsidiaries, but across CTOs, CDOs, design, production, support, etc.

We recognize that ESG management is not just about fulfilling corporate social responsibility but is also a crucial strategy for building future competitiveness. LG H&H will actively implement ESG management in collaboration with all partners and stakeholders to achieve a sustainable and eco-friendly society.

Thank you.