2019-2020 POSCO CHEMICAL CORPORATE CITIZENSHIP REPORT CO2 2019-2020 POSCO CHEMICAL CORPORATE CITIZENSHIP About This Report Contents REPORT POSCO Chemical’s 2019-2020 Corporate Citizenship Report aims to transparently announce the company’s eco- OVERVIEW CEO Message 03 nomic, social, and environmental responsibilities and sustainability management activities and to expand com- OVERVIEW 2019-2020 Highlights 04 munication with stakeholders. CEO Message Company Introduction 06 2019-2020 Highlights Management Philosophy 06 Company Introduction Reporting Principle Our Businesses 07 Management Philosophy This report was prepared based on the Global Reporting Initiative(GRI) Standards, a global sustainability manage- Global Networks 09 Our Businesses Global Networks ment reporting initiative, and satisfies the Core Option required by GRI. SUSTAINABILITY Corporate Citizenship Strategy 11 SUSTAINABILITY STRATEGY Reporting Scope STRATEGY SDGs Commitment 12 Economy: K-IFRS-based consolidated financial statements Integrated Value Creation Process 13 SUSTAINABILITY FOCUS AREAS Society: Pohang Plant(Head Office of POSCO Chemical, POSCO), Gwangyang Plant, Sejong Plant, Seoul Office, Stakeholder Communication 14 and some overseas business sites Materiality Analysis 15 Environment: Pohang Plant(Head Office of POSCO Chemical, POSCO), Gwangyang Plant, and Sejong Plant GOVERNANCE Reporting Period SUSTAINABILITY Response to Climate Change 17 This report contains not only our company’s economic, social, and environmental activities and achievements FOCUS AREAS Healthy and Safe Working Environment 20 BUSINESS from January 1, 2019 to December 31, 2020, but also some of the achievements in the first half of 2021. We also GOVERNANCE Corporate Governance 24 report the recent 3-year data in the Appendix section to enable time-series analysis. Ethical Management 26 SOCIETY Compliance 28 Reporting Term Risk Management 30 Every two years(The previous report was published in 2019.) PEOPLE BUSINESS 01 Sustainable Business 33 Assurance 02 Shared Growth 37 Financial information in this report was independently audited by EY Hanyoung Korea(FY2019) and Deloitte Ko- 03 Environmental Management 42 04 Quality Management 46 APPENDIX rea(FY2020), while non-financial information was verified by the Korea Management Registrar Incorporation to 05 Customers 49 ensure objectivity and reliability. SOCIETY 06 Social Contribution 54 Contact For inquiries about the 2019-2020 POSCO Chemical Corporate Citizenship Report, please use the following con- PEOPLE 07 Employees 58 tact points. APPENDIX Qualitative Data 64 Address 110, Shinhang-ro, Nam-gu, Pohang City, Gyeongsangbuk-do, Korea GRI Index 68 Department Corporate Citizenship Bureau SASB Index 70 Homepage http://www.poscochemical.com/kr The Third Party’s Assurance Statement 71 E-mail [email protected] Awards and Association Memberships 72 2 2019-2020 POSCO CHEMICAL CORPORATE CITIZENSHIP CEO Message REPORT We will make safety a top priority and reinforce environmental management to reduce carbon emissions. Safety is the supreme principle and value that cannot be compromised. To ensure safety, we will not only strictly OVERVIEW company with the basic safety rules such as 5-second pause and mutual caution but also spare no investment CEO Message 2019-2020 Highlights in identifying and correcting risk factors at worksites. By doing so, we intend to fundamentally eliminate unsafe Company Introduction conditions. Moreover, we will continue investment in battery materials business and development of resource Management Philosophy recycling technologies to lead the response to climate change issue. Our Businesses Global Networks We will further tighten the strategic collaboration with partners for higher competitiveness and shared SUSTAINABILITY STRATEGY growth. Strategic collaboration with partners is essential for POSCO Chemical to evolve into a comprehensive chemical SUSTAINABILITY FOCUS AREAS company. In 2020, we established P&O Chemical, a joint venture engaging in producing ultra-high purity hydrogen peroxide, which is used for semiconductor processing, through the collaboration with a domestic chemical company. Our efforts for strategic collaboration with partners, customers, and suppliers will continue in order to GOVERNANCE build a healthy business ecosystem and create both economic and social values across all business activities. We will establish a culture of learning and enhance trust and harmony. BUSINESS To ensure the power of robust execution and substantial growth, we will establish a culture of self-learning that POSCO Chemical is committed to growing into a global leading company stimulates the challenging spirit and competence of employees. The company will also fulfill its responsibility and SOCIETY in chemical and energy materials business that pursues both economic role as a global corporate citizen by keeping the Charter of Corporate Citizenship in mind in all business activities, and social values as a corporate citizen. thereby gaining greater trust from stakeholders. The Audit Committee and Non-executive Director Candidate Recommendation Committee will be launched next year to further strengthen our corporate governance and PEOPLE communication. Dear respected stakeholders, I deeply appreciate your consistent and unwavering interest in and support for POSCO Chemical. Dear stakeholders, APPENDIX The global economy is still suffering from prolonged COVID-19 disease. Nonetheless, POSCO Chemical has focused All employees of POSCO Chemical will take a strong step toward making the company sustainable without being on a large-scale investment in energy materials business and relentless innovation activities as well as the discovery complacent with the achievement we have made so far. We will devote ourselves to creating customer value and of new business opportunities to lay a foundation for becoming a 100-year lasting company under the vision of “A contributing to the development of our society and economy, eventually growing into “A Global Leading Company Global Leading Company in Chemical and Energy Materials.” in Chemical and Energy Materials.” I look forward to your continued interest and support. Starting its business as a refractory-specialized company with the establishment of POSCO’s Pohang Works, POSCO Thank you. Chemical has contributed to the progress of Korean industries including steel business by supplying basic materials. Based on accumulated experiences and know-how, our business territory has been expanded to quicklime, coal CEO of POSCO Chemical, chemistry, carbon materials, and secondary battery materials. We celebrate our 50th anniversary this year. Going Min Kyung-zoon forward, the company intends to grow into a top-tier company with supreme productivity and competitiveness that creates both social and economic performances in a balanced way based on the “Corporate Citizenship,” the management philosophy of POSCO Group. To this end, we will concentrate on the following three strategies. 3 2019-2020 POSCO CHEMICAL CORPORATE CITIZENSHIP 2019 Highlights REPORT OVERVIEW CEO Message 2019-2020 Highlights Company Introduction Management Philosophy Our Businesses Global Networks SUSTAINABILITY STRATEGY SUSTAINABILITY FOCUS AREAS First Half of the Year Second Half of the Year GOVERNANCE Integrated the Group’s Energy Materials Completed the First Stage of Completed the First Stage of the Business with the Change of Company Moved to the KOSPI Market Cathode Materials Production Second Anode Materials Production Plant BUSINESS Name and Acquisition of POSCO ESM Facility Expansion Project Expansion Project SOCIETY PEOPLE We changed the company name to POSCO Chemical Our stocks, which had been listed on the KOSDAQ On July 21, 2019, a production facility with an POSCO Chemical held a ceremony for the completion from POSCO Chemtech through the resolution at the market, successfully moved to the KOSPI market annual production capacity of 6,000 tons of cathode of the first stage(annual production capacity of APPENDIX general shareholders’ meeting on March 18, 2019 with within the scheduled period after the change of materials(first stage of facility expansion) was 20,000 tons) of production expansion at the second the aim of definitizing our business and corporate corporate name and integration of energy materials completed in Gwangyang Plant located in the Yulchon anode materials production plant located in the high- identity that leads POSCO Group’s chemicals and business. Because the examination period took Industrial Complex. It allowed us to secure a total tech industrial complex in Sojeong-myeon, Sejong materials sectors. We also acquired POSCO ESM, a only 20 business days(generally 45 business days) annual production capacity of 15,000 tons of cathode City on November 15. Our annual anode materials cathode materials manufacturer, to further enhance as the fast track principle, a screening simplification materials including Gumi Plant and contributed to production capacity was expanded to 44,000 tons R&D capability and accelerate synergy creation in the procedure for large superior companies in case of laying a foundation for meeting increasing demands including the first plant. The second plant boasts energy materials business. The acquisition will allow market switch, was applied and we fully satisfied for secondary battery and customer requirements. around 25% higher production capacity per line than us to fully develop next-generation market-leading all requirements for relisting