November 18, 2024

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LG Chem's Vice Chairman Shin Hak Cheol (second from the left) and other officials examine equipment at a partner company in 2019. (LG Chem)

LG Chem is ramping up efforts to strengthen ties with partner companies through a series of new initiatives to promote sustainable development across its supply chain, the firm said Sunday.

The South Korean chemicals giant outlined five key strategies under its “Shared Growth Solutions” framework: promoting fair trade, providing financial support, advancing environmental, social and governance practices, enhancing partner capabilities and improving communication.

As part of the plan, LG Chem said it has adopted standard subcontracting agreements and implemented guidelines from the Korea Fair Trade Commission. The company has also launched a compliance program to oversee internal practices and provide training for transparent operations.

In financial support, the company is offering 2.06 trillion won ($1.54 billion) to partners, which includes a 1.06 trillion won low-interest loan program and a 1 trillion won ESG growth fund created in partnership with Shinhan Bank to help firms invest in eco-friendly projects.

To assist small and medium-sized enterprises in adopting ESG practices, LG Chem said it allocates 20 billion won annually for consulting, training and life cycle assessment initiatives. Since 2012, the company has identified nearly 400 energy-saving opportunities through audits and plans to expand its support for renewable energy projects. LG Chem also provides safety certification assistance and free safety equipment to improve workplace conditions.

The company said it further supports innovation by offering free testing and analysis services to smaller firms facing equipment shortages. It also provides intellectual property protection, including joint patent applications and technology escrow services, while supplying experimental equipment to enhance production quality and consistency.

Additional efforts include workforce development programs, such as subsidies for new hires at partner firms and free online training in leadership, IT and business management. To improve coordination, LG Chem has launched an online portal and expanded communication initiatives.

These measures have earned LG Chem the highest rating for seven consecutive years in the Korea Commission for Corporate Partnership’s Shared Growth Index, along with the designation of “Honorary Excellent Company.”

“Through these initiatives, LG Chem seeks to align its success with that of its partners, creating a sustainable and mutually beneficial ecosystem,” a company official said.

By Park Li-na (linapark@heraldcorp.com)