2016-2017 Sustainability Report, LG Electronics Adopt- Contents Ed the G4 Guidelines of the Global Reporting Initiative (GRI)

For a Better Life LIFE’S GOOD WITH

“Life’s Good with LG” is the official CSR slogan of LG Electronics and conveys our earnest desire for comprehensive communication with stakeholders about our CSR efforts in a variety of areas. LG 2016-2017 LG Electronics Sustainability Report

1 REPORT OVERVIEW In preparing our 2016-2017 Sustainability Report, LG Electronics adopt- Contents ed the G4 guidelines of the Global Reporting Initiative (GRI). As part of the process for implementing the guidelines, we reviewed the previous year’s edition and best practice cases from corporations at home and abroad against the latest indices to identify the aspects that are lacking in our report. In order to address these aspects and prepare a more comprehensive Story of LGE's Sustainability and insightful report, we had extensive communication with functional departments, focusing primarily on our strengths and weaknesses. We 4 Innovation for a Better Life also reached out to our internal and external stakeholders through a wide 8 Communication for a Better Life range of communication programs to seek their opinions, and performed a 10 Cooperating toward a Better Life for All materiality analysis to identify the information that is considered material to stakeholders as well as to LG Electronics. Based on the findings, we tried to introduce information concerning “Ma- Overview terial Aspects” as defined by the G4 guidelines. Externally, we worked with a third party assurer to review the analysis results against the aspects 13 Management Philosophy perceived as material to industry peers to verify what is missing from each 01 14 Message from the CEO other’s list (and vice versa), while internally reviewing the results with re- Pages 12-39 15 Management Messages lated business departments to select and introduce the information that 20 Corporate Overview is material and useful both to LG Electronics and to our stakeholders. 18 Who We Are Articles on material aspects prepared by functional departments were finalized after a review by management and a third party assurer. 20 What We Do 24 Where We Operate REPORTING PRINCIPLES 26 What We Achieved G4 Guidelines of the Global Reporting Initiative (GRI), 28 CSR Management UN Global Compact (UNGC) Index, Accountability Principles Standard Stakeholder Communication (AA1000APS), and Stakeholder Engagement Standard (AA1000SES) 30 Stakeholder Consultation on CSR REPORTING SCOPE 32 Responsible Management of This report covers all business sites of LG Electronics, both in Korea and Our Value Chain overseas, and major supplier sites, including activities and performance in 34 Materiality Analysis economic, environmental, and social areas. 36 Key Progress & Performance

REPORTING BOUNDARY Information is organized based on material issues and presented under the “DMA (Disclosure on Management Approach)” for each section. Materiality Report

REPORTING PERIOD 42 With Our Customers 02 52 With the Environment Data from the calendar year 2016, from January 1 to December 31 (for performance in select areas, data from the first half of 2017 was Pages 40-102 72 With Our Suppliers also included) 82 With the Community 92 With Our Employees ASSURANCE Independent Assurance Statement (Korea Productivity Center) (See pp. 112-113) Management Report

104 Corporate Governance Information Sources concerning 03 105 Compliance Risk Management LG Electronics’ Sustainability Management Efforts Pages 103-107 106 Jeong-Do Management 107 Fair Trade

Appendix

109 Economic Data 04 110 EESH & Quality Certifications Pages 108-119 111 Memberships/Awards & Recognition CSR Team, LG Electronics | LG Twin Towers 112 Independent Assurance Statement Website Annual Report 128 Yeoui-daero, Yeongdeungpo-gu, Seoul, Korea 114 GRI/UNGC Index www.lg.com/sustainability Email: [email protected] Tel: 82-2-3777-3263 119 Contributors to Report Preparation 2016-2017 LG Electronics Sustainability Report 1 4 MaterialityLGE's Report Sustainability a BetterLife Innovation for enthusiastic response. Industrial of Revolution, ourinitiativesfortheFourth as part receiving immediate and technology concepts suchasIoT homeappliances, guideandcleaningrobots andairport Consumer Electronics Show(CES)2017heldin LasVegas,LG Electronics unveilednew to thriveup itseffort inthecoming wave Industrial of Revolution. theFourth At the envir nesses havenoother option butto embrace theoncoming transformation andchanging a more “intelligent” intheprocess. society Itisincreasingly becoming clearthatbusi complete connectivity andconvergence of technology, accelerating theevolution toward will blurtheboundar score themagnitudeof thisoncoming transformation. Theseadvances intechnologies the transformation willbeunlikehumankindhasexperienced anything before,” to under Schwab, executiveKlaus chairmanof theWEF,stated, “Initsscale, scope, andcomplexity, future. At theWorld Economic 2016, inJanuary Forum(WEF)heldinDavos,Switzerland of Things)are expected to Industrial bring Revolution abouttheFourth intheforeseeable Emerging Intelligence), technologies such asAI(Artificial robotics, andtheIoT (Internet TODAY onment to ensure Basedonthisrecognition, theirsurvival. LG Electronics isstepping ies between technologies andbetween industries, andbring about Robotics AI IoT - 5 5 - 2016-2017 LG Electronics Sustainability Report 6 carry outtasksthatrequirecarry highmusclestrength. wearable-typerobotswho strengthsthose givemoretomuscle that developing by life human for value additional creating to contribute to plans also Electronics LG term. near the in hospitals and hotels applicationsfor for wellas applicationsas developedB2B for further be will airports, to introduced be initially will which robots, cleaning and guide mower, airport lawn and robotic a into evolve easily could own, its on house the around moves which (HOM-BOT), cleaner vacuumLG’s robotic instance, For strengths. core our leverage that robots of types new develop to hard working is Electronics LGrobotics, of evolution the with pace Tokeep pace. rapid a at expanding is robotics of application the laundry, fold or cook that those to floor factory the on productivityimprove that Fromrobots Robotics the location of people. sensing by performance cooling greater offer and energy less use conditionersair that smart and patterns, use the analyzing by power conserve and commandvoice groceriesvia order to users allow that refrigerators smart effect, optimum an for time washing the adjust automatically and quality water analyze that machines washing smart as such products appliance home of value intrinsic the increase to aims Electronics LG effort, these Through own. their on products becomesmarter our make to technology learning deep the utilize and features recognitionvoice with TVs and appliances home smartphones, develop to Amazon and Google as such companies tech global with partnerships formed already has Electronics LG life. human of enrichment the and boundaries across applications technology— the of value potential the underscored victory AI’s the and world, the across interest huge attracted titles, world 18 with professional Go 9-dan Lee, Dol Se and system intelligence artificial an between match machine,”Go vs. 2016 “man the as billed Widely IntelligenceArtificial (AI) LG Electronics’ Preparation fortheFuture LGE's Sustainability 3, 4 and isconnected to LG appliances. LG HubisanAIhomerobot thatresponds to voice commands 3 1 4 2 1 to LG Electronics’ SmartThinQ SensorandSmartThinQ Hub. commands alonebyconnecting Amazon’s A.I.voice recognition Alexa service homesolutionthatcan controlSmart LG's homeappliances withvoice gate information, andescorting passengers. AirBot asaguideandescort providing attheairport, serves boarding and while prepare ourselves thoroughly to discover newdrivers forfuture growth. drive whichinturnwillhelpusstrengthen changesinworkstyle, ourexisting businesses, based oncollaboration. This willhelpLG Electronics acquire core future technologies and and start-ups. LG Electronics willbecome more active in itspursuance of openinnovation pursue collaborative partnerships withresearch institutions from various fields,academia, a pervasive force. Inorder to thrive inthisnewbusinessenvironment, businessesneedto a sustainedsuccess onitsownbecause theconvergence of technology willbecome and autonomous driving. Itwillbecome impossibleforabusinessto enjoy virtually the future across areas suchasAI,robotics, andtheIoT drones, aswell asforAR/VR, will bring indifferent areas. Thismakes itallthemore to bewell-prepared important for It isdifficultto predict howmuchof innovative changestheFourth Industrial Revolution TOMORROW ! 2 pace. faster a at goods of variety a of production low-quantity handle effectively that factories smart with future the for prepare will returnedsafely.has home area,B2B LGthe in addition, ElectronicsIn child your if check and strangers, by intrusion an detect quality, air the maintain to own their on work devices the where environment smart-home comfortable more and safer a create will Electronics LG sensors, IoTdevice of networking the through Furthermore, home. from away are we while own its on vacuuming of care take couldHOM-BOT and house, the leave we when off turned be automatically will lights reality, a into vision our turning in succeed we If society. our of future the into insight and appliance home in experience our through accumulated capability technological on based Era Revolution Industrial Fourth the in value new create will Electronicsconditioner. LG air the on turn or light the off turn also They stocks. or weather about questions our answer and discussion our understand room living our in speakers smart Now, past. the in creatingdidn’tvaluesis that this anotherexistthroughand network, one to connected being are devices digital of number great A Internet of Things(IOT) 7 2016-2017 LG Electronics Sustainability Report 8 2 ways. external stakeholders invarious communications withinternal and end, LG Electronics isexpanding stakeholders can trust.To this to beasustainablecompany that ecosystem. LG Electronics aims to grow healthy andthrive in the thathelpsLGthe earth Electronics called society, andstakeholders are member of anorganic ecosystem because LG Electronics isa management system. Thisis in LG Electronics’ sustainability Stakeholders are thetop priority TODAY LGE's Sustainability Management CSR Change for aBetterLife Communication Engagement Stakeholder Management Risk process. implementation throughout theCSR with stakeholders communicate Continue to Valuable Social Valuable Social Contribution Trust based onStakeholder Sustainable Growth Social LG GOAL - Stakeholder C - Seminar/Forum - Sustainability Report - Sustainability M - Homepage eetings - Survey/Interview EXTERNAL onsultation S esetr utiaiiyRpr Homepage Report Sustainability CSR Newsletter (Blog/Facebook) (Collegiate CSRAcademy) - SNS - Intranet - Love Genie - Companynewsletter INTERNAL (entry-level andprior experience positions) /FSEandPresident of - Training fornewlyhires (PRIDELG) - Marketing/Procurement they make anydemands. with stakeholders first before to engageandcommunicateefforts LG Electronics willcontinue its stakeholders withanopenmind. in allpossibleways to listen to its channelsof communications up withthechangesandexpand with anewperspective to keep intends to lookatstakeholders changing aswell. LG Electronics of stakeholders are constantly environment, theneedsandtypes With changesinthebusiness TOMORROW subsidiaries College education ! (for allemployees) - CSRNewsletter 9 2016-2017 LG Electronics Sustainability Report 10 3 p. Technology that Cares 85 LGE's Sustainability for All toward aBetterLife Cooperating TODAY of many neighbors withthe helpof sincere of employees. participation stakeholders; andthethird which meanspursuing oneis“Sharing andComfort” better lives better life;thesecond oneis“Trustworthy Partner" whichmeanscommunicating with first oneis"Technology thatCares" thataddsvalue to lifesothateveryone can enjoya LG Electronics’ corporate contribution to branches thesociety outinthree ways. The social issuesinallof thecountries where itoperates inasustainableway asatruepartner. toward abetter lifeforall.” Withthisinmind,LG Electronics to solve isputtingefforts LG Electronics’ visionisto become aresponsible company to by“cooperating thesociety 1 member of thelocal community. respected and trusted a become to strives Electronics LG as expanded be will employees its by driven initiatives contribution social Electronics’ LG need. in those help to volunteer and campaigns donation blood global in participate employees our Day,Environment World of celebration in organized initiatives protectionenvironmental to addition In basis. voluntary a on part take actively employees that so Comfort" and "Sharing practicing actively is Electronics LG operates, it where countries all in citizen corporate a as responsibilities social its Tofulfill 3. Sharing andComfort between LG Electronics anditsstakeholders. trust on based cooperation strengthening by issues community resolve to harder work to continue will Electronics LG forward, Going trust. on built partnerships forming by etc. academia, NGOs, organizations, international as such groups stakeholder various from experts with together out carried are initiatives Theseeffectively. issues community solve to order in activities ElectronicsLGcommunity-focusedpursuescorporate contribution 2. Trustworthy Partner technologies to enrich thelives of more people. and products its of use make to continue will Electronics LG phones. mobile using programs relief emergency operates also It Lanka. Sri and Cambodia, Pakistan, Ethiopia, in villages remote in stations charging power solar installed it effort, such of part As business. its to related technologies and products leveragingcommunity, local the to value differentiated provide to programs Cares” “Technologythat operates Electronics LG 1. Technology thatCares

LG HopeScreen Campaign World EnvironmentDay LG SolarPowerStation p. Trustworthy 3 87 Partner 2 p. Sharing and 88 Comfort corner of theworld. slogan, “Life’s GoodwithLG,” inevery Electronics willstrive to realize its can excell. Through LG theseefforts, selecting areas where LG Electronics Cares” and“Trustworthy Partner” by social value through “Technology that therefore, focusedoncreating more LG Electronics’ socialcontribution is, can excel byleveraging itsstrengths. for abetter lifeandtheway thatLG LGthat reflects Electronics’ commitment refers to theway of socialcontribution Contribution Worthy of ItsName,” which LG Electronics strives for“Social TOMORROW ! 11 2016-2017 LG Electronics Sustainability Report 12 Overview 01 36 34 32 30 28 26 24 20 18 20 15 14 13 Overview Key Progress &Performance Materiality Analysis Responsible Value ChainManagement Stakeholder ConsultationonCSR Stakeholder Communication CSR Management What We Achieved Where We Operate What We Do Who We Are Corporate Overview Management Messages Message from theCEO Management Philosophy to, wih ovy or uies betv, n “People-OrientedManagement, and objective, business our conveys which ation,” Cre “Customer-Value of comprised are principles management Our Management Principles G, Favored byInvestors > G, Trusted byCustomers > inv Become afavorite investment option for value. with exceptional andbrand quality Capture of customers thehearts L L Investors Customers estors bydelivering highprofits. The LG Way ourbeliefinattainingthevisionof becoming articulates “No.1LG” through “Customer-Value Creation” and ” ouroperational principle. “People-Oriented Management,” theguidingprinciple forourthoughtsandactions,aswe stay trueto thespirit of Self-management andcreativity / Capability development/ Capability and actualization /Performance- / Respect forhumandignity Innovation-driven creation Delivery of substantive / Customer-Value People-Oriented Customer first /

Management

based reward Creation Management Philosophy

“Jeong-Do Management”inoureveryday practice. “No. 1LG,” amarket-leading company What we ultimately aspire to achieve through Jeong-Do Managementand its two tenets,its two “Customer-Value Creation” and“People-Oriented recognized andrespected by Management,” isto become industry peers industry andthe broader market. Vision LG Way - management standard byJeong-Do Management. articulated we base our professional conduct and business practices on the ethical our fundamental competitiveness continuously and competing fairly as strengthening for commitment our expresses Management Jeong-Do Behavioral Mode according to principles Work transparently and standards Integrity 01 nities andfairtreatment Provide equalopportu- >LG, Feared andRespected byCompetitors in every transactional Fair Transaction Management Elements of Three Core Jeong-Do >LG, Coveted byTalented Professionals relationship industry leaderfearedindustry andrespected “No.1 Management”andbecome an 02 inspires talented professionals to Produce strong results through Create agreat that workplace work withpassionanddrive. Improve capabilities with which onecan fairlywin Fair Competition Based onMerit the competition by competitors. Competitors Employees 03 13 2016-2017 LG Electronics Sustainability Report 14 Overview more systematically inallitsmanagementactivities. with, andwillendeavor to management implementsustainability truly desire, unfaltering in spite of whatever crisis itisfaced future, LG Electronics aimsto become “No.1LG thatcustomers To stay asacompany capable of sustainablegrowth inthe Message fromtheCEO future growth engines. In addition, we will actively utilize smart smart utilize actively will we addition, In engines. growth future new as them promote also will we and business robot a as such business of paradigms new into them advance to ones existing such with - businesses - Cloud IoT,and as Intelligence, future Artificial data, big the for prepare to businesses smart link will We promotingfurther premium brands. ing flagship products that bring new value to consumers, as well as developgenerateprofitsby to- method business our shift will we “completea manner,”in different business our of petitiveness and com- basic the improvedramatically will we accordingly and year advancingyearonkeepon and companybeyondsurvival cana go growth profitable through only that convinced are We agement. man- sustainable for foundation firm a build to order in business First, we will take “Profitable Growth” as an ofpillar important our well asahealthy thesociety company onitsown. as market the throughout health promoting of role its fulfill can it particular, LG Electronics intends to focus on three initiatives so that In activities. management our across systematically more agement man- sustainability implement to strive will we with.”And faced is whateverof it spitecrisiscustomersdesire, unfaltering in that truly LG 1 “No. become to aim we growth, sustainable achieve to tinue standing by LG’s founding spirit of entrepreneurship. In order to con- customersfirstand its putting by valuebrandraising LGgroup and within innovation leading been has Electronics LG years, 70 past anniversary.the For70th its marked LG as meaningful is year This To ourvaluedstakeholders: Seong JinJo Vice ChairmanandCEO May 2017 Thank you. interest. and continuedsupport Weforwardyour tolook stone forgrowth forouremployees. stepping a futureas the for vision and hope the present can that company a be will and citizen, fill its social responsibilities as a global corporate ful- change, of journey our through customers our with grow to continue will Electronics LG the society. by respected and year on year advanced is that company a as off take Electronics LG can basis a as given efforts these with Only change. by luck or expedient not competence, fair performancethrough creates which management, Do Jeong- to stick thoroughly of will employees all our transformation, of process the in Also, the foundationof becoming No.1. passion and thirst for success is what I believe is this off,and started we once takes, it whatever commitment to seeing the finish line of anything, our established have we that believe ture.’ We Spirit to become No. 1’ and ‘Smart Working Cul- Finally, we will internalize and settle the ‘Winning low suit. fol- to suppliers our encourage also will we and quality and safety by engaging all our employees, tomers, taking the lead in establishing first-class cus- our with trust commitmentlutebuilding to abso- and basic most the is quality that mind in keep always will We business. our of pillar a as customers our with promises important and basic “Safety,”most and the are “Quality” which taking businesses our manage will we Second, well. as equipment manufacturing and production in technology smart applying by competitiveness manufacturing world-class a gain to technology 15 2016-2017 LG Electronics Sustainability Report 16 Overview our lives. of culture and lifestyles present and consumers, founding spirit, checkwhetheritisacceptable to e lieverolethe ofLG Electronics tocontinuouslyis be I else. anything than important more is shift without even value creating in important is velopment t combined are trends social and trends nological with communicating by value new create and nience conve technological providing simply beyond go Robots us. to bringing are robots that value the on focus to need now we think I appliances. home through lives our of culture and lifestyle LG Electronics has had a profound impact on the o create enormous synergies. Technologicalsynergies. enormous de create o xperiment with new perspectives based on LG’s modern people in their everyday life. Techlife. everyday their in people modern auatrn, u I hn paradigm think I but manufacturing, CTO (ChiefTechnology Officer) President SkottAhn Management Messages - - - - Such work. their in performance outstanding strating demon for compensation best the individuals overall of quality lifeof thesociety. c the with grow potential, their maximize can ber mem each that sure make to efforts making keep will we mind, in country.that the With and asset not just to the company, but to our society and society.the bersof We each awarearewellthat mem respectedby lovedand is companythat a on creative thinking so that ultimately, we can be based innovation pioneering by life customers' our improve fundamentally to organization our abilities demonstratetotheir opportunity the ganization or our of members the giving means humanity management through based value customer ating “cre- is philosophy management Electronics' LG ompany, and enrich not only their lives but the but lives their only not enrich ompany,and every one of our members is an important important an is members our of one every aaeet il ud te ebr of members the guide will management on respect for humanity’' and respect for respect and humanity’' for respect on on an equal footing and giving talented giving and footing equal an on Vice President CharliePark CHO (ChiefHROfficer) - - - - to further advancementto further of humandignity. occurrence of negative issuesandto contribute r safety, to attention paying especially by sibility respon- social its fulfill will Electronics LG tion, addi In convenience. with and safely products Electronics LG use to consumers enable that productsdeveloping on focuses also but world, and bility. LG Electronics not only complies with laws responsi- social corporate assess who holders stake- of number growing a are Today, there egulatory,environmentalpreventand to issues regulations in various countries around the countriesaroundvarious in regulations Executive Vice President BrianNa Global Sales&Marketing Officer - services allthewayservices to endcustomers. provides also but business, eco-friendly and smart of areas in solutions comprehensive bec is Electronics LG products, sells that pany than Rather level. global the to expanding ually grad is responsibility social the of area the responsibility,social the of axis an forms and itself business the of DNA The themselves. in needs social the with line in are efficiency energy and development technology smart its to related businesses Electronics' LG of business important an becoming increasingly and ing grow are Energy Smart and Life Smart as such demands friendly environmentally the countries, on depending differences Despite Executive Vice President HoGeonHwang oming a company that not only provides only not that company a oming en cmlcn wt big com a being with complacent being gna tm W blee ht all that believe We item. agenda B2B Officer - - - the globalcommunities. localand the ofbetterment the for activities contribution social valuable through Goals the achievement of UN Sustainable to Development contribute to strive we addition, In chain. value entire the standardsthroughout and workers in accordance with international for Safety’ and Health ‘Environment, the aging particular,In man areactivities. we business through impacts positive maximizing while aspects negative minimizing by life human betters that company a become to effort its stak with communications on based sibility respon- corporatesocial its fulfill to order In Executive Vice President ChoongHakLee h poeto o te oa community local the of protection the hles L Eetois s aig an making is Electronics LG eholders, Business Support Officer Business Support 17 - 2016-2017 LG Electronics Sustainability Report 18 1999 1995 1982 1978 1966 1965 1959 1958 An InnovativeStart 1958-1999 CORPORATE HISTORY Income Operating Sales Number of Shareholders Credit Rating Total Liabilities Total Assets Number of Employees Date Established President Major Products Industry Location of Headquarters Name CORPORATE PROFILE(AS OFDECEMBER31,2016/CONSOLIDATED) ditions andeffectively aligntheexecutional strength of ourorganization. con business changing everto response fast facilitate to structure management one-CEO accountability.strengthenElectronicsLG readoptedand companies 2016, Decemberthe In structure in December 2015 management and adopted its a groupto leadership changes structure to made empower Electronics business LG growth. future for drivers securing and operations, B2B to shift the accelerating market, premium the in position our enhancing strategicdirections:three the following portfolios technology and business its advancing in Air Solution (H&A) and Vehicle Components (VC). LG Electronics has been sparing no effort c business four through operations its conducts and appliances, home and devices cations communi - mobile electronics, of provider and innovator leading global a is Electronics LG 1 porate Overview mais Hm Etranet H) Mbl Cmuiain (C, oe plac & Appliance Home (MC), Communications Mobile (HE), Entertainment Home ompanies:

Cor

Officiallyl Ex Intr Intr R (U.S.), afirst foraKorean company Establishes ano delights to bedelivered byLG Electronics Intr Korea’s electronics industry Establishes GoldStar ebrands thecompany to LG (Renaming andCIrenewal) Overview ceeds USD100millioninexports oduces Korea’s first &White TV Black oduces Korea’s first refrigerator oduces Korea’s first radio, thefirst of themany Consolidated Parent Consolidated Parent aunches LG-Philips LCD verseas production baseinHuntsville , nowLG Electronics, to givingbirth KRW 1,337.8billion KRW -290.5billion KRW 55,367.0billion KRW 28,743.2billion 186,629 Korea: AA(Stable),S&P:BBB(Negative), Moody’s: Baa3(Negative) KRW 24,498.5billion KRW 37,855.3billion 75,150 (37,912inKorea and37,238overseas) October 1, 1958 Seong JinJo Commer Navigation System, Stereo System, VideoSystem, Security System, Vacuum Cleaner, HealthCare Appliance, AirConditioner, Monitor, Automotive Washing Machine,CookingAppliance, Built-in System Kitchen Appliance, TV, HomeTheater System, MobileHandset,Laptop Computer, Refrigerator, Manufacturing LG Twin Towers, 128Yeoui-daero, Yeongdeungpo-gu, Seoul,Korea LG Electronics Incorporated cial Display, etc. Who WeAre akes the lead in the U.S. drum washing machine market 2009 2008 2005 Global BrandLG 2000-2009

Bec D T evelops theworld’s first LTE mobilemodemchip omes theworld’s second largest LCD brand TV

- 2014 2013 2012 2011 Faster andSmarter 2010-PRESENT

Introduces withtheQuadHDdisplay theG3Smartphone Intr appliances; LaunchestheVehicle Componentbusinesscompany Intr Intr the 3DT Intr oduces theworld’s first andtheWeb 4KOLEDTV TV; OSSmart oduces awiderange of easyandconvenient devices smart and oduces theworld’s TV largest 84-inchUHDCinema3D Smart TV,oduces theCinema3DSmart masterfully integrating V technology and smart TV features TV V technology andsmart

2016.07 2016.03 2016.01 2015.07 2015.06 2015.03

Gr for the28thconsecutive year. U.S. market fornineconsecutive years. medicine Factive, andlinearcompressor technology) &White TV,GoldStar Black lithium-ionbattery, LCD backlightfilm,thenewglobal celebration of the70thAnniversary of Independence. (GoldStarRadioA-501, Achievements” organized of Science, bytheMinistry ICTandFuture in Planning production hubby2028. Concludes theannualc Launches L L The Ultr Intr L Complet G drumwashing machineremains thebestsellingwashing machinemodelinthe G technologies are includedinthe“70MajorScientificandTechnological am 15setsaGuinness World Record forthelightest laptop model. oduces theTROMMTwin Wash a OLED TV (65EG9600)a OLEDTV isnamedthe“King of TV.” es theHaiphongCampusinVietnam.Expected to grow into aglobal G SIGNATURE, anultra-premium home appliance brand. ollective bargaining andwage negotiations withoutdispute

19 2016-2017 LG Electronics Sustainability Report 20 31.5 Portion of Sales mix andcost competitiveness to strengthen ourprofit base. brandt high-end a building successfully is Electronics G ketexpansionTVsof UHD affordablewith Wemodels. continuewill mar popular the leading while fundamentals, its enhancing tinually con and TV OLED in leadership its strengthening further by image 2

o build up our position as a premium brand with improvedpremiumbrandwith a productas position our up build o (Unit: KRW100million) OPERATING INCOME (Consolidated) SALES (Consolidated) Our Business Overview L 12,374 (USD 1.1billion) % What WeDo HE (HomeEntertainment) 174,255 (USD 15.0billion) - - Executive Vice President -BongSeokKwon President, HECompany t spansperspective long-termthat a tomerswith cus our with bond emotional and people trust, faithful to fundamental values such as customer ensuredwebe remainwhen will business our of come. We also understand that the sustainability to future the in business a as Electronics LG of cust our of trust the ultimately is it that is derstand un clearly we What century. next the through us sustain will that vision a develop and years 100 next the for ourselvesprepare to time is it skillfully reconcile the two. At HE, we believe that deliver,can we thatproducts creating ultimately sought by our customers value and the best value best that the align to ways exploring always are we efforts, such of part As value. customer the as products OLED with portfolio product mium pre- its expand continually will Electronics LG Management Message en to twenty years. omers that will determine the sustainability the determine will that omers oe rvr wie en coey tue to attuned closely being while driver, core - - 21.1 Portion of Sales turnaround inmobilehandsets. streamlining our business structure as a foundation for a successful for initiatives implemented actively we 2016, of half second the In designs exquisite with technology superior our merging by products gular (Unit: KRW100million) OPERATING INCOME (Consolidated) SALES (Consolidated) and innovative ideas, continually enhancing customer value.customer continuallyenhancing innovativeideas, and Our -12,591 mobile communicationmobile strivesbusiness todeliver sin- (USD -1.1billion) % 117,097 MC (MobileCommunications) (USD 10.1billion) President -JunoCho President, MCCompany product model. the for design our changed and process the in usedwasnickel becauseoption that on up gave However,we G6. the developing of process the using considered have we instance, For sponsibility. re social basic our as well as practice business standard our as sourcing responsible fully embrace we addition, In reality. a confidence,” full with ones loved our to recommend proudly can we that products “Let’smake slogan, our make to effort no spare committed and stewardship product are to we efforts, these with line In control. single-hand and issues heating quality, battery quality, screen safety, product as such that details on emphasis particular a place we nition, recogthis on Based customers’life. wakingour in part integral an become that have fact smartphones the of aware keenly are we MC, At Management Message nue utmr aey n convenience and safety customer ensure a process that enables a slimmer design in 21 - - 2016-2017 LG Electronics Sustainability Report 22 31.1 Portion of Sales product competitiveness. that serves as a strong foundation for our technological leadership and the market thanks to our highly productive global production network air costriorand technologycompetitiveness LGas SIGNATURE.such Our appliance brand with high-end product offerings that merge our supe (Unit: KRW100million) OPERATING INCOME (Consolidated) SALES (Consolidated) solution business is also posting strong performance and leading and performance strong posting also is business solution Overview L G Electronics is fast-emerging as the global premium home 13,343 (USD 1.2billion) % H&A (HomeAppliance&AirSolution) 172,342 (USD 14.9billion) - President -DanSong President, H&ACompany this missionseriously. togrow LGwith tandem in Electronics, takeand conviction, we spare no effort to help our society corporatea as ofsociety.member thison Based responsibility social our fulfil scrupulously to is belie we sense, this In milestone. important the to er liver but also defines the path that leads us fast de striveto should we that value customer the enr andworld the livergreaterof people tocomfort At LG Electronics, our foremost mission is to de- Management Message ich their lives. Our mission not only predefines ve that our responsibility to our customers our to responsibility our that ve - - 5.0 Portion of Sales c GM’scomponentsfor EVproductionof Bolt mass the createdby tum momen the on building business, component EV its expand to effort c group-wide through systems navigation and stereos displays, motive auto- in products singular deliver to continuously working while kets, mar telematics global in leadership market our expanding and tions LTEsolu in-vehicle leading is Electronics LG communications, mobile ommenced inthesecond halfof 2016. ollaboration. Going forward, the VC company will make an overarching -632 (Unit: KRW100million) OPERATING INCOME (Consolidated) SALES (Consolidated) (USD -0.1billion) 27,731 Le eaig u ognztoa eprec ad aaiiy in capability and experience organizational our veraging (USD 2.4billion) % (etc. 11.2%) VC (Vehicle Components) - - - President -Woo JongLee President, VCCompany shared growth. true become and relationships customer-supplier al w approach, innovative this Through value. tomer cus- new deliver to feedback customer porate str our with together and technologies, mentable imple and ideas new offer will Electronics LG together.markets new pioneer to proposes and relations, client-supplier conventional transcend Electr LG have. already we what again elements, nical tech these integrate to capability engineering and UX camera, display, as re such technologies EVs quire to cars conventional from market transition The Electronics. LG for opportunities creating are market automobile the in Changes Management Message e will make a clean departure from convention ategic partners, develop products that incor that products develop partners, ategic motors, what we already have, and superior and have, already we motors,what Invto Prnr” o ssanbe and sustainable for Partners” “Innovation nc prus taei prnrhp that partnerships strategic pursues onics 23 - - - - - 2016-2017 LG Electronics Sustainability Report 24 Operate Where We (Unit: KRWbillion) 3

Total Sales Global Net Overview South &Central America Middle East&Africa North AmericaNorth work Europe Korea China India Asia CIS (As of December 31,2016)

Sales by Region (Unit:KRWbillion) 1,609.3 2,326.3 2,767.6 Other Sales Subsidiaries Production Sites Business Sites 3,663.0 3,894.9 4,060.6 5,869.2 9 43 42 Americas Other: 1 Sales: 4 NORTH AMERICA 30.0 55,367.0 Sales: 8 Production: 5 SOUTH &CENTRALAMERICA 14,593.0 Sales (%) 7.0 16,583.0 Total Number of Employees South &Central America Middle East&Africa North AmericaNorth Europe Europe Korea China India Asia CIS (As of December 31,2016)

Global Workforce (Unit:Person) 1,718 1,855 2,215 Other: 2 Sales: 14 Production: 2 EUROPE 10.6 & Africa Middle East 4,561 4,777 Other: 4 Sales: 9 Production: 4 MIDDLE EAST &AFRICA 6,062 6,982 6.6 9,068 2.9 Production: 2 CIS 4.2 Asia Production: 2 INDIA CHINA Other: 1 Sales: 2 Production: 15 5.0 Other: 1 Sales: 6 Production: 4 ASIA 7.3 26.4 75,150 Production: 8 HQ: 1 KOREA 37,912 25 2016-2017 LG Electronics Sustainability Report > 26 4

(Unit: KRWbillion(USDbillion)) Sales (Unit: KRWbillion) Flow of Economic Value(Parent) Financial Performance (USD 28.1) 29,556.4 * Past datawas revised to salesin2014.For reflect thesuspensionof PDP modulesandPDPTV more information, pleaserefer to our2016annualreport. * 1USD=KRW1,053(2014)/KRW1,131(2015)/KRW1,160(2016) P Financial &Non- Parent Consolidated erformance Payments Interest 226.4 Overview 2014 (USD 56.1) 59,040.8 Taxes & Dues Donations 6.2 32.3 Governments Creditors (USD 25.1) Communities 28,368.4 financial Local 2015 Suppliers (USD 50.0) 56,509.0 Service Expenses Service Procurement & 32,400.0 Shareholders Dividends 72.9 Customers Employees (USD 24.8) What WeAchieved 28,743.2 2016 (USD 47.7) 55,367.0 Sales 28,743.2 3,606.4 Wages & Benefits Economic Value Retained Economic Value Distributed Donations Taxes &Dues Capital Costs Expenses Wages &Fringe Benefit Operating Expenses Economic Value Generated Financial Profits Non-operating Income and Sales Category (Unit: KRWbillion) Economic ValueGenerated, Distributed andRetained (Parent) (Unit: KRWbillion(USDbillion)) Operating Income Parent Consolidated (USD 0.29) 301.3 2014 (USD 1.74) 1,828.6 (USD -0.02) -17.5 32,977.9 28,859.5 29,033.7 28,743.2 -4,118.4 3,606.4 2015 299.3 116.2 2016 (USD 1.05) 32.3 1,192.3 6.2 (USD -0.25) 32,078.8 28,120.1 28,386.0 28,368.4 -3,958.7 3,332.1 -290.5 -248.3 314.7 2015 14.5 31.5 2016 (USD 1.15) 1,337.8 32,817.9 29,274.9 29,255.0 29,556.4 -3,543.0 3,221.5 -281.5 298.1 2014 10.4 32.9 * Number of Employees Contribution Initiatives Number of inSocial Employees participating Supplier Self-Assessment the Production Stage GHG EmissionsReduction from Global CSI(Customer SatisfactionIndex) 2016 2015 2014 2016 2015 2014 Community 2016 2015 2014 Supplier 2016 2015 2014 Environment * Conducted onabi-annualbasis. 2016 2014 2013 Customer Employee > aggregation standards. Figur es were revised followingthechangesto ourdatacollection and Non-financial Performance 126 264 (Unit:10Kton CO (Unit: EA) 18.4 2 e) (Unit:points) 75,150 77,176 93,659 35.3 36.2 100.3 101.4 100.8 99,123 83,641 100,081 1,334 Donations 2016 2015 2014 Training Costs itable donationsbyouroverseas subsidiaries have beenincluded * 2016 2015 2016 2015 2014 Conflict-free Percentage of Smelters as Certified * 2015figures are updated. 2016 2015 2014 e-Waste Collection 2016 2015 2014 T Quality In-class since 2015.(Percentage of charitable donations decreased dueto a declineinspendingonone- Char (Unit: KRWbillion) (Unit: KRWbillion,Korea) raining (Unit:ton) time events.) (Unit: person) 49 26.3 68 2,865 213,058 38.2 221,119 39.6 227,323 3,382 41.3 83 3,453 40.1

27 2016-2017 LG Electronics Sustainability Report 28 pr andstandards internal our as well as policies, management tainability LG Electronics CSRPrinciples the SupplierCodeof ConductGuidelinesin2017. our into requirements CSR incorporated we risks, CSR chain supply duce re to initiatives ongoing our of part As requirements. customer and Compact sponsibility Standard. We are also in full compliance with the UN Global tainability Accounting Standards Board) and the ISO 26000 Social Re (Sus SASB the by prescribed guidelines the including management, sustainability standardsfor rigorousinternational most the as well as Enterprises, Multinational for Guidelines OECD the and and Policy, Social Enterprises Multinational Concerning Principles of Declaration Tripartite(ILO)’s Organization Labor International the Rights, Human L manner. balanced and holistic a in economy and environment, ciety, so the consideration into takes that management sustainability for strives Electronics LG Management,” “People-Oriented and Creation” process.the principlesmanagement our ofon “Customer-Value Based in society and customers our of respect and trust the earning citizen, LG Electronics is committed to fulfilling its responsibility as a corporate Corporate SocialResponsibility asPracticed by LGElectronics G Electronics respectfully complies with the Universal Declaration of Declaration Universal the with compliesrespectfully Electronics G ocesses, to ensure their conformance with international standards international with conformance their ensure to ocesses, hand to those inneed. bestowed byinvestors andsociety, andbecome thefirst to extend ahelping ensurefurther transparency inourbusinessmanagementto honorthetrust be aimedatmakingourcustomers’ lives better. Inaddition,we needto structure andmanagementsystem. Eachandevery actionwe take should asabusiness,evensustainability ifwe have anadvanced inplace business If we failto earnthetrust and respect of society, we failto achieve Let usstrive to become acompany respected bycustomers andsociety. regular and ad-hoc supplier assessment in 2016, and established and 2016, in assessment supplier ad-hoc and regular 2017 NewYear SpeechbyBonMooKoo, Chairmanof LG Corp. International Standards & Established SocialNorms Overview and the EICC Code of Conduct, and regularly revisesus regularly our and Conduct, of Code EICC the and · · SA8000 · ISO26000 · GRIGuidelines · SASB Guidelines · ersal Declaration of · · EICCCodeo · Enterprises &SocialPolicy Compact T Ent OE P IL Human Rights Univ en Principles of UNGlobal rinciples Concerning Multinational O Tripartite Declaration of CD GuidelinesforMultinational erprises f Conduct

LGE’s Management Principles · eople-Oriented · Creation Management Cust P CSR Management omer-Value Scope - - - - - · Society · Environment · Economy Total Online Offline Category (Unit: person) CSR Training Working-leveland Council (Executive Council Management tainability ment and efforts across the board. LG Electronics has in place the Sus ment collaboration based on the recognition multi-depart that CSR requires facilitates involve that system a established have we Second, social contribution initiatives andshare ourperformances. a operatingtrends,while CSR board ployee message latest share tothe the training. Additionally, we use the biweekly CSR newsletter and em new stance, we use case-based training materials and open discussions for in Fortraining. our of effectiveness the increase to videos and cases latest as such targets training different to employ tailored materials training also We overseas. based staff procurement for workshops and suppliers, our from employees for College Management Growth procurementstaff,for ProcurementWin-Win College the the as such trainingpresidents,job-specific courses and candidatessubsidiary and FSE positions), experience prior and (entry-level hires new targeting coursesspecific position- of consistprograms training Our programs. awareness CSR employee of range wide a runs Electronics LG First, our businessmanagementandeveryday businesspractices. Electr LG impact, consistent and profound creates responsibility social rate to ensure of ourefforts As part thatourcommitment towards corpo Integrated ManagementofCSRInitiatives volunteering information board to promote employee participation in hires with prior experience to increase the practical implications of onics engages in a broad range of initiatives to integrate CSR into LG Electronics Sustainability Management Policy - Job-Specific Position-Specific. 5. LGE SupplierCodeof Conduct 4. LGE GlobalEESHPolicy 3. LGE GlobalLaborPolicy 2. LGE Codeof Conduct 1. LG Codeof Ethics 2,102 1,253 2016 478 371 CSR Principles communication transparent holders through spected bystake- trusted andre- tainable growth, striving forsus- A company 2,943 2,052 2015 557 334 1,788 2014 463 336 989 ------Apr of (as them of percent 100 completing initiatives, improvement teen thir of total a selected we 2016, corporate-levelvelopsIn programs. year,the compilesof improvementbeginning the at initiatives de and Electronics LG council, the Through performances. and progress our review to basis semiannual a on meets council staff the while basis, annual an on convenescouncilexecutive The etc.) procurementteam, the team, safety & environment the bureau, ethics the team, HR the team, CSR (the departments related the from staff working-level and CSR CSR & Sustainability Management CSR &Sustainability Organization forLG Chart Electronics consumers, the media, customers, suppliers, employees, industry peers, Our communication. agencies, assessment investors,shareholders, are: our groups stakeholder in transparency ensures and stakeholder our of voice the to listens carefully Electronics LG of stakeholders, trust our the earn to mutually efforts our for of basis part As a relationships. respectful is trust that believes strongly Electronics LG Stakeholder Engagement the United NationsSustainableDevelopment Goals(SDGs). reflects that framework contribution social new our and regulations CSR in trends on briefed wasboard the 2016, December In direction. of part our efforts to align as our social contribution initiatives and management issues CSR important on members board the briefs and established ElectronicsLGvalues. social and economicboth achieve to issues nity commu- local address to technologies and products our of ad vantage takes which programs, cause-marketing present and risks CSR emerging on management top brief to meetings management level organization and corporate-level in participates team CSR the Third, c improvements,executivesystem councilthe as to such cision-making, those from customers, while delegating the issues that require executive including de efforts, multi-departmental requiring requirements gr to response effective support to council staff the join will team ance onvenedsecondthe in ofcalendarhalf the year. complithe 2017, In Report Report owing compliance requirements. il 2017). At the staff council, we discuss and decide on stakeholder Working-Level CSRStaffCouncilFor Management Sustainability Sustainability Management Sustainability Staff Council) comprised of executives in charge of CSR issues CSR of charge in executives of comprised Council) Staff Engagement Stakeholder Executive Councilfor Board of Directors CSR as part of the official duty of the Board of Directorsof Board the of duty official the of part as CSR Risk Management Approval Approval Social Contribution CSR Committee - - - - - Organizations NGO &International Governments Central &Local Leaders Academia &Opinion PeersIndustry Employees Suppliers Customers Consumers &Media Assessment Agencies Shareholders, Investors & Stakeholder Group Stakeholder Communication points withourB2Bcustomers. aw CSR the enhancing at aimed collaborationinitiatives and training port to efforts pr our of part as 2017, In feedback. their seek and holders stake external to initiatives management sustainability our municate com to efforts of range wide a make to continue will ElectronicsLG T initiativesability andreceiving stakeholder feedback. Electronics’sustain LGintroducing for communicationchannel active acc network social official our including services, networking social use ly In tives andrequired implementation. improvementinitia identified we which on based suppliers, and tions loca production our at risks CSR on opinions their collect us helped CEREAL, SOMO and Greenpeace. Our communication with these NGOs r orative relationships withNGOs.In2016,LG Electronics responded to these Through procedures. appropriate the following transparently mation infor the discloses Electronics LG issues, emerging on confirmation If our stakeholders such as NGOs, media outlets and investors request departments. related with collaboration through manner timely a in addressed are stakeholder gr our of each for channel effective most the selecting ly careful and messages customized creating channels, communication of range broad a employs Electronics LG organizations. international and NGOs, governments, central and local leaders, opinion academia, equests made by NGOs such as KTCN Watch, Amnesty International,KTCNWatch, Amnesty as such NGOs by made equests aking advantage of our diversecommunicationstakeholderchannels,our of advantage aking omote engagement with B2B customers, we plan to actively sup actively to plan we customers, B2B with engagement omote us Saeodr eurmns olce truh hs channels these through collected requirements Stakeholder oups. order to facilitate interactive stakeholder communication, we active areness and capability of our B2B sales staff, one of our key contact ounts and the “Social LG Electronics” website, as an effective inter communication efforts, we were able to build healthy and collab based ontechnologies that care. Contribute to resolving community issuesthrough partnerships policies. andregulations, andsupport Comply withlaws conduct jointresearch. Receive feedbackonhowto improve ourCSRinitiatives and (EICC)tonetwork address CSRissues. industry Benchmark bestpractices, collaborate, andformacooperative training andpromotion programs. Raise CSRawareness andpromote through participation voluntary CSRtraining.and voluntary Provide CSRconsulting forCSRrisk management andsupport de Comply withtheirCSRrequirements andcollaborate on promote sustainableconsumption. Receive feedbackonevery stageof theproduct lifecycleand by disclosingandassessingourCSRinitiatives. Receive feedbackonhowto improve oursustainablemanagement Communication Strategy veloping products thataddress socialissues.

29 ------2016-2017 LG Electronics Sustainability Report 30 plementation system.” before implementation. directors of board the and council management sustainability the to is ment plan through discussion with related The departments. final plan improve- our into drafted and reviewed carefully are consultation er year’sstakeholderconsultation.collected Opinions through stakehold management ment Goals (SDGs). Environmental issues, one of our key sustainability Develop Sustainable Nations’ United the meeting in role businesses’ including scale, global a on expectations stakeholder emerging newly to responses our explore to opinions expert seek to plan we 2017, In CSR. on consultation stakeholder our continue will Electronics LG Future Direction our pation in social contribution initiatives.” Our employees, however, found external communication” and “continuous increase in employee partici most positively evaluated our progress in “transparency in internal and constitute our management philosophy. A majority of the respondents percent also believed that CSR had become one of the core values that the progress we have made over the past ten years. Furthermore, 16.0 indicate that 67.8 percent of the employees gave positive responses to per their and CSR on awareness employee assess to survey online an ed conduct Electronics LG session, consultation the with conjunction In another. in report sustainability and consultation stakeholder our on opinions expert of exchange the facilitated and track one in community) and employeesupplier, environment, (customer,the management CSR of aspects material five the in performance and progress our reviewed the for roadmap a explore and decade past the over management ability tation on CSR held in Korea was designed to take stock of our sustain Consul Stakeholder 12th the report, sustainability our anniversaryof tenth the of celebration In U.S. the in once and Korea in once twice, In 2016, LG Electronics convened the stakeholder consultation session Key Takeaways from2016StakeholderConsultation ticipated. par have fields professional various from experts 90 over and date, management. This semiannual consultation has been held 13 times to and par sions that cover the issues under their purview to hear expert opinions, ses consultation attend also executives Our insight. their for zations organi international and NGOs academia, agencies, governmentfrom experts invites issues—and community and protection environmental c stakeholderdiversegroups,ofstakeholderour expectations the dress Tomanagement. sustainability ad and business our into them porate incor and experts, and stakeholders of opinions valuable the obtain to CSR on Consultation Stakeholder initiated ElectronicsLG 2010, In Stakeholder Consultation onCSR onsultation touches upon all aspects of CSR—including labor rights, labor CSR—including of aspects all upon touches onsultation then incorporated into corporate-level action items and presented and items action corporate-level into incorporated then ception of our progress and performance in this area. The results The area. this in performance and progress our of ception next ten years. Organized in two tracks, the consultation session consultation the tracks, two in Organized years. ten next CSR initiatives lacking in “longer term strategy and effective im effective and strategy term “longer in lacking initiatives CSR ticipate indiscussionsto shapethefuture of oursustainability Overview areas, are another topic that we plan to discuss at this at discuss to plan we that topic another are areas, Stakeholder Consultation onCSR ------2016 2015 2014 6. 5. 4. 3. Recognition byexternal organizations 2. 1. 02 01 LG Electronics’ CSRManagement Employee onthePast Survey Ten Years of Aspect Long- service Global implementationo high-efficiency products R c T social contribution initiatives Continuous incr system ransparency ininternal andexternal ommunication eduction inGHGemissionsandincrease in term strategy andeffective implementation 6.1 over thepastten years? How doyourate LG Electronics’ CSRmanagement past ten years inCSRmanagement? What isthegreatest achievement over the legal requirements Compliance with 40.85.2 29.52.7 38.4 ease in employee participation in ease inemployee participation Negative f thee-waste take-back 32.2 +13.8 e Response to 51.8 xternal pressure 44.5

46 strategy. initiatives basedonalonger-term external pressure to implementing should evolve from responding to position thatourCSRmanagement Our employees maintainedthe negative responses decreased. responses haveincreased and (2010-2012), positive Compared to ourpastsurveys 44.6 42.4

(Unit: %) implementation Systematic Korea 12.7 15.7 17.6 21.9 22.8 (Unit: %) Positive 5 16.0 philosophy CSR isacore Overseas 11.6 10.9 67.8 55.5 12.7 13.2 15.9 13.5 20.9 21.6 54 Discussion Topic Key Inputsfrom 2016Stakeholder ConsultationonCSR&OurProgress 13th 12th Agenda Participants Moderator Topic System Compliance Employee Community Supplier Environment Customer F operation, KOICA), HohKim(Founder, HeadCoach&Lead University), ChangSubKim (Director of Public-Private Co Division of BusinessAdministration, SookmyungWomen’s for Corporate Partnership), SoonWon Kwon (Professor, Jay Young Kang(Secretary-General, Korea Commission Min GuJeon(Director, BSIGroup Korea) (October 31,2016) CSR ManagementatLG Electronics: Present andFuture ③ ② ① Policy of Office,Environment) Ministry andTechnologyIndustry DivisionDirector, Environmental acilitator, h),ChangHeumLee(Environment THELAB 12th Stakeholder Consultation Ne L CSR andOr L (including employ A R G Electronics andCSRManagement–Shapingthe G Electronics’ Response to theAgeof Risks: · · · · · · · eholder awareness onLG Electronics’ achievements in · · Feedback · that CSRprograms have created. providing accessibility informationto B2Bclients. Enhanc acc Legal advic and cr Cr in anagingsociet P Industr D whatLGpersonify Electronics standsfor. Build andmaintaintheimageo CSR br R D initiativ Engage inmediapr CSR. Raise stak xt Ten Years (Discussion) eview of LG Electronics’ Achievements inCSR repare to helpolderemployees maintainandboostproductivity evolution (mutualgrowth powered byinnovations). evelop acomprehensive recruiting strategy fortheFourth evelop fortheFourth awin-wingrowth plan Industrial eate acorporate culture thatpromotes employee ideas essibility andadviceessibility onenhancingaccessibility features eativity. anding isrequired: Develop yourmessagearound theimpact ial Revolution. es (i.e.developing environmentally friendly products). e customer service inaccessibilitye customer andtheprocess service for ganizational Resilience (Presentation) e oncompliance withUSFCCregulations on ee survey results) y. omotions withanemphasisonpreemptive f socialcontribution programs that

· · Enhanced theprocess forrequesting andproviding accessibility information. · · · Operate internal andexternal ventures and employee ideacontests. · · Develop abranding strategy forLG Electronics’ socialcontribution programs. · · eholder perception through mediacampaigns includingthe · · Progress &ImplementationPlan (taking into account factors suchasrequired skillsets,training anddiversity). accessibility awareness training subsidiaries. atservice Pl menu options andmessagesrequire revisions. In mostpar programsupport forolderemployees. Oper Establish ar programs. Adop projects.and industry-academia D fr F report. sustainability Raise stak eature LG Electronics’ achievements inenvironmental loadreductions evelop thereport content around LG Electronics’ programs R&Dsupport om thesource report phaseonthesustainability an to expand braille manualsto allproducts andconduct andservices ate a life planning programate alifeplanning foremployees andhealth management t result-based performance managementforsocialcontribution Agenda pants of Partici Number Topic t, LG Electronics satisfiescompliance requirements, butsome ecruiting andHRdevelopment strategy to secure required talent - ③ ② ① disabilit from29 (experts local accessibility and (November 29to 30,2016) Stakeholder Feedback Understanding intheU.S. theAccessibility Regulations & 13th Stakeholder Consultation B2B Clients Enhancing theSyst Centers Establishing Acc Accessibility R Legal Advice onCompliance withAccessibility Regulationsity Our P egulations +Advice onEnhancingProductegulations &Service y organizations) roduct Compliance withtheUSFCC’s Accessibil

essibility Service attheU.S. Service essibility Customer em forProviding Informationto

Implement 2017 implement Implement 2017 implement T 2017 implement T 2017 implement To be Implemented Status To be o be o be

- ed ed ed ed ed ed

in in in in 31 2016-2017 LG Electronics Sustainability Report R&D R&D Research (Technology)&Development (Design) · · · Design foreasydisassembly(DfD) · Compliance withstandards onhazardous substances (DfE) Developing Eco-friendly/High EfficientProducts & people withdisabilities Enhanc (Suppor D 32 evelopment of products tailored to local needs ed accessibility forseniorcitizens and ting IssueResolution) Products thatAddress Local Issues Overview f 230 Conflict f 230Conflict · Smelters (Use rate: 83percent) Free Smelters (CFS) Use o Mines · rights issuesatextraction sites & RRMI) (Activ Initiativ > e memberof theEICCCFSI Responsible Managementof es to address human

> Our Value Chain · · · · · · Lower-tier Suppliers in theMaster Purchase Agreement 1,334 supplierlocations &CSRauditat40locations) ener R the Gr 161 supplieremploy Gr (penalt R R Supplier CSRr

eduction of 1,300ton GHGemissionsthrough andad-hocsupplierassessment egular equires compliance withtheSupplierCodeof Conduct een supplychainmanagement(GPPlus) gy managementassessment een Expert Programeen Expert y involved) Responsible Sourcing 362,000 tons CO R GHG Emissions Production Level isk management(CSRrisk assessmentat eduction ees completing Protecting theHumanRightsof Workers & Ensuring SafeWorking Conditions

e First-tier Suppliers

· · (gener t Implement pr Ener o businesslocations. oduction facilitiesandequipment gy efficiencyimprovement for · · · Production Sites management Industr supplier loc EESH managementatlogistic - initiativ c sites (28sites rated “LowRisk,” CSR r - ated 6,900MWhin2016) ompleted 94percent of improvement (Str Age v W orking hourmanagement,etc. ed a solar power systemed asolar ict prohibition of childlabor) isk assessmentatall37production ial safety andhealth ial safety es) erification process

ations

s and

· · Reduction of R product packages eduction of Green Logistics > 8.7 percent 8.6 percent empty space from packingmaterials · · · Products Ext 517 ENERGYST No hazar High Quality ProductsHigh Quality ended product life dous content AR-certified productsAR-certified (U.S.) local regulations the EUWEEEand Compliance with Disposal > 5,302 Use of recycled materials · · verage timerequired to complete service · Customers (Consumers) c Cust Rat (o A ompetitors: 100.3points through HighService Quality verseas): 3.1days tons of PCRplastics e of repeat request service (global):4.8% omer satisfactionrate compared to Customer Satisfaction Take-back Service Free e-Waste

across 50countries Offered at83locations

Maximizing Resource Recycling

Responsible Disposal& e-Waste 33 2016-2017 LG Electronics Sustainability Report 34 outsourcing suppliers. As part of our “consumer campaigns that em that “consumercampaigns our of part As suppliers. outsourcing W efforts. management risk CSR their ofcontrol take and system ment manage CSR a establish to suppliers and subsidiaries our supporting while efforts, improvement voluntary suppliers’ facilitate to system follow-up managementrisk CSR our supplier a established we efforts, management of part As management. sustainability for initiatives corporate-level2016 wereincorporatedour 2016) improvementinto year’s(2015- previous analysis the through identified issues Material Materiality Analysis&Implications management. r tronics will continue to scrupulously collect and respond to stakeholder syst management risk CSR the and issues Health) and Safety, vironment, our requirements(Energy,and inquiriesstakeholderwereEESH about En of bulk The assessment. supplier regular and selection supplier and inquiries customer in increase an drove turn in which etc.), tomobile, au retail, IT, communication, (mobile industries across management chain supply for requirements growing the reflecting share, largest incr slight a stakeholders,external by issues CSR and sustain management ability to pertaining made were inquiries 266 of total a 2016, In Key StakeholderInterest the issues. of prioritization the in targets 169 and (SDGs) Goals Development Sustainable Nations United 17 the account into took also We rights. five areas: consumer, the environment, fair trade, community, and labor F awareness. management and responses, our and stakeholders ternal policy,internal and implicationsshort-term financial from norms,inquiries ex social analysis, media and consultation identified stakeholder through interest stakeholder standards, international industry on based selected and explored are analysis material our for criteria The Materiality AnalysisCriteria report andthecorporatethese issues,inthesustainability website. concerningdirections future and performances our of review detailed a with along disclosed, assurer,fully the are and management the by review a after finalized are which issues, Material Electronics. LG on impact and intereststakeholder on based assessment an perform we carefully reviewing latest CSR trends in Korea and overseas, after which issues material identify We engagement. stakeholder for standard national Five-Partthe TestMaterialityon based ysis inter the AA1000SES, of LG important, Electronicsfind particularly performs a materiality anal stakeholders our that issues CSR manage systematically to order In Materiality Analysis equirements, while incorporating such requirements into our business or our 2016-2017 analysis, we selected 37 issues in the following the in issues 37 selected we analysis, 2016-2017 our or e also carried out self-assessments and CSR on-site audits at our at audits on-site CSR and self-assessments out carried also e ease from the previousyear.fromthe ease theaccounted for inquiries Customer em, with supplier related requirements increasing sharply. LG Elec requirements concerning CSR management for reasons such as such reasons for management CSR concerning requirements through a two-step process: First, we create an issue pool by pool issue an create we First, process: two-step a through Overview Materiality Analysis ------our stakeholders. departments from respective subsidiaries, and share the outcome with initiatives relevantand organizations business improvementHQ, among collaboration through implement and develop will Electronics LG departure, of point a as results analysis materiality 2016-2017 our world the across locations 41 at eventscommunities,” organizedpower we Analysis of 2016External Stakeholder Inquiries (Unit: %) Topics of Inquiries (Unit: EA,(%)) Ethical Management Practices/ Conflict Minerals Management Conflict Investors Supplier CSRManagement CSR ManagementSystem 8 (3) in celebration of World Environment Day 2016. In 2017, with 2017, In 2016. Day Environment World of celebration in Media 17 (6) Product Stewardship 2 (1) NGOs (Energy, Environment, Safety, Health) 41 (16) Other Labor Rights Fair Trade Other EESH 4 5 8 8 9 198 (74) Customers 10 13 43 Opinions” Weing. significantit find “Initiativesalso that Customer Collecting for increas continually is responses post-accident our in interest tomer 2016-2017 Materiality AnalysisResults sourcing responsible for demand With year’sanalysis. this in issue al materi a as emerged Biodiversity”“Protecting area, environment the In management. e-waste and safety issues, environmental at directed per stakeholders—43 external by expressed interest strong the given ed, expect be can which Products”materialissues, High-efficiency as ing our stakeholders have found “Reducing GHG Emissions” and “Develop in es)” and “Providing Information on Products and Services” ranked high ProductGreaterfor ing Responsibility Defect/Post-Accident Respons In our 2016-2017 materiality analysis, “Product Stewardship (Assum 2016-2017 Materiality AnalysisResults the consumer area following the previous year. This shows that cus cent of external stakeholder inquiries from the previous year wereyearprevious the from inquiries stakeholder external of cent

Stakeholder Interest have newly emerged as a material issue. For the environment, Customer Environment Employee SupplierCommunity > easing Product > > > > > > Protecting Biodiversity Engagement Policy Enhancing Cust Socially Disadv Acc Incr Gr P Ensur P D Business Management Properties and Technologies romoting Shared rotecting Intellectual eveloping Green Businesses owth essibility forthe essibility ing Transparency in Important new antaged omer

new

new > > > romoting theSustainable > > > > ManagingWater Use > reventing Environmental > > onger Product Quality > Social Contribution Programs Loc Str Measur D Ec P Conf Car Antimonopoly Substanc R Emissions R P P P Management Str ollution through Waste/ roduct Education Safety eplacing Hazardouseplacing eveloping Products andServices forthePoor onomic Growth of Communities onger Communication with al Communities tel Prevention Very Important lict Minerals Management ing theEffectiveness andImpactof es inProducts eduction , Anticorruption and Impact onLGElectronics ------new

in Evaluation andRewards” have newlyemerged asamaterial issue. F and Labor Child “Preventing on requirements customer and ulations issue that has been consistently raised by our stakeholders, while reg of stakeholders. For labor rights, “Protecting Basic Labor Rights” is the attention the captured has and area, community the in high still are Communities” for Initiatives Contribution and Donations “Increasing priority in the fair management area. Our stakeholder expectations for growingacrossCSR “Enhancing importance, in Chain”Supply takestill orced Labor” are increasing continually. In this area “Ensuring Fairness

> > > > > roviding Informationon > > > Managing SupplierCSRRisks P P Raising SupplierA Establishing FairT Str P P Resolution Mechanisms Information of Customers’ Personal Post-Accident Responses) forProductsibility Defect/ (Assuming Greater Respon- Products andServices (Labor Rights) on CSR Standard BusinessPractice romoting Internal Grievance rotecting BasicLaborRights roduct Stewardship engthening Protection > > Fair Evaluation andReward System > ImplementingFamily-friendly ManagementPolicies reventing Discrimination andPromoting> Diversity > Contr P P roviding forLearningandGrowth Opportunity ibution to Addressing GlobalLaborRightsIssues Extremely Important wareness rade as

> > > > > > Needs Services thatAddress Local Communities Contribution Initiativesfor (Eco-friendly) Products Resource Recycling Change Responding to Climate International Organizations Go Coll D Incr e- D R educing GHGEmissions/ eveloping Products and eveloping High-efficiency Waste Collectionand vernments, NGOsand easing Donations and aborating with new

35 - 2016-2017 LG Electronics Sustainability Report 36 environment. Stakeholder interest ine-waste take-back andresource recycling isgrowing aswell. living their improving or bill energy their lowering as such customers of lives the improveto expected ofare innovations technology impact and environmentalProduct products. the on standards international and regulations stronger to leading rise, the on is products eco-friendly for demand Customer Development ofProductswithGreenerFeatures regulations related to dataprivacy are beingstrengthened aswell. and rights customer trend, this privacy.with and line security In data with associated risks to rise giving is technologies emerging of Implementation Protection ofPersonal Information Inlinewiththistrend,services. customer rights andregulations related to product are safety beingstrengthened aswell. andproducts on provideinformation moreand products their of safety the for responsibilitygreatercorporates take for to demand increasing an comes Risks associated with product safety are increasing with the proliferation of new technologies and a faster implementation cycle. With this increase in risks Product Safety of ourproducts (Eco Index). for assessingtheenvironmental impact Strengthen managementrequirements Management Stra Business &Sustainability 1) Management Stra Business &Sustainability 3) 2) 1) Management Stra Business &Sustainability 2) 1 2 accountability. Height per r Establish astr acc Height r R and technology development process. of theproductmanagement aspart Firmly establishqualit technologies. esponse system againstbreach of esponse to product regulations. safety educe risks through preemptive sonal informationandproprietary ountability. Overview en employee awareness and en employee awareness and ong prevention and tegy tegy tegy y assessmentand

Key ProgressandPerformance

Major Achievements in2016 Major Achievements in2016 Major Achievements in2016 the third consecutive year Awards Received theTop Honorfor ENERGY STAR Partner of theYear “Sustained Excellence” atthe2016 ISO 27001 1) roduct Quality 1) Management Syst Information Security Int 129 sessions) (2,865 par T P raining Performance ernational Standard on ticipants, Environment

em Customers

100.3 omer SatisfactionLevel 2) global markets) (compared to competitors, Cust 2) 3 Second Consecutive Year Received theaward forthe Accessibility Technology CES Inno Consecutive Years vation Award in Points 2 1) Mid- toLong-termGoals - the Eco Index. our pr Manage theenvironmental impactof Mid- toLong-termGoals c acquire independentmanagement Ensure subsidiaries andsuppliers to Mid- toLong-termGoals apabilities ininformationsecurity. products to 80 percent by2020. Incr ) safet F product management. quality Continually str oster experts inproductoster experts and quality ease thepercentage of Green 3Star oducts andourperformance with y. engthen accountability in

uct producers to take greater responsibility forEESHrisks throughout theirsupplychainhave become aprevailing trend inrecent years. NGO monitoring and consumer awareness on EESH (Energy, Environment, Safety, and Health) issues are increasing, while social expectations for end-prod- EESH Managementat ProductionSites demandisincreasingSocial andregulatory forlow-carbon andenvironmentally-minded production processes. Climate ChangeResponse 2) 1) Management Stra Business &Sustainability products. sions throughout thelifecycleof our footprint andreduce carbon emis- Expand thedisclosure of carbon Management Stra Business &Sustainability 2) 1) Management Stra Business &Sustainability - - Make ourproduction locations greener. Management Stra Business &Sustainability revenue). R energy use. Manage andr system. the e-waste take-back anddisposal substanc V R as requirements. system. Establish supplychainEESHmanagement Enhanc educe water use(intensity target per oluntarily replace hazardous educe theuseof resources andexpand e theglobalEESHmanagement es inourproducts. educe GHGemissionsand tegy tegy tegy tegy

4) EngagedinEESHcompliance campaigns. 3) Implemented GEARS3.0,LG Electronics’ EESHassessment system. ompliance auditsat9 1) 2016 2008 Major Achievements in2016 Major Achievements in2016 Major Achievements in2016 Major Achievements in2016 2) aste take-back and 1) 227,323 achie EESHc (Cumulative). overseas production subsidiaries process. and usedinourproduction substances inourproducts agement of hazardous Str - disposal ser e-w 83 loca and LatinAmerica Japan, Europe, U.S., Australia, India and countries includingKorea, ved 84%improvement rate engthened theman- tions across50regions vice

e tons intotal

36.2 year 2008) production (compared to thebase GHG emissionsassociated with

- low carbon labels. ed withproduct useandacquired Reduced GHGemissionsassociat 2007) (compared to thebaseyear associated withproduct use million tonsofGHGemissions Contr 3) 2) ees from 85Suppliers for161Employ- Support Gr ibuted to reducing 42.83 78 een ManagementTraining e- Rate (Global) Waste Recycling (10K tons CO % 2 e) - 3) ManagesupplychainEESHrisks. 2) 1) Mid- toLong-termGoals 2) 1) Mid- toLong-termGoals 2) 1) Mid- toLong-termGoals - - product use. Reduce GHGemissionsassociated with Mid- toLong-termGoals from 2008through 2020. R c R ompared to thebaseyear 2007. at overseas locations. duction (intensity target perrevenue). production. Enhanc Global EESHManagementSyst Expand theimplementationo - R - R hazar Expand tar r tak Continually e educed 400million tons (cumulative) educe 60million tons by2020 egions andcountries. educe water use associated withpro- educe GHGemissionsassociated with 2020 compared to thebaseyear 2007. 2008. by 2020compared to thebaseyear R R educe water useby20percent by educe 150,000tons of GHGemissions e-back service to includemoree-back service dous substance replacement. e EESHmanagementcapabilities get product groups for

xpand thee-waste f the em.

37 2016-2017 LG Electronics Sustainability Report 38 charitable givingto apotential market. their of beneficiary the from communities local to in approach competenciestheir coreshifting also their are Business utilize communities. local to of sustainability as financial the well supporting as issues, community addressing to more contribute to business expecting increasingly are Stakeholders Sustainable Economic GrowthofCommunities /EngagementandCollaboration with Communities for Supplier CSRrisks may result inahugecontroversy asconcerns over extraction CSRissuessuchasunlawful of commodities and Supplier CSR Social demandforwin-winpartnerships between large corporations andSMEsisgrowing continuously. Win-Win Growth 2) 1) Management Stra Business &Sustainability 2) 1) Management Stra Business &Sustainability 2) 1) Management Stra Business &Sustainability ced/child labor areced/child labor raised continuously. 3 4 D 3, 7,8,11and12) core competencies. closely related to our businessesand Contr supply chainCSRrisks. Establish anearlydet in ourproducts. origin andcontent of conflictminerals Establish asyst capabilities. subsidiary process byenhancingprocurement and Establish thesupplierassessment Initiatives. Implement theFiv address local issues. evelop products andtechnologies that Overview ibute to achieving SDGsthatare em fortracking the tegy tegy tegy e Win-Win Growth

(Fir ection system for st Priority: Goals

Major Achievements in2016 Major Achievements in2016 Major Achievements in2016 1) Self-assessment CSR On-site Audit - and technologies. Expanded socialcontribution initiatives thatleverage ourproducts 40 1,334 Win-Win Growth Academy donat Offer Supplier CSRRiskAssessment ed accessibility appdevelopment training, ed our solar power systemed oursolar to hospitals, etc. Suppliers Community Suppliers Suppliers from Trained 347 2,520 2)

Smelt CFSP-c Use Rat suppliers ers: 83% ertified ertified e of employees

sec programsExpand support to include Mid- toLong-termGoals 2) 1) Contribute to achieving SDGs. Mid- toLong-termGoals 2) 1) Mid- toLong-termGoals t D - Establish anadv - Manage supplychainCSRr for regulations onconflictminerals. the EICCstandard. ond- andthird-tier suppliers echnologies thataddress local issues. evelop anddistribute products and minerals suchascobalt. a response system fornon-regulated In additiont Incr high-risk group (25%orhigher). ease CSRauditforsuppliers inthe o 3TG minerals, establish anced response system

isks basedon

labor rights maylabor leadto improved andproductivity. quality Non-compliance may result infinancial lossesaswell asdamagingbrand value andconsumer trust,whileproactive protection of Protecting theLaborRightsofEmployees Work-life helpsenhance balance employee satisfactionandproductivity. Promote Corporate Culture partnerships withstakeholders. Build trust-based andcollaborative Management Stra Business &Sustainability e theefficiencyof our assess- 3) 2) 1) Management Stra Business &Sustainability employee work-lifebalance. Create acorporate culture thatpromotes Management Stra Business &Sustainability programsnities andsupport contribution initiatives withmore- opportu Promote insocial employee participation Management Stra Business &Sustainability 5 audits. improvement byexpanding CSR efforts third-party auditandencourage voluntary rights of workers. Asc Impr the EICCrequirements. depar ment byintegrating andreconciling Enhanc ertain ourperformance throughertain ove policyto better protect thelabor tmental assessmentcriteria with tegy tegy tegy tegy

Major Achievements in2016 Major Achievements in2016 Major Achievements in2016 Major Achievements in2016 - Governments andAcademia Organizations, BusinessPartners, Local nership withGovernments, International Social Contribution Initiatives inPart 1) 1) (130 Cor L 1,696 29 1) Global Employee SocialContribution Events G HopeScreen, LG SocialFund impr Implement flexible workschedules. flexible programs suchasworkstyle 37 locations) (Moder Self Implement Average Score 88.2 Campaign Global BloodD -Assessment (iSAQ) ovement initiatives and porate Beneficiaries) ate RiskGroup: 9 Locations ed employee care ed In-depth onation Employees Points

Employees o u t o f f o t u o

- 3) 2) 2) Comments Employee Suggestions& 1,474

Supplier Codeof Conduct Amended andDistr 12 Sessions Thir 4 Sessions “Let’ Implement orld Environment Day 2) d-Party Audit, in 41 BusinessLoca W s OpenUp” Program 24 Countries ed the of EICC of Internal Audit

ibuted the

tions

engagement andcollaboration. partnership programs through stakeholder Develop andimplementsocialcontribution Mid- toLong-termGoals 3) 2) 1) Mid- toLong-termGoals fr pr Establish acorporate culture that Mid- toLong-termGoals donation pr Promote employee volunteering and Mid- toLong-termGoals ee-flowing communication.ee-flowing omotes employee and work-lifebalance regulations andmonitoring byNGOs. CSR risk management. capabilities to enhance subsidiary-level Enhanc Help subsidiar our pr Achie ve “LowRisk”at100percent of oduction sites. e ourresponse rights to labor ograms. y CSRstaffdevelop their

39 02 Materiality Report

42 With Our Customers 52 With the Environment 72 With Our Suppliers 82 With the Community 92 With Our Employees

40 Materiality Report 41 Report Materiality 2016-2017 LG Electronics Sustainability Report 42 Management S Information Security International Standardon 2,865 129 Accessible Tech 2 CES Key Performance in2016 Product QualityTraining ISO 27001 Materiality Report consecutive years sessions Innovation Award ystem employees

Certification With OurCustomers Hilton Hotel Group Director &Responsible Sustainability Sourcing JUDY PINES make environmentally choices. smart a c covering 100percent of therecycling costs. Thisinitiative supports of usedTVs byreplacing themwithnewLG televisions, Hospitality Together, we have implemented asustainablesolution to dispose resources, andpositively impactinglocal economic development. to managing ourenvironmental footprint, preserving ournatural wider world.Hilton andLG Electronics have ashared commitment to make positive difference alasting, inpeople’s lives andthe At Hilton, we believe thatwe can useourpassionforhospitality ommitment to reduce electronic waste andencourage others to

- - Customer, Investor Our Focus WHAT AREIMPORTANTISSUES? for theSociallyDisadv Incr Management Str onger Product Quality easing Product Accessibility map. based market appliance home premium the in ities c will Electronics LG offering, core our as TURE LGcustomerskeytoSIGNA With markets.in a offering by brand SIGNATURE LG the of age im premium the convey effectively to aims New as such world the across cities major in paign cam brand worldwide a launched Electronics LGbrand’s2016, CES the at debut successful sta that products premium of lineup a with terns pat use to responsiveexperience user tuitive in an and designs, minimalist refined mance, perfor exceptional offering brand, appliance home ultra-premium our is SIGNATURE LG Global Markets Brand CampaignsinMajor antaged ontinue to expand our presence and capabil and presence our expand to ontinue tronics’ True PremiumBrand LG SIGNATURE Soars asLGElec- genuine “state-of-the-art”genuine experiencebrand y true to their essence. Following up on the ok Prs n Lno. u campaign Our London. and Paris York, on a mid- to long-term strategic road strategic long-term to mid- a on

- - roviding Informationon - Customers’ Personal Information Str Defect/Post-Accident Responses) Greater Responsibility forProduct P P P roduct Stewardship (Assuming roducts andServices engthening Protection of

------Our Evaluation 3) en employee awareness onproduct and safety 2) 1) Future Direction satisfaction. to increase of ourongoingefforts sonal informationaspart customer to ensureevery effort product andsafeguard quality customers’ per ofquality ourproducts, servicepoliciesandprocesses, whilemaking LG Electronics incorporates customer requirements into enhancingthe tion. manage ourinformationassetsincludingcustomers’ personal informa in place acorporate-level response system to safeguard andeffectively strengthening accountability management.We inourquality alsohave LG Electronics ensures thatsafeproducts are delivered to customers by Our Approach HOW WEMANAGE IT? took anunconventional approach, adopting also products, and brand the with experience pr brand Our structures. sublime the of those lel paral that products the of functionality and world, chitectural buildings in major cities around the SIGNATURELG poses ar iconic productswith juxta campaign City” the in SIGNATURE “LG the instance,For York, London. New Parisand as such culture and that arts the in trends metropolises shape in taste discerning with customers to experience brand first-hand a offer that spaces and events promotional as o Art “The philosophy, brand the on based ers cr on focuses SIGNATURELG for campaign tion spec hardwareas such information product of tion communicaone-way on rely that approaches traditional the from departure radical a made of-a-kind, ultra-premium brand, LG Electronics one- a SIGNATUREas LG position to order In Communication initsTrue Class Esne” hog avrieet a well as advertisements through Essence,” f eating an emotional bond with our custom our with bond emotional an eating mto sae wih fes first-hand a offers which space, omotion management syst Suppor pr Establish ac establish clearacc Height iority onproduct safety. s or technical features. Our brandpromotechnicalfeatures.Our or s underscoring both the aesthetic qualityunderscoring aesthetic the both t suppliers inestablishinginformationsecurity orporate culture thatplaces theforemost em. ountability. ------of Essence The Art

- - 43 2016-2017 LG Electronics Sustainability Report 44 120 over CES 2017 미국 471 Materiality Report 개 Awards “true-cl gallery. art an in is These preciated artwork as gr a offers that brand specialized refined, rious, “luxu a of image the gained SIGNATUREhas LG brand, caring” and trustworthy “friendly, a of image the have brands LG existing While premium the image of the brand in major markets. establish and SIGNATURE LG of profile rint forLG Advertisement SIGNATURE TV 2 - 1 - to opportunity an offer to France and many Ger U.K., the to introduced also was Gallery” SIGNATURE“LG The malls. shopping high-end at roadshow brand a hosting and cities major “ the took also We attention. international ed attract that event launching brand a hosted frontRockefellerin the ofandCenter Gallery” In the U.S., we created the “LG SIGNATURE Art to thepremium imageof thebrand. stores and engaged in VIP marketing programs at SIGNATURE pr LG for zone” “brand a ated cre also We message. brand unconventional but consistent a delivering Art,” into Reborn “Appliance, exhibition, photo online the and projects, marketing “art” the Jang, Joo Yoon model fashion the and Kang Jin Sue ballerina the featuring commercials TV with brand the of image premium the convey to class” “true brand promotion campaign in Korea strived for to k brand ultra-premium the introduced ics Electron LG 2016, of half first the in debut Korean SIGNATURE’ssuccessful LG Following Global Roll Out space where LG SIGNATURE products are ap SIGNATUREareLG products where space the art gallery” concept on the road, touring ninetouringroad, the concepton gallery” art ey markets such as the U.S. and Europe. The Europe. and U.S. the as such markets ey 2 1 emium offline channels such as department as such channels offline emium eat product design.” Br P look and feel of an art gallery to create a create to gallery art an of feel and look and Promotion Space &Event forLG SIGNATURE ass” efforts helped us raise the brand the raise us helped efforts ass” ------functionalit and aesthetics unparalleled deliver that ucts intuitiv including ChinaandtheMiddleEast. markets Asian major to brand ultra-premium ie pee f anig Te tog response strong The painting. of piece a like justwall, the against completelyflat mounted w the including thin 4mm just At response. tic succ instant an was Series “W” TV OLED NATURE SIG LG the 2017, CES the at unveiled First confidence inoursuperior technology. of vote a as show, the at showcased product best the to given is which 2017, CES Best” theprestigiousawardsof 120 “Best including overreceivedweplayers, industry 3,600 than more by participated event this In world. in the kind its of show trade largest the 2017, Better a ElectronicsLife”Consumer the at (CES) Show for “Innovation theme, the under products market-leading of lineup extensive Januar In technologies. new and products ting-edge cut with trends MWCindustry setting ISE, the the and IFA, the CES, the as such shows trade international prominent in participates regularly Electronics LG global industry, the electronics in leaders market the of one As 120 A LG Electronics Receives Over Global Trade Shows Recognitions at all mount, the “W” series TV models can be can models TV series “W” the mount, all s, eevn imdae n enthusias and immediate receiving ess, 21, G lcrnc socsd an showcased Electronics LG 2017, y wards at theCES2017 l eprec hm apine prod appliance home experience ely y. In 2017, we plan to launch the launch to plan we 2017, In y.

LG SIGNATURE Brand Experience Event - - - - like anartwork. perfection andadesign closetoquality a OLED withapicture the truepotential of LG Electronics showed by Advertising Age. by Advertising Guide Airport The SlashGear. and Verge The graph, TeleWired, including outlets media different six by product best the named and butler, a over the home WiFi, the Hub Robot serves like home appliances, lightings and security system succ a made also products robot Our viewed.com. Expert R and Techlicious TechRadar, cluding in outlets media different eight by product best the selected was OS Web the featuring InstaView R Smart LG the instance, For ucts. prod appliance home core for awards major AtLG2017, CES the Electronics receivedalso to aperfectionanddesignlike anartwork.” close quality picture a with OLED of potential true the showed Electronics “LG comment, a “Editor’swithChoice” its TV OLED the named reviews, electronics in Todayspecializing USA of affiliate an is which Reviewed.com,awards. 30 than TechRadar,more and earning Money CNET,CNN Journal, Street Wall the including outlets, media major other by honored also was Series “W” TV OLED SIGNATURELG The thatrivalsquality real life. that the W series offers the sound and picture there,”out televisionpraised any and than art models TV with rooms living our changing is tronics Elec “LGcomment, a with news the nounced an- show the for partner media online ficial show, Product and the Best TV Award. The of the at products the of best the awardedto is which 2017, CES Best the of Best Engadget: being minated with the LG SIGNATURE OLED TV “W” cul- experts industry and outlets media from ves n nmd Eio’ Coc” y Re by Choice” “Editor’s named and eviews Space Magic Knock-on the with efrigerator essful debut at the CES 2017. Controlling honored with two different awards from Robot was selected as the best product that look more like a work of modern of work a like more look that ------INTR Gley fes frthn brand first-hand a offers Gallery SIGNATURE LG the experience, one-of-a-kind a delivers productthat art an developedas and Planned o essence true and technology core the preted reinter creatively who Bruges, Jason signer de interactive British the by works the were gallery the at Essence.”Featured of Art “The embodies NATURE Gallery, a brand promotion space that L nology show, the IFA held in September 2016, tech and electronics Europe’slargest the At Two iFDesign Awards at theIFA2016 LG SIGNATURE Receives Gallery the Honor. a first for a brand, and not a product, to receive is which techniques, exhibition and innovation the LG brand in recognition for our technology to Award Winner” Pick “Super its bestowed show,the for outlet media official the TWICE, rated at2000lumens. projector HD full a with TV smart a combines ProBeam,whichthe and hours, battery longer with Laptop Gram LG the Atmos, Dolby with BarSound Resolution High SJ9 the engine, jet Mo Inverter Smart performance high cro-sized, larger), mi or the featuring Vacuum Stick CordZero the capacity 15kg with 2009 after models machine washing drum other with bination which can be used as a second washer in com Mini-Washer,TROMM the include: 2017 CES the at honoredproducts ElectronicsLG Other G Electronics made a splash with the LG SIG f LG SIGNATURE products pieces. into art o, hc sis 6 ie fse ta the than faster times 16 spins which tor, wsig ahn mdl produced models machine (washing the design philosophy of the brand the of philosophy design the ------int awards,communicationanddesign in national inter major the of one 2017, Award iF Design the received also Gallery SIGNATURE LG The events. launching worldwide brand’s the of part as cities major to introduced was and experience to customers with discerning taste, gories. cate award main seven the of two winning ro acietr fr xelne n design, in excellence for architecture erior G SIGNATURE Gallery 2 - 1 - 2 1 IF L A 2016 LG SIGNATURE Gallery 45 - - 2016-2017 LG Electronics Sustainability Report 46 customer needs down to minor inconvenienc minor to down needs customer and (VOC)” Customers of “Voice the review fully care- to system a place in has Electronics LG Delights Customers Customer-centric Servicethat of customers.hearts impression thatwinsthe creatingheart, alasting ers’ bestinterests at needs andputscustom- identifies withcustomer We strive that forservice to enhanceefforts ourcustomer service. our of part as issues address and insight gain continue to use customer feedback surveys to will Electronics LG survey. Index) Satisfaction competitor(Customerglobal CSI our tothe in compared points 100.3 of rating a received Electronics LG result, a As satisfaction service. our with customer measure to surveys c pair capabilities and techniques. In addition, we to 4.8 percent (2016, Global) by enhancing re customers the most, from 8.0 percent (2012) frustrates which requests, service repeat of locations. We were also able to reduce the rate days (2016) from 3.7 days (2012) in overseas 3.1 to request service a complete to required time average the reducing service, expedient through inconveniences customer minimizing world. the around locations service rectly-managed di of network a through service high-quality delivers Electronics improve LG to experience, customer efforts ongoing our of part As Stays True totheBasics Increasing Satisfaction withService that communities around theworld. impact positively that initiatives contribution l a imparts that service customer-centric liver this goal, LG Electronics not only strives to de achieve to order In fundamentals. truecore our to stays that service friendly fast, and through precise customers our to very value the best deliver and satisfaction customer maximize to service customer in goal our is It asting impression, but also engages in social in engages also but impression, asting nut wd rne f utmr feedback customer of range wide a onduct through CustomerService Customer Engagement noprts h fnig i addressing in findings the incorporates e lcd priua epai on emphasis particular a placed We Materiality Report - - - - Electr LG result, a As improvements. for efforts ing ongo makes and impression lasting a that leaves service customer-centric on emphasis strong a places particular, in Korea’s division, service Electronics LG customers. on value foremost the places that culture corporate a promoting processes, business our enhancing into insight customerincorporate also We es. world engage in social contribution initiatives contribution social in engage world the around divisions service Electronics’ LG Our CustomerService Division Social Contribution Initiatives by and detailedself-diagnosis content. inquir out the entire process—fromservice customer an easy and intuitive user experience through with customers provide to implemented was upgrade customer-centric This convenience. our on editions) national (all page support tomer cus the overhauled recently has Electronics t dustry, Trade and Energy. As part of our efforts In of Ministry sponsoredthe and by sociation releasedKoreathe by Brand As Management K-CSBI (Korea Customer Surprise the Brand Index) in service after-sales appliance home in y consecutive five for Certification (CCM) ment Manage Centered Trade Customer Fair Commission’s Korea the receive to us enabled service customer-centric to commitment Our Award. Quality National Korean 42nd the at in mendation for Excellence in Service Innovation o achieve excellence in customer service, LG service, customer in excellence achieve o ears and rank first for two consecutive yearsconsecutive two for firstrank and ears verage Time (Unit: days, %) Repeat ServiceRequests Complete Service&Rate of Average TimeRequired to h Ntoa Qaiy noain category Innovation Quality National the 1 est (Gcm t ices customer increase to (LG.com) website 2012 ies to service requests—and more variedmore requests—and service to ies nc rcie te rsdnil Com Presidential the received onics 3.7 Service (Overseas) R A equired to Complete 2016 3.1

e of Repeat 2 2012 8.0 (Global) Service Requests Rat 2016 4.8 ------r at tours service operating areas, ter-stricken whose w productsfor offersservice repairfreeand eas ar low-income in festival service annual an Panama’sElectronicsLGhosts division service Panama_ “Service Fest” Electronics Korea. “Master Repair Engineers” dispatched from LG or subsidiary service Representative’s Region by led are which basis, regular a on training cial spe offers school the courses, training nical tech basic to addition In Ethiopians. young in College TVET Hope es LG-KOICA the (KOICA) tablished Agency Cooperation national Inter Korea the and Electronics LG 2014, In LG-KOICA College” HopeTVET Ethiopia_ “Technical Training at ronment. envi clean a maintain facilities the help and appliances on checks-ups preventative offer to nationwide facilities welfare visit regularly also engineers service Our the program. Heart” “Extending the under facilities at welfare used products our on service repair free offers division service Korea’s Electronics LG Korea_ “Extending theHeart” visions: di service regional our by initiatives local at look close a is Here instructors. as programs such expertise, technical and attitude service tric customer-cen their of use good make that emote locations and volunteering for trainingvolunteeringfor and emotelocations tipa o rvd vctoa tann to training vocational provide to Ethiopia instructors from the Middle East & Africa & East Middle the from instructors 2 - eceived thePresidential Commendation 1 - 2 1 s feig re ear evc i disas in service repair free offering as T for Ex R College (Ethiopia) echnical Training atLG-KOICA HopeTVET arranty period have expired. cellence inService Innovation (Korea)

------a crisis orthesameincidentfrom recurring. also prevent a PL incident from escalating into efforts not only help us avoid PL incidents, but These incident. PL a of event unfortunate the in response effective and timely and risks PL of detection early ensuring risks, (PL) liability our nent level. We are also continuously enhancing compo- a on as well as conditions use sumer con real in safety their test to batteries as corecomponentssuchon conduct extratests safety,weproduct enhance further to efforts our of part As process. product our of stage first very the from quality and safety to ensure models and products new on quality inspection product our strengthened have We System Enhancing theProductSafetyAssurance stages of ourproduct process. emphasis on principles and fundamentals in all foremost the places that culture corporate a promote and Guidelines,” Assurance Quality “Employ as such activities assurance quality for dards stan- developed we customers, our to ucts prod quality highest and safest the deliverto mark design, product targets, sales as such ations oper business our of aspect other any over Product priority highest the customers. particular,takes in safety, our of trust complete the earn to way best market—the the reach ensure the quality of our products before they c the as quality product defined wequality, uct prod towards commitment strongCEO’s our with Tool),”keting visionthis on up following is and Mar Best the is Quality (Product Consumers and Customers by Quality Best World’s the as Perceived Electronics, for “LG quality, vision product clear a developed Electronics LG Our VisionforProductQuality neers generators. asportable using plied power to areas suffering from black-outs sup and facility laundry free a operated also electronics products for damaged by the flood. LG Electronics service repair free provided years,and100 than more in rainfalls heaviest c service a up set we recently, Most areas. en disaster-strick in camp service repair free a operatesIndia’sElectronicsLGdivision service Flood-affected Regions India_ “Service Camp” in r vle n u bsns mngmn and management business our in value ore amp at Chennai, a region devastated by the by devastated region a Chennai, at amp Securing ProductQuality&Safety oioig n mngmn o product of management and monitoring etability, and costs. of As our part efforts a full range of initiatives. Encouraged by Encouraged initiatives. of range full a the motorbikes used by our repair engi repair our by motorbikesused the ee Creed on Product Quality” and “Ten ------CFEI theprograms as certification such creditedby n hs pout oehaig n igniting, and overheating products these in condensate)removing for motors used splash the to due initiated was recall voluntary The ica. 2010 and May 2014 and sold Amer in North July between manufactured units) (500,000 conditioners air portable of recall voluntary a conducted Electronics LG 2016, December In Global Initiatives toPrevent PLRisks CRE Specialist, (PL) Liability Product as such courses expert-track offers product in qualit expertise and capability ployee em our enhancing on focus primary a With program. the completing individuals 2,865 of 129 provided we 2016, prod In safety. and in quality uct drive strong and capabilities core with professionals train to Korea in Program College Quality the operates Electronics LG Strong Capabilities&Initiative Cultivating QualitySpecialistswith dacd rdc ad aey aaiiis ac capabilities safety and product advanced ofdevelopment the in employees our support and safety trainingand safety programs. productqualitylocaloperate and develop also possibility of an electrical component (for component electrical an of possibility ➌ esos f ru tann, ih total a with training, group of sessions y and safety, the Quality College Program , CRE and CQE. Our overseas subsidiaries focus Impact TestonBatteries Expected Result Test Method Purpose ➊ n CQE and The impactdoesnot cause afire (sparks)orexplosion. drop a9.1kilogram weight from theheightof 61centimeters. a16mmdiameterPlace barontop of afullycharged and battery fire orexplode. Determine ifanexternal impactcausesto catch thebattery on ➋ to to - - - - ensur to order in agency the with discussed dures customers. r uct Safety Commission (CPSC) and voluntarily Prod Consumer U.S. the to case this report percent), LG Electronics decided to proactively 0.00079 or units, 500,000 of out (four low these ofprobability the and America North dardsin stan safety product satisfied fully products posing afire andburnhazard. Althoughthese Explosion Investigator FireCertified & CFEI Engineer Quality Certified CQE Certified Reliability EngineerCertified CRE ecall these products pursuant to the proce the to pursuant products these ecall 3 2 1 e the safety and satisfaction of all of our rdcs asn frs a extremely was fires causing products 47 - - - 2016-2017 LG Electronics Sustainability Report 48 easier t features accessibility products’ our on mation cate our accessibility policy and to make infor As par ucts andservices. prod- of range broad a to application the ing appliances with a longer-term goal of expand home and PCs, monitors, TVs, smart phones, consecutive year attheCES2017. in the Accessible Tech category for the second Electronics received the CES Innovation Award the on button a of press the with want they vice ser and content the access directly and TVs Smart their on size font the control easily to the of development the to led efforts These zen. citi corporate a as responsibility our fulfilling Media zations and the National Center for Accessible organi disability U.S. invited also We trends. on current ourselves keep and field the in perts ex to out reach to etc.) Summit, M-Enabling the Convention, HLAA the Conference, CSUN on tively in internationalparticipated conferences ac we 2016 improvein features,accessibility developandto efforts ongoing our of part As 2.0 WCAG the mented imple have we addition, In disabilities. with customersand organizations disability of help Eur and U.S. the Korea, from stakeholders lated accessibility-re with collaboration expanding are we development, service and product into accessibility greater requiring customers of accessibility develop to this el task force team (TFT) dedicated to achieving products. In 2012, we created a corporate-lev our by offered conveniences and benefits full that ensure to hard working are We advantaged. dis socially the particularly customers, all for c is Electronics LG citizen, corporate global ble responsi- and maker electronics leading a As LG Electronics’ Accessibility Policy inc and expectations user collect to CSR on tion h Acsiiiy eto o or corporate our website (global and U.S. editions) to on communi section Accessibility the to our corporate website, while having in place specifications AA Level standard) accessibility ommitted to making our products accessibleproducts our making to ommitted Disabilities Senior Citizens&Customers with Enhancing Accessibility for orporate the results into upcoming models,upcoming into resultsorporate the accessibility for people with disabilities (the p, n cnutn ue tss ih the with tests user conducting and ope, h lts acsiiiy ehoois and technologies accessibility latest the remote. Thanks mainly to these efforts, LG “Quick Apps” function, which allows usersallows which function, Apps” “Quick ennfl ol n luce a project a launched and goal meaningful l gop o or utmr ejy the enjoy customers our of groups all t of our efforts to incorporatet of ourefforts thevoice (NCAM) o access. Materiality Report ➌ to our Stakeholder Consulta- ➊ ➋ etrs o mobile for features itrainl web (international ------people withdisabilities projects onaccessibility for zation dedicated to research A U.S. basedresearch organi- Accessible Media) (National Center for NCAM with disabilities. for senior citizens and people ofall types users, primarily content more accessible for Wide Web, formakingweb organization fortheWorld international standard (W3C),theConsortium the World WideWeb Guidelines publishedby WCAG 2.0 levels. regardless of theirtechnical with andwithoutdisabilities, accessible forboth users and informationisequally to ensure thatallfeatures and peoplewithdisabilities, ple, suchasseniorcitizens socially disadvantaged peo- technology) forthe latest (primarily thosefeaturing orenvironmentsservices, design of products, devices, Accessibility refers to the Accessibility 3 2 1 Major Initiatives forEnhancingAccessibility accessibility technologies forautomotive applications Mellon University specializinginHCI (Human-Computer Interaction) androbotics research to develop 5) Human-Computer InteractionInstituteandRobotics Institute:Research institutes atCarnegie Pittsburg dedicated to improving andfunctionof themobility peoplewithdisabilities 4) HERL(HumanEngineeringResearch Laboratories): Aresearch institute attheUniversity of interactions andhostsaQoLT contest formobileaccessibility apps 3) HCI(Human-Computer Interaction):Anacademic associationinKorea thatstudieshuman-computer Korea dedicated to improving accessibility forpersons withdisabilities. 2) QoLT (QualityofLifeTechnology)Center: Agovernment-funded research institute in attended policymakers, bymobiletechnology experts, andrespected scholars from around theworld ing accessibility to mobiletechnologies forseniorcitizens andpersons withdisabilities.Theconference is Commission (FCC)andtheUnited NationsInternational Telecommunication Union(ITU)aimingto improv- 1) M-EnablingSummit:Aninternational conference jointlyhosted bytheU.S. Federal Communications 2014 2013 2012 2017 2016 2015 · · eceived theCES2017Innovation Award (Accessible Tech · · eceived theCES2016Innovation Award (Accessible Tech · TVsed accessibility test onsmart withtheNCAM · · · · · ed theQoLT contest hosted byHCI · · · ed accessibility to theglobaleditionof the · · · · · · · · · sity (August2013) sity NCAM (U.S.) (U.S.) (2015-2016) for People withvisualimpairments(September 2014) etc. service, disabilities (2014-Present): braille product manuals,customer Korea (2014-Present) Sponsor M-Enabling Summit Select models(Korea TV andsmart smartphone andtheU.S.) c Launched apr Korea Electronics Association(KEA)(2013-Present) Joined theHomeApplianc or Launched annualstak and o de Launched ataskfor Established ade c Enhanc T Cat R cust P Cat R Conduct hearing impaired D Conduct Sponsor The USContactCent Established asyst America) user feedbackonhomeappliance accessibility (Korea andNorth organizationswith disability andusers with disabilitiesto collect home appliance products (September 2014-Present): engage Launched ataskfor TVsmobile handsets,smart andother mediaproducts 2014): HERL K Signed anMOUwiththeQoL (Model Name:M2352-PN) Intr Signed anMOUwiththeK versity echnologies (65B7/65UJ7500) ollect feedbackfrom users withdisabilities(2013-Present): orporate website (2012-Present) orea-US technical exchange onQoLT accessibility (January roduced anddistributed theG4braille manualfor onated forthevisionand 12,000unitsof theMiniTV ganizations based in North Americaganizations basedinNorth (2013-Present) velop accessibility features TVs formobilehandsets,smart oduced forthevisionandhearing theMiniTV impaired egory): TV 65-inch 4K OLED / LED TV w/Accessible 65-inch4KOLED/LEDTV TV egory): (65UH7700) 65-inch4KLEDTV egory): omers withvisual impairments(February 2016) ther mediaproducts ed asaproduct “Recommended bySprint CEO” atthe 5) ed therehabilitation atNowonWelfare facility Center ed accessibility test onall-in-onePCmodelswiththe 4) ogram forconducting usertests withand , University of Pittsburg /CarnegieMellonUni- velopment system foraccessibility features: em forproviding braille product manualsin ce dedicated to enhancingaccessibility: 1) ce dedicated to enhancingaccessibility of (June2013) er exclusive forcustomers service with eholder consultation withdisability e Accessibility Forum (HAAF)of the orea BlindUnion(July2013) T Center 2) atSeoulNationalUniver 3) (January 2014) (January

- Our Efforts towardsOur Efforts EnhancingAccessibility · · Motor Features · · Vision Features · · · · · · ouch Feedback Time” · Motor Features · · · · · · Vision Features ”Knock-on Sing- Scr r ic Optimum gestur by Intuitive v and Verbal det z acc “Magic fix keyboard input(repeat keys, HW c input op Hold del c menu thatgiv “T (T “T the Call inv High the “Touch r Control Font c v “Talkback” eorganization eorganizing ommon features ontent olume erbal oom ons ouch &HoldDelay) ouch Assistant”: A floating ouch Assistant”:Afloating

ed keys, slowkeys, etc.) ersion/share the een timeout ess erioration

power screen convenient termination

touch calibration size screen

onvenience features for and

feedback

feedback wheel

to Zoom”

Zoom”:

and

option

tions ay to activate and without control

control UI photo easy

” &“Knock”code

button screen for

speed

contrast/color offering changes

screen and es access to

zoom

content for

single-click

pitch,

control

supported and with with

quality

tapping pointing

reader control resizing

screen content

video in/out

intuitive

easy

for

and

65B7 V20 · · · · · · · · Cognition &Other Hearing Features

(for select limit “Touch (Guest op Limit (Lef Sound Audio Turn Flash LED Caption · · · Cognition &Other · · Hearing Features

single t Quick pointing Remote F Shade Caption back “Clear tions o ont

t/Right)

autistic alert

off desired touch

access

alert ed

type

ground

Balance Control size mode)

and

support Apps: all click Voice” control area

support control

speed

control sounds (Stereo/Mono)

control

features children, to service

noise instant

Areas” menu for

screen for remote

for

in minimum

menu and

etc.) the

cursor

and to

content

options, direct

size

access by and

· · · · · · · · Motor Features · · · · · Vision Features · · Motor Features Vision Features t back

Screen t aler “Hands Password Screen “Knock-on” Screen c menu “Touch (T “Touch butt Call Font inv Screen Minimum c v “Talk “Knock” Automatic ext ext ommon ontent erbal ouch ersion,

messages) on termination

messages)

size for Back”

that

feedback

& Assistant”: Feedback brightness reader time color

screen Free”

and

code

incoming

features

Hold

control screen customized reader

gives screen

screen

out changes adjustment,

mode

“Knock”

(Verbal Delay) content

with

access brightness Time”

activation

calls control a

reader

screen (Spoken

floating

the

calibration feed- code

and and to G PADX8.0 Urbane LTE LG Watch

color power for

· · Cognition &Other · · · · · · Hearing Features

“Touch (Guest op Limit Sound Sound Volume Flash LED Caption · Cognition &Other · · Hearing Features

Bo Middle: (T Three Vibration Call tions op:

alert ttom:

access

alert

quality

balance type

Control

mode)

Quick

control and support physical

App

alert (Stereo/Mono)

features to

setting, optimization

back)

list

(Left/Right) Areas” menu (turn

keys

off

all

sounds) 49 2016-2017 LG Electronics Sustainability Report 50 in theprocess of handlingtheirpersonal data. infringement upon the rights of our customers cust protectionstrengthenour forfurther to posal technical and management measure in our dis risks. Furthermore, we are implementing every t body executive-level new the around zations organi privacy data internal reorganized and Electr LGchange, response In regulatory tion. tothis and role in the protection of personal informa responsibilitycorporate in increase an signals requirement new This information. personal processof collecting, providingand using their subjects sponsibility is to ensure that the rights of data P Data a appoint to companies private cluding in processors data and controllers data both mandates (GDPR) ProtectionRegulation Data General EU the 2018, protectionMay effective directive data existing the replace to Set Protection (GDPR) Regulation DPO inResponse to theEUGeneral Data formation assets. corporatein- and customers our of formation in personal the protect better to and privacy r fective response to newly emerging regulatory ganization, as part of our efforts to ensure ef executive-levelor an ProtectionFD, Data the LGDecemberElectronics2016, In established Protection Regulations Response toChangesinData isks and security trends associated with data with associated trends security and isks o ensureo systematicresponse privacytodata oeto Ofcr DO woe rmr re primary whose (DPO) Officer rotection log anddataencryption. ment, maintenance of access trol, access privilege manage- measures suchas access con- physical andmanagement plement all necessary technical, personal information,we im- In transferring andstoring 03 - Data Security tion ofPersonal Information Information Security&Protec- & PRIVACY ON DATA SECURITY BASIC PRINCIPLES mr’ esnl nomto ad prevent and information personal omers’ Measures toEnsure onics established the Data Protection FD Materiality Report r big rtce truhu the throughout protected being are and obtain theirconsent. w information to athird party, int pur of personal informationfor We strictly prohibit theuse 04 - uses. extra informationforfuture We absolutely avoid collecting needed inproviding ourservice. of informationabsolutely We collect a minimumamount 01 - Amount ofInformation Collection Purposes e informcustomers inadvance ended ones.Inproviding the poses other thanthe

Use ofInformation within Collection ofMinimum ------

on Based regulations. and laws privacy and tion establish and conditions external in changes manage ly proactive to responses real-time implements operations Electronics LG boundaries, international whose span corporation global a As Data Protection Regulations Monitoring &Analysisof Changesin e salse “rvc b Dsg” s our as Design” by “Privacy established we with data protection and privacy. Furthermore, IoTproductspotential risksagainst associated to ensuring the security of all of our smart and dedicated organization independent an place in has Electronics LG threats, security rising protectordercustomersbetter fromIn toour risks such as privacy infringement and hacking. increasing individuals, of patterns behavioral the in increase dramatic a caused however, ucts, prod and technologies “smart” sector.These in the thing” big “next the as emerging are ing learn- machine and IoT the as such nologies rise gave to smart products, and fast-evolving tech technology digital in advances Recent Privacy Protection(Privacyby Design) Initiatives forPersonal Data & protection andprivacy. data in capabilities their enhance to countries these in located subsidiaries overseas the to support corporate-level provide and regions also we 2017, In subsidiaries. overseas our at ing aris risks to responsecorporate-level ensure to system reporting the streamlined and FD and processprivacy and protection data our nized reorga have we borders, national transcend that implications far-reaching carry changes

h rcgiin ht eet regulatory recent that recognition the olcin f esnl aa nldn the including data personal of collection organizations around the Data ProtectionData the around organizations lcrnc ad nomto technology information and electronics ln o dniy ihrs lctos and locations high-risk identify to plan unrecoverable. is completely destroyed and ensure thattheinformation tion period withoutdelay and theretenpurposes andlapsed - itsinformation thatserved We destroy thepersonal 05 - their consent. collected informationandobtain the retention period forthe collecting theinformation,and tion we collect, thepurpose of advance of thetype informa- always informourcustomers in In collecting information,we 02 - Collected Information be Informed opine ih oa dt protec data local with compliance Safe Disposalof Protection ofRightto

------o tion and privacy compliance” assessment on all “dataprotecthe requiresElectronics LG tion, o stage each at requirements privacy and tion protec data with compliance technical and legal of review a out carry and development and planning product in principle governing the through identified issues security the dressed and products 18 on assessments security ducted con ISAC LGE the 2016, In attacks. hacking mock employing by services and IoTproducts to dedicatedidentif organization security mation infor internal our is ISAC) (LGE Center ysis Anal Security Information ElectronicsLG The Internal andExternal Systems Strengthening Security forIoT Products & (Security by Design) Ensuring Data SecurityforOurProducts are infullcompliance with ourprivacy policy. that products the only deliversElectronics LG process, this Through products. B2E and B2B B2C, exceptionincluding no with services and products our of all to standard this applying process, development and planning product apps icy compliance of all our products, systems and As part of our efforts to ensure the privacy pol- Pl Data Protection attheProduct principles forpersonal dataprotection. our with compliance strict in process review the out carries and process the of step every l international and local with complies lously scrupu- Electronics LG information, such ing collecting,In providing,and using destroyand infringing upontheprivacy of anindividual. for potential carries that information any to data and other information, but also to extend those fromidentified be can who individual an to ed information personalsimple include only not to data sonal per of definition comprehensive and broad a adopts Electronics LG policy, privacy our In P Our Principles onPersonal Data ing “Privacy byDesign.” achiev in keybecomeenabler toa employees our of all inspire and process our strengthen tocontinue protected. Electronicswill LGfully collected by our systems, products and apps is data the that ensuring for measure foremost w, euain ad nuty rcie at practices industry and regulations aws, or rdcs rm h ery tg i the in stage early the from products our f the as development, and planning product f rotection &Privacy anning andDevelopment Stage process. In 2017, we expanded the scope the expanded we 2017, In process. services services from 13 products groups and ad that handle customers’ personal informa ying security vulnerabilities in our majorvulnerabilitiessecurityour ying in aa o fo a obnto o those of combination a from or data, (name and phone number) relat number) phone and (name

------y xeinl dtcig n bokn a in an blocking and detecting expediently by customers our of data personal and the privacy safeguards 3.0 WebOS Electronics’ LG the Featuring Korea. in certification security informa tion an acquiring model TV Smart a of agency in Korea. This marked the first instance l the(TTA), Technology Association munication Telecom- the by awarded certification ified” Ver “TTA the acquired 3.0 TV WebOS platform Smart Electronics’ LG 2016, January In Information Security forExcellence Certified LG TV Smart in rity of ourproducts. corporate-wide initiative to enhance the secu pr this apply to plan we 2017, In stage. opment devel the in early from vulnerabilities tential po eliminating and detecting and features, security implementing and designing lifecycle, development software the of stage each at c by software secure of development the sures standar in engaged currently is and process, opment by “Security the incorporates which (SDL), cycle de ElectronicsLG software, product our of curity se- the strengthen to efforts our of part As Process Standardization Product Software Security & mation. infor personal and data sensitive store that assessments ing products, and initiated regular security risk exist include to assessment security our of 2 - 1 - ret T euiy ehooy certification technology security IT argest ryn ot e scrt asrne activities assurance security key out arrying 2 1 ocess to all of our products as part of our of part as products our of all to ocess eoe te GScr Dvlpet Life Development LG-Secure the veloped Global InformationSecur Information Secur Smar ein cnet no u sfwr devel software our into concept Design” aet nomto scrt technology, security information latest t TV Certified forExcellence Certified t TV in iig h poes Te GSL en LG–SDL The process. the dizing on internal and external systems ity ity Conferenceity

------rity risks. independently to security information protectionand data al sidiaries have developed capabilities in person - sub our initiatives, these Through protected. loc business our making on knowhow fessional pro their exchange and practices best share Dubai U.S.,China, in together came subsidiaries seas over 67 from managers security information 2016, In board. the across practices security mation secur sidiaries that showed excellence in information K in sites business our from security formation in and protection data best personal in present practices we conference, annual the In subsidiaries.overseas from managers security the professional capabilities of our information part of our corporate-level initiative to enhance ConferenceisSecurity Information Global The Global InformationSecurity Conference suppliers. and subsidiaries overseas our from managers security information to support and training security across the board, LG Electronics offers information and protection data personal for system management our upgrade to order In Information SecurityCapabilities Ensuring MutualGrowththrough development. technologyinformation oflevel highest the of fast-evolving IT environment and keep abreast the to respond effectively will Electronics LG secure experienceTV Smart to our customers, par As sources. unidentified from apps by trusion orea and overseas and honor overseas sub overseas honor and overseas and orea tos n ifrain ses eue and secure assets information and ations t of our efforts to deliver a convenientbuta deliver to efforts our of t t mngmn t ehne u infor our enhance to management ity LG-SDL: ActivitiesbyProcess and Vietnam for regional conferences to vr 6 esnl aa rtcin and protection data personal 96 over products mation security of final infor Review andcertify security issues Address post-release security training Conduct information SW Approval &Distribution Response Preparation identify and identify manage local secu ------Standar (British Certification Management formation Cer (PIMS) System Management Information al ternational certifications including the Person in and local with together system, agement data protection and information security man personalcompletesour that piece final the as infections. The ISO 27001 Certification serves malware and attacks hacking breach, data as such threats security external and internal to management system that effectively responds that LG Electronics has in place an information tr ty policy, physical security and security incident 114 items in 14 on areas including information securi assessment careful a after system an effective information security management place in have that businesses awardedto and security information in standard international 27001 ISO The system. management security mation infor strong business a completing Korea, in our locations of ISO all on the Certification acquired 27001 Electronics LG 2016, In ISO 27001Certification annual sessions. tion security, and Q&A and information sharing lines on personal data protection and informa guide supplier Act, Protection Secret Trade and Prevention Competition Unfair the cases, espionage industrial on lectures for together came suppliers 215 from managers security information and CEOs 2016, In suppliers. our CEOs and information security managers from for workshop security information annual an hosts Electronics LG security, information in As part of our efforts to ensure mutual growth Suppliers Information Security Workshop for cig Te etfcto i a tog proof strong a is certification The acking. iiain n te S 01 Proa In Personal 10012 BS the and tification d). etfcto i te ot recognized most the is Certification Conduct fuzzandintrusiontesting Review security code, assess carry outstaticanalysisoncarry open source vulnerabilities, requirements the andplan rity level, analyze security Define theproduct secu- test security functions, Review security design information security Requirements Implementation LG-SDL process Design Testing 51 ------Report Materiality 2016-2017 LG Electronics Sustainability Report 52 e-Waste Collected & Disposed GHG EmissionsReduction 362,000 >Production Level 42.8 >Product UseLevel Key Performance in2016 Waste Recycling Rate (Global) 78 227,323 Materiality Report % million tons CO tons CO tons 2 e With theEnvironment 2 e BSI AsiaPacific Managing Director DAVID HORLOCK resilience. LG Electronic’s Jeong-do managementto buildgreater organization supply chainandbelieve thatthiswillprovide asolidfoundation for the progress thatLG Electronics makes inmanagingEESHrisk inits supplier performance andaccountability. We lookforward to seeing continues to embrace thesechallengesbyadopting programs to build changing withnewpriorities andexpectations. LG Electronics behaviour insupplychainsandmanagingCSRissues isconstantly shareholder expectations, therise of transparency andorganizational best practice principals andguidelines.Dueto changingconsumer and by integrating theirEESHmanagementsystems andadopting global to key challenges.LG sustainability Electronics are leadingtheway We are proud thatLG Electronics withBSIto ispartnering respond - ManagingWater Use - NGOs, Governments, Communities Our Focus WHAT AREIMPORTANTISSUES? Emissions Reduction Pollution through Waste/ P reventing Environmental odtoes ad oios. G Electronicstar and environmental performance manages LG monitors). and conditioners, phones, coremobile(TVs,products our for features er developingapproachgreentosystematic our performance and establish targets) to support environmental quantify to indices developed W partnerships. green strengthening and cation, communi green promoting features, greener e at aimed tasks critical out carry and sources; thr account into takes that products and ogies technol developing for framework strategic disposal/ and r distribution production, ing, (sourc cycle life their throughout products our of impact environmental the reduce and Electr LG regulations, tightening and issues mental environgrowingconcernfor - a to response In Strategic Directions ccig. o hs n, e ae n lc a place in have we end, this To ecycling). xpanding the development of products with products of development the xpanding Products withGreenerFeatures as ipeet h Eo ne (internally Index Eco the implement also e e oe atr: ua, nry n re and energy human, factors: core ee nc srvs o ae rdcs greener products make to strives onics ergrtr, ahn mcie, air machines, washing refrigerators, - - educing GHGEmissions/ - Resource Recycling e- (Ec D Responding to Climate Change R eveloping High-efficiency Waste Collectionand o-friendly) Products

------3) Upgrade theGlobalEESHManagementSystem. 2) 1) Future Direction ress andperformance of related initiatives onanongoingbasis. based onthe“Green 2020”group-level initiative andreviews theprog products withtheEco Index, whileenhancingourEESHmanagement Electronics assessesandmanagestheenvironmental impactof our to develop of ourefforts As part products withgreener features, LG Our Evaluation features andstrengthen our“green” businessportfolio. make ourproduction locations greener, develop products withgreener “Gr er products. Inlinewithourgroup-level green managementstrategy impact of ourproducts throughout theirlifecycleandto develop green LG Electronics makes continued to minimize efforts theenvironmental Our Approach HOW WEMANAGE IT? maintain its effectiveness. LG Electronics will Electronics LG effectiveness. its maintain in changesincorporate to index the revise ously continu - and manage carefully also We ucts. prod eco-friendly of range the expanding to the work for products with greener features” since “strategicthe by frame set targets annual all L date, To standards. environmental higher isfy sat which products, Star 3 Green of centage mance with the objective of expanding the per perfor environmental their on based Star) 3 Green and Star, 2 Green Star, 1 (Green tiers and products, our all of performance vironmental en the assessing quantitatively for standard LG Electronics uses the Eco Index, our internal for ProductswithGreenerFeatures Performance &Target Management with greener features. productstowards efforts development our by inde the on based products our of each for gets G Electronics has consistently outperformed consistently has Electronics G r St for pr Continuously str the product development environment and environment development product the een 2020,” we are implementingabroad range of initiatives to eduction efforts acrosseduction efforts ourvalue chain. adoption of the Eco Index, and contributed t epn te oiie mat created impact positive the expand to x categorizes our product models into three ep upGHGemissionsandenergy management/ oducts withgreener features. engthen therequirements

------

- - 53 2016-2017 LG Electronics Sustainability Report 54 · Reduce standbypower educe power consumption · Efficiency Enhance Energy · ease theuseof · Increase Recyclability · Userecycled materials educe product volume · Consump Reduce Resource with Greener Features Strategy forProducts R disassembly D r Incr and weight R (Unit: %) 2016 Performance inProducts with Greener Features & Mid-to Long-Term Targets Innovation Resource Human Energy Category Rating Requirements forEco Index ecyclable materialsecyclable esign foreasy Materiality Report Green 3Star Green 2Star Green 1Star tion

- on r Complies withregulations on hazar Complies withregulations Satisfies energy standards Green 1Star->

ecycling

2 2016

dous materials E

G Y 35 69 100

PRODUCT greener features Leads themarket interms of efficient r Offers designfeatures for v Replaces hazardous substances energy efficiency Satisfies market standards on Green 2Star-> R Core AssessmentCriteria oluntarily andproactively

GREEN E

S 2018

R C 60

esource use E

2020 (Target)

adv Achieves competitive Green 3Star-> M U H

3 antage (highefficiency) · educe theuseof · Substances Replace Hazardous 80 R heavy metals R ous chemical substances · · Userenewable energy Reduce CO e product noise · · Envir Improve Home educe theuseof hazard- life cycle thr R living environment environmental impactsin Minimiz and vibration Minimiz educe CO oughout theproduct onment e negative 2 2

emissions Emissions

St the verified has France in agency sessment as non-profit prominent most the is which and hazardous content. sumption, useof resources, impacts, suchasenergy con- that create environmental cycle assessmentof factors through acomparative life from theprevious model its environmental impact has substantiallylowered is given to aproduct that LCIE’s Ecodesign certification France): of ElectricalIndustries The Central Laboratory des IndustriesElectriques, LCIE (Laboratoire Central work are and Korea, of Energy and Industry Certification awarded by the of Ministry Trade, Product Technology Green the acquired also LCIEfinally, (Germany), Mark Product Green TUV the and Trust (U.K.) Label Carbon Footprint Product the acquired System Caring Clothe Styler our of ecodesign the 2016, In Trust Product Footprint Carbon Label(Europe). the and (Korea), Certificate Neutral Label, FootprintCarbon the as such certifications ty integrity of thethe information through third-par ascertaining while report, sustainability and website corporate our through data the disclose and products our of footprint carbon cycle life the and impact warming global the assess also We basis. annual an on system) conditioning air residential/commercial and phone, monitor, mobile refrigerator, (TV, machine, washing categories product seven on assessment cycle life perform we which with corefor database product categories 2011,in the (LCI)Inventory Cycle Life the createdweLCA, on based process assessment product our establish firmly to efforts our of part As products. eco-friendly of development the in identif product’sa cycle, of life stages the all with ed to measur used technique a is LCA the tools, ment ser anceinternationalstandardswith 14040(ISO compli In products. our of cycle life the with associated impact environmental the manage and quantify accurately to (LCA) Assessment Cycle Life used has ElectronicLG 2002, Since Life CycleAssessment(LCA)forProducts the Ec with products our of performance ronmental envi the managing and carefullyassessing by greener features that address customer needs continue to develop and expand products with 1 yler as an official ‘Eco-Design’ product. We product. ‘Eco-Design’ official an as yler ies) for environmental performance assess o Index. the Low Carbon Certificate, the Carbon the Certificate, Carbon Low the y improvement, and it is used primarily used is it and improvement, y te niomna ipc associat impact environmental the e ➊ ------

Mobile Phone Air Conditioner R Air Conditioner Commercial Refrigerator Washing Machine Monitor TV Category (Unit: %) Product CarbonFootprint Assessment,Breakdown byLifeCyclePhase trioxide in 2012. PVC cables in our UHD and UHD our in cables PVC 2012. in trioxide phthalate and beryllium in 2011 and antimony by followed 2010, in products phone mobile our of all from BFRs and PVC remove to able As (BFRs). retardants flame brominated and chlo (PVC) ride polyvinyl as such ecosystem, the and belie but regulated currently not are that stances sub- of use the reduce or replace to ponents de continuously are we hu instance, For body. the man to hazardous are that substances other replacing proactively are we Moreover, diphenyl ether polybrominated and (PBB), biphenyls minated polybro- chromium, hexavalent cadmium, ry, mercu(lead, substancesregulated of use the including RoHS and REACH, strictly prohibiting regulations, environmental international with people ofhealth the awareresponsibilityfor ly our of As a global corporation, LG Electronics is keen- Substances ReplacementVoluntary ofHazardous into the development of eco-friendly resultsproducts. the incorporate and phase, planning phone, and TV home appliance products in the po the assess to tools LCA Simplified the oped devel Electronics LG data, accumulated and Taking advantage of our experience in the LCA products suchaslaptops, monitors andovens. “green”the expand to ing otherto technology esidential Product Stewardship veloping alternative technologies and com and technologies alternative veloping tential environmental impact of our mobile our of impact environmental tential rsl o or non efrs w were we efforts, ongoing our of result a ved to be hazardous to the human body human the to hazardous be to ved and the environment and fully complies

s (PBDE))inourproducts. Pre-Production 26.23 20.33 37.50 12.59 0.56 4.46 7.49 Production 0.01 0.02 0.37 0.19 0.29 0.03 0.05 - - - - - focus Transport 6.50 0.03 0.25 1.29 1.14 0.54 1.40 Hazardous Substances Performance inReplacing Product Use 66.83 95.14 78.22 77.88 57.06 90.95 84.94 Disposal 16.71 0.43 4.25 0.31 4.02 0.99 1.01 04 - 03 - 02 - 01 - response to the EU’sresponsethe to POPs(persistent organic preemptive our of part as materials, packing brominated of f type a mocyclododecane), (Hexabro HBCD replaced also we 2015, In many products aspossible. as to practice the expand quality,and of level c and products our in substances hazardous ly potential or hazardous replace to is efforts R&D in focus primary Our 2013. in products refrigerator our of all to lower skirt PVC-free a implementing while BFRs, and PVC of free PVC-free materials. We also introduced laptop productsOLED TV have been substituted with lame retardant, from all of our products and products our of all from retardant, lame moet wie anann te highest the maintaining while omponents · · · ted PVC-free LCD modulesfor · Monitor oduced PVC/BFR-free modelsin2013 · Laptop · Adopted mercury-free display panel · Adopted PVC-free cables OLED/UHD TV emoved PVC andBFRsfrom · Watch, Phone,Smart Smart G-pad Adop all models(2011) Adop pow thermal module,c adap Intr all models(2012) R all models(2011) R all models(2010) R for allmodels(2013) (except forFPCB,Bare PCB,battery, emoved antimonytrioxide from fromemoved andberyllium phthalate er cord) ter, keyboard, cable, touch pad, ted PVC- andBFR-free LCD modules able connector, and

55 - - 2016-2017 LG Electronics Sustainability Report 56 Green Technology Acquired Certification byLG Electronics Energy-saving smart TV designtechnology withOPCand intelligentEnergy-saving TV sensors smart Inverter linearcompressor forrefrigerators Clothes andclothes dryer managementsystem usingaheatingpump Six-Motion washing technology Parallel doubleevaporator cycleforrefrigerators Energy- andwater-saving Turbo Shot washing technology II(fordrumwashing machine) Eco-friendly compressor forwater purifiers High-efficiency gasheatingpumpwithengineoptimization technology Design technology forenergy efficientmulti-core application processors Gas stove production technology forreducing CO emissionswithceramic heatingplates Design technology fora high color rendering PLSlightingsystem Energy- andwater-saving Turbo Shot washing technology Technology forreducing standbyenergy consumption forlaptops energySmart savingformonitors through backlightadjustments Technology the Unit (Products soldin 517 STAR Products Number of ENERGY ed States) Materiality Report

pr our managing thoroughly are and infectants, deaths in Korea caused by toxic humidifier dis our products to prevent the issues such as the toin used substances biocidal the of protocolall disclose management chain supply our revised we 2016, In regulations. pollutants) gy issues. ener on employees trainingefficiency, and gy ener on awareness consumer raising models, product STAR-certified ENERGY of number greater a offering as such environment, the protecting in leadership continued for 2012 since year consecutive fifth the for Year the r been also has Electronics LG years. secutive Award, garnering thetop honorforthree con STAR Partner of the Year-Sustained Excellence been has Electronics LG 2016, In products. sumer o Department U.S. the and (EPA) Agency tion Protec Environmental U.S. the by tablished es- program certification a is STAR ENERGY ENERGY STAR internally. targets and goals demanding more set have and consumption power standby and energy ar tions such as ErP (Energy related Product), we regula energy international satisfy fully ucts prod our of all Although milestone. every hit to striving product, each for targets specific T gy efficient, LG Electronics has established the ener moreproducts our make to effort an In Enhancing EnergyEfficiency stances are not usedinourprocesses. cgie a te NRY TR ate of Partner STAR ENERGY the as ecognized cnlg Ra Mp TM ad instituted and (TRM) Map Road echnology Eeg t pooe nryefcet con energy-efficient promote to Energy f e not easing back on our efforts to reduce to efforts our on back easing not e oduction process to ensure that such sub such that ensure to process oduction recognized by the EPA with the ENERGY (Korea) ------Number of ENERGYSTAR Products enhancing toresources, of use the lighter,reducing ucts prod our making as such cycle, life their of stages all in produced emissions GHG reduce the discloses and footprint) (carbon products jor ma our of cycle producedlife throughoutthe measur bon life style among consumers, LG Electronics orderIn encourageto low-cara facilitate and Reduction ofGHGEmissions 184 data, while making a concerted efforts to efforts concerted a making while data, TV es the total amount of GHG emissions GHG of amount total the es 89

Monitor LG particular, In efficiency. energy 81 Refrigerator 55 Air Conditioner 46 Washing Machine Date Certified 31

2014-07-17 2014-08-26 2014-08-26 2014-08-26 2014-08-26 2014-08-26 2012-08-30 2014-11-20 2015-01-29 2015-10-14 2013-11-21 2013-11-21 2016-02-18 2016-03-10 Dryer 13 Dish Washer - - - 11 PC

Dehumidifier 3 2 2

Valid through Air Purifier 2017-07-16 2017-08-25 2017-08-25 2017-08-25 2017-08-25 2017-08-25 2017-08-29 2017-11-19 2018-01-28 2018-10-13 2018-11-20 2018-11-20 2019-02-17 2019-03-09

Set-top Box our in (1kg) percent 13 approximately of duction (c tons million 42.83 by use product with ciated asso emissions GHG of reduction a to uting and policy of GHGreduction technology on current level assumptions Projected GHGemissionsbased BAU (BusinessasUsual): disassembly of ease ensuring and product the of clability recy the increasingprovedstructure, product im an through respectively percent 24 and percent 8 by materials packing the of weight the and product the of volume the reducing while materials, improved with size same the compared to the previous model (27MU67) of possible. wherever weight and size factor form ducing re- while performance product and sembly, disas ease recyclability, increase to recyclers of product development andcollaborates with qualityand material of level highest the taining main- into efforts great puts Electronics LG Improving Materials &Structure Resource Reduction energy efficiency. broada with range of initiatives enhancingfor forward push to plans Electronics LG by 2020, target reduction the achieve to order In emissions reduce to target a with products, gy-efficient pared to BAU to pared use tion of GHG emissions associated with product reduc the to contribute to plans Electronics with highly energy-efficient features, contrib features, energy-efficient highly with productsintroducing into effort great put we productTo (cumulative). use 2016in end, this million tons of GHG emissions associated with approximatelyreducingcontribute400 to will Electronics LG target, the meeting By 2007. 1 ompared to the 2007 energy consumption).energy 2007 the toompared 2016 27-inch monitor model (27UD68P)model monitor 27-inch 2016 by developing and introducing highly ener rdc srcue rm h iiil phase initial the from structure product We were able to achieve a weight re y 0 ilo tn b 22, com 2020, by tons million 60 by . ➊ levels from the baseline year baseline the from levels ------tronic Equipment (WEEE) regulations and lo and regulations (WEEE) Equipment tronic take-back pursuantWaste to service ElectricalElec and e-waste provides Electronics LG e-Waste (Overseas) ManagementEfforts e-Waste Management groups. use o the in performance our manage tematically e and stitutetechnologies parts to continuously sub develop will we term, long the In 2015. intons 6,730 and 2014, in tons 7,885 2013, Electr LG products. our for 2016 in used being tics plas (PCR) recycled post-consumer of tons and TV,frigerator, smartphone, solution, quality air mat recycled efforts, these Through tests. liability re and careful stability componentsfollowing utilizes recycled plastics in some of its product Electronics LG resources, of use efficient the As part of our efforts to promote recycling and Use of Recycled Materials xpand our use of recycled plastics, and sys and plastics, recycled of use our xpand focus erials are used in our washing machine, re oio pout, ih ttl f 5,302 of total a with products, monitor f recycled ineachof plastics ourproduct onics used 5,617 tons of PCR plastics in Components Number of Package Weight Product Volume Product Weight Screen Size Model Name Improvement Case 2016 Materials andStructures

282 Approx. 1.41kg 0.071m Approx. 7.7kg 27 inch 27MU67 3

2015 > ------(Unit: ton) ConsumptionAnnual PCRPlastics 7,885 2014 244 Approx. 1.07kg 0.065m Approx. 6.7kg 27 inch 27UD68P 6,730 2015 3 5,302

2016

2016 > 57 2016-2017 LG Electronics Sustainability Report 58 by Philippines, the and Chile as such 2017, ter af regulations WEEE implement to planning countries in system take-back a establishing of process the in also are We program. the expanding continually is and 2016), of the end of (as countries 50 in regions 83 from LG Electronics offers tothe service customers Currently,world. the around requirements cal rdcs ad ae epne t icue all include to expanded later and products, implement initially were guidelines The materials. aging pack of recycling and reuse promotethe and w the reduce to guidelines Design Packaging er Green- its introducedElectronics LG 2012, In Green Packaging r (http://www.lg.com/global/website its on ties activi related and system take-back e-waste L e-waste.of disposal vironmentallyresponsible contributeen to to plan we efforts, these on implement toorder in organizations industry and mental govern with dialogue open an maintaining 3) SouthAmerica: Brazil, Colombia,andPeru 2) 1) Figures forsome European countries are estimates. (based ontheperformance from theprevious year orthedatafrom theneighboring countries). As such,thosefigures may beadjusted slightlyinthenext year’s report. As thereporting period fore-waste collection performance varies from country to country, figures forsomecountries presented inthisreport are estimates Japan U.S. Korea Europe (Unit: ton) e-Waste Take-back andRecycling Performance byCountry ecycling) forourstakeholders. Eetois lo fes nomto o its on information offers also Electronics G ih ad oue f u pout packages product our of volume and eight Austr aeul rveig oa rgltos and regulations local reviewing carefully alia: Materiality Report 2015 figur 2016 2015 2014 2016 2015 2014 2016 2015 2014 2016 2015 2014 ed for select TV and mobile phone mobile and TV select for ed h aporae epne. Based responses. appropriate the es are updated /2015datawas presented asthereporting period fore-waste collection performance in2016 was not concluded asof thiswriting. 3,134 3,171 3,370 18,770 68,433 21,880 71,844 23,964 - - - - - 87,053 use mance. As a result, we were able to reduce the and assessment of their environmental perfor for the package design of new product models guidelines the implemented also we 2016, In semiannual basis. a on performance reviewed and level, business division the at packages) the empty inside and space packages, of volume materials, packaging of (use rates reduction annual for packaging. product our in used stock paper the of tent use the data to increase the recycled pulp con we and packages, product our for used stock paper the of content pulp recycled lists that database a built also We 2013. in products ness divisionlevel. busi the at system packaging green a run to them at packaging technology workshops, and todisc plans Electronics LG performance, aging part of our effort to maximize our green pack incr an despite respectively percent 8.7 and cent inside the packages for new products 8.6 per 105,644 ease in size for some products. In 2017, as 109,808 over green packaging best cases and share f akgn mtras n epy space empty and materials packaging of 115,459 1) ic 21, e ae e targets set have we 2014, Since Total America South India Australia 3) 2016 2015 2014 2016 2015 2014 2016 2015 2014 2016 2015 2014 - - - - - address requirements. globalregulatory identif to us enables also it management, tainability promote our suppliers’ competitiveness in sus help graded to GPPlus.Not onlydoestheprogram up and sites supplier our at emissions GHG this response, regulatory a as substances ardous Initially ed knowhow. relat and technologies green transferringour by performance environmental their improve suppliers our help to program the uses and chain, supply our for program management Gr operatesElectronics LG growth, mutual mote pro and chain supply our across petitiveness As part of our efforts to enhance “green” com- Green ProgramPlus 40 Green Partnerships 228 367 een Program Plus (GP Plus), a sustainabilityPrograma een Plus), (GP Plus 1,066 1,280 rga hs en xadd o include to expanded been has program 1,424 s ul srn gen atesis and partnerships green strong build us y risks existing in our supply chain and chain supply our in existing risks y 2,452 implemented in 2005 to manage haz manage to 2005 in implemented 4,832 4,832 2) 2) 213,058 221,119 227,323 - - - - - products. in substances hazardous of replacement and analysis, use substance chemical assessment, o areas the in projects our for Russia) and nam Viet (India, operations overseas established have that suppliers 14 to support providing is and Energy, and Trade, Industry of Ministry the of Project Partnership Green Global in the participated Electronics LG chain, supply green a build and system production cleaner a establish suppliers our help to efforts our of part As expertise. their built and training Korea-basedfrom85 suppliers completed the supplier our of capabilities technical improvingthe ers, suppli our fromoperators testing equipment Exper Collection Data (Environmental data stance sub hazardouscollecting in experts foster to program new a introduced also we 2013, In our and suppliers our from staff management tal environmen to management emissions GHG and technology, green substances, hazardous for response compliance provides on Electronics training annual LG suppliers, partnerships its green with strengthen to order In for Suppliers Training andTechnologySupport the of integrity the ensuring and substances ous f productionf process energyassessment, use data. In 2016, a total of 161 participants 161 of total a 2016, In data. mlye i cag o te partnership. the of charge in employees Porm, n poie riig o the to training provide and Program), t s in managing and measuring hazard measuring and managing in s Green Packaging Improvement Case HE 02 MC 01 Logistics Costs Mat Amount of Improvement Product Model Logistics Costs Materials Used Amount of Improvement Product Model erials Used

- - - - - Reduced: USD3.18/unit→2.56/unit → 1.8kg/unit Reduced: 2.9kg/unit Reduced from five layers (DW)to three layers (SW)byoptimizing thepackagebox strength All LCD 49UJ65ModelsProduced TV inKorea (2016model→2017model) KRW 250/unit Reduced: KRW525/unit→ →50g/unit Reduced: 105g/unit cardboard box adop Reduced theuseof materials by Japanese Market) modelfortheV32 →V33(Smartphone ting afoldablestructure forthe 2016 Green Training Expert Green Program Plus – Practical Application Substances Hazardous Measurement of Building Capacity Working Level Green Expert Program LG Electronics 5 Layers · SupplierSuppor · · GHGEmissions Products Substanc Hazardous es in

Fifth Fifth Session

t >> from Suppliers Inspectors Environmental Suppliers Staff fr Working-level Managers & Target Training Suppliers First-tier om Logistics Costs Materials Used Amount of Improvement Product Model

70 91 Participants Number of > Supply Chain Suppliers Second-tier KRW 645/unit Reduced: KRW795/unit→ →129g/unit Reduced: 159g/unit to types one two the structure of cardboard from inserts required to box theproduct bychanging reduction aswell asto reduce thetime Improved thepackageto achieve weight V480 →V525(8-inchTablet PC) · · GHGEmissionsManagement · · · Introduction to Environmental Regulations · Measuring XRF(Practice) · Measuring XRF(Theory) Curriculum (HSMS) Substances L Hazar Hazar Management &AnalysisT GE Standards forManagingHazardous dous Substance ManagementSystem dous Substances > 3 Layers

Suppliers Third-tier echnology for

59 2016-2017 LG Electronics Sustainability Report 60 ment and energy efficiency in the United environ the improving to its commitment for recognized was Electronics LG t for Year” the of “Partner earning tently protectingin environmentconsisthe by demonstratedhavecontinued leadership given to businesses or organizations that is Award Excellence Sustained The ment. environ and energy in achievements for ofone prestigiousmost the recognitions regardedasSTAR Awardis ENERGY the ST ENERGY the and YearAward the of ner have also earned the ENERGY STAR Part A Excellence Sustained - Year the of ner STARENERGY 2016 PartEPAthe with U.S. the by honored was Electronics LG y consecutivethree spectively,and five for wo ormore years. ears. Launched in 1993 by the U.S. EPA, Awards ad o te hr ya rnig We running. year third the for ward Materiality Report AR Climate Communicator Award, re Award, Communicator Climate AR particularly significant as the award isaward the as significant particularly Environmental Third Consecutive Year STAR Awards for Top Honorat ENERGY LG Electronics Receives 1 ------models, product certified STAR ENERGY of ber Stat generations,” shesaidinhercomment. futurefor planet healthy a preserving to c strong a demonstrates “LG plishment. accom its for Electronics LG applauded also McCarthy Gina Administrator EPA U.S. year. previous the from percent 15 machines, washing TVs, including categories uct 500 than more for certification STAR ERGY In 2015, LG Electronics acquired the EN energy issues. on programs outreach ployee em in engaging and efficiency, energy mimn t eeg efcec and efficiency energy to ommitment es, such as offering a greater num greater a offering as such es, product models in a range of prod of range a in models product

Third C Gold TierAward for Electronic U.S. EPAHonors LG 2 raising consumer awareness on awareness consumer raising refrigerators and monitors, upmonitors,refrigerators and onsecutive Year s withSMM

- - - - - e-w tally responsible disposal and recycling of environmen- the towards efforts our ue contin will Electronics LG management, As a global leader in responsible e-waste our about information detailed sharing licly pub and recyclers, third-party certified to collected electronics used of percent 100 send to striving recycle, and reuse amount tronics Challenge goals by increasing the Elec SMM EPA’s the to significant contributions our recognizes Award Tier 2017 CES the at Presented recyclers. tronics collect through third-party certified elec 100 percent of the used electronics they (SMM) Management terials EPA’sthe in recognition Ma Sustainable the with (EPA) Agency Protection mental Environ- U.S. the by recognized was ics Electron- LG recycling, electronics sible respon - in leadership our Underscoring r tronics manufacturers, brand elec owners and to given is award The Challenge. ties ht niomnal dispose environmentally that etailers oluntary programoluntary thatencourages ➊ Management (SMM): U.S. EPASustainableMa - aste withrenewed commitment. 2016 Gold Tier Award, the top-levelAward,the Tier Gold 2016 of e-waste andincrease therecycling rates. electronics recyclers to prevent illegalexport own organizations to third-party certified from thepublic,businessesandwithintheir percent of theused electronics they collect and retailers to worktowards sending100 electronics manufacturers, brand owners A v lcrnc aaeet practices. management electronic Sustainability Day event, the Gold the event, Day Sustainability of used electronics collected forelectronicscollected used of

terials ➊ Electronics

------at, rmt te utial development sustainable the promote Earth, EESH vision: our attain to strive also We ployees. Policy,em our with guidelines sharedthe and EESH own our established has Electronics LG principles, EESH and management green for strategy group-level the with line In practice. everyday their in changes positive affect and awarenessemployeeraise to diverse channels EESH work, and is communicating the significance of frame management group-levelgreen the as Environment”Working Safe the for Principles “Seven the and “LGPolicy” Environment & the Safety established Corp. LG 2015, July In EESH Policy with Gr progress review we meetings, sensus con strategy and performance annual our At implementation. their with forward is pressing and targets, and Health) initiatives management and Safety, Environment, (Energy, EESH own its set also Electronics LG 2020, line with In businesses.” new “greener and ucts” “greenertowardsa workplace,” “greener prod conveyedwhich 2020, LGCorp.’s commitment Green initiative management environmental group-level the announced Electronics, LG of company holding the Corp., LG 2010, April In EESH Management Objectives &Achievements in EESH Targets &Performance 1) Basedon14locations withanannualenergy billof USD2millionorhigher at Ov EnhancementEESH Capability System Implementation Global EESHManagement Water UseReduction GHG EmissionsReduction Targets Mid- toLong-term LG Electronics EESHPolicy environment/vision-and-policy http://www.lg.com/global/sustainability/ EESH ManagementSystem een 2020andrelated initiatives. erseas Locations the vision and strategy conveyed in Green management to our employees throughemployees our to management t poet h evrnet f the of environment the protect “to

Low Riskorhigher All locations rated acquisition 100% inISO50001 acquisition 100% inOHSAS 18001 acquisition 100% inISO14001 target perrevenue) 20% inreduction (Intensity reductions) (1 milliontons incumulative 150,000 tons inreduction KPI

- - - - 2020 2025 2020 2020 (Base Year 2007) 2020 (Base Year 2008) 2020 Target Year for allof ourproduction locations. certifications 18001 OHSAS the and 50001, ISO the 14001, ISO the acquire to working are and corporate-level 2010 in system management the EESH implemented also We r insystem the updatedtronics revisedand has Elec LG 2009, in established dardsfirstwere stan and regulations guidelines, EESH Since in EESHmanagement.” No.1 Global becomingof goal our achieve and facilitates an advanced level of EESH practices, that culture corporate a establish society, of esponse tofast-changingesponse emergingand risks. Green 2020 Businesses Greener Products Greener Sites Greener 82% 40% 80% 93% 32% in r 362, 000tons 2016 Performance eduction

Three ManagementGoals LG Green 2020 · · · · educe GHGEmissionsby · higher by2020 Gr gr Expand theper 400 milliont efficiency (mor maximization o annually thr emissions by R Management Syst Str r (int R r 40% R evenue inKRW) evenue inKRW) educe use-level GHG educe water useby30% een newbusinessesinthe oup’s total salesto 15%or engthen theEESH ensity targetensity per (intensity target per - - ough the ons, cumulative) 60 milliontons nue fetvns. n u 21 ES au EESH 2016 our In effectiveness. ensure thr identified risks EESH on based developed ria crite- management adopts also but lations, t preemptively respond to order in quirements, the re stronger with GEARS 3.0, of version advanced GEARS implemented we 2016, In ensure successful implementation. performance at each site on a regular basis to and location the of head the to findings the port re we identified, are initiatives improvement points (95“excellent to rating the up bring to tives and average good, (excellent, sites R&D and tion produc our of each at management EESH of level the rate we results, audit the on Based issues EESH issues in advancetify and prevent those Korea and overseas on an annual basis to iden in locations R&D and production its on audit (GEARS) System Rating Audit EESH Global the oped devel Electronics LG management, EESH in No.1 Global become to efforts our of part As EESH Audit e that standard management EESH of level er upgraded GEARS 3.0 not only requires a high and new Our globe. the across requirements regulatory toughening and management risk e than centage of f energy o growing stakeholder expectations on EESHon growingexpectationsstakeholder o ces h cmlac o lw ad regu and laws of compliance the xceeds em ough audits on our production locations tolocations production our on audits ough poor) and implement improvement initia improvement implement and poor) subsidiary, and monitor the progress and progress the monitor and subsidiary,

or higher)” across our locations. After locations. our across higher)” or rm eeoig no eiu risks. serious into developing from

nenly n prom a EESH an performs and internally

> for Green BusinessSites Long-Term Goals LG Electronics Mid-to · · educe production-level GHG · · Enhanc EESH ManagementSyst implementation o Expand theglobal r (Compar R (Compar R capacity atoverseas sites 2007, intensity target per 2008) emissions by150,000tons evenue inKRW) educe water useby20% e andstabilize theEESH ed to the baseyear ed to the baseyear f

61 ------2016-2017 LG Electronics Sustainability Report 62 ai Aeia ad ot Ain subsidiaries Asian South and American Latin Chinese subsidiaries and 2016 assessment on eleven on assessment 2015 Our regulations. EESH local in experts of assistance the with emer equipment, and facilities safety, general rials, quality, w water quality, air environment, eral (gen areas different ten in requirements the performanc compliance their evaluate to subsidiaries tion produc our of all target headquarters Korea r ance performance at all of our locations. EESH ulations around the world and monitor compli monit we which through 2014, in System agement Man- Risk Compliance EESH the plemented effective im we regulations, ensure EESH global to to response efforts our of part As System EESH Compliance RiskManagement based onGEARS. o out at capabilities management EESH en hance to efforts our continue will Electronics LG year. previous the from points five down 83.0, scored locations overseas while points, 97 of scoreaverage an “excellent”with rated were Korea in locations R&D and production system, upgrade the on based performed dit * (in 100pointscale) Past Three-Year EESHAuditResults isk assessment conducted by the company’s the by conducted assessment isk esa sbiire truh EH audits EESH through subsidiaries verseas changes inchecklistit A declineinthe2016sc aste, chemical substances, hazardous mate hazardous substances, chemical aste, 95.9 Overseas Korea 2014 ec raies ad nutil health) industrial and readiness, gency or changes in EESH and legislations reg 84.1 Materiality Report ad dniy sus ae on based issues identify and e 97.8 2015 88.0 ems. ore isduemainlyto 96.8 2016 82.9

------initiatives. improvement of progress the managing and monitoring continuously while Africa, and CIS Europe,in subsidiaries ten on assessment risk compliance perform to plans Electronics LG that those for except issues identified the of cent per 84 addressed have We issues. jor/minor have identified, respectively, 323 and 230 ma the system. We are also expanding the system Component Company Vehicle the and plementation, im BCM the complete to locations R&D our of first the became Campus R&D Gasan the acquire certification22301 ISO the Korea.in 2016,In to first the became line production mobile Pyeongtaek our 2014, November In been expanding the system to other locations. line production mobile the to BCM the troduced in first we Since system. the enhancing and expanding continuously is and 22301), ISO (BCM, Management Continuity Business the shareholder value, LG Electronics implemented business unforeseensuch selvesevents,against ensure our prepare fully to order In operations. ness the serious implications they have on our busi and (external), attacks terrorist and impacts well as of external risks such as climate change as accidents/disasters safety-related as such LG Electronics is keenly aware of internal risks Management (BCM)System Strengthening BusinessContinuity at the Pyeongtaek Plant in 2008, we have EESH Compliance RiskAssessmentonOverseas Subsidiaries require mid- to long-term plan. In 2017, In plan. long-term to mid- require * 84percent of improvement cumulative rate (465outof 553issues) Risk MitigationRate Target Locations forCompliance RiskAssessment continuity,protectand andcustomer Icen Kra as implemented also Korea) (Incheon, (Completed 282outof subsidiaries inChina) 11 (All production 323 issues) 87 2015 2015 locations % (Completed 183outof Indonesia Tangerang India (2),Vietnam, 9 ------230 issues) Mexico (3), 80 Brazil (2), 2016 2016 locations t continue will Electronics LG 2016. in sidiary sub Vietnamese our at implementation BCM the completed and locations overseas our to who are preparing for a overseas transfer,to overseas a for candidates, preparing are who FSE require also We expertise. further gain to course introductory five-day the complete to required are functions agement thermore, Furour employees from the EESH man workshops. and theories management a Employees,”EESH programcoursescomprisingon training LG for Essentials “EESH the complete candidates promotion our have we Electronics, LG of company holding the Corp., LGof Policy EESH the with line In risks. EESH functions) (positions/business groups employee ferent tr offering chain, value its across training ness aware EESH strengthening is Electronics LG Employee EESHTraining the stakeholders trust. andsociety that system management sustainable strong the pare ourselves against such risks, and enhance pre- fully risks, future forecasting in pabilities effor these Through management. continuity ness improve our toorganizational capabilities in busi committees BCM operate and programs training develop also will we infrastructure, BCM our strengthen to efforts our of part As companies. business our of all to certification epn te C ipeetto ad ISO and implementation BCM the expand o aining programs tailored specifically for dif for specifically tailored programs aining % efficiency of our risk responses to build a build to responses risk our of efficiency three-day advanced course as well as the as well as courseadvanced three-day ts, LG Electronics will strengthen our ca our strengthen will ElectronicsLG ts, as part of our efforts to minimize to efforts our of part as Poland (2),Russia,Kazakhstan, Turkey, Egypt, SaudiArabia, South Africa, Thailand, Inspection in 10 Indonesia Cibitung Progress 2017 2017 locations ------W performance. our improving at aimed tiatives ini rangeof full a implement targetsand tion change response through which we set reduc “Green 2020, established and management, ness busi our of part critical as response change opportunities. LG Electronics considers climate and risks related to responding proactively is the serious implications of climate change and recognizes Electronics LG community, the global of member corporate responsible a As Climate ChangeResponse everyday practice. establish and EESH EESH on awareness ployee em promote to programs training EESH our enhance to continue will Electronics LGstaff. productionour practicalfor training EESH out carry and develop to plan we 2017, In region. Tianjin the from staff EESH for benchmarking on ber 2016, LG Corp. organized training sessions Septem In candidates.promotion for training EESH foster to July in sessions train-the-trainer ing conduct China, in staff EESH our for training EESH strengthened Electronics LG 2016, In semiannual basis. a on overseaslocationsproduction at training complete EESH training, and conduct the same able energy sources. In addition, we are making renew of use the increase and sites, duction efficient, energy more equipment and facilities duction Emissions andWater Use Management ofEnergy,GHG ae prn n efr t mk or pro our make to effort no sparing are e hn’ ES rgltos n compliance and regulations EESH China’s a oprt-ee iiitv fr climate for initiative corporate-level a ” compliance as an integral part of their of part integral an as compliance riig pcait i cag o EESH of charge in specialists training reducefromemissions proGHG our ------Safety TrainingSafety (NanjingLearningCenter, China) developing newenergy businesses. productproductsandour efficient portfolio in energy expanding as such change, climate of impact negative the address that businesses and products through opportunities into risks pr Our Climate ChangeResponse external communication systems asfollows: and internal place in have also we tr theensure toorder In response. change mate of initiatives as part of our efforts towards cli range broad a implementing is Electronics LG Climate ChangeResponse System Strategic Direction Train-the-Trainer SessionforEnvironmental nprny n efcec o or initiatives, our of efficiency and ansparency epie uies eiin t transform to decisions business eemptive Target Value annually through 2020 Emissions associated Reduce 150,000tons (1 milliontons incumulative reduction)mulative with production Low-Carbon Productivity Reduce GHG Improved Factory Establish infrastructure for efficient GHGemissionsmanagement annually through 2020 Reduce 60milliontons emissions associated cumulative reduction)cumulative Improved Product (400 milliontons in Competitiveness with product use reducing GHG Contribute to Low-Carbon Product - value throughvol- of GHGemissions untary reductionuntary Deliver Low-carbon customer set” businessesto obtain carbon credits. initiativ exter our promote to and channels communication nal internal our through with engages stakeholders actively Electronics LG 4 -Internal &External Communication Mechanism Development Clean in participating while ter, Cen Business Energy the of under leadership the products eco-friendly developing as the curb that services and products with tunity oppor business into change climate with ed associat risks transforming is Electronics LG 3 -From Riskto Opportunity locations inKorea andoverseas. production our at accidents industrialprevent to Committee Management Emergency EESH the place in have also Westrategy. response we develop and implement our climate change which on based System, (CRM) Management Risk Compliance our through change climate with associated risks manages Electronics LG 2 -RiskManagement and gr presentations performance through formance progressthe on carefullyand reviews per our initiativ 2020 Green the for strategy our develops ics Under the leadership of LG Corp., LG Electron 1 -Executive Decision MakingCouncil eaie mat f lmt cag, such change, climate of impact negative een managementmeetings. lifecycleof products s o ciae hne epne and response change climate for es e, and regularly briefs top management emissions reduction Improved Opera- tional Efficiency throughout the Low-Carbon Reduce GHG Value Chain Manage GHG emissions CM poet ad “carbon-off and projects (CDM) Social Contribution Achieve GlobalNo.1 Raise awareness in Promote employee our communities Low-Carbon participation Culture 63 ------2016-2017 LG Electronics Sustainability Report 64 Business Conditions Physical Regulatory Category Business Conditions Physical Regulatory Category associatedResponse withClimate to Change Risks&Opportunities Base Year 2008) (Compared to the 362,000 Reduction Amount of GHGEmissions Materiality Report e tons • Stringent standard forcorporate assessmentbyinvestors andNGOs • Decline inpurchasing power • Risingcosts dueto tougher regulations andsupplychaindisruptions • Negative impactonemployee health • Increase innatural disasters • Stronger energy standard forproducts • Implementationof theEmissionsTrading Scheme • Growing demandforthedisclosure of product carbon footprint • Improved brand andcorporate profile • Growing demandforlow-carbon products • Deteriorating airandwater quality • Riseinaverage globaltemperature • Implementationof theEmissionsTrading Scheme • • Stronger energy standard forproducts r Rising ener enewable energy Opportunity Risk gy prices andgrowing requirements fortheuseof W ing employee energy-saving activities. energy,renewablepromot of and use the ing employees to raise theirawareness. our with issues related change climate share newsletter on energy issues through which we employee regular include also initiatives Our requirements. DJSI and CDP with compliance ourof transparentpart and as clear manner a in response change climate for initiatives and climate strategy our on disclose particular,we In change. awareness employee heighten 2020. and 2009 between emissions GHG of lative) total of approximately one million tons (cumu a reduce to expect year we which through 2008), base the from reduction percent (ten 2020 by emissions GHG production-level of efficiency operational the enhancing equipment, ciency effi high in initiatives investments expanding at of aimed comprised is which response, “four the implementing are we end, Tothis mance. wide a in engage to continued since has and sions emis long-termGHG reductiontotargets for mid- the established Electronics LG 2009, In Performance ManagementSystem GHG EmissionsReduction Target & e have set a targeta reducehavetoset e tons150,000 range of efforts to improve our perfor our improve to efforts of range strategic directions” for climate change climate for directions” strategic To this end, LG Electronics also sets a sets also Electronics LG end, Tothis of facilities and equipment, expand equipment, and facilities of

• Proactively acquire carbon footprint andlowcarbon labels • Increase engagementwithexternal stakeholders • • Expandtheairpurifier, water purifier andionwater purifier business • Expandtheairconditioner andHVAC system business • Pursue aCDMproject withhighefficiencyrefrigerators • grid, LED, insmart sue newbusinessopportunities • • Strengthen internal andexternal communication • ExpandCSRinitiatives includingdistribution of required technology • Analyze commodity prices andmanagesupplychain • Acquire ISOandOHSAS certifications forallproduction locations • • • ate ITsystem forGHGemissionsmanagementandsetreduction • Expand thede Expand de geo Pur Str P Establish c Oper technology cell technologysolar major facilities internally for conducting carbon footprint assessment onproduction locations ment high-efficiencyfacilitiesandequipment targets Response Response erform LCA onmajorproducts andacquire certifications required ------engthen EESHcompliance assessment onproduction locations and thermal heating/cooling, etc. in ie n aaye u rdcin perfor reduction our analyze and site tion produc Gumi the for (EnPI) Indicator mance PerforEnergy the adopted also We 2016. in implementation the completing Campus R&D Woomyeonthe and site production Gumi the withlocations,other to system the expanding production site in 2015. LG Electronics is now Pyeongtaek the at system the implemented o efficiency energy and flow energy the proving im and assessing analyzing, toolfor a as map st first a As locations. production our at mance impr porateenergy systemtofurthermanagement cor user-based a established Electronics LG Equipment More Energy Efficient Making OurProduction Facilities& Korean government. emissions trading scheme implemented by the r emissionsGHG and energy saving our for tem sys management a establish to facilities R&D and production our for certification 50001 achie performed the annual target by 262,000 tons, out we 2016, accordingly.In emissions manages GHG and year the for target reduction In pared to thebaseyear 2008. velopment andproduction innewbusinessareas suchas orporate-level standard response, forregulatory andimple- eduction performance, and is adhering to theto adhering is and performance, eduction f our production facilities and equipment, and p n hs ieto, e rae a energy an created we direction, this in ep diin L Eetois curd h ISO the acquired Electronics LG addition, velopment of highly efficient,low-carbon product v GG msin rdcin perfor reduction emissions GHG ove ig rdcin f 6,0 tn com tons 362,000 of reduction a ving

------for sulfur hexafluoride (SF hexafluoride sulfur for processingsystemthe in investment an made alsoWe 2016. in sites Gumi and Pyeongtaek w and Agency, Energy Korea the from tification cer FEMS the acquire to facility Korean first the became Plant Changwon Our emissions. GHG of reduction a to contributing demand, energy peak manage effectively and energy Ener tomated control system as part of our Factory au an implemented we 2015, In equipment. e pro continually and facilities of general and duction efficiency operational the proving im- by use energy reducing is Electronics LG Expanding Useof Renewable Energy Reducing Production-level GHG Emissions & tification awarded by the Korean government. . our improving while efficiency, energy tion-level to enhance of efforts producour tempart as pr the in also is Electronics LG reduction. sions energy efficiency and contribute to GHG emis t tive measures. We plan to expand the initiative quantita on based performance our manage (Unit: 10Ktons CO Reduction Performance Production-Level GHGEmissions oa pnl rdcin aheig reduction a achieving production, panel solar assess scientificallyorderto in location the at mance o include all of our business sites to promoteto sites business our of all include o pnig u ivsmns n high-efficiency in investments our xpanding 146.3 e have expanded the system to include the include to system the expanded have e 2008 ocess of implementing a smart factory sys factory smart a implementing of ocess Emissions Reductions EnPI to acquire the Energy Champion Cer y aaeet ytm FM) o save to (FEMS) System Management gy production-level energy efficiency and efficiency energy production-level 127.9 2014 18.4 2 e) 111.0 35.3 2015 6 ) gas generated bygenerated gas ) 110.1 36.2 2016 ------which locations, production other include to tation implemen the expand to plan We agency). assessment third-party a by (certified 2016 in emissions GHG of tons 160,000 about of promote energy efficiency. and use energy reduce to efforts our of part as efficiency, energy for project pilot new a including initiatives, energygovernment-led in Electr ute to stabilizing the nation’s power supply. LG contrib to as well as sites production our for supply power stable a ensure to levels, power reserve on based implemented requirements peak hours and complying with the energy use tunities. related risks andoppor proactively responding to issues of ourtime,andis pressing environmental change, oneof themost implications of climate recognizes theserious LG Electronics fully during use energy reducing voluntarily by use power our manages Electronics LG buildings. by profits generating for initiative energy ment D cations in Korea have participated in the Power lo R&D productionand our of all 2014, Since avoided 825tons of GHGemissions. purchases,Europeanour while office buildings energy renewable through tons emissions GHG 1,285 of of total a reduced facilities US 2016, In energy.renewable of purchase their increasing also are Europe and States United t 3,217 about reducing and 2016 in mulative) (cu- MWh 6,900 approximately of total a ing produceach, MW 5.4 combinedof capacitya Changwon panded solar power generating systems at our ex Wehave purchases.energy renewable ing expand and systems generating power solar adopting by emissions GHG no produce that Electronics LG continues to expand the use of annually.energy sources emissions GHG of ons of GHG emissions . Office buildings in the emand Management project, a new govern new a project, Management emand aig lcrc oe ue a pat or plants at used power electric saving onics will continue to actively participate is expected reduce about 300,000 tons and Gumi sites in Korea to secure to Korea in sites Gumi and ------(As of 2016) 6,900 PowerSolar Generated MWh 65 2016-2017 LG Electronics Sustainability Report 66 half. The reduction in SF GHG used in our production process, by almost Development Mechanism (CDM) project in In in project (CDM) Mechanism Development Clean a pursuing is ElectronicsLG addition, In required forthisproject. equipment monitoring the with suppliers our provide to plans also Electronics LG program, partnership win-win our of part As suppliers. our with shared be will CERs from generated profits and annually, emissions GHG of tons 10,000 about reduce to expect we project, this Through future. near the in developed be to processes monitoring and methodologies on based CERs to translated be will process dia, which was approved by the United Nations LGal, Electronics SF cut toexpects By replacing magnesium with the new materi 3G, the eco-friendly substitute for the mineral. KM- with phones mobile in used magnesium thereplace to is line in projectfirst The parts. suppliersdevelopto eco-friendly products and its with ElectronicsLGpartnered system, new in GHG emissions reduction. In response to the performance own their recognizedas amount reduction the have and emissions GHG duce resuppliers busi helping by CERs earn can nesses scheme, trading emissions the Under cap. emissions government-assignedGHG the on based targets reduction meet to (CERs) initiatives to earn certified emission reductions tem in 2014, LG Electronics engages in diverse TradingKoreanEmissions the Sys in Included Emissions Trading System Materiality Report 6 achieved through this Development Mechanism the United NationsClean The executive committee for Climate Change): Framework Convention on UNFCCC (UnitedNations 1 6 , a type of type a , - - - - - (UNFCCC) Change Climate on Convention Framework posed of energy experts from the respective the from experts energy of posed com is group Observer Energy The activities. and role its expanded Energy further and as Observer taskforce monitoring energy ee employ its renamed Electronics LG 2014, In Energy Activities Observer households. ships to women and children from low-income scholar of form the in communities local to projectthis from profits the of portion a nate do to plan also We UNFCCC. the by proval ap and verification third-party after 2017 in credits carbon in tons 70,000 obtain to pect production and sales of appliances, and we ex projectsacquireto carboncredits through the in February 2015. It was the first among CDM credits carbon of tons 6,954 earned and dia, the sales of highly efficient refrigeratorsefficient highly of sales In the in forexchange in acquirecreditscarbonto plan BP Sharing forSupplierEnergy Performance ➊ in 2013. Throughproject,2013. this in we Enhancement Program ------energy requirements (regular inspection of en external and internal with compliance ensure steamminimizeand and leakage, energy loss), power for screen equipment, and use energy (monitor energy and save to activities Korea, in engages in locations R&D or production tem (FEMS). Sys Management Energy Factory the of tour and invited them to our Chagwon Plant 1 for a staff supplier to training management energy provided also Electronics LG efforts, agement man energy their continue they as eficiaries efficient. In order to support the program ben energy more facilities their making by million 300 KRW save and assessment energy performance through annually emissions GHG of tons 1,300 reducesuppliers these Wehelped suppliers. 15 to knowhow saving energy our transferred and Energy and Trade, of Industry Ministry the by led Project Partners the Energy in participated Electronics LG 2016, In panel production in2017. lineatourGumiplant solar the expand to plans and packs, battery and components EV our with mobiles developmentthe eco-friendly of porting auto sup are We businesses. energy new through level end-use the at emissions GHG ducing re to contributes also but locations, duction pro at use energy its managing by emissions GHGreduce to strives only ElectronicsnotLG Management across ValueChain Expanding GHGEmissions ing initiatives. energy-sav our expand to locationsoverseas with our production sites in Korea as well as in cess cases from the Energy Observer activities practices.saving LG Electronics sharesuc will energy promote and targets) energy summer winter/ of management and equipment ergy Energy LossInspection ------oet ws nue fo mtao ue in used methanol from injured was ponents tier supplier that produces mobile phone com thirdour at employee an 2016, March in fort, Despite our careful chemicals management ef for R&Dusesaswell as forproduction. imported or purchased directly chemicals on out carried be to process screening this quire sites in Korea through this system. We also re production our at as well as sites R&D our at usedstoredchemicalsand all screeningon tal environmen and safety preliminary performs and 2013, in (LGCMS) System Management Chemicals LG the established Electronics LG Strengthening ChemicalsManagement lence inwater management. excel for Award Best Water CDP 2016 the received also We management. resource ter wa in efforts our for recognition in agement, man water in level highest the A, Leadership Korea Water Disclosure Program, and acquired CDP the in part took Electronics LG 2016, In terruption. in supply water a of event in longer or days two for operations their continue to sources water emergency maintain locations duction pro our which on based plan contingency a place in have also We landscaping. or duction pro for treatment after it reuses and plant cles all industrial wastewater generated by the recy that systemzero-discharge a built India in Plant Noida our locations, production our at water waste industrial of recycling crease in to initiatives our with line In mechanism. supplying water efficient more a modelsfeature that machine washing as such products efficient water introducing continually are we instance, For chain. value our across use ter wa lower to initiatives of range a plements at our production locations, LG Electronics im usewaterreduce to efforts our to addition In of thewater was reused. mately 9.80 million tons, and 0.31 million tons approxi to amounted Korea) in facilities R&D some (including overseas and Korea in sites production our at used water of volume total the 2016, In overseas. and Korea in R&D locations and production its at reuses and uses it water of amount the of track close keeps and 2007 year base the to compared 2020 ics aims to reduce water use by 20 percent by ing in a broad range of initiatives. LG Electron part of the Green 2020 initiative and is engag as targets reduction set Electronics LG chain, value our across use waterreduce to order In Water Resources Management System for EESH Management Enhancing &Expanding ------organizations such as the International Agen International the as such organizations will continue our efforts tocreatecontinue will worksafe efforts a our we 2017, In (IARC). Cancer on Research cy toxic (CMR) reproand carcinogenic,mutagenic, of list the against production our for used substances chemical referencing cross by safety management and substance harmful in standards stronger much establish to agencies external In addition, LG Electronics is collaborating with mote safety. workplace pro and system management chemicals our full range of follow up measures to strengthen a implementing also is Electronics LG again, occurring from incident same the prevent to order In alternative. safer a with it replacing and methanol of use the mea discontinuing sures, up follow implemented and locations spection of methanoluseatallof oursupplier the incident, LG Electronics carried out an in an out carried Electronics LG incident, the to hisvision.Immediately uponlearningabout damage suffered and process production the 03- 02- 01- Water Supply (Unit: Kton) Global Water Usein2016 Discharged into Treatment Facility Secondary Production Sites * Scope 2(indirect water use)was excluded from thewater supplydata. * Basedonproduction sites inKorea withaninternal waste water treatment facility Wastewater Discharge inKorea 2,182 Ground Water 3,501 Industrial Water 3,739 Municipal Water ➋ substances compiled by research Tan Stream Center Water Reuse Tancheon Woomyeon R&D Seoknam Stream Center Sewage Treatment Cheongju Cheongju - - - - - Reprotoxic) Mutagenic and (Carcinogenic, CMR to thanks extinguished promptly was which fire, first the after immediately premises the employeesour evacuatedas riesfatalities and inju no left fire Fortunately,the line. duction prorefrigerator the from wires the of circuit short a by caused Mexico, in our site production at out broke fire a 2016, November In Management System Strengthening Safety and employees atoursupplierlocations. employees our of safety the ensuring ment, manage substance hazardous for standards environment, and implement the strengthened Gwangam Stream Center Sewage Treatment Gumi Gumi 2 Jinhae Bay Center Sewage Treatment Deokdong Changwon 06- 05- 04- Water Discharged 309 Water Reused 5,466 Facility &Other External Treatment 3,647 Facility Internal Treatment Mangyeong River Center Sewage Treatment Samrye Jeonju 67 - - - 2016-2017 LG Electronics Sustainability Report 68 in implementation for planning subsidiary produc tion Mexican our with program, the ed spar will Electronics LG safety, workplace of tance Fire Hazards &Responses system. management EESH our strengthen further to groups product our of all include to program our 2016, In chain. value our throughout bilities effor uted a risk management manual as part of our distrib producedand Weyears.also five past addressingfor risksfactors overidentified the roadmap detailed a and factors risk individual managing for tool a developed have we end, the same incident from occurring again. To this analysis of root causes, and ultimately prevent deep-dive a on based plan improvement an thr identified risks address to efforts provement im make to only not subsidiaries production overseas require we which through Initiative, BP) (RM Practice Best Management Risk the In cident from occurring again. in same preventthe and safer locations R&D With bles aspreemptive measures to ensure safety. nonflamma to materials flammable replaced and strips, protector surge to locations R&D changed hazards,firewe such eliminate orderto In els. pan and absorbents acoustic flammable by powerand strips catch exacerbated fire, often cables old like objects everyday from Sparks promote fire growth, and addressed the issues. and ignition causecould which cables, old and absorbents acoustic flammable like hazards fire on focused we explosion, and fire as such accidents industrial major against measures management risk comprehensive our of part our production and R&D locations in Korea. As of all at hazards fire identify to inspection an A responsecoordination.effective our and ment depart firelocal the of intervention swift the Fire Growth Fire Occurrence tr h icdn, G lcrnc conducted Electronics LG incident, the fter 07 L Eetois ln t epn the expand to plans Electronics LG 2017. ough our assessment, but also to develop to also but assessment, our ough 06 L Eetois lo implemented also Electronics LG 2016, n efr t mk or rdcin and production our make to effort no e ts to enhance EESH management capa management EESH enhance to ts hi rdcin usday implement subsidiary production Thai the incident as a reminder of the impor the ofreminder a as incident the Location Materiality Report all power strips at our production and wall finishFlammable absorbents acousticFlammable Failed initialintervention Old cables Fire Hazard mable materials - Replace withnonflam materials mable orfire-retardant - Replace withnonflam system Install thesprinkler etc. with insulation, cable replacement, issues sectionsfor Identify ------ns ad aey aaeet assessment is management safety and iness read disaster Our 2016. in world the around facilities warehouse our of all on assessment conducted and 2015 in system management safety and readiness disaster warehouse the established we Toend, sites. this supplier and facilities warehouse include to locations R&D and business production, from management LG Electronics is expanding the scope of EESH Across Value Chain Expanding EESHManagement rmt epoe ES aaees includ awareness EESH employee promote that initiatives of range wide was a of campaign comprised the life, everyday their in as o practiceeveryday as compliance EESH tablish es- to Designed EESH. on the awareness ployee em raise in to engaged Campaign” Compliance Electronics “EESH LG 2016, In Employee EESHCompliance Campaign Enhancing EmployeeSafety&Health risks before they materialize into actualharm. EESHeliminate to efforts our of part as basis issues safety address to support provide will tronics electrical safety. Based on the results, LG Elec 2016, seas over a two-month period from December of our production subsidiaries all and suppliers over on assessment safety fire Electronics performed LG chain, value our across EESH risks identify to measure preemptive a As pose fire risks. to identified subsidiaries nine from locations 50 on assessment safety fire conducting and the following facilities, warehouse our on assess risk ment fire out carried also we 2017, March and February Between departments. related other and department EESH the by coordinated consulting improvement include underperforming facilities (C and D), which will to support necessary the providing and D), to (A levels different four into results the rating Response or mlye a pouto lns s well as lines production at employees our f opie o promn self-assessment, performing of comprised rcs o promn self-assessment, performing of process and monitor the progress on a regular a on progress the monitor and with a particular emphasis on fire and fire on emphasis particular a with 78% (Korea) 82% 68% September 2017 To becompleted by Implementation ------r PlantChangwon IIthe health, employee mote pro to efforts our for recognition In training. as such support additional for leaders ganization pr disease for plan management health a paring pre support, management health of range a with employees these provide also We care. arr andgroups employee high-risk selects tronics the four to relating conditions with those for ly particular problems, health with employees pr on focusing is em- Electronics promote LG health, to ployee initiatives our of part As Enhancing Working Conditions Promoting Employee Health& porate culture. corour of part complianceas EESH establish implementing a mid- to long-term roadmap to c EESH our monitor carefully to plans tronics Elec LG 2017, In initiatives. campaign the in partake to continue would they said percent helped heighten their EESH awareness, and 95 our employ of percent 88 campaign, the of fective ef the on survey a In compliance. EESH for Electronics, including the CEO, signed a pledge LG of members all commitment, strong our of expression labor clear In initiatives. our USR union’s of part as organized compliance EESH for pledge labor-management the ing liv and levels cholesterol high diabetes, tension, eceived a commendation from the Korea Oc Korea the from commendation a eceived ompliance performance, while developing and vdn hat mngmn spot to support management health oviding eventiontreatmentand or with liaising and er diseases. Through this program, LG Elec LG program, this Through diseases. er ne fr hm o eev poe medical proper receive to them for anges ok ceue eragmn ad fitness and rearrangement schedule work gency Preparedness Drill 1,2 - ao hat rss wih nld hyper include which risks, health major 2 1 ees responded that the campaign had campaign the that responded ees (Gumi A1Pl Emer ant, Korea)

------healthier tinue to explore ways in which we can create a and members.its toLG closer Electronics conwill organization the into arts the bringing employees, of health mental the promoting toapproachcreative a programwas This arts. the with encounter pleasant a through down wind and week work hectic a from breather a take employees our helping exhibitions, art and performances music live staged and sites business our visited disciplines diverse from artists program, this For stress. work relieve and arts the enjoy to time a with employees ecn lwr hn ht s eurd y law, by required is what than lower percent 50 levels at pollutants water and air manage to local communities and the environment. We activities business our of impact negative the minimizing in effort no spares Electronics LG Environmental Pollutants Strengthening Management of waste into resources. all transforms that system recycling a for striving recycling, of scope the expand and generation waste minimize to effort our continue will Electronics LG 2016. in percent 85 to 2015 in percent 50 from plant the at rate recycling the enhancing landfills, from it divert and sludge wastewater recycle to able now are we efforts, these Through recycling. for quality water the improve to treatment the chargedreplacedand from Plant A1 Gumi the dis water waste of content the analyzed we 2016, In efficient. more process recycling the make and waste solid of volume the minimize c installed Electronics LG waste, solid for tem sys recycling the improve to efforts our of and tinuous investments in environmental facilities con making by recycling through waste solid LG Electronics makes ongoing effort to reduce Increasing Recycling Rates forWaste Minimizing EnvironmentalImpact employees. Caf “Art the ganized K the and Tourism and Sports Culture, of istry Min- the by cosponsored program Artist ing Visit the in participated also Electronics LG welding techniques to lower thenoiselevels. pr els at the production lines, replacing tools that im implemented provement initiatives, measuring the noise lev- and investments facility e produceprocessthat production of free place work a create to order In health. employee promotingin excellence for 2016 of half first the in Agency Health and Safety cupational matr a or rdcin oain to locations production our at ompactors csie os, u Cago Pat made I Plant Changwon our noise, xcessive ra Ats Wlae onain n or and Foundation Welfare Artist orean dc ecsie os ad eeoig new developing and noise excessive oduce implementing process innovation. As part As innovation.process implementing hmcl gn ue fr wastewater for used agent chemical and safer working conditions for ourconditionsfor working safer and é porm o fe our offer to program ” ------inv our of part As efforts. management and ing monitor constant through discharged ants pollut of amount the minimize to strive and equipment. r replaces, immediately and management, tal environmen for equipment and facilities our Electronics also performs regular inspection of pis r prds udtd aiiis and facilities outdated upgrades or epairs smn i evrnetl rtcin LG protection, environmental in estment Recycled (%) (ton/KRW billion) Basic Unit (Unit: ton) Waste Generated andRecycled focus P Employee Campaign A Employee Compliance Pledge forEESH Executive Message 100,000 150,000 200,000 articipation articipation wareness EESH Compliance Campaign 5,000 Campaign Activities 0

* Recycling doesnot includeheatrecovery through incineration. Total Waste Generated 179,294 · · · · parties practices, healthmanagementandteam Awareness campaign onbasicsafety ment andemployees Pledge forEESHCompliance bymanage- of theLaborUnion Message from theCEO andtheChairman campaign Sur Initiative) Management boosting activitiesinKorea andoverseas W Sit orkplace safety employee safety orkplace morale e-level healthpromotion activities vey ontheeffectiveness of the 2014 3.04 76 135,993 -Labor Pledge(USR Activity - - - Recycled 149,408 2015 2.64 77 115,362 · · Take direct andspecificactions safe andhealthy employee practices Create acorporate culture thatpromotes signific Raise employee awareness onthe company leadership Convey strong EESHcommitment of the par Enc ticipation ourage employee voluntary ance of EESHcompliance Expected Benefits 164,205 2.97 2016 78

128,889

69 2016-2017 LG Electronics Sustainability Report 70 ENVIRONMENTAL DATA · · Datacorrection thethird may verification. occurafter party able businesssites: 13Korean (production andR&D)31overseas (production) · · · · able businesssites: 16Korean (production, office andR&D)51overseas · · (K ton/KRW 10billion) Intensity Total Overseas Korea Total Other Coal LNG Steam Electricity Input Data Total HCFC (R22) able business sites: 16Korean (production, office andR&D)51overseas · Verification status:Third verification party was completed (2012-2016). · Ozone-depleting Substances Water Energy Data c (2012-2016). V Applic production sites (2008-2016). V c Ener and heatusage(e Applic (pr Applic sites; dataforKorean sites covers theScope 2data(indirect water use) (pr Applic onsumption of steam recovered from waste heatgenerated atourdomesticlocations. erification status:Third assurance party was completed onallKorean sites erification status:Third assurance party was completed onallKorean andoverseas oduction andoffice) sites oduction andoffice) sites gy consumption was calculated basedonthenetcaloric value. Steam includesthe Materiality Report able energy usage:Combustionfacilitiesinbusinesssites, andexternal electricity orrection thethird may verification. occurafter party (Unit: Kton) (Unit: TJ) Overseas Korea xcluding energy consumption byvehicles) 7,346 1,086 4,918 2016 882 460 9,799 4,157 5,642 (Unit: ton) 2016 - 1.77 1,630 1,340 2016 290

6,769 4,454 2015 9,492 682 227 979 427 4,649 4,843 2015 1.68 2,212 1,876 2015 336

11,292

3,356 9,174

2,842 4,946 6,346 1,086 5,976 2014 2014 2014 1.91 514 624 862 626 * Corrected in2015data. typos · erification status:Third assurance party was completed onemissionsfrom leasedbuildings · Scope 3 · · able businesssites: 16Korean (production, office andR&Dcenters) and51overseas · · (Kton CO Intensity Total Overseas Korea GHG Emissions Output Data VOCs Dust SOx NOx Air Emissions GHG Emissions from thelistof items forGHGemissionsaccounting andreporting since 2016. and employees’ businesstrips (2011-2016). tion sites (2008-2016). Protocol, etc. (production andoffice) sites GHG emissionsassociat V Data c V Based onthe2006IPCCGuidelinesforNationalGr Applic erification status:Third assurance party was completed onallKorean andoverseas produc orrection thethird may verification. occurafter party 2 e/KRW 100billion)

Commuter Vehicles Business Trips Domestic Logistics Leased Properties Scope 2 Scope 1 Scope 2 Scope 1 Region Overseas Korea Total Overseas Korea Total Overseas Korea Total Overseas Korea (Unit: ton) (Unit: Kton CO (Unit: ton CO ed withlogistics andemployee travels (Korea) have beenexcluded

2 e) 2 e) 1,101 2016 1.99 403 150 357 191 57,743 2016 8,991 30.5 46.2 59.5 21.9 45.8 52.6 25.3 2016 8.6 0.4 6.9 3.6 eenhouse GasInventories, theWRI’s GHG - - 1,110 2015 54,463 1.96 39,198 384 162 314 250 2015 5,188 9,267 42.8 46.7 57.4 2015 35.1 43.5 50.0 22.3 7.7 3.2 7.4 3.7

57,348 40,960 1,279 5,179 9,134 2014 2014 2014

426 222 458 55.3 81.3 57.9 2.17 53.8 76.3 45.2 12.7 27.9 173 1.5 5.0 3.8 - · Total Overseas Korea Waste Generation Output Data eport onlypresentseport thehazardous· Heatrecovery waste datafrom Korea isincludedinincineration. asthedefinitionof · Total Landfill Incineration Recycle Wastewater Discharge PDP oper A declineinw hazardous wastes varies from country to country. This r ations (seeour2016annualreport) astewater discharge in2014was largely dueto thediscontinuation of Region Total Overseas Total Korea Total Korea (Hazardous) Korea (General) Total Overseas Korea Total Overseas Korea Total Overseas Korea (Unit: ton) 3,647,000 3,017,007 (Unit: ton) 629,993 2016 164,205 113,736 128,889 50,469 49,254 26,068 22,216 88,612 40,277 1,215 9,248 3,852 2,908 6,340 2016 2,610,092 2,326,903 283,189 2015 149,408 107,654 115,361 41,754 40,507 25,376 21,353 83,160 32,201 1,247 8,671 4,023 3,141 5,530 2015

3,727,530

179,294 133,812 135,993 101,892 727,516 ,000,014 45,482 43,691 31,993 11,308

27,037

34,101 1,791 4,956 4,883 6,425 2014 2014 Worked Total Hours (No. of case) Incident (No. of case) Fatality OIFR LTIFR Data Safety Health &SafetyData 2) 1)

OIFR: L x1,000,000)/ (T none o mat L TIFR: G Electronics hasemployees whoworkinspecialconditions orwhoworkwithspecial otal hours worked inaccounting period) 2) 1) erials undergo aspecialmedical checkuponanannualbasis.Theresults indicate that Occupational Injur Lost f ouremployees contracted occupationaldiseasesfortheperiod between 2014-2016. -Time Injuries Frequency Rate (Numberof lost-time injuries x1,000,000)/ (T otal hours worked inaccounting period) Total Overseas Korea Total Overseas Korea Total Overseas Korea Total Overseas Korea Average Overseas Korea Region ies Frequency Rate (Numberof occupationalillnesscases 209,854,371 134,335,842 75,518,529 2016 0.90 1.37 0.07 189 184 5 2 1 1 0 0 0

220,443,879 143,751,926 76,691,953 2015 0.91 1.31 0.14 200 189 11

1 0 1 0 0 0 195,920,945 128,960,370 66,960,575 2014 1.85

2.78 0.07 363 358

5 0 0 0 0 0 0 71 Report Materiality 2016-2017 LG Electronics Sustainability Report 72 Smelters Use Rate forCFSP-certified Win-Win GrowthAcademy 2,520 347 Supplier CSRRiskAssessment 40 >CSR On-site Audit 1,334 >CSR SelfAssessment Key Performance in2016 83 Materiality Report suppliers % Suppliers employees suppliers With OurSuppliers CEO, Yuyang DNU SANG OKKIM achieve “GlobalNo.1”andcreate agreater future forboth. Electronics asastrategic business partner, helpingLG Electronics new product development project. We willcontinue LG to support initiatives, collaborating implementationand factory onsmart are continuously expanding thescope of ourpartnership and joint that isconstantly Yuyang inastate of flux. DNU andLG Electronics foundation forasustainedgrowth amidstabusinessenvironment tier suppliers, thathelpedusovercome challengesandbuilda initiative andtheindustrial innovation movement forsecond- win growth programs, suchasthequality/productivity improvement 1987. Itisthislong-standingpartnership andLG Electronics’ win- The partnership between Yuyang DNUandLG Electronics beganin - Protecting Intellectual Properties Minerals Management - Conflict - Governments, Suppliers Our Focus WHAT AREIMPORTANTISSUES? Car Antimonopoly tel Prevention , Anticorruption and is nldn cret ates ad removes and partners, current including nies compa of partner eligible list 5,000 approximately a manages currently Electronics LG partners. of number total the of percent 81 million with 2,500 companies, which represent abroad, making transactions of over KRW 100 800 companies in Korea and 2,000 companies and Korea including region Asian the in place ing KRW 23 trillion or 78 percent of the total tak withtrillion, 29.6 KRW to suppliersamounted In 2016, company-wide purchases from direct other services. direct purchases such as advertisement, IT and than other services provide suppliers indirect while components, or products manufacture and materials raw provide suppliers Direct ingly. accordcompanies- partner manages and ers” suppli- “indirect and “directsuppliers” as ners part business its categorizes Electronics LG Supply Chain Procurement Performance & Procurement &SupplyChain hn. G lcrnc prnr wt over with partners Electronics LG China. opnns sd y G lcrnc to Electronics LG by used components - -

on CSR Raising SupplierA Standard BusinessPractice Establishing F air Trade as wareness - - - Our Evaluation 3) 2) 1) Buildsustainablepartnerships forshared growth. Future Direction fulfilling theirsocialresponsibilities. Jeong-D agement program oursuppliers to support intheircompliance with pliance Program. We alsohave inplace thesupplychainrisk man- transactions withsuppliers through Fair thevoluntary Trade Com suppliers, LG Electronics ensures transparency andfairnessinour of ourinitiativesAs part to buildtrust-based partnerships withour “R ment Goalsintheareas of “Decent Work andEconomic Growth” and to contribute to achieving theUnited NationsSustainableDevelop win-win growth andsupplychainrisk management.We alsostrive LG Electronics iscontinually expanding ourinitiatives forsustainable Our Approach HOW WEMANAGE IT? (17.6) 5,198.0 Asia (Unit: KRWbillion,%) 2016 Direct Purchases byRegion esponsible Consumption andProduction.” used inourpr Build afullandc r Str isk management. Americas 4,406.1 engthen thesystem to facilitate effective supplychain (14.9) 2,019.2 (6.8) 2,019.2 o Managementandrelated andregulations aswell laws asin Europe oducts. omplete (100%)inventory of anyconflictminerals 97.6 (0.3) MEA 0.3 (0.1) 0.3 CIS 4,426.9 (15.0) China (45.3) 13,416.8 Korea

- -

73 2016-2017 LG Electronics Sustainability Report 74 (Unit: %) Breakdown byCategory 2016 Indirect Purchases, (Unit: %) Breakdown byProduct 2016 Direct Purchases, which isincharge of indirect purchases. department, (GP) Procurement General the Indir inKoreaing fifteen andfourinChina. includ companies, 20 with partnerships new began Electronics LG 2016, In suppliers. top of “A-list” an create to partners performing the amount of business transactions with high Thr problems. quality of history a with or tronics companies who have no dealings with LG Elec 14.0 Parts Electronic 12.4 IT 8.0 R&D Mechanical Parts uh hs rcs, e otnal expand continually we process, this ough c sples r mngd eaaey by separately managed are suppliers ect Semiconductors Materiality Report Travel Production 4.2 Logistics 2.0 23.7 Professional 3.6 2.6 Service Service Other 2.9 General Purchases 1.5 0.1 Utility 28.0 Display Components 42.5 Marketing 26.7 Materials 27.8 Raw - - et cniuly sesn rss ln the supply along risks assessing continually ment, manage risk chain supply its strengthening is Electronics LG governments, national from supply corporate the with associated issues environmental and social for community national inter the in concerns growing to response In with theinitiatives. forward pushing is and Objectives,” Win-WinGrowth “5 the established growth, Electronics LG win-win for philosophies these on basis for mutual trust and partnerships. Based a as (https://winwin.lge.com) website Growth including tion is also made available to our stakeholders ples, and put them into practice. This informa- princi and philosophies our understand fully departments relevant other to procurement from employees our all that ensure andto works Growth” Win-Win for Principles 5 and LGElectronics Philosophies“3 the established and laws related to compliance strict with tices prac business fair and transparent through cooperation and trust mutual of partnerships building while suppliers, our for field playing levelensurea tradeto fair ofprinciples the to adhere closely we recognition, this on Based our supply chain as valuable business partners. insuppliers our of ElectronicsconsidersLGall panies. in transactions with 58 percent of these com including fromwere2016 companies,es in these made totalA trillion2.8 ofindirectKRW in purchas - supplier tronics works with approximately 700 indirect (Unit: KRWbillion) 2016 AmountandPercentage of Local Purchases byKey Subsidiaries byProduct Management System Our SupplyChain Total Other Monterey, Mexico (LGEMM) Rayong, (LGETH) Thailand Taizhou, China(LGETR) Nanjing, China(LGENT) Qingdao, China(LGEQD) Yantai, China(LGEYT) Nanjing, China(LGEPN) Korea Subsidiary euain. s pr o tee efforts, these of part a As regulations.

hi ad iig euaoy pressure regulatory rising and chain s in Korea, with over KRW 100 million 100 overKRW Korea,with in s hi, n ipeetn tml and timely implementing and chain, KRW 1.8 trillion from Korea. LG Elec u sples hog te Win-Win the through suppliers our TV Air Conditioner Refrigerator Monitor Mobile Phone Mobile Phone Washing Machine Product ------Total Purchase gr win-win include to programevaluation mance perfor executive our revised and ganizations phy, we also expanded our win-win growth or rgas o ep u sples ul world- build suppliers our help to programs LG Electronics has in place a variety of support Competitiveness for BuildingGlobalNo.1 Support the second consecutive year. for honor the receiving in, TradeCommission for Commission Korean the by Assessment ship ing in the 2016 Fair Trade & Win-Win Partner rat Excellent” “Most the received Electronics LG efforts, these to Thanks competitiveness. suppor to commitment broader our of part as pliers panding support to second- and third-tier sup- ex while competitiveness, supplier promote tobasis annual an itemson action weidentify growth, win-win for framework this on Based an to firmlyincorporateforts win-wingrowth as ef our of part As suppliers. our for programs support expanding continually basis, annual has pliers at the “LGE Win-Win Growth Camp” and sup our with growth shared to commitment our reaffirmed Electronics LG 2011, May In Sustainable Win-WinGrowth velopment Goals(SDGs). l stones in the roadmap for a sustainable future mile Production”—crucial and Consumption “Responsible8),” and (Goal Growth Economic and Work Health “Decent 3),” (Goal “Good Being Well and achieving to closer us bring also but management, chain supply effective and growth win-win sustainable ensures that system a create us these help only not that will efforts believes Electronics LG unfortunate events. of case in responses effective aid out by the United Nations Sustainable De 29,564.9 15,690.6 wh efrac i assmn criteria. assessment in performance owth Amount integral aspect of our management philoso 7,763.5 1,749.8 1,307.3 Corporate Partnership and the Korea Fair Korea the and Partnership Corporate since set win-win growth initiatives on an on initiatives growth win-win set since 522.6 482.9 419.7 775.2 853.3 t every partner company develop global Local Purchases 17,348.6 11,258.6 3,124.2 446.7 410.1 674.6 166.6 699.0 532.6 36.3 Percentage 40% 85% 85% 52% 40% 90% 62% 72% 59% 2% ------Our SupplyChainManagementSystem In pursuance of win-wingrowth, · Process innovation · Training &HRsupport · Financialsupport t forbuildingGlobalNo.1 · · Sustainable Win-WinGrowth 5. Make long-term basedoncommunication andongoingefforts andtrust. 4. Complywithfairandtransparent standards withdiscipline,andcooperate witheachother. 3. Establishclearstandards forGlobalNo.1first, thensetgoalsandexecute accordingly. plans 2. G Electronics mustreinvent anddisciplineitselffirst to comply withgloballevel processes 1. LG Electronics strives to help t Suppor c Suppor Working TogethertoAchieve SDGs companies withGlobalNo.1 suppliers grow into strong echnology ompetitiveness cr Car and rules. L eates profound impact. efully selectsuppliers thathave competitiveness, andthenprovide that support competitiveness. t fordeveloping next-generation 1 Goal 12 Goal 8 Goal 3 5 Principles(Innovation +Jeong-Do Management) 12.6 8.8 8.7 8.3 3.9 3 Philosophies(No.1Spirit+SharedDrive) ous chemicals andair, water andsoilpollutioncontamination. Substantially reduce thenumberof deathsandillnessesfrom hazard - Ensure healthy livesandpromote well-being forallatages full andproductive employmentanddecent workforall Promote sustained,inclusiveandsustainableeconomic growth, tion into theirreporting cycle. to adopt sustainablepractices andto integrate informa- sustainability Encourage companies, especiallylarge andtransnational companies, Ensure sustainableconsumption andproduction patterns migrants, andthoseinprecarious employment. ments forallworkers, includingmigrant workers, women inparticular Protect rights andpromote labour safeandsecure workingenviron- its forms. ment anduseof childsoldiers, inall andby2025endchildlabour and eliminationof theworst formsof childlabour, including recruit andhumantrafficking andsecureend modernslavery the prohibition Take immediate andeffective measures to eradicate forced labour, financial services. small- andmedium-sized enterprises, includingthrough access to innovation, andencourage theformalizationandgrowth of micro-, activities, decent jobcreation, entrepreneurship, creativity and Promote development-oriented productive policiesthatsupport

Suppliers are avaluable source and partners ininnovation. of LG Electronics’ business Expected Benefit Major Activities competitiveness

2 · · · Strengthen SupplyChainRiskManagement · · Financialhealth Conf and safety Labor r Fir Jeong-D management e safety lict Minerals ights, ethics, environment, health o managementandcompliance LG Electronics shouldnot simply In pursuance of win-wingrowth, from growing competitiveness share existing resources but strive to share thebenefits achieved through ongoing innovation. 3

- projects. From 2011 to 2016, LG Electronics LG 2016, to 2011 From projects. ent mid-size and small Korea’s of technolo capabilities gy to next-generation aims the Program strengthen Partnership Green Our 1 -Green Partnership Program generation technologies. for strengthening suppliers’ capabilities in next initiatives on-going in engages Electronics LG Next-Generation Technology fortheDevelopmentSupport of and local subsidiaries. overseas suppliers’ our to support same the by Encouragedmanagement. chain supply mizing opti- and system production and quality ing supplier 95 for productivity enhance and issues fect de chronicaddress to able werewe 2016, In internal experts. while programs, support supplier running in cialized spe experts fosteringinternal into effort and time investing also is Electronics LG industry. same the from suppliers our for opportunity benchmarking a creating events, networking share supplier at suppliersother practiceswith best and select we addition, In term. the long in initiatives improvement manage and implement independently to capacity develop the with impact sustainable a creating on phasis L es andbuildupstrengths. same the towards work they that ensuring pliers, sup and staffs support our among teamwork build and suppliers our motivate to programs support our into results the incorporate We need,” and reach a consensus on “where to go.” they “what and are” they “where understand t and production exceptional with suppliers ter fos- to support capability-building with pliers sup our provides Electronics LG end, this To times, anddeliv lead development shrinking and needs tomer constantly changing market, fast-evolving cus the to respond to and products competitive e tiveness. Supplier competitiveness is becoming competi own our to translates directly pliers sup our of competitiveness the Electronics, LG like end-products of producer a to understand that, clearly we because technological capabilities and production quality, class manager sup top the consultsElectronicsprogram, LG port a initiating to Prior operations. global cnlgcl aaiiis n cpct for capacity and capabilities echnological Eetois lo lcs priua em particular a places also Electronics G e mr iprat n u aiiy o deliver to ability our in important more ven rrss hog jit r pnoe R&D sponsored or joint through erprises hs rga’ sces w ae extending are we success, program’s this upr porm ad ep suppliers helps and programs support goal and successfully address weakness sitn or upir bid po of pool a build suppliers our assisting s by focusing our support on enhanc on support our focusing by s fo te upir ie o clearly to side supplier the from s er competitive products. 75 ------2016-2017 LG Electronics Sustainability Report 76 P Development Technology chase-Guaranteed right to theirtechnology. establishing registration,andent disputes,patent handling pat processing for support provided and ers, suppli 31 to patents 129 opened we 2016, pat technology our to access provides and pliers patent shar a operates Electronics LG itiveness, compet technological strengthen and sales increase SMEs help to efforts our of part As atent Partnerships and 4 - t 2015 in 106 and year,2014 ery in 104 from The number of service cases has increased ev service. the using by incurred costs all bears r supplier’s the safeguard to technology pliers’ sup- of stewardship take organizations ment Under the Technology Escrow govern Service, thr developed technologies new for Service crow technology,plier Technologythe utilizewe Es- sup protect better to efforts our of part As projects. R&D supplier for support expanding arecompetitiveness,technologicaldevelopwe suppliers our help t forDeveloping and and parts and equipment major of production localpromote to order In 3 - their products. develop ideas into technologies and create markets them for helping by markets overseas capture and growth achieve to fields biotech and digital the in ventures forand startups local center support our as serve will facility Invention The 2015. KoreaFebruary in Association Promotion the of Chapter Chungbuk for Center Chungbuk the opened also We gram. and medium small for programs support R&D ment govern- in participates actively Electronics LG 2 - crease ourinvestments intheinitiatives. to capabilities,in- R&D and nologies plans and tech key with suppliers top develop and find to billion 60.6 KRW approximately invested gt t te ehooy ad G Electronics LG and technology, the to ights o 175cases in2016. rogram and the Cost-Saving Joint R&D Pro R&D Joint Cost-Saving the and rogram ough joint R&D projects with our suppliers.our with projects R&D joint ough ents, the source of true competitiveness. In P Programs P P Suppor Expanding Suppor raie cnm ad noain t the at Innovation and Economy Creative ing program for small and mid-sized sup mid-sized and small for program ing rotecting Core Technologies atent forSuppliers Platform Materiality Report enterprises (SMEs) such as the Pur the as such (SMEs) enterprises lgl r qial proprietary equitable or legal a t forGovernment

------velopment of next gener our suppliers inthede- programssupport to help tinually implementing LG Electronics iscon- ation technologies. funding support and favorable payment terms. including support financial indirect and direct c for investment their support and stability al operation and financial suppliers’ our ensure to efforts continuous makes Electronics LG Financial Support hog wih e fe etne financial andlegaladvice. support extended offer we program, which through support sourcing commodity the such as the overseas partnership program and As LGport Electronics projects. sup to operations overseas established have from suppliers based in Korea to suppliers who beneficiariesprogram of scope the expanding continuously is and institutions, financial with Guar Growth Win-Win the and Program, nership Part Business Overseas the Loans, Network as such programs support financial wide of range a operates Electronics LG addition, In through theprogram. respectively, billion, 40 KRW and billion 94.6 and suppliersfirst-tier 111 2016, In loans. terest low-in provide to (KDB) Bank Development Korea the and (IBK) Korea of Bank Industrial Win-Win Growth Fund in conjunction with the billion 200 KRW a established Electronics LG and provides low-interest funding to suppliers. Electr LGsuppliers, our of stability financial the sure en to efforts our of part As 2016. and 2004 250.4 KRWprovidingvancedtotaloftechnologies, a ad develop and projects, LGE for operations expand capacity and facility, establish overseas our of part as suppliers to support funding rect di- zero-interest, provided has Electronics LG 1 -FundingSupport L markets, global in competitiveness gain ers apacity expansion through a broad range of range broad a through expansion apacity G Electronics has in place support programs support place in has Electronics G at f u iiitvs o ep u suppli our help to initiatives our of part efforts efforts to improve productivity and quality, ne Spot rga i partnership in Program Support antee 9 eodte sples eevd KRW received suppliers second-tier 99 onics partners with financial institutions financial with partners onics ilo i fnnil upr between support financial in billion ------capability development andcompetitiveness. to make a sustainable impact on our suppliers’ competencies business core and productivity quality, as such fields relevant from experts external and internal 200 over by consulting offer also We professionals. experienced and provideto suppliersaccesscompetent towith government agencies and major media outlets by hosted fairs job sponsors Electronics LG 2 -Recruiting andConsultingSupport completed thesetraining programs in2016. suppliers 347 from employees 2,520 of total qualit the enhance to coursesdesigned including es, process technicalcore on coursestraining of employ their and suppliers local our to programs ing train- of accessibility the enhance to versity) a with consortium a up set also Wefacility. ing train- our at Academy) Growth (Win-Win ing a established Electronics LG capabilities, ployee em- their boost suppliers our help to order In 1 -Win-Win Growth Academy tiveness in HR development and management. competi core their boost them help to order in suppliers second-tier and first- to support LG Electronics continues to expand its training Training &HRSupport in 2016. system the through suppliers to payments in banks in Korea and processed KRW 6.8 trillion the operates Electronics LG accordingly. cessed pro are companies these to payments that third-tiersecond-toand andwellsuppliers as supplier first-tierour to paymentterms our suresthat en- PaymentElectronics’SystemWin-Win LG 3 - and employee welfare. t Year’s(New holidays al Thanksgiving) and Day suppliers earlier than scheduled before nation to payment make weAdditionally, processing. pa makes and month a twice suppliers from es invoicprocessesElectronicsLG suppliers. our and in processingpayment of frequency the has creased Electronics LG issues, cash-flow of oving Payment Conditions& suppliers our relieve to efforts our of part As 2 - ipoe upir’ iaca management financial suppliers’ improve o dedicated training facility for supplier train supplier for facility training dedicated mns n ah ihn e dy o invoice of days ten within cash in yments oa uiest (hnwn ainl Uni National (Changwon university local P Implementation o Making EarlyP Impr adjusted the payment schedule in favor of ytm n atesi wt svn major seven with partnership in system ayment System o mtlpatc odn pout. A products. molding metal/plastic of y ees, as well as to provide a wide range wide a provideto as well as ees, s (cash or note payable) are extended are payable) note or (cash s ayments f Win-Win

------pany OneDecision.” our by faced difficulties any addressing to ment regularly visit suppliers ofas part our commit Department Purchasing the from employees no sparesElectronicsLG and face, suppliers sues is various the understand toorder in surveys satisfaction partnership periodic out carry to enlisted are agencies certification Recognized Suppliers). of (Voice e-VOS the and website Growth Win-Win the place in has Electronics and effectively address supplier grievances, LG company’sorderthe sharetoIn policiesmajor suppliers. with communication for diverse channels place in has Electronics LG growth, In order to build strong partnerships for shared 1 - communication withoursuppliers. enhancing at aimed programs of range broad pr internal through growth win-win for dation foun- the solidify to initiatives our of part As Process Innovation 3 -Purchasing MeetingforSMEs andProductivity2 -Quality Improvement Support 1 -2016LG Group PledgeforFair Trade 3 2 1 ocess innovation, LG Electronics operates a operates Electronics LG innovation, ocess effort effort in trying to address these issues. Our R Enhancing Communic partners under our principle of “One Com esolving SupplierConcerns ation &

- - - (Unit: EA) Results (Summary) Supplier CSRRiskAssessment quest services. re- gift and products, selected for prices cial spe etc.),(self-development, activities, leisure services care employee range including services wide of a provides with.lglifecare.com) (http:// mall shopping benefit online the employee programs, our of part as Operated employees receive, under the same conditions. own our our that benefits several of with suppliers employees provides Electronics LG 3 -SupplierOnlineShoppingMall forournation’sness opportunities SMEs. busi expanding further Electronics, LG with relationship business a open to chance a with them provide to 2016 in companies 17 with ofmeetingsholding Companies, Small and Big go chasing meetings with SMEs organized by local LG Electronics also actively participates in pur ideas. business submit to Electronics LG with c cess” feature on our supplier portal and invites in place the “New Partnership Application Pro artnership Process & new technologiesmaterials,and LG Electronics has discovering for process our of part As 2 - ompanies with no previous history of working vernments or the Collaboration FoundationCollaboration the or vernments 2014 High Risk Moderate Risk Low Risk 126 Pur Open P chasing Meetings (61%) 77 (32%) 40 (7%) 9 2015 264

(61%) 161 (29%) 76 (10%) 27 1,334 2016 (37%) 497 (48%) 638 (15%) 199

- - - - ui. n u rcmedto, u suppliers our recommendation, our On audit. safetyfirethrough our identified risksfire the address immediately to suppliers our require fir and materials, flammable of quality agement firefightingelectricalman for and equipment, fireprevention measures check safety as such a on audit safety fire performs and sessment self-as out carry to suppliers our requiresics Electron LG suppliers, our at risks safety fire address to order In operations. business our assets, corporate of loss and fatalities as such pliers sup our to damage great a cause could and risks safety industrial major the of one is Fire Fire Safety financial improvement through monitoring. requiresuppliersthat manages and amounts), major suppliers (selected based on transaction of assessment rating credit regular conducts effor our of part As suppliers. third-tier sec and our ond- of stability financial and agement man the on impact negative a have to likely r credit in drop a and expansion business less restructuring,reck as such risks financial and management that ElectronicsunderstandsLG Financial Soundness & Management Stability and subc trade fair on regulations and laws with ance compli our review and monitor and practices, subcontracting in fairness ensure to Council Gr Shared and Partnerships Corporate Prac for tices Business “Four the adopted also We fairness and transparency ensure to system curement pro the through suppliers with transactions business our of all handle also We Conduct. Code of Ethics and the LG Electronics Code of LG the to pursuant requirements internal our o selection the in transparency defined tronics Elec LG suppliers, our with transactions ness transparentbusi- and fair for framework a As Jeong-Do Management&Compliance response. such prevent or mitigate and risks, potentials tify iden to system management Risk supplier a place in has and value, brand our undermine also but operations business our on impact direct a have only not could chain supply our LG Electronics clearly understands that risks in Supplier RiskManagement tn sfee b or is-ir upir are suppliers first-tier our by suffered ating sples n fins i te rcs as process the in fairness and suppliers f regular basis with a particular emphasis on emphasis particular a with basis regular eproofing of key production equipment. Weequipment. production key of eproofing wh etbihd y h Kra ar Trade Fair Korea the by established owth” s o iiae uh ik, G Electronics LG risks, such mitigate to ts ik fo mtraiig hog timely through materializing from risks which may in turn cause disruptions indisruptionscause turn in may which throughout the procurementthroughoutthe process. ontracting onaregular basis. 77 ------2016-2017 LG Electronics Sustainability Report 78 all of oursuppliers inKorea andoverseas. include to suppliers major from program this risks. In 2016, LG Electronics began to expand the addressing in support expert provide and customers, our from requirements CSR share management, risk CSR of nature critical the emphasize to side supplier the from COO and initiatives. Our CSR experts meet with the CEO our CSR experts to support their improvement identifies supplier Electronics LG results, sessment as the of analysis and review careful a After on the based internally developed (iSAQ) naire question self-assessment in-depth an using supplier ment Center. Under this program, we reviewed Procure the through program management Risk CSR supplier a operates Electronics LG risk management throughout our supply chain, CSR systematic for initiatives our of part As CSR Risk(LaborRights,EESH) of fire intheireveryday safety practice. t bookguide fire distributedsafety a ducedand out the process. In addition, LG Electronics pro carrying to prior days five least at posted and prepared be to plan safety a requires which flames, and smokes sparks, produce that jobs alladvance-noticefor an adoptedsystem also o raise supplier awareness on the importance EICC Code of Conduct and audit criteria. audit and Conduct of Code EICC Supplier CSRRiskLevels byRegion (Unit: %) s requiring our assistant and dispatch and assistant our requiring s Total High Risk Moderate Risk Low Risk (Unit: Number) Materiality Report High Risk Moderate Risk Low Risk opine ih S requirements CSR with compliance 17.7 Korea 25.6 1,334 Total 199 638 497 56.7 - - - - at sessment, LG Electronics carried out CSR audit and overseas. of oursuppliers inKorea program to include all CSR risk management expanding oursupplier chain, LG Electronics is throughout oursupply cally manageCSR risks In order to systemati- as ous year, with 199 suppliers being categorized previ the from percent 430 up assessment, year’s this in participated suppliers 1,334 of In-depth Self-Assessment Questionnaire (iSAQ). A total the using subsidiaries production overseas27 its with relationships business in suppliers global of performance CSR compliance the evaluated Electronics LG 2016, In CSR Self-Assessment forGlobalSuppliers risk” including eleven major suppliers (top 80 (top suppliers major eleven including risk” 40 supplier locations categorized as “high as categorized locations supplier 40 28.3 “high risk.” As a follow-up for the self-as the for follow-up a risk.”As “high 18.3 Korea 441 250 113 78 9.3 Europe·CIS China 18.3 62.4 China 508 144 317 47 63.4 Vietnam, Thailand) (India, Indonesia, 23.5 19.5 Asia 200 143 39 18 Americas Asia - - (Poland, Russia, 30.9 9 Europe·CIS Kazakhstan) lationship with our production subsidiaries in subsidiaries production our with lationship re business in suppliers include to China and CSR Koreain locatedprogramsuppliersfrom audit our expanded Electronics LG 2016, In CSR On-siteAudit LG Corp. from September 7to 9,2016. by organized sessions training group risk CSR Chinese tions, we had supplier CSR risk managers from loca overseas of at staff management risk capability CSR the enhance to initiatives our of part As subsidiaries. overseas our of each at staff procurement the from management assigned firsta as and phases, tiple step process,the in mul We’rein ownership task the transferring r CSR supplier through efforts our of tiveness of initiativesour part as to increase effec the subsidiaries production overseas to HQ Korea risk atTeam Procurement the chain from management supply global of ownership task thetransfer to Electronicsbegan LG 2016, In CSR RiskManagementSpecialists TrainingSupplier Global ProgramsFoster to cess. non-conformances identified through the pro improvementin engaged addresstoinitiatives and amount), transaction on based percent isk management tailored to local conditions. local to tailored management isk 71.5 93 17 59 17 45.6 production subsidiaries participate in participate subsidiaries production a contact point for supplier CSR risk CSR supplier for point contact a (Mexico, Brazil) Americas 68 16 31 21 8.4 (Saudi Arabia, Egypt, MEA 45.8 45.8 South Africa) MEA 24 11 11 2 - - - - - o of lack as non-compliancesuch of areas tified c and expanding, continually are lines duction the largest numberof our overseas suppliers represents geographically which region, the r CSR for training conducted also we sidiaries, risk sub overseas CSR our of capability the management enhance to initiatives our of part As reference. a as management ethical on documents provided and issues these on conduct. LG Electronics required improvement Nanjing and Tianjin in located suppliers eleven at dit au- CSR out carried Electronics LG China, In China impr ongoing make to them encouraged and tive initia long-term a as items these establish to on rules company to revisions as such mitment com longer-term requiring those for except immediately, issues the addressed suppliers Ourhealth. standards and industrialsafety for came from failure to comply with international non-c carriedand majorityofment, A audit. CSR out self-assess CSR the through risk” “high as categorized suppliers Korean from Provinces fr amount) ma- transaction on 20 (based suppliers selected jor Electronics LG Korea, In Korea potential CSRrisks. manages effectively that strategy business reviewedtheir also suppliers and experts CSR our session, this of part As management. risk chain supply of significance the and supplier, in tions, the international CSR standard launched regula CSR global on information to the share side supplier the from manager site the andCEO the with meeting a had experts CSR our audit, CSR to Prior outcomes. the shared and improvementinitiatives, in engaged audit, non-c address suppliers our help to program port F curementTeam Koreaexperts.at CSR and HQ Pro the between collaboration the through tak to capabilities build them helped and sidiaries ita ad lw, oad wee u pro our where Poland, Mlawa, and Vietnam isk management staff from our Chinese sub Chinese fromour staff management isk nutd S adt n hs fu regions four these in audit CSR onducted ollowing the CSR audit, we launched a sup a launched we audit, CSR the ollowing fficial guidelines on ethical management and management ethical on guidelines fficial m yogu, yoga ad Gyeonggi and Gyeongnam Gyeongbuk, om 2010 (ISO 26000), CSR risks faced by the by faced risks CSR 26000), (ISO 2010 onrhp f S rs mngmn for management risk CSR of ownership e hiring. LG Electronics advised our suppliers our advised ElectronicsLG hiring. ovement efforts. ompliances identified through our audit our through identified ompliances the through identified cases ompliance n etme 21. u adt iden audit Our 2016. September in ------effectiv od of two months. We also discovered that the rae fil prun t rltd as and regulations. laws related to pursuant fairly treated were workers these that confirm to satisfied werewe and nationals, foreign employed that locations audit only the were suppliers Polish k record poor and guidelines management cal wereimmediat that issues minor for except ulations, reg and laws local with compliance strict in audit Our Mlawa. in locations supplier four of dits au- CSR performed Electronics LG Poland, In Poland guidelines. distributing and sessions training as conducting such questionnaire self-assessment the on awareness supplier raise to initiatives engage in will Electronics LG situation, the of w as questionnaire self-assessment the of ing understand an lacking suppliers our to due of our Vietnamese suppliers was compromised engaged jointly and audit the through identified sues is the address suppliers our help to program our through identified case non-compliance other an- was process response emergency quate Inade equipment. safety fire and materials chemical of management inadequate as such sit supplier our of some at non-compliances fied dits of five supplier locations. Our audit identi au ElectronicsLGconductedCSR Vietnam, In Vietnam 1,2 -SupplierCSROn-site Audit(Korea) eig n mrec eauto dil. Our drills. evacuation emergency on eeping 2 1 l a ohr omncto err. n light In errors. communication other as ell s msl i idsra sft ad health and safety industrial in mostly es, audit. LG Electronics launched a consulting eeld ht u Pls sples were suppliers Polish our that revealed eness and accuracy of self-assessment in improvement initiatives over a peri l adesd sc a lc o ethi of lack as such addressed, ely ------ten conflict-affected countries conflict-affected ten in sourcing conflict-free support to goal our of pursuit in program conflict management our minerals enhanced further we 2015, In Conduct andother contractual agreements. of Code Supplier our in requirementsrelevant c best practicesdustry for source minerals from pr management our aligning include also tiatives ini- Our sourcing.responsible support to forts ef continuous our reflect to website our global on available information the made and programs our of update and review regular performed have we 2012, in minerals conflict managing to approach our introducing Since value chain. entire our across rights human respecting to corporatea committedcitizenas issues these our operations, we are deeply concerned about occur not do activities mining and extraction erals sourcing of these minerals. Although raw min the and abuses rights human of concerns to response in 2011 since products our in used (3TG) gold and tantalum tungsten, tin, the originsof the tracing been has Electronics LG LG Electronics Conflict MineralsPolicy initiatives outlinedbelow. nine neighboring countries through the various and (DRC) Congo the of Republic Democratic Uganda, Zambia Rwanda, SouthSudan, Tanzania, Republic, Republic of Congo, Burundi,CentralAngola, African Democratic Republic of Congo, Ten C 1 nlc-fetd ra, n strengthening and areas, onflict-affected Conflict MineralsManagement ogram with international guidelines and in and guidelines international with ogram onflict-affected N directly within the sphere of influence of Republic of Central African Republic Congo 10 Countries Angola ations: Democratic Republic of Congo Zambia Burundi South Sudan ➊ including the including Uganda Tanzania Rwanda 79 - - - 2016-2017 LG Electronics Sustainability Report 80 Based suppliers.our by us to reported data the of ty ed with conflict minerals to improve the quali- epne fr ofit ieas management. minerals conflict for responses effective support to CMMS boardthe Q&A on a operates Electronics LG sessions, training t relatedrequirements our to and minerals flict con- on regulations to response supplier tive o part as information, relevant collecting for es approachand minerals conflict awarenesson group a training program launched designed to enhance supplier Electronics LG 2013, In in conflictminerals managementefforts. suppliersour support and conditions business updat and review to continue will Electronics LGity. reassessment to enhance data reporting qual perform and improvements, require training, an performed have we 2015, SinceProgram. ers Smelt Conflict-free the with compliance and information as well as us, to supplied parts and ponents com in minerals 3TG of use the on suppliers v collect, we CMMS, the Through (CMMS). tem Sys MineralsManagement Conflict calledthe traceability, 3TG support to 2013 in system a establishedElectronics LG issue, minerals flict As part of our regulatory response to the con- S Conflict MineralsManagement lict Minerals Policy onOurGlobalWebsite 2 – 1 – o conflict minerals. In addition to these group ldt ad aae nomto fo our from information manage and alidate or upr iiitvs o esrn effec ensuring for initiatives support our f ystem -ImprovementsandTraining oprt-ee tsfre n luce a launched and taskforce corporate-level assessment on supply chain risks associat risks chain supply on assessment Conf Conf 2 1 te nomto t rfet changing reflect to information the e n h rsls w cnut necessary conduct we results, the on lict Minerals ManagementSystem (CMMS) Materiality Report on the origins of mineral sourcingmineralof origins the on

------(Unit: %) CFSP CompliantSmelters par fectively address these challenges, and actively entir the of benefits the in believe also Wedustry. in the in used not are regions flict-affected the Trade(KITA)International andreaAssociation Ko the as such organizations external collaborationwith expanding while issue, this respondto effectively to customers business and suppliers with partnerships strengthen L tomer requirements onconflict minerals. cus manage effectively subsidiaries overseas and Korea in organizations business our help In 2016, we enhanced our internal systems to r as dmn ceiiiy n transparency and credibility demand also ers stakehold - Our engagement. smelter and ing report diligence, improveddue for (CFSI) tive mines the from extracted minerals 3TG en- that suring in effort best its makes Electronics LG SmeltersCFS-certified toExpandtheNumberof Efforts minerals management standards and systems. to continuously improve the company’s conflict expertsconsulting programsoutside and with and mation from stakeholders including customers infor for requests to responsive also are We minerals. conflict on regulations to respond suppliers overseas and Korean our help that on ticipate in or sponsor seminars and workshops par actively we partnerships, these minerals). Through conflict for initiative EICC-led an Eetois s otnal wrig to working continually is Electronics G the issue, and implement support programs ticipate in Freethe Conflict Sourcing Initia civil society, while conducting partnership conducting society,while civil e industry working together to more ef more to together working industry e ofit re orig ntaie (CFSI, Initiative Sourcing Free Conflict otold y re gop i con in groups armed by controlled 49 68 83 2014 2015 2016 ------cent, 2014:CFS49percent) As supply chain. flict-free validated smelters and refiners in our ning in 2017, the work of the TWG will be car Begin- industry.broader and government, ers, stakehold local with collaboration continued on depends success and journey a is solution ago, years four TWG the joined we since plished accom been has much that believe we While on mining. dependent largely is earning whose families local for livelihoods alternative and mines of pr The activities. strengthening policy and ment engage government continue plementation, im roadmap oversee to partners local hiring sustainable roadmap and incentives guide; and, with partnerships government; from dorsements en conditions; local of analyses and search re included have initiatives These mining. of forms sustainable more promote to actions take to actors key from commitments gain loc theunderstand better to initiativeskey of ber Sinc cant globalsource of tin. signifi a Indonesia, Banka-Belitung, in mining tin of challenges sustainability the addressing goal of the Group is to positively contribute to member of the Tin Working Group (TWG). The TradeSustainable aas 2016 in Initiative(IDH) chain, supply its in materials mined or sourced sibly of its broaderAs part commitment to respon- Tin MinesinBangkaIsland,Indonesia Tin WorkingGroupActivities for (2016: audit. CFS a undergoing of process the in ers smelt of percent four include we if percent CFSI’s Conflict Free Smelter Program reach 87 the to compliant found refiners and smelters ofrate usage our efforts, these of result a As t efforts support to CFSI with smelters on tion informa new sharing certification, CFS quire ac to chain value refinersour smeltersand in encourage also We basis. annual an on (CFS) supplier our that expectation the establish to letter ry adviso an out sending chain, value collective our in smelters CFS-certified of number the increase to initiatives coordinated in engage to Council” Response “LG Mineral Conflict the Family formed and Innotek LG and Chem Display,LGLG with up teamed Electronics LG challenge by increasing the percentage of con in conflict-free sourcing – we are meeting that o keep globalsmelter informationupto date. ogram is also exploring ways for reclamation al situation, engage local stakeholders and stakeholders local engage situation, al part of these efforts, in September 2014, September in efforts, these of part e 2013, the TWG has undertaken a num a undertaken has TWG the 2013, e we recognize that achieving a sustainable local industry, the development of a 2020 LG Electronics continued tothe support suc fo Cnlc Fe Smelters Free Conflict from source s F 8 pret 21: F 6 per 68 CFS 2015: percent, 83 CFS ------t work to continue will Electronics LG holders. our efforts for communication with our stake of part as website corporate our on sourcing available responsible on policy and position our made also We government. Chinese the by led (RCI) Initiative Cobalt Responsible the the Novemberin by 2016 launched tiative(RRMI) Ini SourcingMaterial Raw Responsible the of member a this became Electronics LG on conviction, Based Indonesia. Bangka-Belitung, as such issues mining mineral resolve and dress multi-stak with collaborating to committed seri is and ously very matter this takes Electronics LG components. discover notthe origin of cobalt contained could in some we Indonesia, and Philippines the China, to back products our of most in used mineral the of origin the trace to able were we Although 2015). of (as cobalt contained c 3,750 that revealed diligence due our ever, directno made pany purchase of cobalt. How- com- the that confirm to able was and erals, min conflict including illegally commodities procured of use the prohibits Electronics LG As the issue. on NGOs and customersfrom inquiries ceived re also Electronics LG chain. supply their to introduced and extracted being is cobalt how trace to manufacturers for call a prompting l child including violations rights human posed ex International Amnesty 2016, January In Cobalt Mining&ChildLaborIssues tinuser. downstream a as progress constructive achieve to ways for partner to continue will and c sues including cobalt based on communication Industr Electronicsthe of auspices the under out ried abor in the cobalt in the DRC,mining industry owards a sustainable solution for minerals is omponents supplied by our first-tier suppliers stipulated stipulated in our Supplier Code of Conduct, ofit ieas cbl ad i mnn in mining tin and cobalt minerals, conflict IC n i loig no atcptn in participating into looking is and EICC ollaboration withourstakeholders. Ctznhp olto (IC ad we and (EICC) Coalition Citizenship y hle iiitvs okn t ad to working initiatives eholder ------csr-in-supply-chain business-partner/ global/sustainability/ http://www.lg.com/ Total Tungsten Tantalum Tin (Unit: Case) CFSP (Conflict-Free Smelter Program) Compliance Statusof LGE 3TG Mineral Smelters Gold 2016 2015 2014 2016 2015 2014 2016 2015 2014 2016 2015 2014 2016 2015 2014 CFSP CompliantAuditinProgress CFSPNon-Compliant LG Electronics’ Position on Responsible Sourcing 8 21 25 8 28 33 34 42 116 16 185 52 10 59 6 64 0 0 10 0 32 75 2 19 31 3 35 0 90 230 37 41 3 45 5 45 28 8 6 25 8 21 10 75 78 78 34 82 4 10 66 29 239 36 22 101 272 276 114 116 81 Report Materiality 2016-2017 LG Electronics Sustainability Report 82 Life’s GoodVolunteerGroups Contribution Initiatives Employee Participation inSocial 100,081 93 54 Key Performance in2016 Campaigns inAsia Public HealthPromotion 60,741 83 Materiality Report teams business locations countries 1,904 beneficiaries employees employees With theCommunity Technology Center the Director of of Quality Life Prof. of SeoulNational University and SANG MOOKLEE possible withoutLG’s commitment grateful. whichIamvery the awareness andprogramming skills.Allthiswouldnot have been the United Arab Emirates to educate college studentsboth we successfully embarked onnewmissioninlessknownregion of life of through peoplewithdisability technology. Thanksto them, world. LG Electronics shares thisvalue of improving thequalitiesof but to become theirsource of informationandconnection withthe not onlyeyes,smartphones ears andvoice forpeoplewithdisability advancements incomputation, SNSandcloudcomputing have made is thistruethaneverof human history thanatpresent. Recent Computer isGod’s forpeoplewithdisability. gift Nowhere inthetime - Communities, NGOs,International Organizations, Employees Our Focus WHAT AREIMPORTANTISSUES? Communities Ec P romoting theSustainable onomic Growth of

17 SDGs as our priority. Following these new these priority.Following our as SDGs 17 the of five identified and management, and thr ples that govern our social contribution efforts w cause, valuable the of support In efforts. tion contribu social our in objectives primary the the SDGs and embraced these goals as one of of purpose and intent the honors Electronics LG citizen, corporate global responsible a As in achieving theseambitiousgoals. stakeholders between partnerships expanded as well as sector private the including society places a particular emphasis on the role of civil economic, of social and environmental range issues, and broad a covering targets 169 and de future this 2030, through development able development. Expect sustainable the for mitment com global a as (SDGs) Goals Development Sustainable the adopted leaders world 193 Nations, United the at 2015, September In Our GoalforSocialContribution Life’s GoodwithLG reaie ad esalse te princi the reestablished and reexamined e eomn faeok opie 1 goals 17 comprises framework velopment ough discussions with our key stakeholders

ed to serve as a roadmap for sustain for roadmap a as serve to ed - - easing Donations and - Organizations NGOs andInternational Coll that Address Local Needs D Communities Contribution Initiatives for Incr eveloping Products andServices aborating withGovernments, - - - - Our Evaluation 3) 2) 1) Develop products andtechnologies thataddress local issues. Future Direction programs. carries outannualassessmentandusestheresults to upgrade our contribution through oursocialcontribution initiatives, LG Electronics to create of ourefforts As part greater impactandmake long-term Sharing andcomfort.” our commitment towards “Technology thatcares, Trustworthy partner, contribute to thelonger-term development of communities, of aspart communities withprograms thataddress majorsocialissuesand our socialcontribution initiatives, LG Electronics strives to empower With “Cooperating Toward aBetter Lifefor All”asthevisionfor Our Approach HOW WEMANAGE IT? impact the monitors and SDGs, the achieving to ute contrib- that initiatives implements and ops devel continuously Electronics LG guidelines, fetv sca cnrbto iiitvs Third, initiatives. contribution social effective stak out with collaborate and stake expectations holder identify we which through channels hav back into our social contribution initiatives. We feed their incorporating in effort best make and stakeholders with partnerships our value and communitiesaddresssocialhelp that nologies developing and distributing products and tech productstechnologies.and To weend, this are our with need in those to value differentiated putting is and directions strategic three set tronics Elec LG vision, this attain to order society.In human the in all for actions lives better building our are in consideration and thoughts our in empathy that believes Electronics LG Our PrinciplesforSocialContribution regular basis. Promote involunteering employee participation andcharitable giving. disenfr P e in place a wide range of communication of range wide a place in e rovide education andtraining to thesocially opportunities hles o ein n ipeet more implement and design to eholders niomna ise. eod w will we Second, issues. environmental and effectiveness of our efforts on a on efforts our of effectiveness and them into action. First, we will deliver a anchised from emerging markets anddeveloping countries. - - - - -

83 2016-2017 LG Electronics Sustainability Report 84 focus own businessesandcore competencies, thevaluable causes andsupport witharenewed commitment. programs that only LG Electronics can deliver. LG Electronics plans to focus our energy and resources on the SDGs that are highly relevant to our implementorder to competencesin and business our to issues relevancethe ofthe countries, and these in communities by faced issues social impact, positive a create can Electronics LG where countries identified also we priorities, these on Based competencies. core and businesses, and risks. As a result, we were able toand prioritizeidentify five Sustainable Developmentopportunities Goals that havefuture a considerable and relevance business, to our goals, our of purpose and nature the as such conditions management overall account into taking initiatives, CSR for goals own our relevanceto their assessed and targets, associated and Goals Development Sustainable the studied carefullyElectronics LG the SustainableDevelopment Goals(SDGs) LG Electronics and Materiality Report 01 - s SDGs patterns and production able consumption Ensure sustain- sustainable resilient and inclusive, safe, Make cities for all and decent work employment economic growth, and sustainable Promote inclusive energy forall and mod-ern able, sustainable affordable, reli- Ensure access to for allatages mote well-being lives andpro- Ensure healthy 02 - World Heritage sites. protecting biodiversity and filtration systems, and efficiency, expanding water Contribute to enhancingenergy Social Issues training. through employmentand Need to foster youngtalent Social Issues poor infrastructure. in underdeveloped countries with for stablepower supplyisstrong energy sources, whiledemand consumption of conventional advanced countries, lowering the energy sources isgrowing in Demand fornewandrenewable Social Issues underdeveloped countries. hygiene andpublichealthin drinking water andenhance Need to ensure access to clean Social Issues support programs.support to communities through minimizing thenegative impact and consumption, while promote sustainable production science and technology to enhancing theircapabilities in developingSupport countries in Social Issues Relevance to LG Electronics developing countries. training inelectronics repair in economy andprovide vocational sustainability, promote local people achieve financialself- programsHas inplace thathelp Relevance toLGElectronics promoting valuable causes. billboards thatcan beusedin infrastructure suchaslarge digital community. Hascampaign as acorporate memberof the World Heritage sites Responsible forprotecting Relevance toLGElectronics entrepreneurs. forstart-upsupport invest inemployee training and Has organizational capabilities to Relevance toLGElectronics and ESS. power generationsuch assolar Operates newenergy businesses Relevance toLGElectronics water filtration systems. issues suchasrefrigerators and contribute to alleviating the Has products thatcan Relevance toLGElectronics · · 03 - · ganized theWorld Environment · orea, provides to social support · akistan andSyria, contributed to · h c mosquit tr Contr enhancing h In SouthEastAsia,c In Ethiopia,oper Da Or L envir ec In K syst and schoollibr secur In P expanding themobileclinicservice. and Africa inUAE. forMiddleEast subsidiary our service Engineers” at andtraining opportunity special lectures byour“Master Service develop technical capabilities through in electronics repair, helpingstudents sites. protection of UNESCO World Heritage OLED TVs forraising awareness onthe New York TimeSquare billboard and volunteered attheevent. Alsousedour 4,000 employees from 41businesssites Heritage Sites” asthetheme.More than through programs thatretrofit hospitals ountries withapoorsanitationand G SocialFund. ygiene system, suchasBangladesh. ansmitted bymosquitos byintroducing onomy organizations inthe y event with“Protecting World ems. onmental sector through the ing access to stablepower supply Programs &Impact ibuted to reducing diseases o away airconditioner in ygiene andpublichealthby aries with solar poweraries withsolar ates avocational school ontributed to

each percent 11 with initiatives, community for ed dated), 78 percent of our budget was expend- our customers intheprocess. oftrust the humanity,earn the and for future better a create to comfort” and Sharing and “t through part our do to continue will ward,we for Going programs. contribution social our enhancing continuously into feedback their diverse group of stakeholders, and incorporate T valued. and respected is everyone where nity commu a creating capabilities, core our with in pabilities to enhance the social value for those ca- core our utilizing to committed is tronics Elec LG citizen, corporate responsible a As Future Direction cent, and8percent of thetotal investment. for,accounted per respectively,9 percent, 18 protection environmental and growth, welfare win-win social for Programs sports. culture and arts, the for programs sponsorship social our of percent 33 for accounted research ic academ and education programsfor Support donations.charitable programs marketingand KRW our at look closer a take we If donations. ble ministered by the parent company for charita ad was billion 6.2 KRW which of investment, alloc countries.tronicsacrossWe54 locations also Elec LG different 93 at initiatives tribution con social of range a in themselves involved than power communities in which we operate. em- More to initiatives of range broad a in gaged Throughout the year 2016, LG Electronics en- Our 2016Achievements andAssessment donation. talent and work volunteer through place ter bet a communities their make that activities diverse in participate actively employees our bettera together.life of efforts,these part As build and need in neighbors our help can we which in ways explore Electronics to together LG work will of member every and each o this end, we engage and collaborate with a collaboratewith and engage we end, this o cnlg ta crs Tutoty partner Trustworthy cares, that echnology need and from disadvantaged backgroundsdisadvantaged from and need ated a total of KRW 26.3 billion in social in billion 26.3 KRW of total a ated 100,000 employees (cumulative) actively en amnsee i cuebsd CSR cause-based in administered being 63 ilo sca ivsmn (consoli investment social billion 26.3 netet wie 2 ecn wn to went percent 22 while investment, ------11.4 Charity Area Category (Unit: %/Consolidated) Social Investmentin2016 8.6 Welfare Social 7.5 Protection mental Environ- 11.7 Other 10.5 Marketing Win-Win Growth 17.6 78.1 Community 32.7 Education Arts, CultureArts, and Sports 21.9 a establishedweproject, Formembers. this nity commu for initiatives generation income and livelihoods with training on farming techniques sustainable population—achieve country’s the of percent 80 constitute farmers—who help to conceived was initiative, Community Hope L livelihoods. sustainable achieve Ethiopia in lies fami income low help to Community Hope LG the launch to Together World and Corp. LG with up teamed Electronics LG 2012, In LG HopeCommunity inEthiopia for all. life better a build and cares” that “technology int expand will We hospitals. solar-powered ing build and disabled, the for apps accessibility developing conditioners, air away mosquito introducing schools, vocational operating as such community, each of needs specific the address that initiatives implement we Africa, and Asia as such potential growth high with markets emerging In concerns. environmental and social including issues, local address technologiesthat and products distributing and developing by members community engage and communities help to strives Electronics business ber of our society. As a global corporation with nologies and build a better life for every mem- tech and products our through value service differentiated create to strives Electronics LG Overview mia region. In 2016 alone, we trained 50 com- G Hope Village, the first program of the LG the of program first the Village, Hope G Technology that Cares five-hectare pilot farm in Sendafa of the Oro rdprmna claoain o create to collaboration er-departmental operations throughout the world, LGworld, the throughoutoperations LG-KOICA College HopeTVET 85 - - - - - 2016-2017 LG Electronics Sustainability Report 86 200 Hope TVET College Hope TVET LG-KOICA LG-KOICA Materiality Report Students pr to order In courses. repair device ICT and ics 200 pair technicians. As of March 2017, more than re- professional become them help and pians Ethio young to training vocationalprovide to 2014 in established was which College, TVET HopeLG-KOICA is program Another program. the through introduced crops cash major the kilograms1,800 ofofone harvesting garlic, in succeeded and horticulture, in leaders munity 2 -Solar-powered Hospital inPakistan 1 -PublicHealthPromotion CampaigninCambodia medic dia. Through this program, LG Electronics visits Cambo and Bangladesh include to program under medically for Myanmar in campaign motion In 2013, LG Electronics launched a health pro Public Health Promotion Campaigns in Asia Chem, LG Display, andLG Uplus). Group employees (LG Electronics, LG Corp., LG LGfrom contributions with operated is which program,scholarship the from students benefited have 146 of total a far, Thus veterans. pr scholarship a to contributing also are ployees em- Our 2016). of end the of (as tifications cer (intermediate) II Level and (entry) I Level test: 98 percent of our graduates acquired the certification national the in well exceptionally performing are students Our location. service and organized a student field trip to our Dubai sessions, advanced two lead to school the to Engineers Repair Master our dispatched we 2 1 ga fr h dsedns f oen War Korean of descendants the for ogram experience, learning possible best the ovide students enrolled in the school’s electron evd epe ad ae epne the expanded later and people, served ly nesre cmuiis n pro and communities underserved ally ------18 organized we 2017, March of As hygiene. al equipment to hospitallocations. two generation power solar provided we Syria, In pr and camp health a up set also We system. er pow - solar a with facilities the retrofit to gy technolo power solar our leveraged we and which Pakistan,in offices health local at room gency emer the to supply power stable a provide toWorldVision with ElectronicsLG partnered r to students college UAE and Korean of tion participa the with UAE the in Competition) & TechnologyEducation Assistive EDUCOM,(AT training development app accessibility offer Ser Humanitarianfor City organizationSharjah ity National University’s QoLT Center, local disabil Seoul with cooperate we instance, For issues. local addressing in cares” that “technology of advantage take social that in programs contribution engaged Electronics LG 2016, In Products &Technologies Social Contribution throughOur than 1.1millionlocal residents. Deli,New conditionsliving enhancing morefor in neighborhoods income low acrosslocations 83 controlin in activities engaged we India, In on diseases classes transmitted by mosquitos. awareness and neighborhoods, income low in sour gaged in a mosquito control campaign such as en- also We mosquitos. by transmitted eases dis prevent to mosquitoes, malaria-carrying down slow or away chase to wave ultrasonic special a features conditioner,which air away and water.Indiadrinking In safe supplying of pose pur arsenicthe ironcontaminationofand for free source groundwater a find to well tube F al households in four different farming villages. system and a water supply system for individu waterdrinkingcommunity a building diseases, waterborneofrate onset reducethe to 2016 of half second the in Neighbors Good with up teamed we Bangladesh, In visitors. for events health-h hosted and individuals, 60,000 over to plies sup medical and service medical free provide health various cover that classes awareness giene vides free medical service as well as health-hy- aise awareness on accessibility in the country. or this project, we drilled a 100 meter-deep 100 a drilled we project, this or ovided a free medical service at the location. vices (SCHS), and the Startup Campus to Campus Startup the and (SCHS), vices elh wrns cmag ssin to sessions campaign awareness health e euto atvte, oto activities control activities, reduction ce Bangladesh, we introduced the mosquito the introduced we Bangladesh, ufr fo pwr upy problems, supply power from suffers ois sc a ntiin ad person and nutrition, as such topics, ygiene awareness and classes cultural ------ties across theworld. into reality incommuni- “Life’s GoodwithLG,” our CSRslogan, to turnther ourefforts LG Electronics willfur oil epniiiy nttt, OR) o as to KOSRI) Institute, Responsibility Social (Korea party third a commissioned also We helped had Fund Social LG the that answered dents beneficiar 2016 our on conducted survey a In ception. in its since support receiving organizations and marketing and training, overseas portunities, op networking sessions, seminar trainingand through support 2016. management offer also in We extension and renovation reopened a which after Campus, Social LG the at space office and Union, the Labor Electronics LG from consulting productivity financing, t tailored support of range wide a ganizations or economy social programprovidesselected organizationsenvironmentalthe in sector. The economy social promising to support provide toFund Social LG the operated has Chem, LG Since 2011, LG Electronics, in partnership with Environmental Sector Social Economy Organizations inthe LG SocialFund: for Support in communities across theworld. reality into vision CSR our turn to efforts our further will Electronics LG stakeholders, with Based NGOs. and Organizations International ments, govern local agencies, government including that organizationsthroughcollaborationwith tives initia contribution social our of impact the expanding while conditions, local into insight with partnerships pursue also We initiatives. tion localneeds identify to stakeholders with laborate col- and engages actively Electronics LG gan, slo- CSR our as LG” with Good “Life’s With Overview ter ed, uh s re r interest-free or free as such needs, their o Trustworthy Partner rmto spot wt a oa o 130 of total a with support, promotion have expertise in addressing local issues, local addressing in expertise have ainl n lcl oenet t gain to governments local and national on the partnerships and mutual respect n dvlp fetv sca contribu social effective develop and them grow and develop as a business. a as develop and grow them ies, about 93 percent93 about ies, of responthe ------the environment. r to efforts our of part as NGOs and nizations orga - international to available assets keting Since 2011, LG Electronics has made our mar LG HopeScreen co.kr). av isactivities their Loveand on Genie formation in More expertise. develop graduates help to opportunities networking and lecturesregular NGOs and other social organizations, and offer in or corporations business at organizations our help gr also We sites. program CSR seas over our visit to opportunity an provided we the team with the highest performance record, independently pl they as students the ported contribution.social Weand sup safety also & health environment, the ethics, rights, human and training systematic offered and students lege col - 30 welcomed Academy the 2016, In ety. c andpromoteperts socialresponsibility among the collegiate CSR Academy, to foster CSR ex Genie, Love launched Electronics LG 2014, In Collegiate CSRAcademy, “LoveGenie” Social Fund. LG the of efficiency operational the enhance the program, ofas part our toongoing efforts managing and plan support a developing into sess the program and incorporated the results aise public awareness on social issues such as ollege students – future leaders of our soci our of leaders future – students ollege ne ad xctd S poet, n to and projects, CSR executed and anned dae fn a aer potnt i CSR in opportunity career a find aduates ailable on their official blog (www.lovegenie.blog official their on ailable etrn o CR sus uh s labor, as such issues CSR on mentoring ------causes championedbytheseorganizations. valuable the on awareness public heightening UNESC and Summit, Leaders’ UN the Day, ronment Envi World for videos campaign feature to Koreaof Administration Heritage Cultural the Unit the (UNEP), Programme Environment tions Na United the to billboard digital City York New Square, Times our offered we 2016, In 2 -Love Genie Visitto Overseas CSRSite 1 -2016-17LG SocialFund Festival ed Nations Global Compact (UNGC), and (UNGC), Compact Global Nations ed 2 1 O WorldO contributingHeritagesites, to LG HopeScreen 87 - - 2016-2017 LG Electronics Sustainability Report 88 employees 1,904 83 Volunteers Life’s Good Materiality Report teams activ are employees our contribution, social wards to - commitment Electronics’ LG with line In Overview make baby stuff for single mothers and help and mothers single for stuff baby make time vantage of thisprogram andvolunteered their ad took employees 434 2016, In weekdays. on volunteer to year per leave paid of hours eight to up take can employees program, the Under 2013. in Program Volunteer Workday the introduced Electronics LG volunteering, employee promote to efforts our of part As financial orother reasons. but operations, their in services professionalquire re which organizations, non-profit for work Good Life’s the formed and together came pertise In communities. act of sharing intheir ees to inthe take part encourages ouremploy- a corporate culture that We strive to create scuba divingskills. and skin their using dives clean-up local in ing preparing meals for the elderly, and participat children, local for classes soccer and classes science running as such projects, volunteer of v employeesfrom1,904 year 2016, the out 83 Through issues. community addressing and need in those help to talents and time their shar of act the practiced have and groups unteer vol- workplace a initiative, own their on nized, orga- Electronics LG at employees 2005, In Employee VolunteerPrograms range of policiesandprograms. sharing, and support their efforts with a broad employees to volunteer and practice the act of create a corporate culture that encourages our to strive we Corp., LG by 2012 in introduced PolicyContribution LGSocial the and 2005 in establishedContribution Social of Charter the causes that help their communities. Guided by olunteer groups participated in a wide range wide a in participated groups olunteer Sharing andComfort 2015, our employees with professional ex professional with employees our 2015, are unable to obtain such services due to due services such obtain to unable are n oe te at 2 er, contributing years, 12 past the over ing ely volunteering their time and talents for to assist the operations of a food kitchen, oute’ Po o rvd pro-bono provide to Pro Volunteer’s - - - - - 06 al rces rm h Lf’ Go Day Good Life’s the from proceeds all 2016, originalthe price donatedifference.and the In and teriasreduceda at menu simpler offera price, cafe company days, special these year On round. all giving in participate to opportunity an employees our offer to basis bimonthly ona cafeterias company at event Day” Good “Life’s the hosted also have we 2011, Since promotion campaigns inSouth EastAsia. health and Pakistan, in hospitals and libraries the erans, accessibility app development training in KoreanWarofvet descendant the for grams pro scholarship including world, the across communities empowering for used was fund our of support in 2004 in founded Fund, bution Contri Executive the in participating also executivesare Korea Electronics LG of percent 86 Over families. income low help to salaries raise by employees which Fund, Up Round Sal- ary the to contributing are employees rea Ko- Electronics LG of percent 95 than More Donation Programs Children’s Day. children with disabilities have a fun day out on ldig R 100 rm hi monthly their from 1,000 KRW pledging UAE, construction of solar-powered school social contributionsocial initiatives. the2016, In mlye wo hoe ht eu pay menu that choose who employees 2 -Festive Food Sharing onNewYear’s Day 1 -Workday Volunteer Program 2 1 - - - - 34 7 Overseas Korea Campaign World Environment Day business sites business sites r book of donation a with skills, language rean ment.” Environ the & Sites Heritage World “Protect or ployees from 41 business sites in 24 countries em 2016, In initiatives. (USR) Responsibility conjunction with our labor union’s Union inSocial organized and 5), (June Day Environment sit business our at observed is event Day unteer the Vol and Global The Week. Donation Blood Day Global Volunteer Global the volunteerevents, scale global year every Electronics organizes LG overseas, and Korea in both initiatives contribution social in participation employee promote to efforts our of part As Global EmployeeEngagement for those inneedontheNewYear’s food Day. festive offering and kitchens food at volunteering Africa, in babies newborn for In KRW 180million. approximatelyraised and events the in ipated 420,000 about years, six past the Over books. dren’s chil of titles 500 and volunteers employee and giving charitable combine that initiatives ee multicultural families struggling with their Kotheir with multiculturalstruggling families fromchildren helping to directed were events aes otiig ok eodns ae by made recordings book containing eaders ganized events in line with the year’s theme, es across the world in celebration of Worldof celebration in world the across es addition, LGaddition, Electronics employ in engaged outeig sc a kitn bb caps baby knitting as such volunteering, employees (cumulative) have partic have (cumulative) employees ------incurable diseasesorcongenital anomalies. for used be to Foundation Purme the and ciety WelfareSo Social the to donated was which million, 20 KRW of total a raised campaign The sites. media social on posted support of message each for 1,000 KRW and employees our by made donation each for 10,000 KRW pledged and campaign SNS an ran we Korea, o the on shot proof a left Thailand in ployees employee blood donation event, while our em the to astronauts invited Russia Electronics Day,LGCosmonautics of celebration In blood. donated and participated overseas and Korea in sites business 29 from employees 1,696 on the importance of donating blood. In 2016, awareness employee raise to in donation blood participate to employees our encourage and September in weeks two of period a for We also host the Global Blood Donation Week fca SS con atr oaig lo. In blood. donating after account SNS fficial raig hlrn ufrn fo rr and rare from suffering children treating World Environment Day Campaign(Korea) - - 89 2016-2017 LG Electronics Sustainability Report 90 her. for prostheses arm electronic fit and had lost both of her arms to produce who woman Kenyan a invited gram pro - the 2016, In Hospital. Kikuyu PCEA the at department surgery dic - orthope the with partnership in run program support amputee this from benefited have patients 700 than more decade, past the Over disease. or accident traffic fire, to limbs their prostheticKenyansto limbs lostwho provides that program a operated Since 2006, LG Electronics Kenya has 01 - THE WORLD AROUND Limb Opera Kenya Materiality Report

tion environment. learning better a provide Teheranto in Center Training Kids Gold LG opened the also we 2016, October teenagers. In and children 200 than more to mentoring of hours 1,800 hours of gifted education classes and 10,000 over offered since has gram pro- the 2013, in Launched support. of range broad a with dreams their follow teenagers and children helps ates the LG Gold Kids Program, which Mehrafarin,localNGO oper partnershipthe with in Iran, Electronics LG 02 - LG GoldKids Iran

Limb Operation

LG GoldKids - ficial GuinnessWorld Record. of an as confirmed being processof the in is which messages, 114,000 about posted customers our period, ceremony.cially campaign the During offi- an in Defense of Minister the to delivered was which million), 170 (KRW million 10 INR approximately raised campaign The stores. LG at forces armed country’s the of bers to post a message of hope for mem- customers our invited also WeFund. Defense National the to proceeds the donated and sold product each from proceeds the campaign, of part pledging a ran India LG Electronics Day, Republic of celebration In 03 - Republic Day Campaign R India Kenya 01 epublic Day Campaign

Iran 02 - geles, Chicago andMiami. An - Los York, New D.C., Washington including country, the across cities major in held was series fundraiser uted to the success of the event. This series for No Kid Hungry and contrib- fundraiser culinary the Nation, the of Tasteof sponsor appliance home cial No Kid Hungry, we served as the offi- to being a premier national partner of cooking and eating habits. In addition healthy about families educate and Hungry to help Kid end childhood hunger No organization nonprofit the with partnered USA Electronics LG 04 - India 03 No KidHungr USA USA 04

y No Kid Hungry No KidHungry 05 - SmileContest ceeds to thefundraising campaign. pro - all donating sold, product each for 10 RUB pledged and month ery productsphone mobile and evchine - ma- refrigerator, washing TV, our of one Weselected cause.valuable also thispictures their posting tosupport customers 5,000 over with success great a was event The posted. ture pic each for 100 RUB pledged and of themselves smiling on our website aged our customers to post a picture encour we Contest,” “Smile events campaign the of one In patients. cer can- brain pediatric helping to icated Foundation ded- Khabensky the with partnership in diseases brain from suffering children for campaign ing fundrais - a ran Russia ElectronicsLG Russia - - ln, n a ii t te Shanghai Expo foragreat the learningexperience. to visit a and Plant, China’s headquarters and the Nanjing to Beijing for a tour of LG Electronics invited also were contest the from students 36 Top The children. awarded120 and contest writing a ed host we 2016, In Schools. Primary Hope LG six to supplies school and support scholarship providing been Since 2009, LG Electronics China has 06 - LG HopeSchool China

Smile Contest

Russia 05 - ture endeavors. and offer encouragement for their fu- with their alumni in order to give hope trip to an arboretum, and talk sessions field a classes, science activities, tion explora- career mentorship, as such students to activities and support of range broad a provide we life, dent indepen- and careers future, their for ment to students and present a vision program designed to offer encourage- Deaf.this Throughthe for School sim mater,alma Seong- their for program for the disabled, workplace to organize a support standard and subsidiary our Hanwoori, from employees with up teamed has Park Digital eongtaek Py- Company’s HE our 2015, Since 07 - Life HE C Korea ’s GoodDay ompany,

H&A Company, DreamSoccer Class HE Company, Life’s GoodDay

China 06 08 - qimn fr hlrn ne the care of welfare facilities. under children for equipment training and uniforms balls, soccer donated also We basis. semiannual a on competition soccer a hosting and children home group local for Class) Soccer (Dream program class soccer visiting a running been have I Plant Changwon Company’s H&A at soccer with competitive in employees experience our 2015, Since LG HopeSchool Dream Socc H&A C Korea Korea 07, 08

ompany, er Class

91 Report Materiality 2016-2017 LG Electronics Sustainability Report 92 Employee Training System 880 >Job Training 14 >Business FunctionCollege & Wage Negotiations No Dispute inCollectiveBargaining Key Performance in2016 Our P Average iSAQ Performance of 88.2 28 Materiality Report roduction Locations Tracks Consecutive Years Courses Points

With theEmployee HR Team, LGE Argentina AYELEN NIRENBERG and enthusiasm. the value thatLG Electronics setoutto achieve, withrenewed passion areas. Together withmycolleagues atLGEAR, Iwillworktowards to customers, andtheHRsystem thatnurtures talentacross business innovation of ourproducts, andmarketing &service thatreaches out process thattakes theenvironment into consideration, and the quality in ourorganization andproducts. We take great pride inourproduct HQ do.Whatmakes ussopassionate aboutworkisthepride we have passion andenthusiasmforhisorherworkasourcolleagues atKorea of working atKorea HQforayear. atLGEAR Everyone showsgreat I amanArgentinean andmemberof LGE Argentina withanexperience - - Employees, Suppliers Our Focus WHAT AREIMPORTANTISSUES? Management Policies Implementing F Promoting Diversity P reventing Discrimination and amily-friendly manage andsuppor we which Way,under LG the to aligned tems sys HR operates and ElectronicsdevelopsLG standards. management ethical on practices business and conduct professional our base fundamental c our of strengthening tinuous con- the to commitment our expresses ment Manage Jeong-Do practice. everyday our in true staywe as actions, and thoughts our for ciple prin guiding the Management,” ple-Oriented “Customer-Valuethrough “PeoCreation”and LG”1 “No. becomingof vision the attaining in belief our articulates Way LG execution.”The “individuals who are attuned to the LG Way and strong on foster to strives Electronics LG HR Philosophy meiiees n fi cmeiin s we as competition fair and ompetitiveness Tandem with theOrganization No. 1HRSystem that Growsin to the spirit of “Jeong-Do Management” “Jeong-Do of spirit the to - - - Protecting BasicLaborRights (Labor Rights) Managing SupplierCSRRisks Resolution Mechanisms P romoting Internal Grievance t ouremployees.

- - - - Our Evaluation 3) 2) 1) Create acorporate culture thatpromotes work-lifebalance. Future Direction map outtheirc while operating aone-on-onecaring program to helpouremployees HR objectiv L to acquire of ourefforts As part anddevelop talented professionals, organizations to changeandinnovate continuously. their pr hensive range programs of support to helpouremployees to develop ployees across geographic locations. We alsohave inplace acompre- account local conditions, forallem whileensuring equalopportunity LG Electronics develops andoperates anHRsystem thattakes into Our Approach HOW WEMANAGE IT? iinly w ietfe “teghnn HR “strengthening identified we ditionally, Ad support. HR scientific and systematic for big implemented we environment, business chang ing rapidly the in enabler strategic role a HR’s as redefine to initiatives our of part As evaluation. employee in fairness ensuring further and assessment vertical of limitations the address to review peer introducing while r from evaluation performance employee of od meth our changed we 2016, in end, this To innovation. for drive their strengthen and maintain them change to organizations and individuals both tivate Electr LGenvironment, changing this in growth able sustain achieve to order and In corporateculture. structure, business style, management new a seek to corporations compelling and landscape business the in changes disruptive of pattern persistent low growth, which has a been causing in trapped been has global economy the growth, strong of decades After Key HRInitiative for2017 G Electronics hasset“strengthening HRfundamentals”asourkey ltv assmn t aslt assessment, absolute to assessment elative our employees andworkers atoursupplierlocations. Enhanc inspections andaudits. Ensur aadie H aayis s measure a as analytics HR data-driven nc srvs o H invto t mo to innovation HR for strives onics ofessional capabilities aswell asto motivate both individualsand e thatreal improvements are madebystrengthening n invt cniuul, n help and continuously, innovate and e systems andprocesses to better protect rights of thelabor e andispushingforward withinitiatives to achieve thisgoal, areer objectives anddevelop training accordingly. plans - - - - -

93 2016-2017 LG Electronics Sustainability Report 94 Syst tals through the expanded One-on-One Caring sional growth of individual employees, LG Elec profes the and performance business tained sus- both promote to efforts our of part As Growth of IndividualEmployees Business Performance andthe Reshaping Workstyle forSustained HR index. and Portal,HR Global throughthe systems HR ing tem to the performance/role system, diversify- from the seniority-based position/ranking sys shift process,a arethe drivingwe in first step change ing our systems and programs to embrace the the era,industrial new preparation the In for tries. indus network and technologies emerging by the into marked is which Revolution, forward Industrial Fourth marching is LG growth, Electronics sustained of decades six After HR ManagementParadigm inthe Response to theShift Reengineering our HRSystems in agement principles. agement” asourman- “People-Oriented Man- er-Value Creation” and execution” with“Custom- LG Way andstrong on who are attunedto the to foster “individuals LG Electronics strives grows intandemwiththeorganization. Electronicsachieve systemthatHR 1 “No. the ar operations HR our reorganizing and ployees; em individual of growth the and formance per business sustained ensure to workstyle reshaping paradigm; management HR the in systems and programs in response to the shift HR our reengineering initiatives: HR key three undertake to intends Electronics LG 2017, In c individual of development sustained the mote n i wrig n nacn H fundamen HR enhancing on working is and 2017, for initiative key our as fundamentals” apability. ound global talent. These efforts will help LG HR division of LG Electronics is reengineer em and other programs designed to pro to designed programs other and em implementing big data analytics with the with analytics data big implementing Materiality Report n tk aohr ep owr. s a As forward. leap another take and ------the complement to program, Talk Work the tem, sys management performance ongoing an In Plan. Development Career the on based style One Caring System, while reshaping our work One-on- the through performance individual and goals organizational managed has tronics by encouraging them to take required courses. young professionals tailored for LG Electronics into them groom and students bright recruit “LGprocess;Track,”and the in wethroughwhich students bright discover and universities thr sionals; Industry-Academia profesJoint R&D Projects,- talented discover to organized tion competi- a Challenger”, “Code success; ment recruit ensure and advance in talents young acquireto time ofperiod long overa students creativity,candidateofinterpersonal skills and expertise, the evaluate professionals R&D our which through Program,” Mentoring “Dream the include programs acquisition talent Other that condition the on fields promising from dents stu- bright to scholarshipsoffers which gram, Pro Scholarship Industry-Academia the place and seminars technology hold to candidates) gree master’sde or (PhD students and fessionals pro talented 300 than more invite we event, at events recruitment regular including grams, pro- recruiting of range comprehensive a ate oper and Corp., LG company, holding our by event held recruitment global a Conference, no Tech the in participate we initiatives, our of part As talent. global acquiring on centered system HR an through talent quality acquire and find to works ElectronicscontinuouslyLG operations thatspaninternational boundaries, business our support effectively to order In Global Talent Reorganizing HROperations around mance. perfor organizational our maximize us help will changes these expect individual We performance. their manage independently and employ individual to managers from shifting is ment manage performance employee our of driver in changes encouraging in employees our of ity nativ “digitalnew the of workstyle the embraces ly programdevelopment.new capability This ful and management performance individual of their workstyle. Through these efforts, the efforts, these Through workstyle. their major universitiesmajor countries.and Duringthe uh hc w claoae ih major with collaborate we which ough diin w dvlpd n implemented and developed we addition, n-nOe aig ytm n h areas the in System Caring One-on-One interviews and job fairs. We also have in have also We fairs. job and interviews e” generation and respects the individual they join our company after graduation. after company our join they n oe ad h Uie Sae hosted States United the and Korea in e, norgn te t voluntarily to them encouraging ees, ------high our have we instance, For assignments. rent hy led hv ad aaiiis hy need they capabilities and have already they capabilities identifying by self-assessment a perform employees Our training. necessary receive and program Caring One-on-One the throughroadmap career a develop employees ourwhich Function under the System, College our isfies both the employee’s individual needs and ployees through a development path that sat em- our of all guide to efforts our of part As 2 - skills r acquire employees our help to track opment o we addition, In improvement.require that eas training programs and and identify address ar fromthelearned havepracticethey into what perform ter,results,undergothe and trainingon based Cen Assessment the by capabilities their on mark ers who can drive customer value creation and and high potential employees into future lead candidates leader business groom to order In for required capabilities develop individuals ented tal- these help that programstraining vanced 1 - Business Performance Tailored forImproved Support vidual employees. indi and organizations business our of needs pr training expand continually to plan we tives, initia these of support In Learning.” the-Job On- Continuous “Promoting and Businesses,” Strategic and New in Capabilities Developing T performance. business our on impact found pro and direct a make to expected are who business mance through intensive training programs for perfor business promote and growth tained sus for drivers discover to aims 2017 year the for strategy development employee Our 2017 Strategy forEmployeeDevelopment Business Improved for Support “Tailoreddirections: gic o this end, we established the three strate three the established we end, this o ffer training programs tailored to each devel HR Development Strategy Performance-driven ograms that are tailored to the development their future roles as well as for their cur their for as well as roles future their the FunctionCollege Enhancing EmployCapabilit for Future andCurrent Assignments Employees: Developing Capabilities Business Leader business needs, LG Electronics has in place t edrhp L Eetois fes ad offers Electronics LG leadership, et oeta epoes aeul evaluated carefully employees potential equired fortheirroles inadvance. a simulation business project to put to project business simulation a leaders and high potential employees efrac, “riig upr for Support Performance,” “Training s andHighPotential y with

------c measurable and direct a make who fessionals pro competent nurturing thereby learning, the increasing and initiatives, business of ecution ex the in performance employee our hance providingon is trainingfocus courses en that c secure organization the helps and manner ly new and strategic business ventures in a time syst training a implement and develop to tinues and con Electronics LG environments, industry technology fast-changing to response In Str Training forNewand Support capabilities intheprocess. and credits function acquire to required are ees over 1,500 internal experts. All of our employ by taught courses 880 than more offers and functions, business 14 its of each for College Function Business the established Electronics LGtraining, their in employees support better to achieve their development goals. In order to requiredcourses training take and acquire, to Employee Training System ontribution. primary Our run. long the in ompetitiveness Assistant Managers) (From Second-year (Senior Managers) Self-management Design Happiness Self-development (From First-year Life Planning ategic Businesses Self-reflection m ht drse te R ed o our of needs HR the addresses that em effectiveness of training with case-based with training of effectiveness (Assistants) ytmtcly eeo ter professional their develop systematically Managers) (Retirees) My Life My LG, ➋ IMPM:International Masters inPracticing Management ➊ EnDP:Entrepreneurship Development Program Entry G3-A G3-B level New/Promoted G2 G4 Required for Mandatory Technical Staff for

Leadership Coaching First-time Business Korea & DivisionLeaders First-time Team Required per Enhancement Part Leaders Team Leader Position Leader ------All Employees Manufacturing Procurement Technology Business FunctionCollege Material Quality SCM R&D focus SW Ability MagnifiedProgram(CHAMP) LG Electronics Consortium forHRD 02 01 - hiring candidates to improve theirskillswithjob-specifictraining. or job the on currently workers assist that and suppliers from demand largely organized into courses that help workers acquire skill sets in high programstraining CHAMP are service. training quality a deliver to 2006 fiveconsecutivefor bor years, LG Electronicsin wasestablished CHAMP La- and Employment of TrainingMinistry “Best the a by Named Center” ➍ EIP:EarlyIdentified Pool ➌ GLP:GlobalLeadership Pool -

Establishing theFirst Corporate CollegeinKorea Marketing Win- Training Program forSupplierCompetitiveness and with suppliers byenhancingthecapability of employees from oursuppliers. L leadership development andskillsimprovement. Thesetraining programs help customized fordifferent positions,jobs,andfunctions andoffers courses on suppliers. Thisprogram suppliers supports to develop internal training programs growth, we offer atraining program specifically designedforemployees from of ourinitiativesAs part to promote suppliercompetitiveness andshared program offers ninecourses. (OpenRecruitingComprised andSkillDevelopment), of departments two the dates withcontinuing education forexpert-level professional development. training organization thatoffer workers currently onthejoborhiring candi- of EmploymentandLabor,fied bytheMinistry establishingitselfasacorporate “LGIn 2012,we launched Electronics College,” thefirst corporate college- certi Planning Product Finance G Electronics’ towards efforts win-wingrowth andmutualpartnerships Design B2B HR CS Win Growth First-time Managers Global NewHire New Employees Enhancement On-boarding Required per Position/Job Global Biz. Manager Leaders Overseas Marketing/Sales/ Business Function (Finance/SCM/ Manufacturing Management Business /Quality Service HR)

Global CEO Conference First-time EVPs First-time SVPs GLP First-time VPs EIP Business Leaders IMPM First-time Business Pre-leaders ➍ Business Leader ➌ Candidates ➋ Leaders Expatriate Expatriate

Candi- dates Pre- Pre- FSE FSE Unit Leaders Business

EnDP MBA ➊ 95 2016-2017 LG Electronics Sustainability Report 96 Female Employees Turnover Rate Workforce Diversity Employee Overview Employees Percentage of Non-regular Maternity &Childcare Leave Total Asia South America Central and AmericaNorth Africa Middle East& Japan India Europe CIS China Korea Category By Region Materiality Report (Korea) (Full time/Unit:%) Total Overseas Korea 2014 2015 2016 (=Retention Rate) Returning from Leave Months orLongerafter at Work for12 Employ Percentage of Leave after Employ Percentage of Childc on Maternity & Number of Employees Percentage Total Overseas Korea (Unit:Numberof Employees) No. ofEmployees are Leave ees Remaining ees Returning (Unit: Numberof Employees) 75,150 37,912

5,858 6,982 2,215 1,855 4,561 4,777 1,718 9,068 (Korea/Unit: Numberof Employees)

204 1.0 1.1 1.1

14.4 24.0 oa Female Total Female Male Female Male Female Male Gender 4.8 2016 10,617 16,392 5,775 21.8% 2016 19.0 25.8 6.0 Disabilities Percentage of Employees with Percentage 100.0% 2016 12.1% 50.4% 91% 69% 95% 85% 7.8% 9.3% 2.9% 2.5% 0.3% 6.1% 6.4% 2.3% 624 16.3 27.0 oa Female Total 99 4.5 2015 (Korea) 17,274 11,320 5,954 22.4% 2015 22.4 30.1 Category Overall Overseas Korea By JobandGender 5.8 2014 2015 2016 2015 87% 72% 98% 93% 661 59 15.1 22.7 oa Female Total Total Executives Staff Production Staff Business Total Executives Staff Production Staff Business Total Executives Staff Production Staff Business By Job 6.0 2014 19,869 13,820 6,049 23.8% 2014 1.86 2014 100% 1.71 1.72 19.4 24.3 98% 99% 97% 542 7.8 59 +Temporary) 75,150 37,238 37,912 24,003 50,843 15,831 21,344 29,499 (Full-time 8,172 Total 304 241 63 Performance of Programs Employee BenefitsandSupport Employee Benefits and Support ProgramsEmployee BenefitsandSupport · Optional Benefits:Supportprograms other thanlegallyrequired benefits · 4 HousingandStableLiving 3 Medical /HealthSupport andMaternity Support 2 Childbirth 1 Leisure Support Activity ProgramEmployee BenefitsandSupport Total Overseas Korea Average Numberof Years inService Key Training Index Total Optional Benefits Legally Required Benefits per Employee (Average) No. of Group Training Sessions Completing Group Training No. of Employees (Unit: KRW100million) Total Training Costs Industr Legally R 10,617 10,095 2 9 3 , 6 1 5,775 Female 6,294 4,795 5,822 1,499 4,273 ial AccidentCompensationInsurance equired Benefits:NationalPension, HealthInsurance, EmploymentInsurance, 3 3 -

Percentage Female Male Female Male 21.8% 28.5% 15.2% 26.2% 19.9% 30.3% 27.3% 18.3% 14.5% 1.0% 1.2%

- (Korea/Business Staff) By AgeGroup Total 50 orolder 40s 30s 20s andunder Age Group 95,223 3,530 1,233 2,297 2016 2016 2016 382.2 12.0 9.3 3.2 6.5 7.3 8.2 (Korea) Employees

75,150 15,767 33,651 19,774 7 6 LegallyRequired Benefits 5 Education Support 5,958 No. of Op tional Benefits and Support Programstional BenefitsandSupport (Korea) Percentage 100.0% 97,425 21.0% 44.8% 26.3% (Unit:KRW100million) 3,422 1,196 2,226 2015 2015 2015 7.9% 396.2 11.4 8.8 3.2 6.3 7.1 7.4

37,912 17,499 3,820 9,361 7,232 Korea

Overseas 37,238 16,152 12,542 90,412 3,469 2,138 6,406 1,276 2,193 2014 2014 2014 413.2 10.8 7.9 3.1 5.4 6.3 6.6

sharing. knowledge and learning for efforts voluntary employees’ our motivate to curriculum its in activities community and seminars expanded has College Function Business our instance, For development. professional own their of seminar as such environments learning of forms verse di more embrace to sessions learning group our employ encourage we particular, In efforts. ing self-learn their in employees our for support our expanding and technologies emerging in our encourages Electronics LG environment, gy technolo and business fast-changing the to In order to help our employees better respond 3 -Promoting Self-Learning convenience. the programs of their choice at a time of their same t the on sessions ten-minute of posed com series lecture (online sessions Learning in traininginternalspecialists by led sessions ing c are We location. and time of regardless ing train receive employees our help to sessions o Electronics LG employees, our for portunities op- training expand to efforts our of part As 2 - ulti mately achieve “Customer-Value and Creation.” performance, and quality product on sions with experts for the project team. Based ses study and consulting organize in we R&D, technologies strategic For performance. the cesssetting,or format established an without ated as ofpart fluidly the actual business pro- Oper time. same the at employees our of ity atabil problem-solving the enhancing and hand assignment the completing successfully assignments,” business life real into learning sessions “introduceto opportunity an as seminars and consulting utilizes Electronics LG 1 -Promoting Problem-Solving On-the-Job Learning Promoting Continuous pc t hl or mlye priiae in participate employees our help to opic) niuly xadn goa ra-ie train real-time global expanding ontinually fr a etnie ag o rmt training remote of range extensive an ffers oe ad vres ad mlmn Micro implement and overseas, and Korea such efforts, we continuously enhance our enhance continuously we efforts, such Employ Expanding R employees to proactively seek knowledge seek proactively to employees rga as hls s nac business enhance us helps also program e t epn fo lecture-oriented from expand to ees ad td gop ad ae control take and groups study and s ees eal-Time Training for

------mlye ad oprt clue s at of part as culture corporate and employees ideal balance between the best interest of our recognition, LG Electronics strives to create an mutually beneficial relationships. Based on this form and destiny, shared of community a are members its and organization An execution. meeting and innovate to themselves motivating ually contin workstyle, in changes drive and cation communi free-flowing in engage employees the organization. In a truly strong oforganization, advancement the with tandem in growth har their for recognition to addition In tentment. con true employees our bring not rewardswill alone financial that understand also We happier. makes ouremployees strong, andthatagain makes ourorganization business performance and ployees leadsto strong the happinessof ourem- cycleinwhicha virtuous and No.1LG bycreating achieve market leadership LG Electronics strives to cultur corporatea create to effort no sparestronics Elec LG conviction, this on Based LG. No.1 and leadership market achieving us helping growth, sustained drives that energy positive createshappier.cycle employees virtuous This organization strong, and that again makes our str to leads professional, and personal both ees, employ our of happiness the that believe we the and organization strong a for strives tronics by every member of the organization, LG Elec With the LG Way as the common value shared Workstyle UniquetoLGElectronics r of sense a feel and professionally grow to ty - opportuni an deserve employees our life, al wr fo ter ok aheig individual achieving work, their from eward Work-Life Balance Corporate Culture& n bsns promne n mks our makes and performance business ong wr ad ie o a aifig person satisfying a for time and work d happiness of individual employees. Because e thatbolsters cycle. thisvirtuous raiainl ol truh strong through goals organizational ------fetvl pooe oiie hne i the in changes to positive promote management effectively and departments related employees, by agreed ideas fast-tracking are CT the Center, Quality the including ganizations or other to expanding is program Up” Open “Let’s the organization, HR the by Conceived implementation. reviewfor under currentlyare ideas more and programs,HR into suggestions these of many a on schedules work flexible adopting for gram moting includingapilot work-lifebalance pro without day a and holidays summer two-week icals, sabbat employee as such holidays employee on suggestions received also We innovation. enhancing improvement,and workstyle for channels tion W Smart the operating on ideas offered ployees em hiring our improvement, workstyle For process. the of male improvement for and leaveemployees, childcare leaders, team for assessment leadership system, rotation job the of improvement evaluation, performance adop the include system HR improvingthe on tions improvement employeeand employeeOur benefits. sugges workstyle system, HR our on hav we program, this Through board. opinion line on internal the via anonymously suggestions improvement make to employees encourages program the (CHO), Officer Resource Human Chief management the by led initiative An employees. between and communication of flow free the promote to program Up” Open “Let’s the launched Electronics LG 2016, In 2 -“Let’s OpenUp” Program alongworkday.after allow employees to schedule their arrival times leader.also Weorganization their of approval the with (07:00-10:00) times departure or o age the under child a with employees stance, in- For employees. individual of cumstances cir varying accommodate work to policy flexible schedule a place in has Electronics LG 1 -Flexible Work SchedulePolicy grams asoutlinedbelow. Electr LGemployees, happy by supported ganization or strong a build to initiatives our of part As Workstyle Our Initiativesto Enhance Employee tion andachieve No.1LG. strongtruly a initiativesorganizabuild toour f eight are allowed to vary their arrival and/ arrival their vary to allowed are eight f corporate level. LG Electronics incorporatedElectronics LG level. corporate rig omte, xadn communica expanding Committee, orking ognzto ad h V Cmay We Company. VC the and organization O e received 1,474 postings and comments and postings 1,474 received e tion of absolute assessment in employee in assessment absolute of tion nc oeae a ra rne f pro of range broad a operates onics team leaders, as well as ideas for pro our production and quality process quality and production our 97 ------2016-2017 LG Electronics Sustainability Report 98 weeks. We have changed our summer vacation fiveto two for leavessabbaticaltakecan now in five-dayvacationa offeredto addition in icals: needs. We also have in place employee sabbat personal for or families their with and time spend time, on work leave and finish day, the during work their on focus to employees our encourages program this sites, business our of all at Implemented week. a day one least at time on work leave and finish employees WorkingDay program, ensureswhich ourthat Smart the launched Electronics LG 2014, In Korea side work. out life personal satisfying a have employees our that ensuring while organization, the with t capabilitiestheir utilize to employees our port sup we balance, work-life on conviction this and ronment for its employees to perform at work envi- great a create to strives Electronics LG Work &LifeBalance implemented immediately. the mentals. Success cases are shared throughout funda our rate-levelup building for initiatives corpo- into them develop and voluntarily ees we employ by initiated committee, changes positive identify the Through divisions. and functions business addresses affect that issues Committee chronic Working Smart the workstyle, employee in changes positive drive toinitiatives our of part as 2016 in Launched Working4 -Smart Committee business projects. for support employee mobilize to philosophy topexecutives managementtheir discuss also meeting. the at publicly answers their present utives t questions their relay and future, their on pact questions on our business strategy and its im we conduct their employee surveys to identify executivesmeeting,Priorthe answerthem. to top and questions ask employees our which W employees. and executives top between tion communica direct for program a as meeting LG Electronics operates morning the quarterly 3 -Upgraded MorningMeeting Quarterly changes. enc and process discussion the in employees ing positive changes in the organization by engag about bringing is program This organization. o the fullest extent and grow professionally grow and extent fullest the o exec top which on based executives, top o hv rcnl ugae te omt in format the upgraded recently have e every fifth year of their service, employees service, their of year fifth every ouraging them to take initiative in driving in initiative take to them ouraging raiain o e sd s eeec or reference as used be to organization no fliln proa lvs Bsd on Based lives. personal fulfilling enjoy Materiality Report n u qatry onn meeting, morning quarterly our In ------per of protection on regulations and laws lated re- and centers counseling for rules erational op standard the to pursuant defined clearly objectiv operational The percent). (6 devel issues career opment and percent), (8 stress work percent),(23 issues relationship and personal that showed Records counseling. group of sions sessions of individual counseling and 335 ses In ductivity. pro employee and teamwork improves turn in which development, leadership stress and control communication, promote to centers the through counseling group provides Electronicsalso LG stability. emotional restored throughproductivity employee ensuring while balance, work-life promote to employees our membersoffamily the to service their extend centers Counseling counselors. professional fulltime of help the with stress personal and professional with cope effectively employees our help Koreato in locations business eleven LG Electronics operates a counseling center at Counseling Center concluded. is project a after vacation“refresh” a take to huge workload during a project, allowing them handle to have who developers for program refresh a and turn, in day-off monthly a take location business each from employees our of all have to Day” “Refresh include programs balance work-life Other days. personal and their holidays summer paid of days four the combining by vacation summer of weeks two to week one take can now employees rules: 06 cusln cnes ade 4,234 handled centers counseling 2016, oa ifrain Or oneig centers counseling Our information. sonal u epoes ogt oneig for counseling sought employees our ad oe f oneig etr are centers counseling of role and e - - - - t cameday The children. for especially citement vacy of employees whoreceive counseling. confidentiality regulations and protect the pri with compliance strict in service their provide purifiers andmobilephones. D Ball Smiley ing, shop (Card making, Christmas Character mak- from these competitions, the Christmas work Apart families. their and participants the as internal judges who enjoyed the event as much ofpanel a competitionsby wereThese judged the event inatalentcompetition. competed in front of the families on the day of entir ployees em and their eagerness to be our a part of the by shared enthusiasm the showed 2016. December19th on Lab, Software India at tion by an audition for an in-house talent competi preceded wasyear’s event This organized. are alike, children and adults – them entertaining the office where a series of activities, aimed at to invited are employees our of families the event this For policy. Door Open an through growth, and support constant of instruments key its honors and celebrates always as Lab, work-life healthy a of benefits the promote de to signed activities and programs of range verse hugely-di- a offer subsidiaries overseas Our Overseas w from ranging products LG exciting won bers evd hog lv cutr cetn a ex an creating counters live through served A number of fun and exciting snacks were also Cone forchildren etc. were proceeded. o an end with a Lucky Drawwhere o anendwithaLucky mem the ashing machines and refrigerators to water to refrigerators and machines ashing eet Te iait fo o ti round this of from finalists The event. e The innumerable entries for the same the for entries innumerable The balance. ForSoftware balance. India example, Open Door -IndiaSoftware Lab é cor), Selfie-Booth, Wishing Selfie-Booth, cor), ------bor-rights-protection ity/employee/la- global/sustainabil- http://www.lg.com/ English labor_human_rights.jsp holder-engagement/ sustainability/stake- lgekr/company/about/ http://www.lge.co.kr/ Korean Global LaborPolicy POLICY LABOR GLOBAL 제 8조(법규준수) 제 7조(결사의자유) 제 6조(임금과복리후생) 제 5조(근로시간) 제 4조(차별금지) 제 3조(아동고용금지) 제 2조(강제노동금지) 제 1조(인간존중) 정도경영에 바탕을둔글로벌노동방침을수립하고,이를기반으로인권및노동관련전프로세스를관리·운영한다. 및 윤리규범 LG 같이 다음과 위해 실천하기 경영이념을 경영’이라는 ‘인간존중의 가치창조’와 위한 ‘고객을 LG전자는 공유해야 할가치임을확인한다. 함께 이해관계자들과 모든 LG전자의 의무로서 기본 할 준수해야 협력회사가 모든 거래하는 LG전자와 이는 나아가 더 위해 노력할것이며,일하기좋은환경을유지하기최선의노력을다한다. 보장을 임금 적정 안정과 고용 임직원의 면에서 경제적인 · 사회 준수하고, 노동관계법규를 지역의 및 국가 각 LG전자는 에 대한권리보장을사업영위의기본가치로실천한다. 존엄성 인간의 불문하고 남녀노소를 준수하며, 노동기준을 및 인권 국제기구의 노동관련 등 ILO UN, LG전자는 가진다. 권리를 추구할 행복을 관련해 제공과 근로 가지며, 가치를 존엄과 인간으로서의 관계자는 및 임직원 모든 LG전자의 각 국가 및 지역의 법규에서 정한 최저 고용 연령을 준수한다. 만 18세 미만의 청소년 고용 시 고용 청소년 미만의 18세 만 준수한다. 연령을 고용 최저 정한 법규에서 지역의 및 국가 각 양도를 요구하지않는다.또한,임직원에게채용과관련된수수료를 허가증의 노동 또는 여권 신분증, 발행한 정부가 고용조건으로 않는다. 강요하지 근로를 어긋나는 자유의사에 임직원의 구속하여 부당하게 자유를 신체적인 또는 정신적 등 감금 · 협박 · 폭행 않도록 적극노력한다. 발생하지 대우가 비인격적 신체적으로 또는 정신적 존중하고, 인간으로서 한 임직원을 모든 부여하지 않는다. 근로조건을 낮은 기준보다 그 준수하며, 기준을 근로조건 상 노동관계법규 지역의 및 국가 각 조합 가입및활동또는결성등을이유로부당한처우를하지않는다. 노동 보장하며, 자유를 결사의 위한 집회를 평화적 단체협약과 따라 노동관계법규에 지역의 및 국가 각 또한 부여한다. 기회를 의사소통의 간의 임직원 회사와 위해 발전을 조직 건전한 않는다. 이를통해생활안정과근로의욕의질적향상을꾀하며,건전한경제발전에이바지한다. 허용되지 감급은 조치로서의 징계 지급한다. 수당을 초과근무 따른 동일법규에 시 근무 초과 불가피한 지급하고, 이상을 임금 최저 따른 노동관계법규에 지역의 및 국가 각 임직원에게 모든 마다 하루이상휴무를부여한다. 7일 매 준수하며 근로를 60시간 주당 따라 기준(EICC)에 국제 전자업계 시, 부재 법규 관련 준수한다. 규정을 관련 휴무 및 근로시간 초과 정규, 정하는 노동관계법규에서 지역의 국가 각 프로세스 상에서차별적처우를하지않는다. 인사 등 승진 임금, 채용, 이유로 등의 신분 사회적 또는 활동 노조 성향, 정치 종교, 결혼여부, 임신여부, 장애여부, 민족/국가, 출신 성정체성, 지향, 성적 나이, 피부색, 인종, 성별, 임직원의 안전보건 상유해한업무를부여하지않으며,야간근무와초과근무도이에해당한다. riig o as sple aaees n our policy. on awareness supplier raise to training the c distribute and develop also will tronics Elec LG suppliers. our of all for requirements basic the as provisions new the establish to also updat We (https://www.lgesuppliers.com). portal er suppli our from available made and Chinese, and English Korean, into translated been has new tively and to engage in peaceful assembly.” The and ensure “employee rights to bargain collec young workers on overtime or on night shifts” r ond round of revision, which prohibit “charging troduced to the Global Labor Policy in the sec incorporateto Conduct provisionsnew the in In 2016, we also updated our Supplier Code of Supplier Code ofConduct and English). made (Korean website corporate our from and available world the throughout locations business our all to distribution for languages P Labor Global our of edition latest erature.The sinc ics established the Global Labor Policy and has Electron LG 2010, In Conduct. of Code EICC the UN Global Compact Ten Principles, and the OECD Guidelines for Multinational Enterprises, Multinational Enterprises and Social Policy, the ConcerningPrinciplesTripartite of Declaration of Declaration Human Universal the as such tions, regula and laws labor as international well as standards with complies Electronics LG Global LaborPolicy cutet es o mlye” n “putting and employees” to fees ecruitment repnig cin udlns n conduct and guidelines action orresponding lc hs en rnltd no 0 different 20 into translated been has olicy Protection ofLaborRights Global LaborPolicy e made two rounds of revisions to the lit the torevisions of rounds two made e edition of the Supplier Code of Conduct of Code Supplier the of edition Rights by the United Nations, the ILO the Nations, United the by Rights ed ourMaster Purchase Agreement

Compliance ofRegulations Article 8. Voluntary Association Article 7. Wages andBenefits Article 6. Working Hours Article 5. Fair Treatment E Prohibition ofChild Article 3. Avoidance ofForcedLabor Article 2. Respect forHumanDignity Article 1. rights, basedparticularlyupontheLG‘CodeofEthics’and‘Jeong-DoManagement’. labor and human respects that manner a in conducted be shall operations business entire its that pledged has company The Dignity”. Human “Respecting and Customers” for Value “Creating namely LGE haspromulgatedvariousslogansthatdefineitsuniquecorporateculturalandethicalprinciples, partners ofLGE. business all for requirement basic a them making by values these spread to work furthermore will company The environment. working humane a and wages fair employment, stable provide to strive and operates, it where region and country every of laws and codes labor the follow will LGE such internationalorganizationsastheUNandILO. by defined standards labor all satisfy to pledges and business, sustainable a of management the for prerequisite basic a is gender, or age of regardless dignity, and rights human of upholding the that view its declares furthermore LGE respected. beings human as value their have to and dignity with work to happiness, pursue to employees all of right the recognizes (LGE) Electronics LG Article 4.

mployment

such standards. meet to fail which employment of conditions any provide not will and operates, it where region and country each of standards and laws labor the follow will LGE union, orattemptingtoorganizeone. a with involvement of because disadvantaged be to employee any cause not will and law, local by governed as assembly, peaceful in engage to and collectively bargain to unions, trade join and form to employees of right the guarantees also LGE company. the with communicate to employees for opportunities sufficient provide will LGE respect, mutual and trust of environment an promote to order In contribute tolocaleconomicdevelopment. and standards, living community higher support employees, motivate will LGE so, doing By permitted. be not will measure disciplinary a as wages from Deductions necessary. when rates overtime of payment the including region, or country each in law local by prescribed minimum the than higher are that wages offer will LGE one dayoffeverysevendays. least at allowed be shall Employees week. per hours 60 than more be not should workweek A – standards. EICC the with comply will LGE hours, working for limit legal without countries those For holidays. and hours, overtime and regular including hours, working to respect with laws labor local the with comply will LGE pregnancy, religion,politicalaffiliation,laborunionactivityorsocialstatus. disability, origin, national or ethnicity expression, and identity gender orientation, sexual age, color, race, gender, on based rewards and promotions, wages, as such practices employment and hiring discriminatory authorize nor offer not does LGE tasks thatjeopardizetheirhealthorsafety,includingnightshiftsandovertime. perform to 18 of age the under employees permit not does and employment of age minimum to respect with laws labor local the by abide will LGE employment. their for fees related other or fees recruitment any pay to employees require not will LGE employment. of condition a as company the to passport, a as such identification, government-issued any surrender employees that demand not will LGE means. other any or confinement physical by or threat, or intimidation by either will, their against work to employee any compel not does LGE emotional mistreatmentofemployees. and/or physical prevent to steps active take shall company The dignity. human individual on value high a places and compassion, with employee each treats LGE June 2015 ------out dispute forthepast28years. been ableto conclude annualbargaining with L program.employeeloan tothe housing ments improveas such rules, revisionHR ofthe and raisepay a on agreedwe March2017, in held members. At the collective bargaining meeting non-union including employees, Korean all to applied are meetings bargainingcollective the in made Agreements businesses. our in made hold and union the contact immediatelyticular, we par In issues. labor-management other and conditions labor discuss to channels diverse ongoing c in engages Electronics LG gaining, annual and meetings councillabor-managementterly quar as such meetings, official to addition In the endof 2016. of as Korea) in employees all of 21% (about employees 7,835 totaled membership Union bylaws. union the and agreement collective labor the under relations, labor-management our in pillars two the of one is which union, labor the join to eligible are Electronics LG of fulfilling ment can create exceptional value together by manage and conveylabor convictionthat our to and relationships, vertical and conflict as is which relations,” “labor–company term tional conven- the replace to Electronics LG by ed Labor-Management Relations is a term adopt Labor Relations (Korea) ommunication with the Labor Union throughUnion Labor the with ommunication G Electronics is proud to report that we have hre wt ngtv cnoain such connotations negative with charged Labor rights related inSupplierCoC clauses the L dsuso we mjr hne are changes major when discussion a of W Respecting ae eoitos n cletv bar collective and negotiations wage hi rsetv rls Al employees All roles. respective their abor R orkers ights 6 5 4 3 2 1 7 Prohibition of discrimination Humane treatment Wages andwelfare Prohibition of excessive overtime management of juvenile workers Prohibition of hiring childand (prohibition of forced labor) Voluntary work association Guaranteeing thefreedom of ------99 2016-2017 LG Electronics Sustainability Report 100 W investigation. and review include which dure, et f h EC SQ usin, u requires but questions, SAQ EICC the of cent prised of 120 questions, approximately 30 per comVAP EICC the of versionstreamlined a is Program (VAP) and implemented in 2016, iSAQ requirements. D stronger with tool self-assessment developed internally an (iSAQ), SAQ In-depth introduce to decided and met, been has goal initial our that concluded we results, with all of them rated as “low risk.” Based on the points, 92.8 averaged locations production our assessment, 2015 our In sites. production our improvingself-assessmentacrossperformance been has goal our 2011, in tool assessment an as Questionnaire) (Self-Assessment EICC SAQ the implemented Electronics LG Since to beclosed. except for two locations Asia),(Jeonju and Shenyang) in six and Africa, & East Middle in four CIS, Europe& in four Americas, in five China, in production37 our sites(Seven Korea,in eleven of all at self-assessment conducted we 2016, In locations. production its of all for management program risk CSR a operated since and has 2010 in EICC the joined Electronics LG Self-Assessment Selection of AssessmentTargets & CSR RiskManagementProgram and Chinese). English (Korean, languages different three in website Management Jeong-Do the on page at contact the by handled are grievances ployee em- reported, Once grievances. employee ing report for channel a intranetas boardour on message Working) of (Way WOW the place in have also we grievances, their report who employees of identity the protect to process (EA) Assistant Employee the at contact the to es grievanc their report directly employees our which through programs resolution grievance of range wide a place in has Electronics LG Grievance Resolution Channels the familymedical care program. support for eligibility increasing the and corporate-level, at sabbaticals employee implementing include to support funeralexpanding including solved, Boar Junior the through Process Resolution ance Griev Employee the to reported were ances griev employee of cases 17 of total a 2016, In Council). Staff (Business Board Junior the place in has Electronics LG members, union orderIn incorporatealso to voicesthe non- of vlpd ae o te IC aiae Audit Validated EICC the on based eveloped as hv te nie reac reporting grievance online the have also e h E floig h aporae proce appropriate the following EA the , n sx f hs css ae en re been have cases these of six and d, team via email or hotline. As part of our of part As hotline. or email via team rnprns rm h mte’ side, mother’s the from grandparents Materiality Report ------ly addressed asof December 2016. per fied a total of 195 non-conformances, and 94.4 & Africa and one in Asia. Our assessment identi East Middle in three (Mexico), Americas in one China, in locations two include “ModerateRisk” as categorized locations production Our Risk.” “High as categorized was locations production our Risk.”of “Moderate None as locations nine loc duction locations averaged 88.2 points, with 28 pro our iSAQ, on based assessment 2016 our the accuracy and integrity of the assessment. In backup Program Procedures LG Electronics CSRRiskManagement ations being categorized as “Low Risk” and Risk” “Low as categorized being ations cent (184 cases) of the cases have been ful documents on core criteria to increase to criteria core on documents 5

4 Progr ess M on

& it

T R o

h ev ri

i i n r e

d w g

u d

Management

i t

Procedures S - - e - CSR Risk Program l e

t 1 identified assessment Our U.S. the in located sidiaries sub non-production our of two at sessment self-as - CSR conducted Electronics LG iaries, eae dprmns L Eetois ln to plans Electronics LG departments. related c heighten and subsidiary the at system ment w going management. Through these efforts, we on for Taskforce Compliance America North the through identified issues Critical addressed. ly ful been have cases the of eight and efforts, ik aaeet t o-rdcin subsid non-production at management risk In h

mlac aaees f mlye from employees of awareness ompliance e

ere able to enhance the compliance manage

response to the increasing requests for CSR

T C a assessment have been transferred to the to transferred been have assessment

S r g

R e t C o n s nine cases that require improvement u lt in

S AmericaNorth Compliance Taskforce

& e

A f -

u A

d s

i s t e

3 m e n t 2 - - - - - ment capabilities at our production locations. production our at capabilities ment manage risk CSR enhance and audits our of part of our initiatives to ascertain the integrity as audit third-party a to submits voluntarily ElectronicsLG self-assessment, to addition In Third Party Audit ment aswell. assess supplier our to requirements updated the implemented and (V5.1), VAP EICC the of edition latest the on based developed criteria In 2016, LG Electronics newly introduced audit immediately. pr our required we results, the on Based lations. regu and laws labor with compliance agency supplier/labor of verification inadequate and verification pr age inadequate contract, ment employ of copy a provide to failure as such non-conformances identified we result, a As work contract,studentemployment fees, cruitment re including items 22 on emphasis particular a with process the out carried Electronics LG locations, Chinese our at sessions consulting and audit our In efforts. support improvement their to consulting provided and China) in six (including locations twelve visited we impact andlevelsrisk their on based selected cations and sessment, LG Electronics carries out CSR audit self-as- CSR our for process follow-up a As CSR Audit&Improvement Consulting ies. subsidiar non-production include to program management risk CSR our expand continually ○: LowRisk◑:Moderate Risk ●:HighRisk Total Asia MEA Europe· CIS Americas China Korea (Based onSelf-Assessment) Regional Risk-level byRiskArea oduction subsidiaries to address the issues the address to subsidiaries oduction workers, dispatched/subcontract for ocess improvement consulting at production lo productionimprovement at consulting ers, and dispatched/subcontractworkers.and ers, n u bsns oeain. n 2016, In operations. business our on Total ○ ○ ◑ ○ ○ ○ ○ Labor ○ ○ ◑ ◑ ○ ○ ○ ------Health &Safety Third-party AuditResults in2016 (Unit: EA,%) Non-conformance byCategory 8(22.9) Safety Health & (Unit: EA) Health &Safety Occupational Injury andIllness Occupational Injury Sanitation, Food andHousing Emergency Preparedness ○ ○ ○ ○ ○ ○ ○ Occupational Safety

Environment Environment 2(5.7) Ethics Management ○ ○ ◑ ○ ○ ◑ ○ 0 9(25.7) System Ethics /Suppliers 16(45.7) Labor 1 1 2 ◑ ◑ ● ◑ ◑ ○ ○ 2 Ethics (Unit: EA) Management System (Unit: EA) Labor (Unit: EA) Protection of and Identity locations inKorea andoverseas. production our at conditions working improve to initiatives our of part as audit third-party in participation our increase continually will address the issues immediately. LG Electronics and we required our production subsidiaries to (46%), “Labor” from were non-conformances failur and exits, emergency of management quate inade- hours, working employee of agement excessive working hours and inadequate man identified Non-conformances (VAP). Process Audit ed sessions these of four customers,and reour from quests following audits eight third-party of of total sessions a to submitted we 2016, In Management Accountability Freely ChosenEmployment

e to assess supplier CSR risks. The bulk of Supplier Responsibility Audits &Assessments Risk Assessmentand Non-Retaliation Legal andCustomer and Responsibility Risk Management were conducted by the EICC Validat EICC the by conductedwere Wages &Benefits through these audit sessions include Young Workers Working Hours Requirements 2 1 1 1 2 3 3 3 4 101 7 - - - 2016-2017 LG Electronics Sustainability Report 102 tr completedlocationsthe Chinese bers fromour c hiring and notices opening job in quirements Global CSR/EA WorkshopGlobal CSR/EA China, in Corp. LG by organized program training tor audi CSR the in participated also Electronics criteriapracticeassessment best and cases.LG par 22 the workshop, four-day the During ment. depart relations labor the with workshop CSR CSR risk management. In 2016, we organized a for point contactsite-level a assigning as such initiatives awareness in engaging continually pr subsidiary including management, our for ing train- strengthening is Electronics LG nition, recog this on Based management. risk CSR effective in vital are capabilities management LG Electronics fully understands that site-level Awareness Campaign&Other Initiatives (See“Improvementment efforts Cases”). improve- site-level promote to locations tion eliminating and process, hiring the in verification age ing sit Wemanagement. ployeeschedule sharedalso em on improvement and schedules shift in changes through issue this addressed have We standard. international the exceeded but the satisfied site Pyeongtaek the at located ter cen response emergency our instance, For resultsmanagement.toptothe reporting and hour working with associated issues addressing ed select Electronics LG 2016, In changes. ing related departments in order to ensure endur long- rate-level corpo efforts and manage them as mid- requireto that or locations multiple at occur that issues select We audit. third-party CSR through identified self issues CSR dress ad- to efforts ongoing makes Electronics LG Ongoing Monitoring Improvement Initiatives& on monitoring monthly as such initiatives, ment onditions, etc.) with CSR staff at our producour at staff CSR with etc.) onditions, aining. esident candidates and FSE candidates,candidatesFSE esident whileand e-level improvement cases (i.e. strengthen (i.e. cases improvement e-level iiat sae ifrain n h latest the on information shared ticipants working hours at each production locationproduction each at hours working assmn, nenl S adt and audit CSR internal -assessment, legal standard for working hours in Koreain hours working for standard legal ad mlmne a ag o improve of range a implemented and s term initiatives through discussions with discussions through initiatives term and 28 HR and procurement staff mem Materiality Report iciiaoy odns r re or wordings discriminatory ------as workplace discrimination.as workplace well as labor child forcedand ban provisionsPolicy,that includes Labor which Global our on awareness employee raise to training employee regular conducts also B Site ination. Site B removed the age requirement from their hiring conditions due to potential discrim - results themselves. the double-check verificationprocessofleveland same the implement to agencies labor rounds of interview on candidates suspected two of using conduct the ID and of others.IDs Site counterfeitA also or requires forged verify to scanner ID an uses A site process, improvedthe other. ofUnder identity the assuming or IDs counterfeit or forged mitting SitestrengthenedA verificationage hiringits in process to prevent candidates from sub- days of successive overtime work. circumstances,unavoidablecompleted two- under who, employees day-offtoalternative an give to leader department the mandates and advance, in process approval an dergo un- to applications overtime entire the requires now D Site hours. overtime limiting and improvementimplementing measuresreasons, the analyze excessivehoursand overtime monitoringbegan employeesclockofweeklyhours who working day-offs and toidentify also D Site hours. working for process per and policy off management its day revised D one site week), and week per hours (60 standards international and laws labor local with comply and hours working standardexceeding from employees prevent to order In committee. actiondetermined atthedisciplinary disciplinary final the challenge to opportunity an with providesemployees processthat new a opted ad- also C Site revisal. the of employees all notified and agreement management-labor through procedures disciplinary its from deduction wage disciplinary eliminated C Site Improvement Case 01 02 03 Improved AgeVerification intheHiring Process Eliminated DiscriminatoryRequirements from 04 Eliminated Disciplinary WageEliminated Disciplinary Deduction & Enhanced ManagementSystem for Enhanced Procedures Disciplinary Employee Working Hours Hiring Conditions Report Management 03 107 106 105 104 Fair Trade Jeong-Do Management Compliance RiskManagement Corporate Governance 103 2016-2017 LG Electronics Sustainability Report 104 eue a edd r a rsge drn te aedr er Te at The year. calendar the during resigned had or ended had tenure whose directors outside two the replace to appointed was member including briefing),for ten approvaland for (41 agendas review51 to times en offering sound management advice. In 2016, the board convened sev ser directors particular Outside in activities. key management of pervision management issues but also carries out unbiased assessment and su important for recommendations provides actively only not board The Board Activities 7. 6. 5. 4. 3. 2. ectors, executive directors andemployees whoare engagedintheregular businessof 1 Grounds of forOutsideDirectors Ineligibility shar sitions as a board member, and thereby incurring unforeseen losses to po their through obtained opportunities business third-party,with a for or themselves for gains, personal pursuing fromdirectors prevent the before status approval board their verify and interest of conflict tial in place a compliance process to has screen business transactions for poten also Electronics LG management. and shareholders major of dir perfor on three-yeartheir tenure,ofwhich during end the evaluationsmanceat based reinstated are members Board directors. outside four including members seven of composed is Directorsof Board The Board ofDirectors &Independence Outside Director Inside Director Non-executive Director Board Members . engaged intheregular businessof therelevant company years two withinthelatest the relevant company, ordirectors, auditors, executive directors andemployees whohave Dir and executive directors directors, executive directors andemployees of therelevant company asdirectors serve Dir significant interest intherelevant company, suchasbusinessrelations with the company Dir c The dir e The spouses,linealasc inc Dir inc The pr ectors carry out their duties independently, free from any influence independently,any fromduties free their out carry ectors ompany or a subsidiary companyompany orasubsidiary of therelevant company xecutive directors ve as objective supporters by keeping management in check and check in management keeping by supporters objective as ve y come into effect. This compliance process was implemented to implemented was process compliance This effect. into come y ectors, auditors, executive directors andemployees of another company forwhich ectors, auditors, executive directors andemployees of acorporation whichhasa ectors, auditors, executive directors andemployees of thecorporation, eholders intheprocess. ases where thelargest shareholder isacorporation ases where thelargest shareholder isanatural person incipal, his/herspouse,linealascendants, andlinealdescendants, ectors, auditors, executive directors andemployees of aparent Management Report mto fr sl-eln” y ietr. lo a e board new a Also, directors. by “self-dealing” for motion a (Asof March 31,2017) endants, andlinealdescendants of directors, auditors and Yong Ho Baek Dae HyungKim Joon Keun Choi Chang Woo Lee David Jung Seong JinJo Bon JunKoo Name Ewha W Professor, Graduate Schoolof Policy Science at Former Asia/Pacific CEO, GEPlastics Former CEO, Hewlett-Packard Korea Ltd. Professor, BusinessAdministration, SeoulNationalUniversity Representative Director &CFO Representative Director &CEO Vice Chairman Title/Position omans University Corporate Governance

------

gets, aswell asontheirprofessional capabilities. tar non-quantitative and quantitative of comprised objectives ness busi their met have they whether aspects, environmental and social financial, in goals challenging achieved and set have they whether on is compensation of level appropriate the which upon evaluation, mance AGM. Management officers and executives undergo year-round perfor theapproved by as boardand compensationsto pertaining guidelines the with conformance in made is members board for Compensation Evaluation &Compensation to theAGM forappointment process prior to the Annual General Meeting (AGM) and recommended candidates are chosen by the committee through a stringent selection Qualified candidates. of nomination the in transparency and fairness is comprised of two outside directors and one inside director to ensure agendas. ous calendar year, the Management Committee reviewed a total ofprevi 42 the In issues. management other and board the by delegated Management Committee reviews and makes decisions on the agendas t times six convenedCommittee Audit the 2016, In accounting.porate cor in conformance and transparency assure to as well as agement oversightagement toachieve integritycorporateand in fairness man man and fiduciary ofcore duties its carriesout Committee Audit the c maintain to directors outside three of entirely Comprised mendation. tee, Management Committee, and Outside Director Candidate Recom Commit Audit committees: board three by supported is board The Board Committees sites to helpthemgaininsightinto ourfrontline operations. business global our to visit a organizing i.e. activities, management in themselves engage fully to assistance with directors outside provide engagement cial and environmental risks and impact identified through stakeholder so economic, potential as such initiatives, and issues CSR on briefed boardthe isissues, CSR with engaged fully and to attuned areclosely installment of the new director. In order to ensure that board members tendance rate for board members averaged 100 percent following the rve 1 aeds nn fr reig n fu fr prvl. The approval). for four and briefing for (nine agendas 13 review o mlt idpnec fo mjr hrhles n management, and shareholders major from independence omplete determined and awarded. They are evaluated comprehensively based The Outside Director Candidate Recommendation Committee March 2017 March 2016 March 2015 March 2016 March 2017 March 2016 March 2017 Last Appointedin and the publication of the Sustainability Report. We alsoReport. Sustainability the of publication the and Outside Candidate Recommendation Committee Audit Committee, Outside Candidate Recommendation Committee Audit Committee, Chairman of theAuditCommittee Management Committee Committ and theOutsideCandidate Recommendation Chairman of theBoard, theManagementCommittee, Management Committee Note ee

------and seas, and used for monitoring and managing our compliance initiatives edrhp n opine ik aaeet y nacn ter orga their enhancing by management risk compliance in leadership take subsidiaries and units business our help will efforts these that their organizations at compliancethe quarterly committee. We expect of executives and leaders the with progress the share and attention, in the country, and manage the priority identify risks that require their requirements regulatory and legal trackmonitor independently and to r compliance site-specific This Subsidiaries.” Overseas for System ing Report and Monitoring“Compliance the with organizations individual to leadership compliance our shifted Electronics LG however, 2016, corporatethe processlevel.developedInat and compliance policy the led by the Korea HQ with business units and subsidiaries implementing beenprimarilyhave far thus efforts management compliancerisk Our Managing Compliance RisksattheOrganizational Level acr promotingcompliancesteringpracticesas our best such performance bol in and support, and providingfeedback tailoredin results the use tr offline and process,online standardand business i.e. efforts, agement and past noncompliance cases, and reviewed our compliance risk man initiativ global this Through reference. as total) in risks (69 pool risk pliance comcorporate-level the with conditions, business and requirements compliance local with associated factors risk identified overseas and assessment, in which all of our business units and subsidiaries in Korea In 2016, LG Electronics conducted organizational-level compliance risk HighPriorityIdentifying RisksDown to theOrganizational Level c taketo subsidiaries our empoweringregional-levelinitiatives, and cal- the focus of our compliance risk management efforts to promoting lo world. theacross locations business our at system management risk pliance com strong a establishing for foundation a as served and overseas, Koreacomplianceawarenessin employeeandraisebothon us helped at implemented been since have management risk compliance for cess pro- business corporate-leveland our policy 2008, introducedin First toLocal-level ComplianceShift RiskManagement firmly establishingcompliance asastandard businesspractice. each business organization and make an effective use of the results in will develop objective process for assessing compliance performance at c implemented and employees, relevant of descriptions job in sibilities have clearly specified compliance as one of the core duties and respon a create to indicator performance key a as compliance adopted has ics ElectronLGconviction, this on Based compliance.ensuring to critical is management by oversight and leadership strong that believe We Embracing Compliance asaKey Indicator ofPerformance tiatives thatare tailored to thelocal climate. regulatory s mngmn sse epwr bsns uis n subsidiaries and units business empowers system management isk ontrol of their compliance risk management efforts and develop ini develop and efforts management risk compliance their of ontrol we step, next the As 2016. in management top for KPIs ompliance aining programs and other initiatives. The HQ compliance team will team compliance HQ The initiatives. other and programs aining oprt clue ht rmts ul opine Fr ntne we instance, For compliance. full promotes that culture corporate more than 110 business units and subsidiaries in Korea and over and Korea in subsidiaries and units business 110 than more oss organizations. performance. Our corporate-level policy and business process also Encouraged by the progress at the corporate level, we shifted shifted we level,corporate the at progress the by Encouraged e, we have identified a total of 1,386 priority risks (cumulative) Compliance RiskManagement ------2 -2016OnlineCompliance Training 1 -Pre-event Promotional Video FSE Candidate Training New Hire Training (Experienced) New Team LeaderTraining ComplianceOffline Training in2016 Overseas Korea Total Online Compliance Training in2016 39,161 employ of participation the with percent 80 of rate response a achieved vey factorsand maythat employeeundermine compliance. sur 2016 Our at-risk organizations identify compliance toconducted annual surveys ElectronicshasLG 2010, Sinceconduct. employee for implications its and 2016 September in effect into went that law anti-graft new the on employeesKorean our inform to programtraining a developed we work. their to related requirements compliance understand clearly ployees em help to external) and (internal cases actual of illustrations with organizedwaspromotion video the followed that trainingcompliance online regular The participation. encourage and employees engage to via employeesour of all to deliveredcomplianceit motingawarenessand pro video 90-second a producedwe 2016, overseas.In and Korea in both basis annual an on training employee conducts and programs, training offline and online of range wide a place compliance,in has Electronics LG on awareness employee raise to efforts our of part As Compliance Training &Survey c the to specific risks priority their identifying in capabilities nizational ountry, andengagingineffective risk managementinitiatives. 1 email. This video was also screened at our key business locations business key our at screened also was video This email. In response to the Improper Solicitation and Graft Act in Korea,in Act Graft and Solicitation Improper the to response In Completion ees (49,119intotal). Rate (%) 90.0% 82.4% 94.8% Training Targets Number of Number ofSessions 49,294 19,186 30,108 2 Completed Number 44,350 15,803 28,547 6 7 8 Number Not Completed Number of Trainings 4,944 3,383 1,561 105 215 473 259 - - - 2016-2017 LG Electronics Sustainability Report 106 cr or eif ht JogD Mngmn i nt n pin but option, an not is Management “Jeong-Do that belief our score under to Management Jeong-Do on training provides Electronics LG Jeong-Do ManagementTraining &Awareness Campaigns bution programs. contri social our to directed are proceedings the of entirety the and an in-company auction for gifts that could not be returned or donated, Weproofdonation. documented holdthe with repeated,ofalso along be not gift-giving such that company’srequesting CEO,their and gift signed letter official an send and charity to it donate must employees sible, pos not is gift the returning If items. the return and reportincidents such must circumstances unavoidable in gifts such received have who Employees parties. interested from valuables) and/or (cash gifts anyreceivingfrom employees prohibits strictly Ethics of Code LG The System Reporting Voluntary anddistributedlanguages 105subsidiaries worldwide. Code promoteLGElectronicstounderstanding ofemployee Employees’ der or In guidelines. action and rules related by complemented been has under has Ethics of Code the 1994, in introduced first was it Since ducts. tice,”provideswhich conpracticalemployeestheir with for guidelines Prac for “Guidelines the and values, ethical our of declaration public Ethics,”ofthe “Code the of comprised is and ethicalpractices, management for direction and tone the forth sets Ethics of Code LG The Code ofEthics themselves fullyinlinewithJeong-Do Management. Electr LG conviction, this company.”on the Based of favor in work stances, to our customers and society. Non-compliance does not, in any circum c and Management Jeong-Do towardcommitment “Our statement: ing based ployee conduct, and conveys our commitment towards em fair competition for guideline unique Electronics’ LG is Management” “Jeong-Do Strong Commitment towardsJeong-Do Management Type of (Unit:%) CasesReported ompliance is not only a promise to ourselves, but also a solemn pledge Irregularities Corruptions gone five rounds of amendments, through which the literature the which through amendments, of rounds five gone onics requires both our employees and our suppliers to conductto suppliers our and employees our bothrequires onics 12.0 Other f tis te ieaue a be tasae it 1 different 14 into translated been has literature the Ethics, of on ethical management practices,ethicalmanagement on expressed follow best the in by an LG Electronics executive to the party which providedwhich LGthe Electronicsan by party executivethe to Management Report 7.3 80.7 Supplier Grievances, etc.) (HRissues, Complaints Jeong-do Management Actions Taken (Unit:%,Includingreports andself-assessment ) Major Disciplinary Major Disciplinary Warning Action 41.1 7.2 ------51.7 Action Minor Disciplinary 208 and employees 9,056 for overseas and Korea in awareness agement 2016 2015 2014 Number of –Past CasesReported Three Years employee training programs. or are topics discussed Frequently inquiries. 130 of total a received ter diverse channels including intranet, phone, and email. In 2016, the cen via offered is counselingconvenience, employee For Management. Do Jeong- of practiceeveryday the on counseling one-on-one offers and LG Electronics operates the Jeong-Do Management Counseling Center Management, Jeong-Do on inquiries employee to respond to order In Jeong-Do Management Counseling Center suffered byourexternal stakeholders. t websiteWin-WinGrowthweutilize the addition, In etc. reports, sified misleading/fal documents/figures, of manipulation of assets, use company illegal/improper partners, business company’s the of shares the of acquisition improper selection, supplier in transparency of lack parties, interestedfrom gifts of acceptance as such Management, Do system to receive reports concerning any actions in reporting violation of Jeong- mobile a and (http://ethics.lg.co.kr), system whistleblower online the Portal, Management Jeong-Do the operatesElectronics LG Whistleblower System employee awareness onJeong-Do management. raise to initiatives our of part as newsletters Management Jeong-Do same irregularities. In addition, LG Electronics produces and distributes the of recurrence prevent to Portal Management Jeong-Do the and boardmessage online fromthe available them make and studies case philosophy. In 2016, we conducted group training for Jeong-Do Man Jeong-Do for training groupconducted we 2016, philosophy.In this behind principles common the embrace employees our help and r ather an implicit requirement for the very survival of the company” the of survival very the for requirement implicit an ather o collect anonymous reports concerning unfair and unjust treatment unjust and unfair concerningreports anonymous collect o ganized into FAQs to be shared with our employees and used for used and employees our with shared be to FAQs into ganized suppliers. We also organize actual non-conformance cases into cases non-conformance actual organize also We suppliers. HR issues) Inquiries to CounselingCenter Condolence CashGifts (Rules, Other Interpretations of the 22 Congratulatory/ Code of Ethics 11 (Unit: %) 29 429 38 Interest of Conflict 482 548 (Unit: EA) Expenses Business 30 - - - t tronicstradecommunicationfair as initiativesour such implements of ships defined by trust and cooperation. Based on the program, LG Elec with fairtrade improvement. andmake further associated risks compliance against efforts monitoring our heighten r document a implementing December,while of 2016), as (effective es Business DealershipTransactions and Fair Agency on in Act the with agency ourreviewextensive of an noncompliance.out carriedWetential also po for screened are advertisements and labels our of all tothat ensure process business our revise to plan we 2017, In noncompliance. and Advertising, and FairLabeling on Act the with associated riskspliance com identify to analysis careful a performed ElectronicsLG 2016, In Unfair Trade andUnfairLabeling&Advertising compliance. non prevent and awareness employee raise to efforts monitoring en actual cases and revisions in relevant laws and regulations, and height In collusion. of act an as misconstrued be may actions such since itors, overseas to prevent employees from making contact with our compet sur outcarried also preventionwemeasures, cartel our of part As ments. infringe antitrust of risks the to vulnerable more naturally are tions func business whose employees our for training additional provided we Furthermore, issue. the on awareness employee raise onlineto training out carried and cartel a form to attempt any against stance strong management’s communicated clearly Electronics LG 2016, In Cartel Initiatives toPromoteFair Trade Practice and routine monitoring againstnon-compliance. training, awareness employee regular guidelines, action of promotion and risks compliance addressing for process core our as Program pliance ple for our thoughts and actions. We have in place the Fair Trade Com of part our to effort put into practice the “LG Way,” the guiding princi astrade fair and competition fair to committed fully Electronicsis LG Fair Trade Compliance etention policy to upgrade our management process. In 2017, we will op management’s strong commitment toward fair trade compliance, trade fair toward commitment management’sstrong op 2017, we will update our cartel prevention manual, incorporating manual, prevention cartel our update will we 2017, prise inspections of our major business locations both in Korea and promoting mutual growth with our stakeholders through partner odce epoe tann bsd n h fnig t prevent to findings the on based training employee conducted n daesi areet i odr o sals compliance establish to order in agreements dealership and Fair Trade ------Cartel ComplianceCartel Newsletter tracting practice. our efforts towards ensuring fairness and transparency in our subcon continue will we 2017, In year. straight second the for Commission Agreement Observance Assessment conducted by the Korea Fair Trade the “Excellent” rating in the Fair Trade & Win-Win Growth Partnership and corpo a rate-wideensuringsystemfor employee compliance relatedwith laws establishing data, technical handling and ordering pricing, for standard internal our revised particular,we In inspections. regular while Act, SubcontractingTransactions Fairin the with compliance on ness Elec aware- employee raise LGto basis regular a on training conducts ecosystem,tronics business healthy a promote and subcontracting transactions our in transparency and fairness ensure to order In Subcontracting Practices regulations. In recognition of our efforts, LG Electronics receivedElectronics LG efforts, our of recognition In regulations. mlmnig uies rcs ipoeet ad conducting and improvements process business implementing recoverable damageto theCompanyincluding,butnot limited Antitrust violations, suchasprice-fixingAntitrust violations, cartels, can cause ir Company D Company E Company D Company B Company M Company Name According to theCommission,Europe’s biggesttruckmakers 1997, andtheexistence of thecartel was revealed byMAN, t In case of unavoidable contact withacompetitor, employees o, theimpositionof substantialfinesandincurring legal must report andobtain approval through and theReporting Approval Program forContactswithCompetitors (RAPCC) one of thecartelists whoblewthewhistle onthecartel. operated aprice-fixing cartel for14years goingbackto The European Commissionhasimposedarecord fineof expenses to defendtheCompanyinfollow-onactions. € EU issueditshighest-ever cartel fineof procedure. For inquiries, pleasecontact further your for participating inacartel 2.93 billionforparticipating € 2.93 billiononfive European truckmakers. local legalcounsel. (September 2016) Thank you. € € € 490million 750million 670million € € 1,2 billion 1billion Fine - 107 - - - 2016-2017 LG Electronics Sustainability Report 108 Appendix 04 119 114 112 111 110 109 Appendix Contributors Preparation to Report GRI/UNGC Index Independent Assurance Statement Memberships/Awards &Recognition Certifications EESH &Quality Economic Data Total liabilitiesandequity Total equity V. Non-controlling interest IV. Other components of equity otherIII. Accumulated comprehensive loss II. Retained earnings I. Paid-in capital Total liabilities II. Non-current liabilities I. Current liabilities Total assets II. Non-current Assets ent Assets I. of Consolidated StatementsSummary of FinancialPosition 14. Profit (loss)fortheyear 13. Netlossfrom discontinued operations 12. Netprofit from continuing operations 11. Income taxexpense 10. Profit (loss)before income tax 9. Othernon-operating income (expenses) 8. Gain(loss)from method equity 7. Financialexpenses 6. Financialincome 5. Operating income 4. Sellingandmarketing expenses 3. Gross profit 2. Costof sales 1. Netsales of Consolidated StatementsSummary of Income or more details,please refer atourcorporate available to our AnnualReport website. * G Electronics discontinued theoperation of allPDPmodulesandTVs asof 2014.Accordingly, allPDP-related profit/loss accounts were reclassified into a“netlossfrom discontinued opera * F tions” account, withpastincome statements usedforcomparison revised aswell. L

Curr associates Shar Capital st Other non-curr Intangible assets T Inv Other curr Inv T rade receivables angible assets estments injointlycontrolled entitiesand entories http://www.lge.co.kr/lgekr/company/ir/archive/FrontBoardListAllCmd.laf?actcode=LGE_IRMR&mncode=IRMR&lang=K e premium ock ent assets ent assets (Unit:KRWmillion) Economic Data (Unit: KRWmillion)

37,855,269 13,356,742 24,498,527 37,855,269 (1,028,962) 15,744,364 11,222,428 20,864,706 16,990,563 12,398,977 13,736,740 41,630,293 55,367,033 1,369,648 9,233,416 3,088,179 3,992,348 8,754,163 2,966,633 1,571,087 5,104,558 4,759,659 5,171,015 7,059,889 1,337,763 (209,708) (491,326) 904,169 126,315 126,315 595,402 721,717 268,738 884,051 490,593 2016 2016 -

36,313,896 12,983,487 23,330,409 36,313,896 (1,171,979) 14,779,691 10,460,298 19,916,283 16,397,613 11,681,654 12,873,945 43,635,063 56,509,008 1,356,915 9,016,546 3,088,179 3,992,348 8,550,718 3,140,844 1,473,280 4,841,861 4,431,585 4,872,676 7,093,352 1,192,291 (210,343) (598,178)

904,169 249,143 252,971 340,154 593,125 359,510 903,084 542,586 (3,828) 2015 2015

37,068,420 12,991,097 24,077,323 37,068,420 (1,143,557) 15,680,577 10,596,853 19,585,722 17,482,698 11,913,088 13,741,645 45,299,122 59,040,767

1,271,674 9,081,044 3,088,179 3,992,348 8,396,746 3,000,072 1,394,336 4,594,461 4,087,510 5,711,273 7,683,915 1,218,270 1,828,557 (210,412) (177,152) (578,910) 904,169 501,357 678,509 539,761 304,419 752,456 416,660 2014 2014 109 -

2016-2017 LG Electronics Sustainability Report 110 Korea Asia Africa CIS Europe America South China Region At allproduction sites company-wide Appendix LGEKR LGETH LGEVH LGEIN LGEIN LGEIL_N LGEIL_P LGEAK LGESR LGEAT LGESA LGEEG LGERA LGEWR LGEMA LGESP_T LGESP_M LGERS LGEMX LGEMM LGEPN LGEQA LGEQH LGETA LGETR LGEHN LGEYT LGEQD LGEKS LGEHZ LGENV LGENB LGENT Subsidiary Korea Korea Korea Korea Korea Korea Korea Korea Thailand Vietnam Indonesia Indonesia India India Kazakhstan Saudi Arabia Turkey South Africa Egypt Russia Poland Poland Brazil Brazil Mexico Mexico Mexico China China China China China China China China China China China China China Country EESH &QualityCertifications (As of March 31,2017) Chiller Pyeongtaek Incheon Cheongju Changwon2 Changwon1 Gumi_Solar Gumi_TV Pyeongtaek Rayong Haiphong Tanggerang Cibitung Noida Pune Almaty Riyadh Kocaeli Johannesburg Ramadan 10th of Ruza Wroclaw Mlawa Taubate Manaus Reynosa Mexicali Monterey Nanjing Qingdao Qinhuangdao Tainjin Taizhou Hangzhou Yantai Qingdao Kunshan Huizhou Nanjing Nanjing Nanjing City Environmental Management ISO 14001 ISO 14001 ISO 14001 ISO 14001 ISO 14001 ISO 14001 ISO 14001 ISO 14001 ISO 14001 ISO 14001 ISO 14001 ISO 14001 ISO 14001 ISO 14001 ISO 14001 ISO 14001 ISO 14001 ISO 14001 ISO 14001 ISO 14001 ISO 14001 ISO 14001 ISO 14001 ISO 14001 ISO 14001 ISO 14001 ISO 14001 ISO 14001 ISO 14001 ISO 14001 ISO 14001 ISO 14001 ISO 14001 ISO 14001 ISO 14001 ISO 14001 ISO 14001 - - - OHSAS 18001 OHSAS 18001 OHSAS 18001 OHSAS 18001 OHSAS 18001 OHSAS 18001 OHSAS 18001 OHSAS 18001 OHSAS 18001 OHSAS 18001 OHSAS 18001 OHSAS 18001 OHSAS 18001 OHSAS 18001 OHSAS 18001 OHSAS 18001 OHSAS 18001 OHSAS 18001 OHSAS 18001 OHSAS 18001 OHSAS 18001 OHSAS 18001 OHSAS 18001 OHSAS 18001 OHSAS 18001 OHSAS 18001 OHSAS 18001 OHSAS 18001 OHSAS 18001 OHSAS 18001 OHSAS 18001 OHSAS 18001 Health &Safety ------ISO 50001 ISO 50001 ISO 50001 ISO 50001 ISO 50001 ISO 50001 ISO 50001 ISO 50001 ISO 50001 ISO 50001 ISO 50001 ISO 50001 ISO 50001 ISO 50001 ISO 50001 ISO 50001 Energy ------Certification (IVI,MobilePhones) Business Continuity (Mobile Phones) ISO 22301(VC) ISO 22301(IVI) Management ISO 22301 ISO 22301 ------ISO 9001, ISO/TS 16949, ISO 9001,ISO/TS ISO 9001, ISO/TS 16949 ISO 9001,ISO/TS ISO 9001, ISO/TS 16949 ISO 9001,ISO/TS 16949 ISO 9001,ISO/TS 16949 ISO 9001,ISO/TS 16949 ISO 9001,ISO/TS 16949 ISO 9001,ISO/TS ISO 9001&17025 ISO/IEC 17025 ISO/TS 16949 ISO/TS ISO/TL 9000 ISO/TL ISO 9001 ISO 9001 ISO 9001 ISO 9001 ISO 9001 ISO 9001 ISO 9001 ISO 9001 ISO 9001 ISO 9001 ISO 9001 ISO 9001 ISO 9001 ISO 9001 ISO 9001 ISO 9001 ISO 9001 ISO 9001 ISO 9001 ISO 9001 ISO 9001 ISO 9001 ISO 9001 ISO 9001 ISO 9001 ISO 9001 ISO 9001 ISO 9001 Quality - - April 2017 April 2017 March 2017 2017 January December 2016 December 2016 September 2016 August 2016 August 2016 June 2016 April 2016 February 2016 Awards &Recognition Date Awarded ontinued membership in2017. * Korea AssociationforICTPromotion Korea RadioPromotion Association Electronics Trade Promotion) Korea Electronics Association(Private Sector Councilfor The Foundation of Korean Industries* GS1 Korea International of CouncilSociety Industrial Design (ICSID) Korea Chemicals ManagementAssociation andEnvironment Safety Maekyung Korean Academy forTrade Credit Insurance The Korean Institute of Electrical Engineers Korea Chamberof Commerce andIndustry Korean of Society Mechanical Engineers (KSME) Industrial HealthAssociation Organization of ConsumerAffairs Professionals inBusiness International Vaccine Institute Council of Economic Organizations Association Memberships Disc Named the2016GoodPartner. Received Design thetop Awards. honoratthe2017Milano Award attheiFDesign Award 2017. 31 products wontheircategories andoneproduct received theiFGold of theBestAward attheCES2017. Received theCESInnovation Award for120products, includingtheBest Received theGoodDesign Award for16products. the 2016Design Excellence Awards. LG SIGNATURE received thePresidential andtheMinister’s Awards at year). Listed on theDow World JonesSustainability consecutive Index (fifth Awards (IDEA). Received theGoldAward atthe 2016International Design Excellence Received theEISAAward. Photovoltaics (PV)categoryattheIntersolar Europe 2016. Received thePartner of theYear Award andtheIntersolar Award inthe Excellence Award. Received the2016ENERGYSTAR Partner of theYear -Sustained at theMWC2016. Received atotal of 31awards includingtheBestNewMobileHandset Awards &Recognitions Memberships/Awards &Recognition Korea Associationof Industrial Designers (KAID) Korean Industrial Technology Association Korea Associationof Information&Telecommunication Korea Invention Promotion Association Korea International Trade Association Korea Micro JoiningAssociation(KMJA) Korea Association Display Industry Korea ManagementAssociation Korea Association Advertiser Accreditation Board forEngineering Education of Korea Fair CompetitionFederation Korea Economic Research Institute Korea Employers Federation Korea Investor Service Relations Korea AuditBureau of Circulations (KBCSD) Korea BusinessCouncilforSustainableDevelopment General Motors Design WeekMilan iF International Forum Design Consumer Electronics Association(CEA) Japan Institute of Design Promotion of Trade,Ministry andEnergy, Industry Korea Institute of Design Promotion S&P Dow JonesIndices andRobecoSAM of Switzerland Industrial Designers of Society America (IDSA) European ImagingandSoundAssociation(EISA) Intersolar Europe United States Environmental Protection Agency(EPA) GSM Association(GSMA) Awarded by UNGC Korea Network United NationsGlobalCompact(UNGC) Electronic Citizenship Coalition(EICC) Industry ZigBee Alliance Trade IPRProtection Related Association(TIPA) Korean SDGs Associationforsupporting ofSociety CAD/CAMEngineers Korea Intellectual Property Association(KINPA) Korea Intellectual Property Protection Association(KIPRA) Korea Products Association Safety Korea Electronics Association Korea Home Associationof Smart Korea Grid Association Smart Korean forNoiseandVibration Society Engineering (KSNVE) Korea Listed CompaniesAssociation(KLCA) 111 2016-2017 LG Electronics Sustainability Report 112 Employee Community Supplier Environment Customer Sub Category standar er the is information complianton the Report to the GRI G4 Guideline sult may changeaccordingly. pr Pyeongtaek the and headquarters Seoul the to limited was spection in on-site Furthermore, results. assurance existing the with verified and cial statement and disclosed documents audited by an auditing agency, finan the throughverifiedwere data financial manners: following the in Report the on Electronics’performanceLG of reliability the verified We above. standards assurance the following by performance 2016 Electronics’ LG on engagement assurance an conducted Assurer The Limitations AA1000APS the following by responsiveness and materiality, inclusivity, of ability suit the checked statement assurance The process. collection data and management, waste usage, water as indicators specific such to plied ap was engagement assurance Type2 standards. assurance (2008) and moderate level of assurance engagement based on the AA1000AS accordancein Typeperformed with assurancewas independent The 1 Assurance Standards mine ourindependence. preparing this “Report” nor in any conflicts of interest that may under assur “Report”.the contentof the on surancestatement independent an As as the for responsible solely is Assurer The Report. this in presented opinions and information all for responsible entirely is Electronics LG Responsibility andIndependence the followingassurance statement. 2016-2017 Sustainability (the Report” and “Report”) hereby provides Electronics to provide an independent LGassurance on by the “LG requestedElectronics was “Assurer”) (the Center Productivity Korea The To theStakeholders ofLGElectronics: oduction site, and if further assurance process is performed, the reassurancethe process performed, further is if and site, oduction occupational incidents which need the verification of reliability in reliability of verification the need which incidents occupational other data including GHG data and homepage linkage, etc. were etc. linkage, homepage and data GHG including data other ance agency, the Assurer was neither involved in the process of process the in involved neither was Assurer agency,the ance ds. Appendix (2008) assurance principles. Moreover, it verified wheth · ManagingSupplierCSR Risks(LaborRights) · Promoting Internal Grievance Resolution Mechanisms · Protecting BasicLaborRights · Collaborating withGovernments, NGOsandInternational Organizations · Developing Products that Address andServices Local Needs · Increasing Donations andContribution Initiatives forCommunities · RaisingSupplierAwareness onCSR · EstablishingFair Trade asStandard BusinessPractice · e-Waste CollectionandResource Recycling · Developing High-efficiency(Eco-friendly) Products · Reducing GHGEmissions/Responding to Climate Change · Strengthening theProtection of Customers’ Personal Information · · Providing Information onProducts andServices Material Issues P P ost-Accident Responses) roduct Stewardship (AssumingGreater Responsibility forProduct Defect/ Independent Assurance Statement ------7 > 6 > 5 > about viewed the Disclosure on Management Approach (DMA) and indicators re Assurer the Disclosures,Standard Specific ForOption. Core the of verified that the Report is written in compliance with the requirements Guidelines’ Cor G4 GRI the of requirements the fulfilled Report tronics’ Elec LG that verified Assurer the assurance, the Moreover, through performance. and activity management sustainability Electronics’ LG illustrates fairly and accurately Report the that verified Assurer The Findings &Conclusion 3 > 2 > 1 > Report: the about assurance the provide to used was method following The Methodology 4 >

e Option. In the case of General Standard Disclosures, the Assurerthe StandardDisclosures,General of case the In Option. e

has no chain supply the regarding data company,and the of revenue ed percentprocessance100 coverage meets non-consolidatthe of assur the of scope the Therefore, report. the of chain value and region,period, time the ofconducted boundariesaccording the to and Pyeongtaek production site. headquarters Seoul the of inspection on-site an through system V thr strategiesexecutives’ment and Reportpresented the message in V through acomparison analysiswithother publications. V The V of reports basedontheGRIG4Guidelines. quality sustainability and content the dictating principles the with Verifiedconsistency GRI G4Guidelinesw V etd n te otn o te eot y odcig ei re media search andabenchmarkanalysis. conducting by Report the of content the and lected erified the evidence of data and information, internal process, and manage sustainability Electronics’ LG of feasibility the erified errors expression and information the of suitability the erified erified the objectivity and appropriateness of the key issues se issues key the of appropriateness and objectivity the erified erified whetherrequirements from theCore Option of the material issues by using the reporting criteria process below. The ough interviews withcoreough interviews executives. cp ad onais f h asrne rcs hv been have process assurance the of boundaries and scope t beenincludedunlessspecified. L LA14, LA13, LA12, LA11, LA10, LA9, LA5, LA4, LA3, G4-10, G4-11,LA1,LA2, DMA- WithOurEmployees EC7, EC8, SO1 DMA- WiththeCommunit HR6, HR10,HR11,SO3,SO4,SO5,SO7,SO8,SO9 HR1,HR4,HR5, G4-12, G4-13,G4-14,G4-57,EC9,EN32,EN33, LA14,LA15, DMA- WithOurSupplier EN22, EN23,EN26,EN27,EN28,EN30 EN2, EN3,EN5,EN6,EN7,EN8,EN15,EN16,EN17,EN18,EN19,EN20,EN21, DMA-With theEnvironment PR1, PR2,PR3,PR4,PR5,PR6,PR8,PR9 DMA- WithOurCustomers DMA &Indicators A15, LA16, HR4,HR5,HR6,HR7,HR8,HR9,HR10, HR11,HR12 A15, LA16, ere fulfilled. s y

------tainability. sus of standard higher a and Report the of publications future for enhancing its sustainability, the Assurer makes the following proposals for performance and efforts various Electronics’ LG appraising Upon Recommendations and managesperformance withmid-andlong-term goals. analyz companythe that commends particularly Assurer The strategies. cific spe with changes such to responds and employees, community,and issues in the five areas including customers, the environment, suppliers, information mented measures to address them, and adequately presented relevant imple performance, stakeholders’ impact may which issues identified LGElectronicsthat successfullystakeholders.Assurerfound of their The performance the influence may that issues the to responsive be should organizations that articulates responsiveness of principle The 3 -Responsiveness: Response toIssues of theReport. page each in covered evenly are issues core the of performance key and activities the that verify could Assure The 2016. in issues 13 core deduced it and (2008), AA1000SES of Model Materiality” Part “Five- the on based year every test materiality a Electronicsconducts LG process. analysis materiality reasonable a on based stakeholders identified successfully Electronics LG that found Assurer The stakeholders. jor ma its and organization the both to material and relevant issues on The principle of materialitythat organizations articulates should focus 2 -Materiality: SignificantIssueIdentification andReporting biannual Stakeholder Consultation. social expanded its for suitable system communications a building is pany In particular, the Assurer evaluated as excellent the fact that the com opinions. of range a collects and stakeholders its with communicates actively company the that and suppliers, and employees, customers, c Electronics LG that verified Assurer The 2016. in inclusivity of ciple improveand prin by the abide to LG Electronicsvariousefforts made that verify could Assurer the regard, this In sustainability. achieving and to responses strategic developing of process the in stakeholders The principle of inclusivity articulates that organizations should include 1 - separ pects of the Specific Standard Disclosures, and the results are included as non-material the regarding indicators the reviewed also Assurer ategorizes its stakeholders into nine groups, including shareholders, including groups, nine into stakeholders its ategorizes Inclusivity: P ately intheGRI/UNGCIndex. responsibility activities through the continuous promotion of the es the internal and external environments related to each issue each to environmentsrelated external and internal the es issues relevant and material to the company and its major its and company the to material and relevant issues in the Report. LG Electronics monitors changes in the keyLGthe Electronics in Report. monitors changes the in articipation ofStakeholdersarticipation ------• • the r management consultingtainability and assurance and have completed comprised of competent experts who have in-depth experience in sus is Committee Assurance Our engagements. assurance independence conduct to qualified is and verification] and participation stakeholder e ties not only from a global perspective, but also at the regional level by ing the scope of reporting to include sustainability management activi ferent countries. There is a need for LG Electronics to consider expand dif in waysdiverse in emerge may issues management Sustainability onregionalissues 2 -Expandingreporting mation andappropriately evaluate thecompany’s value. infor financial as activities management Electronics’ sustainability LG business activities. Through this, stakeholders will be able to recognize fromoccurring effects environmental and social negative and positive the of impact financial the manage and calculate to need a is There 1 -Measuringexternal socialandenvironmentaleffects or [the AccountAbility by certified officially agency assurance an is ter CenterManagement ofKorea the Sustainability The Productivity Cen AA1000APS AA1000A assurance standard setbyAccountAbility thatprovides theprinciples of theAA1000standards. and reliability of performance information. principles,compliancewith performances, on management organization the evaluating by issues management sustainability reporting of method the provides that AccountAbility, by set dard, xamining the important issuesinthecountriesxamining theimportant inwhichitoperates. Yang HoLee Team Leader Sun JikHong Korea Productivity Center /CEO June 2017 ganization that established AA1000, the international standard forstandard international the AA1000, established that ganization elevant training. S (2008): The AA1000 Assurance Standard (2008) is an international assurance stan- 000-81 (2008): The AA1000 AccountAbilityPrinciplesAA1000 The (2008): Standard internationalan is (2008) Dae KwonYang Researcher Dong SooKim Director 113 ------2016-2017 LG Electronics Sustainability Report 114 Disclosures General Standard GRI Index Governance Engagement Stakeholder Boundar R Aspects and Identified Material P Or Analysis Strategy and rofile eporting eporting ganizational ies

Appendix

(

● Full ◐Partial Reporting ○ Reporting G4-39 G4-38 G4-37 G4-36 G4-35 G4-34 G4-33 G4-32 G4-31 G4-30 G4-29 G4-28 G4-27 G4-26 G4-25 G4-24 G4-23 G4-22 G4-21 G4-20 G4-19 G4-18 G4-17 G4-16 G4-15 G4-14 G4-13 G4-12 G4-11 G4-10 G4-9 G4-8 G4-7 G4-6 G4-5 G4-4 G4-3 G4-2 G4-1 G4.0 Composition of thehighestgovernance bodyanditscommittees envir Processes forconsultation between stakeholders andthehighestgovernance bodyoneconomic, go ec Whether theorganization hasappointed anexecutive-level positionorpositionswithresponsibility for go ec Whether theorganization hasappointed anexecutive-level positionorpositionswithresponsibility for body to seniorexecutives andother employees Process fordelegatingauthority foreconomic, environmental andsocialtopics from thehighest governance focus of eachcommittee) committees responsible fordecision-makingoneconomic, environmental andsocialimpacts(includingkey Governance structure of theorganization, includingcommittees of thehighestgovernance body. any Identify organization's report sustainability and theinvolvement of thehighestgovernance bodyorseniorexecutives inseekingassurance forthe of anyexternal assurance provided, therelationship between theorganization andtheassurance providers, Policy andcurrent practice withregard to seekingexternal assurance forthereport, thescope andbasis GRI index (“in-accordance options, GRIContent Index, external assurance, etc.) Contact pointforquestionsregarding the report oritscontents cycle Reporting Date of themostrecent previous report periodReporting forinformationprovided has responded to thosekey topics andconcerns (key topics andconcerns bystakeholder group) Key topics andconcerns thathave beenraised through stakeholder engagement,andhowtheorganization (including fr The organization’s approach to stakeholder engagement Basis foridentification andselectionof stakeholders withwhomto engage List of stakeholder groups engagedbytheorganization Significant changesfrom previous reporting periods intheScope andAspectBoundaries and ther implement Process fordefiningthereport content andtheAspectBoundaries, andhowtheorganization has not covered bythereport and anyentitiesincludedintheorganization’s consolidated financialstatements orequivalent documentsbut List of all entitiesincludedintheorganization’s consolidated financialstatements orequivalent documents, organizations Memberships associations) andnationalorinternational advocacy of associations(suchasindustry organization subscribes orwhichitendorses Externally developed economic, environmental andsocialcharters, principles, orother initiatives to whichthe Whether andhowtheprecautionary approach orprinciple isaddressed bytheorganization Significant changesduring thereporting period regarding size, structure, ownership, orsupplychain Description of theorganization’s supplychain Percentage of employees covered bycollective bargaining agreements o by individualsother workers, thanemployees orsupervised employees includingemployees andsupervised of theorganization’sportion workisperformedbyworkers whoare legallyrecognized asself-employed, or workersees andsupervised andbygender; thetotal workforce byregion andgender; whetherasubstantial the total numberof permanentemployees andgender; byemploymenttype thetotal workforce byemploy- Total number of employees (includingthetotal numberof employees byemploymentcontract andgender; products andservices) Scale of thereporting organization (includingnumberof employees, netsales,total capitalization, and Markets (includinggeographic served breakdown, sectors of andtypes customers/beneficiaries) served, Nature of ownership andlegalform or thatare specifically relevant to issuescovered thesustainability inthereport Number of countries where theorganization operates, andnamesof countries witheithermajoroperations Location of theorganization's headquarters Primary brands, products, and/orservices Name of theorganization Description of key impacts,risks, andopportunities management andorganizations thestrategies to support Statement from themostseniordecision-maker of theorganization, concerning strategies forsustainability Effect of anyrestatements of informationprovided inprevious reports, Description outsidetheorganization of theAspectBoundary foreachmaterial Aspect Description withintheorganization of theAspectBoundary foreachmaterial Aspect List of all thematerial Aspectsidentifiedintheprocess fordefiningreport content Indicators f contractors), andsignificant variations inemploymentnumbers) onomic, environmental andsocialtopics, andwhetherpostholders report directly to thehighest onomic, environmental andsocialtopics, andwhetherpostholders report directly to thehighest vernance body vernance body onmental andsocialtopics easons forsuchrestatements ed the Reporting Principlesed theReporting fordefiningreport content equency of andbystakeholder engagementbytype group) Not Reported) GRI/UNGC Index

Corporate Governance Corporate Governance Corporate Governance CSR Management,Corporate Governance CSR Management,Corporate Governance CSR Management,Corporate Governance Independent Assur Overview,Report GRI Inde Independent Assurance Statement, Overview Report Overview Report Overview,Report June,2017 Overview Report CSR Management,Stakeholder Engagement CSR Management,Stakeholder Engagement CSR Management,Stakeholder Engagement CSR Management Overview Report ofRestated data portion DMA to Five Key Aspects DMA to Five Key Aspects Materiality Analysis Mat Employ Who We Are, Where We Operate, Wher Who We Are, WhatWe Do, What W Who We Are, Where We Operate, Who We Are, Corporate Governance Where We Operate Who We Are, Where We Operate Who We Are, WhatWe Do Who We Are Performance Management Messages,Key Progress and President Message Report Overview,Report CSRManagement, 2016BusinessReport 2016 AnnualReport, Memberships/Awards &Recognitions Re CSR Management,Memberships/Awards & CSR Management Procurement andSupplyChain Who We Are, WhatWe Do, Where We Operate, Procurement andSupplyChain Protection of LaborRights Location ofDisclosure cognitions, GRIIndex eriality Analysis e We Operate, Economic Data ee Overview x e Achieved

ance Statement

Reporting Level of ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● 42, 52,72,82,92 42, 52,72,82,92 Page Number 2, 28-29,34-35 18-27, 73-74 14-17, 36-39 18-19, 24-27 28-29, 111, 28-29, 104 28-29, 104 28-29, 104 2, 112-113 18-27, 109 27, 58,70 18, 25,96 112-117 114-117 GRI Index 18, 104 2, 119 34-35 28-29 73-74 24-25 18-25 18-23 18-19 14-15 28-35 28-35 28-35 28-29 111 104 104 104 99 2 2 2 2 Disclosures Specific Standard Disclosures General Standard Energy Materials Procurement Practices Impacts Indirect Economic Market Presence P Economic DMAs Ethics andIntegrity Governance erformance

G4.0 G4.0 EN7 EN6 EN5 EN4 EN3 EN2 EN1 EC9 EC8 EC7 EC6 EC5 EC4 EC3 EC2 EC1 DMA G4- G4-58 G4-57 G4-56 G4-55 G4-54 G4-53 G4-52 G4-51 G4-50 G4-49 G4-48 G4-47 G4-46 G4-45 G4-44 G4-43 G4-42 G4-41 G4-40 Indicators Indicators Reductions inenergy requirements of products andservices Reduction of energy consumption Energy intensity Energy consumption outsideof theorganization Energy consumption withintheorganization Percentage of materials usedthatare recycled inputmaterials Materials usedbyweight orvolume Proportion of spendingonlocal suppliers atsignificant locations of operation Significant indirect economic impacts,includingtheextent of impacts Development andimpactof infrastructure investments supported and services Proportion of seniormanagementhired from thelocal community atsignificant locations of operation operation Ratios of standard level entry wage bygendercompared to local minimumwage atsignificant locations of Financial assistance received from government Coverage of theorganization’s obligations definedbenefitplan climat Financial implications andother fortheorganization’s risks andopportunities activitiesdueto Direct economic value generated anddistributed * * Howtheorganization manages thematerial Aspectoritsimpacts * Reasons why theAspectismaterial, andtheimpactsthatmake theAspectmaterial and matt Internal and external mechanismsforreporting concerns behavior, aboutunethical orunlawful and matt c The organization’s values, principles, standards andnormsof behaviorsuchascodes of conduct and for allemploy each country of significant operations to themedianpercentage increase inannualtotal compensation Ratio of percentage increase inannualtotal compensation fortheorganization’s highest-paid individualin significant operations to themedianannualtotal compensation forallemployees Ratio of the annualtotal compensation fortheorganization’s highest-paid individualineachcountry of including ther howstakeholders’Report viewsare soughtandtaken into account regarding remuneration, Remuneration policiesandevaluation criteria forthehighestgovernance bodyandseniorexecutives and themechanism(s)usedt Nature andtotal numberof critical concerns thatwere communicated to thehighestgovernance body Process forcommunicating critical concerns to thehighestgovernance body r The highestcommittee orpositionthatformallyreviews andapproves theorganization’s sustainability social impacts,r Frequency of thehighestgovernance body’s review of economic, environmental and environmental andsocialrisks Role andimpactof thehighestgovernance bodyintheidentification andmanagementof economic, the highestgo and socialimpacts,r Role of thehighestgovernance bodyintheidentification andmanagementof economic, environmental e Processes forevaluation of thehighestgovernance body’s performance andactionstaken inresponse to ec Measures taken to develop andenhance thehighestgovernance body’s collective knowledgeof and goalsr and updatingo Roles of thehighestgovernance bodyandseniorexecutives inthedevelopment, approval, Processes forthehighestgovernance bodyto ensure conflictsof interest are avoided andmanaged used fornominatingandselectinghighestgovernance bodymembers (includingthoseforsubcommittees) Nomination andselectionprocesses forthehighestgovernance bodyanditscommittees, andthecriteria Whether theChairof thehighestgovernance bodyisalsoanexecutive officer Internal and external mechanismsforseekingadvice behavior, onethical andlawful eport andensureseport that allmaterial Aspectsare covered odes of ethics valuation of thehighestgovernance body’s performance the managementapproach, andanyrelated adjustmentsto themanagementapproach Mechanisms fore onomic, environmental andsocialtopics e change ers related to organizational integrity ers related to organizational integrity elated to economic,elated environmental andsocialimpacts ees inthesamecountry esults of votes onremuneration policiesandproposals, ifapplicable vernance body’s identification andmanagementof suchimpacts,risks, andopportunities f theorganization’s purpose, value ormissionstatements, strategies, policies, isks, and opportunities isks, andopportunities valuating theeffectiveness of themanagementapproach, theresults of theevaluation of isks, and opportunities, andwhetherstakeholder consultationisks, andopportunities, isusedto support o address andresolve them ENVIRONMENTAL ECONOMIC

Location ofDisclosure Enhancing Energy Efficiency Our BusinessSit at GHG EmissionsReduction, Reduction Efforts Environmental Data Resource Reduction Procurement andSupplyChain What We Achieved Shared Economic Gains,SocialInvestment legal minimumwage college education was 226%higherthanthe fornewemployee with salary The starting Shared Economic Gains ProgramsEmployee BenefitsandSupport with Climate Change andManagingRisksAssociated Opportunities Key Progress andPerformance, Exploring Shared Economic Gains DMA to Five Key Aspects Location ofDisclosure Jeong-D Compliance RiskManagement, Jeong-Do Management (Approved2016 BusinessReport atAGM) 2016 BusinessReport Corporate Governance, 2016BusinessReport CSR Management,Corporate Governance CSR Management,Corporate Governance Corporate Governance CSR Management,Corporate Governance Corporate Governance CSR Management,Corporate Governance Corporate Governance Corporate Governance Corporate Governance Corporate Governance Corporate Governance Jeong-Do Management o Management,Fair Trade es

Reporting Reporting Level of Level of ● ● ○ ○ ● ● ○ ● ● ● ○ ● ● ● ● ● ● ● ● ● ○ ○ ● ◐ ● ● ● ● ● ● ● ● ● ● ● ● 42, 52,72,82,92 Page Number Page Number 104, GRIIndex 28-29, 104 28-29, 104 28-29, 104 28-29, 104 57, 64-65 GRI Index 105-107 GRI Index GRI Index 26, 85 37, 64 73-74 26-27 115 106 106 104 104 104 104 104 104 104 56 70 57 26 96 26 2016-2017 LG Electronics Sustainability Report 116 Disclosures Specific Standard Gr Labor Practices for LaborPractices Supplier Assessment Women andMen Equal Remuneration for Opportunity Diversity andEqual Training andEducation and Safet Occupational Health Relations Labor/Management Employment Grievance Mechanisms Environmental Assessment Supplier Environmental Overall Transport Compliance Products andServices andWasteEffluents Emissions Biodiversity Water GRI Index ievance Mechanisms y Appendix ( ● Full ◐Partial Reporting ○ Reporting

LA16 LA15 LA14 LA13 LA12 LA11 LA10 LA9 LA8 LA7 LA6 LA5 LA4 LA3 LA2 LA1 EN34 EN33 EN32 EN31 EN30 EN29 EN28 EN27 EN26 EN25 EN24 EN23 EN22 EN21 EN20 EN19 EN18 EN17 EN16 EN15 EN14 EN13 EN12 EN11 EN10 EN9 EN8 G4.0 Indicators by signific andremunerationRatio of basicsalary of womento menbyemployee category, and o employ Percentage of individualswithintheorganization’s governance bodiesandpercentage of employees per by employ Percentage of employees receiving regular performance andcareer development reviews, bygenderand and assisttheminmanagingcareer endings Programs thecontinued forskillsmanagementandlifelonglearningthatsupport employability of employees Average hours of training peryear peremployee bygender, andbyemployee category topicsHealth andsafety covered informalagreements withtrade unions Workers withhighincidence orhighrisk of diseasesrelated to theiroccupation and t Type andrates of injury of injury, occupationaldiseases,lostdays, andabsenteeism, safet by signific Benefits provided to full-time employees thatare not provided to temporary orpart-time employees, Total number andrates of newemployee hires andemployee turnover byagegroup, genderandregion mechanisms Number of grievances aboutenvironmental impactsfiled,addressed, andresolved through formalgrievance Significant actualandpotential negative environmental impactsinthesupplychainandactionstaken Percentage of newsuppliers thatwere screened usingenvironmental criteria Total environmental protection expenditures andinvestments bytype or Significant environmental impactsof transporting products andother goodsandmaterials forthe environmental andregulations laws value ofMonetary significant finesandtotal sanctionsfornon-compliance numberof non-monetary with Percentage of products soldandtheirpackaging materials thatare reclaimed bycategory Extent of impactmitigationof environmental impactsof products andservices r Identity, size, protected status,andbiodiversity value of water bodiesand Basel Conv Weight of ortreated transported, exported, imported, waste deemedhazardous undertheterms of the Total number andvolume of significant spills Total weight of waste anddisposalmethod bytype Total water discharge anddestination byquality NOx, SOx,andother significant airemissions Emissions of ozone-depleting substances (ODSs) Reduction of greenhouse gas(GHG)emissions Greenhouse gas(GHG)emissionsintensity Other indirect greenhouse gas(GHG)emissions(Scope 3) Energy indirect greenhouse gas(GHG)emissions(Scope 2) Direct greenhouse gas(GHG)emissions(Scope 1) by operations, bylevel of extinction risk Total numberof IUCNRed Listspeciesandnationalconservation listspecieswithhabitatsinareas affected Habitats protected orrestored areas of highbiodiversity value outsideprotected areas Description of significant impactsof activities,products, onbiodiversity andservices inprotected areas and value outsideprotected areas Operational sites owned,leased,managedin,oradjacent to, protected areas andareas of highbiodiversity Percentage andtotal volume of water recycled andreused Water sources significantly affected bywithdrawal of water Total water withdrawal bysource mechanisms Number of grievances practices aboutlabor filed, addressed, andresolved through formalgrievance Significant actualandpotential practices negative impactsforlabor inthesupplychainandactionstaken Percentage of newsuppliers thatwere screened practices usinglabor criteria Percentage of total workforce represented informaljointmanagement-worker healthand Minimum notice period(s) regarding significant operational changes Return to workandretention rates parental leave, after bygender elated habitatssignificantlyelated affected bytheorganization’s discharges of water andrunoff ganization’s operations, andtransporting members of theworkforce y committees thathelpmonitor programs andadviseonoccupationalhealthsafety otal numberof work-related fatalities,by region andbygender ther indicators of diversity) ee category ineach of thediversity categories (includinggender, agegroup, minority group, ant locations of operation ant locations of operation ee category ention (2)Annex I,II,III,andVIII,percentage of transported waste shippedinternationally Not Reported) GRI/UNGC Index Labor Practices andDecent Work

Social

R Protection of LaborRights(Grievance Supplier CSRManagement Supplier CSRManagement -Fair Evaluation &Reward System 2015-2016 LGE (80p) Report Sustainability Global Workforce Employee Development Strategy Employee Training System Employee Training EESH Management EESH Management EESH Management,IncidentData Protection of LaborRights(LaborRelations) Protection of LaborRights(LaborRelations) Global Workforce ProgramsEmployee BenefitsandSupport Global Workforce Jeong-Do Management CSR inSupplyChain CSR inSupplyChain Social Investment in2016 No significant cases occurred in2016 Green Packaging EESH ManagementatBusinessSit Products withGreener Features, Waste Water Discharge No Significant SpillsOccurred in2016 Envir Minimizing Discharge of Waste, Environmental Data(Waste Water Discharge) Environmental Data(AirEmissions) Environmental Data(ODSs) GHG EmissionsReduction Environmental Data(GHG,Output) Environmental Data(GHG,Output) Environmental Data(GHG,Output) Environmental Data(GHG,Output) are not applicable.) industrial complexes, thebiodiversity indicators (As ourproduction sites are alllocated in Protecting Biodiversity Reducing Water Use,Environmental Data Reducing Water Use Reducing Water Use,Environmental Data Location ofDisclosure esolution System), Jeong-Do Management onmental Data

Reporting Level of ● ● ● ● ● ● ● ◐ ◐ ◐ ● ◐ ● ● ● ● ◐ ● ● ◐ ○ ● ● ● ● ○ ● ● ● ● ● ● ● ● ● ● ● ● ● ● 53, 57,63-66,70 Page Number 67, 70-71 67, 70-71 68-69, 71 100, 106 GRI Index GRI Index GRI Index GRI Index 99-100 99-100 69, 71 67, 71 77-79 77-79 58-59 52-71 77-79 77-79 68-69 68-69 106 96 96 96 85 67 70 70 70 70 70 70 67 96 94 95 96 Disclosures Specific Standard Compliance Customer Privacy and Communic Marketing Labeling Product andService Safety Customer Healthand for ImpactsonSociety Grievance Mechanisms for ImpactsonSociety Supplier Assessment Compliance Behavior Anti-competitive Public Policy Anti-corruption Local Communities Gr Human Rights Assessment Supplier HumanRights Assessment Indigenous Rights Security Practices Labor Forced orCompulsory Child Labor Bar and Collective Freedom of Association Non-discrimination Investment esponsible Marketing Communication: LG Electronics fullycomplies to marketing andregulations withallapplicable pertaining &communication laws activitiesincludingadvertisements, · sales pr R ievance Mechanisms gaining omotions andsponsorships incountries where we operate, andfollowsuponnon-conformances improvement with voluntary pp.28-29). Report (2011-2012Sustainability efforts ations

PR9 PR8 PR7 PR6 PR5 PR4 PR3 PR2 PR1 SO11 SO10 SO9 SO8 SO7 SO6 SO5 SO4 SO3 SO2 SO1 HR12 HR11 HR10 HR9 HR8 HR7 HR6 HR5 HR4 HR3 HR2 HR1 G4.0 Indicators and useof products andservices value ofMonetary significant finesfor non-compliance andregulations concerning withlaws theprovision losses o and safet Total number of incidentsof non-compliance codes withregulations andvoluntary concerning thehealth for improvement Percentage of significant product categories andservice impactsare forwhichhealthandsafety assessed mechanisms Number of grievances filed,addressed, aboutimpactsonsociety andresolved through formalgrievance Significant actualandpotential negative inthesupplychainandactionstaken impactsonsociety Percentage of newsuppliers thatwere screened usingcriteria forimpactsonsociety andregulations laws value ofMonetary significant finesandtotal sanctionsfornon-compliance numberof non-monetary with and monopolypr and de P impact assessments Total number andpercentage of operations thathave beensubjectto humanrights reviews or Total involving number of incidentsof rights violations of indigenous peoplesandactionstaken relevant to operations Percentage of security personnel trained intheorganization’s humanrights policiesorprocedures thatare and measur Operations andsuppliers identifiedashavingsignificant risk forincidentsof forced orcompulsory labor, and measur Operations andsuppliers identifiedashavingsignificant risk forincidentsof childlabor, c Operations andsuppliers identifiedinwhichtheright to exercise freedom of associationand Total numberof incidentsof discrimination andcorrective actionstaken that are relevant to operations, includingthepercentage of employees trained Total hours of employee training onhumanrights policiesorprocedures concerning aspectsof humanrights humanrights orthatunderwent screeningclauses Total numberandpercentage of significant investment agreements andcontracts thatincludehumanrights Total numberof substantiated complaints regarding breaches of customer privacy and communications, promotion, includingadvertising, andsponsorship, of bytype outcomes Total numberof incidentsof non-compliance codes withregulations andvoluntary concerning marketing Sale of bannedordisputed products Results of surveysmeasuring customer satisfaction of bytype outcomes informationandlabeling, service Total numberof incidentsof non-compliance codes withregulations andvoluntary concerning product and information requirements andpercentageinformation andlabeling, of significant products categories andservice subjectto such Type of product informationrequired andservice bytheorganization’s procedures forproduct andservice Total number of legalactionsforanti-competitive behavior, anti-trust, Total value of political contributions bycountry andrecipient/beneficiary Actions taken againstcorruption Communication andtraining onanti-corruption policiesandprocedures identified Total number andpercentage of operations assessedforrisks related to corruption andthesignificant risks Operations withsignificant actualorpotential negative impactsonlocal communities Percentage of operations withimplemented local community engagement, impactassessments, mechanisms Number of grievances abouthumanrights impactsfiled,addressed, and resolved through formalgrievance Significant actualandpotential negative humanrights impactsinthesupplychainandactionstaken ollective bargaining may oratsignificant beviolated risk, andmeasures taken theserights to support ercentage of newsuppliers thatwere screened usinghumanrights criteria velopment programs f customer data y impactsof products during of andservices theirlifecycle,bytype outcomes es to contribute to theeliminationof allformsof forced orcompulsory labor es taken to contribute to theeffective abolitionof childlabor actices andtheiroutcomes Product Responsibility Human Rights

Society

R R c Korea’s Political Funds Actprohibits corporate Jeong-Do Management Compliance Management,Jeong-Do Management Compliance Management,Jeong-Do Management EESH Management,Environmental Data Social Contribution R Protection of LaborRights(Grievance Supplier CSRManagement Supplier CSRManagement Protection of LaborRights indicator isnot applicable. industr As ourproduction sites are alllocated in human rights. All security staffshave received training on P Supplier CSRManagement, P Supplier CSRManagement, P Supplier CSRManagement, Jeong-Do Management Jeong-D Compliance Management, Supplier CSRManagement Compliance Management, Protection of Personal Information Jeong-Do Management Customer SatisfactionInitiatives Compliance Management, Products withGreener Features Product Stewardship Products withGreener Features Grievance Resolution System Supplier CSRManagement Supplier CSRManagement Fair Trade Fair Trade Location ofDisclosure ontributions to political campaigns andparties. esponsible Marketing Communication esponsible Marketing Communication rotection of LaborRights rotection of LaborRights rotection of LaborRights esolution System), Jeong-Do Management ial complexes, theindigenousrights o Management

Reporting Level of ◐ ● ○ ◐ ● ◐ ● ◐ ● ◐ ◐ ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ● ◐ Page Number 77-79, 99-102 77-79, 99-102 77-79, 99-102 61-63, 70-71

105, 117 105, 117 100, 106 105-106 105-106 105-106 GRI Index GRI Index GRI Index 99-102 77-79 50-51 53-55 55-58 53-55 77-79 77-79 82-91 77-79 77-79 117 106 106 100 107 107 106 46 2016-2017 LG Electronics Sustainability Report 118 Ten Principles Anti-Corruption Environment Labour Standards Human Rights UNGC Index Appendix and bribery. corruption inallitsforms,includingextortion Principle 10:Businessesshouldworkagainst sion of environmentally friendly technologies. Principle 9: encourage the development and diffu- greater environmental responsibility; and Principle initiatives 8:undertake to promote approachtionary to environmental challenges; Principle aprecau 7:Businessesshouldsupport - respect of employmentandoccupation. Principle 6:theeliminationof discrimination in child l Principle 5:theeffective abolitionof for Principle 4:theeliminationof allformsof of theright to collective bargaining; dom of associationandtheeffective recognition Principle 3:Businessesshouldupholdthefree- in humanrights abuses. Principle 2:make sure thatthey are not complicit human rights; and spect theprotection of internationally proclaimed Principle andre 1:Businessesshouldsupport - ced andcompulsory labour; abour; and

suppliers’ ethics managementsystems. in itsCSRrisk management program to monitor itsbusinesssites’ and Jeong-Do Management. Additionally, LGE maintainstheethics category handbook andrequiring employees andsuppliers to signapledgefor business partners. LGE translates anddistributes code of ethics Guidelines. LGE alsoappliesthesamestandard to allsuppliers and Jeong-Do Management, LGE establishedCodeof Ethics andConduct taken byemployees. To helpouremployees remain trueto thespirit of LGE’s “Jeong-Do Management”isaguidingprinciple forallaction st production sites. LGE iscurrently asamemberof the participating and Health)certification system andglobalEESHauditsystem atall strengthened theintegrated EESH(Energy, Environment, Safety, Korea towards foritsefforts promoting low-carbon culture. LGE while beinghighlyrecognized bytheCarbonDisclosure Project (CDP) surpassed itsGHG reduction targets across products’ lifecycle, disclosure indevelopment of greener products. Thecompany also LGE madegreat strides inimproving energy performance andcarbon imizing negative environmental impactsfrom ourbusinessactivities. LGE strives to contribute to thesociety’s sustainablegrowth bymin- accordingly. across thesupplychainandamendedMaster P (EICC), establishedanenterprise-wide policyforprotecting rights labor Additionally, LGE joinedtheElectronic Citizenship Coalition Industry March Union Social Responsibility (USR)charter. 2017)anddeclaring disputenegotiations for28consecutive withoutlabor years (asof relations, reaching anagreement incollective bargaining andwage management LGEOwing to labor itsefforts, isleadinganexemplary the diversity of ouremployees andpromotes creativity andautonomy. LGE continues to establishacorporate itsefforts culture thatvalues those of oursuppliers. rightsfundamental humanrights of andlabor employees aswell as Universal Declaration of HumanRightsbytheUnited Nationsto ensure established byinternational institutionsandorganizations suchasthe LGE respects andcomplies withthestandards, andregulations laws Based onourmanagementphilosophy “People-oriented Management,” Our Activities eering committee represent Korean companies atCaring forClimate. urchase A greement

Supplier CSRRiskManagement Win-Win Growth Protection of LaborRights Jeong-Do Management With theEnvironment CSR ManagementSystem Supplier CSRRiskManagement Win-Win Growth Protection of LaborRights Protection of LaborRights Supplier CSRRiskManagement Win-Win Growth CSR ManagementSystem Management Philosophy Related Content Page Number 99-102 99-102 99-102 77-79 72-77 52-71 28-29 77-79 72-77 77-79 72-77 28-29 106 13 pounds), whichhelps to reduce air pollutionbyminimizingtoxic emissions. As opposed to traditional petroleum-based ink, soy-based ink is more environmentally- friendly and has low levels of VOCs (Volatile Organic Com renewableresource.truly remaina responsiblyand ensureforestsaremanaged to standardsset strict the meet productsthat pulp and paper to This report was printed with soy ink on environmentally-friendly,on FSC ink soy with printed was report This D Environment &Safety Laboratory Product Testing TeamCS Planning TeamPL/Safety Information Security Team New BusinessStrategy Team Brand Strategy Task Fair Trade Team Ethics Bureau Compliance Team Administr Corporate Business Contributors to report preparation LG Electronics’ Reports Sustainability Released inOctober epartment Released inJune 2006 2013 ation LegalTeam

Released inOctober

Released inJune 2008 2014 Jong SuSun Young Woo Lee Lee RanPark Kwang HoonKo Hyo EunKim Jin HyungOh Sung Soo Yeo JinSong Sang HyukAn Seok JinKoh Eun Yong Song Hye JinLee Dong HoonLee Jong Po Choi In suLee Hyun AhSuh In KyoungLee Ha HyunBae Released inJune Released inJuly

Kim 2009 2015 Ⓡ -certified paper. The Forest Stewardship Council paper.ForestStewardship-certified The Planning ·Design Planning LGEUS Corporate SocialResponsibility CSR Team CHO Division Procurement Center Released inJune Released inJune 2010 2016 Released inMay Released inJune 2011 2017 Ⓡ (FSC R Gyu NamKim Wook Ko Joaquim Hong Jin Woo Kim Se Won Min Hye HyunHong Jong Tae Woo Tel: 82-2-303-4266 IM creative Christine Ackerson Kwang MinLee Jung HyunPark Yong HeeKim Chang Woo Yu Seong MiHwang Hyun JinJeon Jung MinSong Ho SungJoo oy Kim Ⓡ ) mark is awarded is mark ) Released inMay

2012 -