Where does sustainability begin?

Before grand declarations, it begins with practical changes: switching the electricity that powers factories, examining the environmental impact of a single product, and giving resources that have reached the end of their useful life a new purpose. Sustainability takes shape through these tangible choices and changes unfolding across day-to-day business operations.

The scope of corporate responsibility has also grown considerably. Companies must consider not only the environmental impact generated directly at their business sites, but also how raw materials are produced and transported, how products are used and disposed of, how suppliers operate, and how business activities interact with the natural environment surrounding their facilities. Sustainability management is no longer a separate corporate initiative. It has become a guiding principle that shapes the direction of the entire business.

LG Chem is turning this transition into tangible action, with the goals of achieving carbon-neutral growth by 2030 and Net-Zero by 2050. The company is expanding its use of renewable energy and managing the carbon footprints of individual products. It is also bringing waste plastics, bio-based feedstocks, and end-of-life batteries back into the industrial value chain as valuable resources. At the same time, its approach to sustainability is extending beyond its own operations to encompass products, supply chains, and the natural environment.

Drawing on the LG Chem Sustainability Report 2025, this article takes a closer look at the changes LG Chem is advancing across energy, products, resources, and the environments within and beyond its business sites.

Changing Energy, Managing Carbon: Toward Net-Zero

The journey toward Net-Zero begins with changing the energy that powers business sites. LG Chem tailors its approach to each site, considering its electricity consumption profile and available renewable energy procurement options. Measures include purchasing renewable energy certificates and participating in green premium programs.

In 2025, LG Chem used a total of 301 GWh of renewable energy across its domestic and overseas business sites. Domestic sites procured approximately 93 GWh, reducing carbon emissions by around 40,000 metric tons of CO₂e. Overseas sites procured approximately 208 GWh, resulting in a reduction of around 130,000 metric tons of CO₂e. Together, these efforts delivered an estimated carbon reduction of approximately 170,000 metric tons.

Managing only the carbon emitted directly from business sites, however, is not enough to achieve Net-Zero. Emissions are also generated when raw materials are produced and products are transported, as well as when customers use and dispose of those products.

LG Chem is therefore systematically managing Scope 3* emissions generated indirectly across the value chain. Based on the GHG Protocol*, the international standard for greenhouse gas accounting, the company has established an emissions calculation framework. It has also completed independent third-party verification of both the calculation process and its results, strengthening the reliability of its data.

LG Chem currently calculates Scope 3 emissions primarily for its domestic business sites. Going forward, it plans to expand the scope to global operations, including overseas subsidiaries. This will allow the company to identify the areas with the greatest emissions impact and connect these findings to carbon-reduction and product improvement initiatives with suppliers.

LG Chem aims to transition 100% of the electricity used at its overseas business sites to renewable energy by 2030, followed by its domestic sites by 2050. By advancing the energy transition at its operations while managing carbon across the entire value chain, the company is laying a stronger foundation for achieving Net-Zero by 2050.

*GHG Protocol (Greenhouse Gas Protocol): An international standard that enables companies and organizations to calculate and report greenhouse gas emissions using consistent accounting principles.
*Scope: A concept that classifies a company’s greenhouse gas emissions into Scope 1, 2, and 3 according to international standards
-Scope 1: Greenhouse gases directly emitted from their factories, vehicles, etc.
-Scope 2: Greenhouse gases indirectly emitted through the use of electricity or heat purchased from external sources
-Scope 3: Other indirect emissions generated across their entire supply chain, including raw material production, facilities, and distribution

More Precise Product Carbon Management

When we follow the flow of carbon more closely, it eventually leads to a single product.

Reducing a product’s environmental impact first requires a clear understanding of its entire life cycle, from raw material sourcing to production, distribution, use, and disposal. LG Chem conducts Life Cycle Assessments (LCA) to evaluate the overall environmental impact of its products. It also manages the carbon footprint of each product based on Product Carbon Footprint (PCF) data, which quantifies greenhouse gas emissions throughout the product life cycle. This helps the company identify which stages have the greatest environmental impact and determine more precisely where improvements are needed.

In 2025, LG Chem incorporated the energy required for production and updated 564 PCF models across 15 product groups. While managing product-level carbon emissions using the latest data, the company also provided customers with 467 LCA and PCF datasets. These efforts helped LG Chem meet customer demand for low-carbon products and transparent environmental information, while supporting preparations for increasingly stringent global environmental regulations.

LG Chem’s product carbon management capabilities are also driving change across the supply chain. In partnership with the Korea Environmental Industry & Technology Institute, the company supported LCA implementation for eight suppliers. This helped each supplier establish the capabilities needed to measure and manage the environmental impact of its own products. Improvement opportunities identified during the assessments were then linked to LG Chem’s Shared Growth Fund, helping suppliers introduce carbon-reduction equipment and solutions in practice.

Rather than stopping at the collection of environmental data, LG Chem is turning that information into tangible reduction initiatives with customers and suppliers. Through these efforts, it is expanding the role of product carbon management across the entire supply chain.

* LCA (Life Cycle Assessment): A method of comprehensively evaluating a product’s environmental impact throughout its life cycle, from raw material extraction and sourcing to production, distribution, use, and disposal.
* PCF (Product Carbon Footprint): The total greenhouse gas emissions generated throughout a product’s life cycle, expressed in carbon dioxide equivalents.

Giving Resources New Life: Expanding the Circular Economy

Once a product’s environmental impact has been assessed, the next question is where its resources go at the end of their useful life. Building a circular economy requires more than technologies that turn waste back into raw materials. It also requires reliable systems that allow recycled and circular materials to be used in actual products and brought to market.

LG Chem is creating new uses for resources across plastic recycling, bio-based feedstocks, and battery recycling. In 2025, the share of reused and recycled materials in its polycarbonate (PC) product line reached 8.2%, up 2.9 percentage points from the previous year. The use of recycled materials also increased across the ABS, PVC, and plasticizer product lines.

As recycled materials find a wider range of applications, ensuring their reliability becomes increasingly important. LG Chem has obtained Global Recycled Standard (GRS)* certification for 30 products, including ABS, PC, and PP. GRS verifies not only recycled content and traceability, but also environmental and social standards throughout the production process. This provides a trusted foundation for recycled materials to be used reliably in the market.

LG Chem has also begun the full-scale commercialization of new circular materials. The company launched sales of Ocean Bound Plastic (OBP) materials made from plastic waste at risk of entering the ocean. It has also begun selling Bio-Circular Balanced (BCB) products that incorporate bio-based and circular feedstocks.

LG Chem was the first company in Korea to develop BCB products. These products are manufactured using both bio-based feedstocks derived from vegetable oils and conventional fossil-based feedstocks. This approach reduces dependence on fossil resources while making use of existing petrochemical production facilities. BCB technology is now applied to a wide range of product lines, including SAP and ABS. As of June 2026, 61 products had obtained ISCC PLUS* certification.

LG Chem is also establishing a production base for bio-based feedstocks. Together with Enilive, the company established the joint venture LG-Eni BioRefining and is constructing a Hydrotreated Vegetable Oil (HVO) plant in Seosan, South Chungcheong Province. The facility will produce bio-oil from renewable plant-based feedstocks such as used cooking oil. With an annual production capacity of 300,000 metric tons, the plant is scheduled for completion in 2027.

The circular flow of resources also extends to end-of-life batteries. When used batteries are crushed and processed, they produce an intermediate material known as Black Mass, which contains key metals such as lithium, nickel, and cobalt. LG Chem is establishing a circular system that recovers these metals from Black Mass and returns them to the production of precursors and cathode materials. The company is also advancing the relevant technologies to ensure that products made with recycled feedstocks achieve quality comparable to those manufactured with newly sourced metal feedstocks.

In the first half of 2026, LG Chem completed the construction and validation of its battery recycling pilot facility. The company is now working toward operating a mass-production facility in 2028. Going forward, LG Chem plans to collaborate with battery cell manufacturers, automakers, and other partners to expand a circular system connecting end-of-life battery collection, key metal recovery, and cathode material production.

The use of recycled materials, commercialization of circular materials, production of bio-based feedstocks, and recycling of end-of-life batteries may appear to represent separate businesses. In practice, they form a single connected flow: securing raw materials, manufacturing products, recovering resources after use, and returning them to the production cycle as new feedstocks.

* GRS (Global Recycled Standard): An international certification that verifies recycled content and traceability, along with environmental and social standards throughout the production process.
* ISCC PLUS: An international certification system aligned with the European Union’s Renewable Energy Directive (RED), one of the world’s most stringent renewable energy frameworks.

Expanding Sustainability: From Waste to Nature

Sustainable production requires careful consideration of not only products, but also the impact that business sites have on their surrounding environments.

This means reducing waste generated during production, monitoring air pollutants in real time, and closely examining the relationship between business operations and nature. LG Chem analyzes the types and characteristics of waste generated at each business site to reduce overall waste volumes. It is also shifting treatment methods away from incineration and landfill toward recycling. One of the most notable outcomes of these efforts is Zero Waste to Landfill (ZWTL) certification.

As of 2025, five LG Chem business sites maintained ZWTL certification: Yeosu Hwachi, the Cheongju separator site, and the Guangzhou, Tianjin, and Chongqing sites in China. The Tianjin site achieved a 100% recycling rate by recycling all waste wood and plastic containers. The Yeosu Hwachi site recorded a 96% recycling rate by recycling wastewater treatment sludge that had previously been incinerated.

Air pollutants are continuously measured through 115 Tele-Monitoring System (TMS) units installed at the Yeosu, Daesan, and Cheongju sites. Using Eagle Eye, a location-based integrated management system, LG Chem monitors emissions from each site in real time. The TMS control center operates 24 hours a day, including nights and public holidays. The company has also established operating guidelines and situation-specific response systems to ensure a rapid response to emergencies such as process abnormalities or measurement equipment failures.

LG Chem’s environmental focus does not stop inside the factory. In 2025, the company analyzed protected areas, species, and water environments around five major domestic business sites: Yeosu, Daesan, Naju, Cheongju, and Iksan. The Yeosu site was selected for a pilot assessment to examine in greater detail both the site’s impact on nature and its dependence on the natural environment.

Efforts to restore marine ecosystems are also continuing. LG Chem transplanted 70,000 seagrass shoots, which absorb carbon underwater while providing habitats for a wide range of marine species. In 2025 alone, the seagrass habitat expanded by 10.224 hectares. Alongside analyzing the impact of its business sites on nature, LG Chem is also taking practical action to support ecosystem restoration.

Energy transition and product carbon management, resource circulation and environmental management at business sites may appear to be separate areas. Ultimately, however, they all point toward the same goal: reducing environmental impact across the entire business process, from the moment raw materials are selected and products are manufactured to the point when resources are recovered after use and given new value.

LG Chem is steadily putting sustainability into practice throughout its business, extending its efforts across products, supply chains, and the natural environment. In doing so, the company is building a stronger foundation for responding to a rapidly changing global landscape.

The LG Chem Sustainability Report 2025 provides further details on the initiatives introduced in this article, along with LG Chem’s broader sustainability activities and achievements.