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Head Office 1,Goedong-dong,Nam-gu,PohangCity, Gyeongsangbuk-do,Korea SEOul Office POSCOCenter,892,Daechi-dong, Gangnam-gu,Seoul,Korea POHang WORKS 5,Dongchon-dong,Nam-gu,PohangCity, Gyeongsangbuk-do,Korea GWANGYang WORKS 700,Gumho-dong,GwangyangCity, Jeollanam-do,Korea WWW.POSCO.COM REPO SUSTAINABILITY 2010 SUSTAINABILITY REPORT T R 2010 TowardFourGreats Designed by DESIGNPLUS Designed by This report is printed on Forest Stewardship Council-certified paper, using soy-based ink. TOWARDFOURGREATS;wemakechange,takethefuture POSCO builds the foundation for mutual sustainable growth of the society and corporation. POSCO reaches for the global top through harmony AboutthisReport of the “Greats” in Business, Market, System, and People. POSCO will achieve its vision through “4 Greats”–Business evolution by expanding to new businesses (Great Challenge); market expansion by pioneering into new markets (Great Voyage); system innovation of establishing the Family management system based on trust and communication (Great Harmony); and human growth where employees and the company grow together (Great People). The POSCO Sustainability Report 2010 is the testimony of POSCO’s footsteps in creating the future through change and innovation. First, this report further expanded stakeholder participation dur- Third, KPIs that represent Open, Creative and Envioronmental ing its production process. The CSM forum with sustainability Management are presented in one page in order to help readers experts conducted in the form of interviews helped us identify understanding. Prior to KPI selection we have carried out Peer stakeholders’ major points of interest and issues that can affect Group Assessments and have reflected our Materiality Process their decision-making. We will reflect the results obtained from results. As a result, we have secured the representativeness of the forum and put our efforts in improving those issues. KPIs by providing useful information to our stakeholders as well as covering areas of importance in the steel industry. Second, the materiality test tool that POSCO developed in col- laboration with POSRI was further refined. In addition to media Fourth, in addition to the sustainability management efforts survey and stakeholders’ survey, peer group analysis was added and performances of the whole POSCO Family, sustainability in measuring stakeholder interest. In addition, we analyzed the performances of individual POSCO Family companies were agendas discussed at the Enterprise Management Meetings to included as well. The performance details of POSCO E&C, further refine materiality test. As a result, the “customer” was POSCO POWER, POCO ICT, POSCO C&C, POSCO CHEMTECH identified as an important issue, and we have added “Quality and POSCO M-TECH will be introduced. Management” and “Creating Customer Value” in the Report. Reporting Framework >> The 2010 January 1 to December 31, 2010. Some financial information in the “Economic Assurance of the 2010 Sustainability Sustainability Report was prepared in sections include the period until April Performances” segment under the Report >> Assurance on this Report OVERVIEW OPENMANAGEMENT GLOBALPOSCOFAMILY accordance with the Global Report- 2011. Please note that the section on “Creative Management” section is based was conducted by KPMG Samjong in ac- 2 CEO Message 26 Win-Win Growth 72 POSCO Family’s Global Operations ing Initiative (GRI) G3 Sustainability corporate governance reflects decisions on POSCO’s non-consolidated financial cordance with the International Standard 4 2010 Key Performance Indicators 32 Creating Customer Value 73 POSCO Family’s Sustainability Management Reporting Guidelines, and with POSCO’s made at the board meeting held on statements. Consolidated financial state- on Assurance Engagement (ISAE) 3000 6 Stakeholder Engagement | Expert Forum 34 Employees 74 POSCO E&C internal sustainability reporting process. February 25, 2011. ments are available in our 2010 Annual and AA1000AS, thereby assuring that 9 Communication with Stakeholders 42 Social Contribution 75 POSCO Power Currently POSCO is looking into GRI Report. inclusivity, materiality, and responsiveness 10 Identifying Key Issues 76 POSCO ICT 3.1, and plans to apply it in the 2011 Reporting Scope >> This report con- are reflected in the Report in addition 11 Materiality Test Process 77 POSCO C&C CREATIVEMANAGEMENT Sustainability Report. All financial tains POSCO’s operational activities and Distribution and Feedback on the to the existing principles of consistency, 78 POSCO Chemtech 52 Technology Innovation information, standards and definitions performances with respect to sustain- Report >> The full report is published in accuracy, and completeness. 79 POSCO M-tech SUSTAINABILITY 54 Green Businesses used or made within the report follow ability management at our Pohang Korean and English. The printed report 56 14 POSCO’s Sustainability Management System Economic Performance Korea’s generally accepted accounting and Gwangyang Works, Pohang Head is available upon request via phone or 16 Global POSCO Way APPENDIX principles. Office and Seoul Office. All subsidiary through our website. Stakeholders’ feed- 17 Vision 2020 ENVIRONMENTALMANAGEMENT 80 Independent Assurance Statement information stated in this report is based back on the report will be relayed to the 18 Corporate Governance 60 POSCO Family’s Global Environmental Reporting Period >> POSCO publishes on each company’s individual standards; pertinent departments upon its receipt 20 Ethical Management Management a sustainability report every year. This hence there may be discrepancies from by phone, mail, or our website. 22 Risk Management System 63 Environment Management & Performance report covers the calendar year from the guidelines set forth by POSCO. The 23 Fair Trade 67 Responding to Climate Change 69 Environmental Communication CEOmessage 2 業-Business, 場-Market, 3 動-System, 人-People The Report reflects POSCO’s aspiration and dedication to contribute to win-win sustainable growth of the whole human society by achieving four “Greats” in Business, Market, System, and People. TowardFourGreats Since the implementation of sustainability management in 2003, 2010 was the starting year that POSCO declared its vision for in developing 29 technologies through the R&BDE (Research & the underprivileged. In collaboration with the Ministry of Gender POSCO has strived for sustainable and balanced growth with a low-carbon, green growth. It declared its voluntary target to re- Business Development Engineering) strategy that independently Equality & Family, POSCO implements a variety to projects to help commercializes and engineers research results. Recently, win-win multi-cultural families. In addition, through volunteer activities focus on economic viability, environmental soundness, and social duce CO2 intensity per ton of steel manufactured by 9 percent responsibility. This Report “Toward Four Greats” shows the reader compared to the average emission of the three previous years by growth with SMEs is gaining more attention. POSCO launched a and social contribution projects in global business sites such as the performance details of sustainability management internalized 2020. In the first year, POSCO successfully reduced 2.3%, and team dedicated to supporting SMEs in 2005, providing assistance Indonesia and Mongolia, POSCO is contributing to the regional in POSCO’s system. plans to invest KRW 1.5 trillion until 2018 in developing break- in finance, technology support, and management counseling to economic growth. through technologies. In addition, POSCO was the first in the 105 SMEs, which established a new cooperation model. The Win- Last year, expanding from the existing “Vision 2018,” POSCO steelmaking industry to publish and distribute the Carbon Report win Growth Support Group is a pro bono volunteer group com- In addition to creating an ecosystem of mutual growth with cus- declared the “POSCO Family Vision 2020.” It reflects POSCO’s assured by a third party. prised of executives from Family member companies who provide tomers, suppliers and outsourcing partners, POSCO practices the aspiration and dedication to contribute to mutual sustainable corporate management mentoring to SMEs. management principle of sharing and consensus with the share- growth of the whole human society by achieving four “Greats” in There have been many achievements in the areas of customer holders, local community and employees, to go beyond great and Business, Market, System, and People. satisfaction and technology innovation as well. POSCO set up the Keeping safe means love for your family and co-workers – safety become a company that is loved by all. We hope for your continued implementation plan for “POSCO Marketing 3.0,” which reflects is the first step in respecting humanity. In September 2010, interest and support in our efforts in sustainability management. POSCO conducted activities across-the-board to move closer POSCO’s commitment to put its heart and soul into the product POSCO expanded and restructured the Office of Safety Innova- to “POSCO Family Vision 2020” under the motto Toward Four and service to be the stepping stone for our customers’ success. tion which conducts safety measures at the Family level including Thank you. Greats. The enhanced marketing efforts led to record sales at 31.5 mil- outsourcing partners. With the commitment to build a safe work- lion tons. ing environment, it started the Mega-Y measures to achieve Zero Despite cut-throat competition both