LS 2020 Reports English
LS 2020 Reports English
LS 2020 Reports English
2020 - 2021
Sustainability Report + Annual Report
About this Report Leading a Sustainable Future
with 'Green' Cable Solutions
Since 2010, we have been publishing the report on an annual basis to transparently LS (Leading Solution) 2020 - 2021 Sustainability Report + Annual Report Overview 04
share with our stakeholders the previous year’s performance and this year’s targets in
For LS Cable & System, sustainable
economic, social and environmental value creation. This report features special pages Chairman’s Message 04
on our ESG (Environment, Social, and Governance) strategy in reflection of the vision management means our belief in the value
President’s Message 06
and management philosophy of LS C&S as part of our efforts to actively respond to the of going forward together. It is not simply a
ESG Management System 08
growing importance of this field. We will continue to work toward ensuring sustainable resolution, but something that must be put
About LS C&S and its Business 12
growth in the years to come. into action on a daily basis. We resolutely
Our Products 14
believe in and act upon our vision to enhance
Company Vision and Philosophy 16
Reporting guidelines the quality of life of our stakeholders,
Our Global Network 18
This report has been prepared in accordance with the GRI (Global Reporting Initiative) including suppliers, customers, investors, and
Key Achievements 20
Standards Core option and fulfills the AA1000 AccountAbility Principles of inclusivity, local communities. Our goal for sustainable
Opportunities and Challenges 22
materiality, responsiveness, and impact. No material changes have been made from the management is to create a society defined by
previous year in reporting boundaries, scope, or measurements. For any changes in a coexistence and a prosperous future.
data collection method, adjustment has been made using the 2020 method and details Sustainable Management 24
are specified in the report.
Corporate Governance 26
Reporting period Integrated Risk Management 27
The period is from January 1 to December 31, 2020. Three-year data from 2018 to 2020 Sustainable Management System 30
is provided to keep track of performance trends. The 2021 issues up to the second Identification of Material Issues 34
quarter deemed necessary to be reported as meaningful performance are also included.
10 Key Topics 36
Reporting scope and boundary
The scope includes domestic worksites (the head office, Seoul office, plants in Customer First
Gumi, Indong, and Donghae, and Central Research Lab) and domestic and overseas 1. New Technology and Products 46
subsidiaries. Financial information is based on consolidated data. Where some of the 2. Quality and Product Responsibility 55
social and environmental data falls in different reporting scopes, this fact is noted.
One LS C&S
Reliability of this report
3. Social Contribution 60
For the accuracy, objectivity, and reliability of this report, a review was conducted by the 4. Shared Growth 66
independent verification agency KMR in accordance with international standards. In
5. Respect for Human Rights and Diversity 71
addition, financial data in the report has been audited by an independent auditor.
Chairman’s Message
As a company supporting industries that deliver energy and information through cable products
just like the circulatory system running through a body, we have initiated ESG management as part
of our efforts to create a cleaner and healthier planet while promoting corporate social value.
First of all, I would like to express my gratitude to all the stakeholders As a company supporting industries that deliver energy and
in our enterprise for your continued interest and support. information through cable products just like the circulatory system
running through a body, we have initiated ESG management as
Last year, we announced our Vision 2030: The World Best Cable part of our efforts to create a cleaner and healthier planet while
Solution Leader in preparation for the coming decade. To swiftly promoting corporate social value.
spark a management paradigm shift, we have set strategic
directions for globalization, new business models, an advanced Our ESG vision, Leading a Sustainable Future with Green Cable
management system, and ensuring an innovative corporate Solutions, reflects the direction for our business and social value
culture. We have drawn up implementation tasks and have been based on our Vision 2030.
conducting activities for their internalization.
Under this vision, we will respond to climate change through green
Amid these efforts, we have been challenged by both the COVID-19 infrastructure innovation, place safety as the top priority at our
pandemic and climate change as these global crises directly worksites, and implement ESG management in an unbiased and
impact all of our daily lives. The pandemic has forced us to face transparent manner. To this end, an ESG management committee
unprecedented uncertainty, and ongoing climate change issues and a dedicated team will be established to carry out key tasks.
are sending us all a warning regarding fossil fuel-based production
and consumption. Whenever we have confronted challenges over the last six
decades, we have renewed ourselves through innovation. Amid
While pursuing their business, companies must consider both growing uncertainty in the business environment, we will remain
society and the environment in order to ensure a sustainable committed to achieving sustainable growth by implementing ESG
future. New trade barriers such as carbon border adjustment management that allows us to forge a better future for coming
mechanisms are emerging with the growing demand for ESG generations.
management in many countries, particularly in Europe. ESG
management has also become a criterion in financial markets I hope that this year’s report announcing our new commitment
when companies seek to raise investment funds through loans. to sustainability will provide another effective communication July 2021
Considering that globalization is one of our key strategies for We look forward to your unwavering support for our efforts.
achieving sustainable growth, ESG is no longer an option, but a
must for our survival. Thank you.
6 LS Cable & System 2020-2021 Sustainability Report + Annual Report Overview Sustainable Management 10 Key Topics Appendix 7
President’s Message
Distinguished stakeholders, Secondly, based on the recognition that fostering shared growth
I would like to express my sincere appreciation for your support. with local communities is an important corporate role, we are
conducting a variety of activities to support our local communities
Despite the global economic downturn and multiple challenges and the children of low-income families. In particular, a job support
being faced by society, we have achieved robust growth based program for those discharged from military service has been
on systematic strategies and innovative technology. We have launched in partnership with the Donghae City Government under
focused on new growth engines such as renewable energy and which a former petty officer joined LS C&S after his discharge.
EVs to boost our business competitiveness. Our submarine
cable products for offshore wind power transmission have been Thirdly, a Compliance Committee was newly established to
consolidating their market position, and we became the first promote a culture of compliance and proactively meet social
supplier in Korea to provide aluminum cables for EVs and EXLW needs. We believe safety should never be subject to compromise,
(high-function magnet wire). but rather that it is a core value. In this regard, all of our employees
are engaged in accident prevention activities.
However, corporate sustainability cannot be guaranteed only
through economic performance. To realize ESG values including In addition, we have initiated a range of efforts at creating social
environmental protection, social contribution, and compliance value and we would like to present them alongside our ESG
management, we have been conducting the following activities: strategy in this report. We will commit ourselves to implementing
these strategies and fully achieving our goals.
Firstly, as a response to the issue of climate change, efforts are
being made to reduce GHG emissions across our value chain from We look forward to your ongoing support for our efforts.
raw materials to production, consumption, and disposal. At our
Donghae Plant, existing power for submarine cable production is Thank you.
being replaced by renewable energy, and the commercialization
of PP polypropylene cables is allowing us to minimize the air pollutants
generated during production. In addition, a foundation for resource
recycling has been laid thanks to the development of recycling
technology for XLPE cross-linked-polyethylene as a raw material. July 2021
President Roe Hyun Myung
8 LS Cable & System 2020-2021 Sustainability Report + Annual Report Overview Sustainable Management 10 Key Topics Appendix 9
For 2021, we drew up our ESG vision and strategy to help us fulfill our social responsibility towards Strategic value Where we are Where we are headed
both our internal and external stakeholders in the environmental, social, and governance fields and
Responding to climate change issues through Shifting to eco-friendly materials and Procuring renewable energy and
to ensure sustainable long-term growth. Key tasks and activities have been selected to internalize
green infrastructure innovation manufacturing processes promoting green technology
ESG management and a governance body and dedicated team will be established to support its
implementation. Setting safety as the top priority at Conducting activities to Raising awareness of safety and
our worksites promote workplace safety health across the supply chain
an ESG Management Our ESG vision, Leading a Sustainable Future with Green Cable Solutions is based on the missions and
core values of our Vision 2030 so that a vision in line with our existing management strategies can
System Creating key tasks and subtasks
provide a foundation as we take the lead in terms of ESG.
We will proactively respond to ESG-related demands and issues that are regarded as critical to the
company. Considering the strategic relevance of the ESG system, our business status, and the available
Identifying strategic values and goals
resources, eight key tasks, subtasks, and an implementation roadmap were determined. The responsible
Based on external trends and our commitment to ESG management, we have identified the following
teams and the ESG Team will craft an action plan for each subtask. The eight key tasks are linked to nine
strategic values: ① Responding to the issue of climate change through green infrastructure innovation; ②
UN Sustainable Development Goals.
Setting safety as the top priority at our worksites; and ③ Implementing ESG management in an unbiased
S P E C I AL S E S S I O N
S P E C I AL S E S S I O N
How to set up key ESG tasks
and transparent manner. Strategic goals for each value have been established to provide direction for
implementation and make each value quantifiable. Identifying critical issues and
Listing key tasks Considering internal feedback Finalizing the list
establishing strategic goals
Our ESG strategy system based on the Vision 2030 Activities Activities Activities Activities
· Analyzing internal/external status · Conducting brainstorming sessions · Making a short list considering ·F
inalizing the tasks through
· Conducting a diagnosis and · Analyzing the cases of other internal feedback discussion
Mission Vision
identifying the gap companies · Prioritizing the tasks on the list
Our business mission and vision
Enable the Cabled World The World Best Cable Solution Leader · Selecting ten key issues · Creating a long list of tasks in line
· Drawing up three ESG strategies with the ten key issues and strategic
and seven goals goals
10 key ESG issues 8 key tasks 3 ESG strategies and 7 strategic goals
ESG Vision Leading a sustainable future with 'Green' cable solutions
➊ Reducing waste and pollutants Internalizing a capacity for
Developing sustainable solutions Responding to
sustainability
communication activities
customers and clients
Conducting external
Society priority on safety
➎ Supporting suppliers in their risk at our worksites
Providing ESG-related
management Promoting our
support to customers
ESG strategies externally
and to society
➏ Supporting local communities
Our core values Customer First One LS C&S Rule & Expertise ➒ Strengthening activities to promote Strengthening supply chain Implementing
Responsibility ethical management Promoting an ESG management ESG management
Gover-
approach in supply in an unbiased
nance
➓ Internalizing ESG management chain management Establishing an ESG and transparent
policies management system manner
10 LS Cable & System 2020-2021 Sustainability Report + Annual Report Overview Sustainable Management 10 Key Topics Appendix 11
Relevance to the UN SDGs Our activities To enable a cabled world and become the world best cable solution leader,
S P E C I AL S E S S I O N
Creating a ‘safety-first’ work
health activities
environment We implement ESG management in an unbiased and transparent manner
• Conducting a real-time health check and monitoring training and activities
We strengthen supply chain management by forming partnerships with our suppliers.
Promoting ESG management outside the company
Providing ESG-related support to We establish an ESG management system by building trust with our stakeholders.
• Strengthening efforts at contributing to the society and launching a program to
customers and to society
make up for environment capital
We continue our efforts at creating a sustainable future for the earth and all humanity.
Conducting external evaluation on our ESG performance
Conducting external communication
• Collecting external feedback from third-party evaluation and participating in
activities
global ESG initiatives
June 14, 2021
Promoting an ESG approach in Promoting ESG management in our global network The employees of LS C&S
supply chain management • Supporting suppliers and overseas subsidiaries in their ESG-related efforts
Company profile Since its foundation in 1962, LS C&S has developed, produced and provided cable solutions, contributing Financial In 2020, the sudden COVID-19 pandemic increased uncertainty and served as a major constraint on
to industrial development by establishing power grids and communications networks at home and our business. We quickly devised response measures to minimize its impact. As a result, we have
performance
abroad. We have been developing state-of-the-art products, including submarine and superconducting marked impressive achievements in our key business areas, including winning a submarine cable supply
cables, to lead a global market while pursing sustainable growth. Going forward, we will continue our contract. Consolidated sales for 2020 were recorded at USD 4,441 million, a year-on-year increase of USD
efforts at becoming a global cable solution leader through customer-oriented and green businesses that 465 million. Operating profit rose USD 12 million to USD 152 million. As of the end of 2020, total assets
meet customer requirements. stood at USD 4,333 million, a rise of USD 788 million year on year: Inventories from expanded business
increased USD 244 million; improved cashflow in sales-allowed cash and cash holdings rose to USD 144
Company name LS Cable & System
million; and tangible assets grew USD 71 million with investments in submarine cable and automotive
Head office 13th-17th Fl. LS Tower, 127 LS-ro, Dongan-gu, Anyang-si, Gyeonggi-do, Korea
part businesses. Our debt-equity ratio was 270%, an increase of 13%p mainly due to expanded business
Domestic worksites Seoul office, plants in Gumi, Indong and Donghae, and Gunpo R&D center
in LS C&S and its subsidiaries.
President Roe-Hyun Myung
Date of establishment May 1962 Sales (unit: USD million) ● Non-consolidated ● Consolidated Operating profit (unit: USD million) ● Non-consolidated ● Consolidated
Primary products Power/telecommunication/industrial cables and materials
Subsidiaries 13 domestic subsidiaries and 18 overseas subsidiaries 2,878 91
Website www.lscns.co.kr
2018 2018
3,612 100
2,801 97
2019 2019
3,975 140
Company
information 2020
3,019
2020
115
4,441 152
275
2,303
2018
3,215 257
History 270
2,618
Establishment of foundation Growth Qualitative growth Toward 2030
2019 235 249
3,545
1962 Established as the Korea 1984 Established 2005 Renamed LS C&S 2020 Declared the Vision 2030 3,202
Cable Industry Goldstar Optical Opened the LS Industrial Complex in Wuxi, Established Sejong 2020 225
4,333
1966 Opened the Anyang Telecommunications, China Opened the submarine
plant a joint venture with 2006 Opened LSCV, the second plant in Vietnam cable Plant 3 in 2018 2019 2020
1978 Opened the Gumi plant AT&T for optical fiber 2007 Opened LSCI in India Donghae, Korea and
1982 Opened the Anyang R&D production 2008 Launched as LS holdings Co. Ltd communication harness
Membership
center 1994 Opened LGMW and 2009 Opened the first submarine cable plant in Korea Plant 2 in India
1983 Opened an HV LGME in a joint venture Acquired HongQi Electricity of China 2021 Opened a power cable
EHV VCV tower at the with Malaysia 2015 Declared the new company vision LS C&S Way plant (LSMC) in Egypt · Korea Personnel Improvement · Korea Business Council for · International Contractors · FTTH Council Europe
Gumi Plant 1997 Opened the Indong Founded LS C&S Asia (a holding company of Incorporated LS Association Sustainable Development Association of Korea · BICSI
plant in Korea and the Vietnam subsidiaries) Materials as a subsidiary · SERI CEO · Korea Engineering & Consulting · Korea Information and ·K
orea Electric Wire Industry
LG-VINA cable plant in 2016 LS C&S Asia listed on the KOSPI Announced ESG Association (KENCA) Communications Contractors
· Korea HRD association Cooperative (KEWIC)
Vietnam 2017 Acquired the power business of SPSX management Association (KICA)
· Korea Employer’s Federation (KEF) · Korean Institute of Electrical · CIRED KOREA
2003 Branched off from LG (establishing LSCUS)
Engineers (KIEE) · FTTH Coucil Asian Pacific
Group LS C&S Asia started the construction of a cable · Anyang Chamber of Commerce · Korea Data Center Council
plant in Myanmar / Established LS EV Poland · Korea Electric Association · Korea Rolling Stock Industries
· Anyang Reserve Commander · ITS Korea
and launched LS EV Korea · Korea Electrical Manufacturers Association
Association · ICF
2018 Incorporated Gaon Cable as a subsidiary Association · Korea Railway Association
· Korea Emergency Planning Council
Established G&P (a merger between GCI and · Korea Electrical Contractors · Korea Profibus Association
Pountek) / Founded a subsidiary in Poland for · Fair Competition Federation
Association · CLPA (CC-Link Association)
optical cable production / Established LS Alsco · Korea Listed Companies Association
· Korea Wind Energy Association · ODVA
2019 Opened LSEVP and LSCP in Poland
14 LS Cable & System 2020-2021 Sustainability Report + Annual Report Overview Sustainable Management 10 Key Topics Appendix 15
Our Products
Telecommuni-
Energy
cation
HV/EHV cable Submarine cable system HVDC cable FTTA (Fiber to the Antenna) Optical fiber / Optical cable FTTH (Fiber to the Home)
This efficiently transmits large- This can be installed along the This supports long-distance This is installed in wireless base This delivers large-capacity data This provides high-speed internet
capacity power with a voltage of ocean floor to allow electric power transmission with reduced power stations to efficiently send electric rapidly and accurately by sending service to homes using optical fiber
154kV or higher. transmission and communications loss by converting AC to DC. power and optical signals to an communication signals using light. cables.
between islands or between the antenna.
mainland and an island.
Superconducting cable system Power distribution cable Overhead transmission line/ Bus duct system LAN (Local Area Network) cable Structured cabling system Coaxial cable
This transmits and distributes large This supplies power at 0.6/1kV to Optical ground wire This has the advantage of This allows high-speed This supports the planned installation This stably transmits a high
quantities of energy with little loss 22.9kV to residential and commercial Overhead transmission line is mainly distributing power efficiently telecommunications networking and operation of cables used for frequency signal from base stations
since there is minimal electrical buildings and industrial distribution installed in steel towers for long-distance in confined spaces with a high within limited geographic areas. communications equipment and to antennas using broadband.
resistance. circuits. power transmission. Ground wire shields demand for electricity, such as personal computers within buildings
the line and intercepts lightning stroke. factories or apartment buildings.
OPGW (optical ground wire) is overhead
ground wire to which telecommunication
features have been added.
Industry Materials
Industrial cables Military cable Rolling stock cable Copper wire Aluminum Magnet wire
These are used to supply signals This highly functional cable is used This is used to power and control This is high-purity copper wire made This is made of lightweight, high- This is used to convert back
and power to electric and electronic to supply signals and power to tanks, various rail vehicles, such as subway exclusively with electrolytic copper to strength aluminum with elevated and forth between electric and
devices and industrial robots. aircraft, and battleships. cars and high-speed electric trains minimize the loss of electricity. conductivity. mechanical energy in electrical or
(KTX). * Products of LS Alsco electronic devices.
Wind power cable Marine and offshore cables Automotive cables and harnesses Ultra Capacitor
This is used to transmit to These are used to power and control and modules for electric vehicles This is next-generation energy
transformers the electricity ships (such as an oil tanker or These are used to provide power to all storage with ultra high-capacity
generated from onshore and container ship) and oil-drilling facilities, devices required in a vehicle. energy output to supplement or
offshore wind power generators. and also for telecommunications on * Products of LS EV Korea replace storage batteries and fuel
such ships and facilities. cells.
* Products of LS Materials
16 LS Cable & System 2020-2021 Sustainability Report + Annual Report Overview Sustainable Management 10 Key Topics Appendix 17
In January 2020, LS C&S declared its Vision 2030 to set a clear direction for the company over the next Management policy
decade. With the intense competition in the market, securing future growth engines is increasingly
in 2021 Profit-oriented Digital
important. Furthermore, paradigm shifts in the industry will present both risks and opportunities. In this Global business
management management
regard, we will strive to achieve our vision through four strategic directions: Globalization; an innovative
business model; advanced business management systems; and an innovative corporate culture.
Achieving profitable growth by Building capacity for global Securing business competitiveness
securing a competitive edge competitiveness to achieve our vision through digital innovation
LSpartnership means employees achieve superior performance through mutual respect, care, and trust.
They cooperate based on open-mindedness and grow together with our stakeholders.
LSpartnership was created with the participation of all members of LS Group and provides the philosophy
upon which employees should act. It serves as a driving force that will bring about a new future.
Mission Enable the Cabled World
LS employees pursue excellence LS employees comply with all LS employees respect diversity
that offers customers pertinent principles, standards, and work together with their
C.O.R.E. and our commitment Customer First One LS C&S Rule & Expertise differentiated value. and procedures and take a rational partners to produce the best
Responsibility approach to doing their work. possible results.
Global Network
● Manufacturing subsidiary As of the end of March 2021, we operate 23 manufacturing subsidiaries, 14 sales subsidiaries/
● Sales subsidiary
offices, and four R&D centers under three Regional Groups in China, Asia and the Americas and two
● Sales office
● R&D center Regional Divisions in Middle East/Africa and Europe.
● Others * Europe R&D office
EUROPE
UK
MIDDLE USA
EAST·AFRICA
Poland KOREA Korea
ASIA
Australia
Indonesia
Sustainable development
Expanding green business Securing new growth engine Opening a 5G telecommunication Opening a power cable plant in Egypt
harness plant in India
Increased production We opened a cable plant in Egypt in
LSCI, our manufacturing subsidiary January 2010, our first plant in Africa. Its
capacity Globalization in India, recently opened its Plant 2 to main product is overhead transmission line.
produce ‘telecommunication harness’, Production recently started after signing
an assembly of cables that connects a cable supply contract with the Egyptian
Winning consecutive offshore wind power cable contracts Expanding EV parts business telecommunication base stations, electric power authority for a project to build
LS C&S has accumulated expertise through a number of offshore Manufacturing aluminum wires for EVs antennas, and systems. The subsidiary a power grid in a new town. As the cable
Opening the submarine cable Plant 3
wind power projects over more than a decade, which has allowed us EV manufactures are concentrating their efforts on automotive plans to focus on the Indian market with market in Egypt is growing steadily with
With the offshore wind power market the relocation of the administrative capital
to win a series of projects in Europe, the Middle East, and Asia. A five- lightweighting in order to improve mileage and fuel efficiency. its coming launch of 5G and expand its
steadily growing due to the implementation and the need to replace aging grids, we will
year preferred supplier agreement was signed with Ørsted, the world's In response, we became the first in Korea to build a production presence in Europe and the US.
of green policies in many countries, we focus our efforts on the Egyptian market
largest developer of offshore wind power. We also won a bid for USD line dedicated to aluminum wire and supplied it to a Japanese
invested USD 50 million in Donghae City and expand into East Africa and the Middle
276 million worth of projects in Bahrain, the Netherlands, and the automotive electronics company. We believe aluminum will become
in Gangwon-do Province to build our East as well.
US. In addition, we won a bid for USD 211 million worth of business a key material for EVs as only 15 kg of aluminum wire is required to
submarine cable plant 3. This has allowed
on the Jeju 3 connection submarine cable construction project by make one EV, compared to 25 kg of copper.
us to double our production capacity and
the Korea Electric Power Corporation (KEPCO). This is the largest
manufacture long-drum length HV/EHV
domestic cable project since the Jeju 2 connection project in 2009. Supplying magnet wire for the drive motors for the IONIQ 5 and EV 6
and large-size cables, strengthening our
With the successful development of magnet wire for motors
competitiveness for bidding on contracts
operating at 800 volts, LS C&S has become the sole supplier
and meeting market demand.
for the Hyundai IONIQ 5 and Kia EV6 electric vehicles. As EV
manufacturers compete over charging speed, the importance of HV/
EHV components is growing. Supplying high-voltage magnet wire to
automakers provides us an opportunity to lead this new market.
22 LS Cable & System 2020-2021 Sustainability Report + Annual Report Overview Sustainable Management 10 Key Topics Appendix 23
Energy Transition To better respond to climate change and shift to a low-carbon society, many countries are working on Digital The COVID-19 pandemic has been accelerating the transition to a digital economy characterized by
the formulation and implementation of green policies. These include not only policies for expanding the contactless and online activities. Students are taking online classes and a growing number of people
Transformation
development of renewable energy, but also for promoting energy efficiency and green mobility. In this are working from home. Some predict that going contactless will become the ‘new normal’ rather than a
regard, the South Korean government announced its Green New Deal designed to secure a sustainable passing fad. Furthermore, new business models such as smart factories, autonomous vehicles, and car-
future and accelerate the transition to a green economy. sharing services are providing momentum for a digital transformation across industries.
Increasing demand for offshore wind power cables Establishment of 5G infrastructure in the US and India
A shift to new and renewable energy is underway in many countries around the world. Offshore wind As countries resume the 5G infrastructure construction projects stalled during the COVID-19 pandemic,
power accounted for 0.3% of total energy production in 2018, but it has increased by 30% annually ever growth in demand for telecommunication equipment and cables is expected. In the US, 5G frequency
since, showing the highest growth rate after solar energy. It is expected that the expanding Asian and bands were allocated to mobile carriers through a bidding process from 2020 to early 2021, and the 5G
North American markets will increase worldwide installed capacity to 230 GW in 2030, marking eight- service currently available only in large cities is soon expected to be provided nationwide. Meanwhile,
fold growth over 2019. the Indian government has been making efforts since 2015 to expand its digital infrastructure under the
Digital India policy. According to their roadmap for 5G commercialization, the service will phase in from
Installed offshore wind power capacity The construction of offshore wind farms
230 worldwide is causing surging demand for large-
2022 for its full operation.
(unit: GW)
27% scale submarine cables. We have signed a five-
Global 5G market (unit: USD 100 million) We are expanding our telecommunication cable
year preferred supplier agreement with Ørsted,
23,175 business in overseas markets, including the
the world's largest developer of offshore wind 20,970
145 US and India, in line with growing investment
25% power. We also won a bid for USD 500 million 18,882 in 5G infrastructure worldwide. Our subsidiary
worth of projects in Bahrain, the Netherlands,
LS Cable India PVT., Ltd. opened its Plant
99 23% the US, and South Korea. Our submarine cable
● Asia, North America 48% 2 and built a production line dedicated to
Plant 3, which opened in April 2020, has allowed
● China 64 18% telecommunication cable harness used for
28% us to double production capacity. As floating
● Europe 45 10% ● 5G 50% 11,588 telecommunication base stations. It plans to
31% wind power is becoming an area of focus, we
29 1% 6% ● All mobile networks
35% focus on the Indian market and also enlarge its
23% 35% have developed dynamic cables adapted for this
* Source: GWEC presence in overseas markets.
(Global Offshore Wind Report 2020) 76% 59% 56% 51% 49% new means of energy generation to increase our * Source: Electronics and
competitiveness in the market. Telecommunications Research Institute 17% 3,565
2019 2021 2023 2025 2027 2030 (ETRI, 2019) 2% 378
SUSTAINABLE
MANAGEMENT
26 LS Cable & System 2020-2021 Sustainability Report + Annual Report Overview Sustainable Management 10 Key Topics Appendix 27
Governance rights in accordance with laws and regulations. Our major shareholder is LS Corp. Management Risk Management Committee
The company-wide Risk Management Committee reviews the risk status and makes a decision on
A board of directors is in place at LS Enhancing shareholder values We will do our utmost to identify response measures. The committee is led by the President as the chairperson and the head of IR/
C&S and BOD meetings are convened Dividends are paid by the resolution of the board of directors and the general meeting of shareholders. risks connected to uncertainties Finance Division as the Chief Risk Officer (CRO). Meanwhile, project bidding cases are deliberated on
to review items regarding company The amount is determined within the profit available for dividends considering investment in the and potential losses so that an in the Bidding Review Committee; the Copper Futures Committee for copper management; and the
policy and businesses. The company company's sustainable growth, enhancement of shareholder value, and the current business efficient response can be ensured Working-level Investment Review Meeting and Investment Risk Review Committee.
is doing its utmost to ensure that environment. In 2021, USD 11,822 thousand worth of cash dividends (on a non-consolidated basis) were in crisis situations and a stable
decisions are made in consideration paid, and the company’s cash payout ratio based on consolidated financial statements stood at 12.96%. business operation environment Risk Management Committee meetings
of the interests of stakeholders. can be sustained. To this end, risk Meetings are held to review the risk status in detail, evaluate potential losses and establish response
2018 2019 2020
management procedures and measures on a quarterly basis. If necessary, special committee meetings are convened for which the
Cash dividends total (USD thousand) 8,616 8,616 11,822
a related system have been put in monitoring team is required to immediately provide the general management team with the report on
Composition of shareholders Cash payout ratio (on a consolidated basis) (%) 10.88 11.88 12.96
place to allow a proactive response, the risk and its impact on the business.
Minority shareholders thereby enhancing corporate value
10.3% BOD and relations with our stakeholders. Risk management organizations
Affiliated persons The BOD features four registered directors. Chairman Cha Yub Koo was appointed as a chair Our risk management activities are conducted by three groups: an execution team, monitoring team,
0.4% considering his expertise and responsibility. President Roe Hyun Myung is serving as a director. and general management team. The execution team implements action plans and takes response
measures. The monitoring team makes a risk prevention plan at the Division or Group level and
Composition of BOD examines risks for prevention. When abnormal signals are detected, the team reports them to the
Directors are appointed at the general meeting of stakeholders. Candidates are selected by the general management team. The general management team establishes a risk management plan,
LS board based on their experience and expertise. The BOD features four registered directors. Director oversees its status, and operates the company-wide risk management committee.
89.3% make decisions in accordance with commercial laws and articles of association and promote the
Organization chart
rights and interests of stakeholder, including shareholders. LS C&S
(as of March 2021)
Risk Management Committee
Full-time Transaction with Relations with the largest and
Name Job title (Y/N) Responsibility the company major shareholders
Chairperson: President
Percentage of CRO: Head of IR/Finance Division
Inside
Number of shareholding Cha Yub Koo Y Chairman N/A
director
Shareholders stocks held (%) Business Group Quality Strategic planning Legal affairs Labor relations / HR Finance Purchasing and
Inside Response to Customer Strategic risks Compliance Environment Labor-management currency and logistics
LS Corp. 16,744,055 89.3 Roe Hyun Myung Y CEO/President N/A
director Executive of the affiliate of competitors’ complaints, system (changing direction management, Environmental laws issues, Labor-related derivatives, liquidity, Suppliers, raw
Minority market entry and and product of internal project contracts and regulations government policy subsidiaries material supply and
1,929,275 10.3 Inside CSO/CISO/Senior LS Corp. technological certifications, strategies) Serious accidents, quality
shareholders Wan Seob Ju Y N/A
director Managing Director changes customer audit natural disasters
Affiliated
75,152 0.4 Inside CFO/Managing
persons Sang Ho Lee Y N/A
director Director
Risk management process
Risk identification (issues and stakeholders) - At this phase, potential cases that may affect
Board Meetings Phase 1 Risk identification (issues and stakeholders)
the company are identified and then defined as opportunities or risks. Responsible teams host
meetings to identify risks of each business process from quotation to contract, production,
The Board Meetings are held on a regular basis according to the pre-established annual plan. Phase 2 Risk analysis/evaluation
delivery, after-sales service, collection and hedging.
Special meetings are convened for prompt decision-making on major agenda items. In 2020, 12
Phase 3 Risk response
board meetings were held in which a total of 31 items were resolved. For details, please refer to ‘About Risk analysis/evaluation - This is a phase of determining how much impact identified potential
Setting management Devising response risks will have on our efforts to achieve goals. Qualitative or quantitative methods are used
Implementing
the board of directors’ in our annual report. goals and establishing measures and
the measures in assessing risks. In the qualitative evaluation method, the likelihood of risk occurrence is
strategies management index
indicated as high, moderate, and low while the results using a quantitative method is indicated
in the form of numerical value (amount), frequency and period.
Performance evaluation and compensation Phase 4 Risk monitoring (management index)
Remuneration consists of basic annual salary and incentives based on evaluation results. It is Phase 5 Risk report and its closing
Risk response - Risk response is a phase of establishing and implementing appropriate
responses to eliminate or reduce identified risks. Risk responses are largely classified into four
provided within the amounts approved at the general shareholders’ meeting in accordance with Management Committee review steps: acceptance, reduction, transition, and avoidance.
Article 388 of the Commercial Act and the articles of incorporation of our company. Financial No Yes
Managed by responsible Importance / Urgency /
performance is evaluated, but non-financial results including the implementation of mid- to long- Groups and Divisions New occurrence Risk monitoring - Risk monitoring is a phase of conducting a series of activities from review to
No supervision, observation, and management in order to identify abnormal signs for the defined
term expectations, leadership, and improvement of organizational culture are also considered in the Yes
risks. Monitoring activity items include start date, expected completion date, time of loss
Ad-hoc Risk Management Regular Risk Management
evaluation. In 2020, the remuneration limit at USD 13 million was approved in the meeting. Committee Committee
reflection, changes in risk amount and the status of risk cases.
Risk portfolios Personal information and corporate security system Operational risks
Management We are striving to create economic, social, and environmental value with our innovative cable ‘Creating shared value’ is based on the concept of harmonizing the economic value of companies
solutions and product technology. In the rapidly changing business environment, we are seeking with the social value of communities. We are sharing our technology and know-how through a
System both economic and social value while promoting the interests of our customers, shareholders, variety of activities and means in an effort to create new value and achieve sustainability at the
and local communities. To this end, our efforts to minimize the negative impact of our business corporate and social levels.
activities and maximize social value will continue.
Implementation roadmap
USD 4,441million Value passed on to shareholders and investors
USD 63 million
PHASE 1. Foundation building PHASE 2. Internalization and promotion PHASE 3. Integration and differentiation
Suppliers Local communities
Policy Policy Policy We make steady efforts to identify As part of our efforts at fulfilling our
Establishing and implementing a system for Improving and promoting CSR operation, Global CSR strategies and nurture competitive suppliers and corporate social responsibility, we utilize
CSR strategies and expanding governance management and monitoring strengthen our global supply network. our strengths, provide educational
Strategic tasks In addition, unbiased evaluation criteria support and talent donation, and
Strategic tasks Strategic tasks - Integrating sustainability and Integrating and systems are being carefully participate in sharing activities to create
- Establishing a company-wide organization - Strengthening a plan-implementation-check sustainability and operated. Financial, technical, and social value. In 2020, we donated USD
: Setting up a consultative body, and defining process - Formulating CSR strategy by overseas
educational programs are being 717 thousand to local communities.
roles and responsibilities for missions/key - Promoting the strategies to domestic and subsidiary
provided to support stable management Communication channels — Social
tasks of seven working committees overseas subsidiaries
- Implementing a system to respond to
by suppliers. In 2020, USD 2,292 million contribution activities / Sharing activities by
(on a non-consolidated basis) was paid employees / Cooperation between industry
ISO26000
and academia
to suppliers for raw materials, energy,
water, repair expense, and service
Donation to local communities
purchase.
We are operating a sustainable management system that reflects our management commitment
Value allocated to suppliers
to its implementation. The Sustainable Management Secretariat is in overall charge of this
effort, and its seven working committees are carrying out KPI-based tasks aimed at increasing USD 2,292 million
stakeholder value. Key issues and achievements are reported to the executive meeting, where
Organization decisions are made on implementation measures to effectively respond to stakeholder needs. Employees Government
Corporate Strategy Division Talented human resources are one of our key corporate assets The government establishes laws and systems that ensure the
Direction
underlying our competitive edge. Based on expertise, one of our stable operation of companies. We are making every effort to fulfill
core values, we are concentrating our efforts on training and our corporate responsibility by faithfully complying with all laws and
Secretariat (Corporate Strategy Team)
Performance investment for employee capacity-building and on improving regulations. In 2020, we paid USD 31 million in corporate tax and
Sharing and
Planning management employee satisfaction through performance-based evaluation utility bills.
Customer satisfaction monitoring
system and compensation. In 2020, USD 299 million was distributed to
Shared growth employees in the form of wages, benefits, and training. Tax and utility bills
Local communities Communication channels — Monthly morning assembly / Intranet / Cyber
Reporting Channel / Counseling office
USD 31million
Compliance management Establishing action plans for (Working committees) Establishing a system and
Ethical management seven working committees in Implementing plans and sharing developing evaluation indexes Value distributed to employees
accordance with the enterprise- issues with the Secretariat. for effective performance
Employees wide CSR roadmap (The Secretariat) Monitoring the management USD 299 million
Green management progress and results of activities.
32 LS Cable & System 2020-2021 Sustainability Report + Annual Report Overview Sustainable Management 10 Key Topics Appendix 33
Activities Responsibility
Material Issues We conduct a materiality assessment on an annual basis to identify issues of greatest Important Very Important Extremely Important
importance impacting our businesses and stakeholders at home and abroad. A pool of economic,
Shareholder interest
social and environmental issues is created utilizing our internal process, GRI Standards Index, GHG emissions reduction Advanced green management
ISO26000, and Sustainable Development Goals. In order to evaluate issues, we analyze our Social contribution activities
Workplace safety
policies and strategies, benchmark other companies, examine press reports, and interview
Talent management Compliance management
employees. In 2020, key issues were selected considering strategy in terms of stakeholders’
Employee welfare
interests and business operations and their financial impact. Our 2020-2021 activities related to Shared growth
ten issues identified as highest priority are included in this report, and evaluation process is as
Ethical management Quality and product responsibility
follows: Unbiased evaluation and rewards
Others (5): Improving financial soundness; offering customized service; providing economic value; securing Business impact
Measuring stakeholders’ interest
future growth engine; and responsible procurement
included in this report. As climate change is having a significant impact on business operations and · Strengthening employee capacity and nurturing
talent shareholders, employees, 401 Employment
requires efforts at the global level, ‘advanced green management’ has been selected. Workplace Talent management 89p
· Securing talent and promoting unbiased HR future generations 404 Training and education
management
safety and compliance management were also included in consideration of the importance of multi-
Expertise · Conducting R&D and purchasing raw materials for
faceted efforts to respond to international and domestic laws and regulations. In addition, as we green products
301 Raw material
302 Energy
continue to pursue our target of enhancing stakeholder value, quality and product responsibility and Advanced green · Responding to climate change issues and shareholders, the government,
303 Water and effluents 96p
management reducing GHG emissions future generations
new technology and products were identified as key issues. 305 GHG emissions
· Managing toxic materials and chemicals in
306 Effluents and waste
products
36 LS Cable & System 2020-2021 Sustainability Report + Annual Report Overview Sustainable Management 10 Key Topics Appendix 37
1. New Technology and Products 3. Social Contribution 6. Compliance Management 9. Talent Management
2. Quality and Product Responsibility 4. Shared Growth 7. Ethical Management 10. Advanced Green Management
5. Respect for Human Rights 8. Workplace Safety and Health
and Diversity
38 LS Cable & System 2020-2021 Sustainability Report + Annual Report Overview Sustainable Management 10 Key Topics Appendix 39
Spotlight Topic 01
·A
5-year preferred supplier agreement
signed with Ørsted
Opening of a power cable plant in Egypt
· USD 460 million worth of contacts with the Netherlands,
· Our first market entry in Africa Bahrain, and South Korea
· Signing a contract with the Egyptian
electric power authority Opening of a telecommunication
harness plant in India
15 sales subsidiaries/offices
Spotlight Topic 02
Zero methane gas, transfer capability 10%↑ , GHG emissions reduction 30%↓ XLPE* recycling technology and its application
* Polypropylene * Cross linked polyethylene
42 LS Cable & System 2020-2021 Sustainability Report + Annual Report Overview Sustainable Management 10 Key Topics Appendix 43
Spotlight Topic 03
COVID-19 support
USD 263 million worth of
local procurement
Donation of 80,000 masks to
regions in short supply A win-win program for job support in Donghae
Spotlight Topic 04
Production of ultracapacitors
Bend Restrictors
To achieve its vision 2030 of becoming Strategic direction Key performance in 2020
The World Best Cable Solution Leader, Developing new technology and products and Expanding the product portfolio Dynamic cable
LS C&S aims to increase its presence securing a future growth engine · Dynamic cables for floating
in global growth markets and innovate offshore wind power
Key tasks · Carbon fiber LAN1) cables
business models for high values by
Enhancing customer value by strengthening · Anti-hacking optical cables
dedicating itself to the research and
product competitiveness
development of new technology and
· Strengthening competitiveness in offshore Launching green products
products. We have recently been wind power solutions · Commercialization of non
designated as a company providing · Developing differentiated products to cross-linked PP2) insulation
power cables
Offshore Dynamic Power Cable
national core technology for our AC/DC enhance customer value
500kV power system. Efforts are being · XLPE3) recycling technology
Continuing innovation activities to respond · 400kW EV charging cable
made to strengthen our competitiveness
to market changes
in the age of digital transformation by
· Developing green products and technology Strengthening business
focusing on green products and XLPE · Increasing capacity for digital transformation capability for digital Advantages
recycling technology. transformation Insulation material is applied to the cable so that it can be
· i-Check cables used in a dynamic sea environment. In addition, the structure
· Big data-based compound is designed to withstand extreme conditions such as rain and
prescription development
wind and ensure a 25-year product lifecycle, proving its long-
system
term durability. To enhance its maintenance efficiency, we plan
Advantages
Advantages This product can be installed and used in the same way as
Carbon fiber shielding allows weight reductions of 10-20% in existing cables. We offer anti-hacking optical cables with
the cable and increases flexibility and durability by 30%. We a variety of connectors, allowing our customers to choose
are working on expanding our business into mobility, smart options suitable for their environment. As this product is easy
factories, and robots using this technology and plan to develop to use and has enhanced security features, increasing demand
a next-generation carbon fiber with high conductivity. is expected from the financial, defense, and IT industries.
50 LS Cable & System 2020-2021 Sustainability Report + Annual Report Overview Sustainable Management 10 Key Topics Appendix 51
Technology advantages
This technology allows XLPE scrap and cable waste that used
Advantages
to be sent to landfills or incinerators to be recycled, thereby
As carbon emissions regulations grow increasingly tighter and
reducing our carbon footprint. Furthermore, the development
corporate social responsibility receives more emphasis than
of new upcycling1) technology is underway. In addition, we are
ever, the product is garnering attention in the market for its eco-
exploring other possibilities such as applications in high-priced
friendliness. This green product compatible with existing power
engineering plastics and measures to strengthen production
equipment is expected to be utilized in power distribution lines
cost competitiveness through process simplification.
for dispersed storage and generation of renewable energy with
1) The process of creating new products of higher quality or value using recyclable
a volatile output in dense urban areas. materials
52 LS Cable & System 2020-2021 Sustainability Report + Annual Report Overview Sustainable Management 10 Key Topics Appendix 53
Reader
Satisfying the requirements of global customers Strengthening capacity for quality differentiation
Acquiring certifications by area Upgrading a QMS IT system Innovation activities by quality circles in 2020 Securing product quality evaluation technologies
We have acquired international quality certifications The first phase of the QMS IT system project was The innovation activities at our site consist of proposals We are making continuous efforts at developing product
and applied the latest changes for a timely response to completed in 2018 followed by the second phase of the and themed tasks. Proposals can be made by any plant performance evaluation technologies to ensure product
customer requirements and market changes. To operate system upgrade in 2020. The upgrade allows us to enter employee in the belief that the proposals collected will reliability and guarantee that defects do not impact
a quality management system, VoCs, pertinent laws and utilize data in real time thereby proactively detecting drive innovation. Themed tasks by quality circles that industrial sites or people’s daily life. We have established
and regulations, and global standards are identified and and addressing potential quality risks. are designed to raise awareness include the reduction of evaluation technologies for long-term reliability and
reflected within the system. production losses and internal failure costs. In addition, electrical and physical property tests while developing
we have developed a quality circle management program alternative available quality specifications.
Customer/ Existing in the QMS IT system. Quality circle improvement cases
ISO 9001 QMS IT system
Supplier system
· Power transmission/distribution and submarine cables are put into a database so that they can be used as a Evaluation technologies secured in 2020 (unit: case)
and connection materials Correction reference for resolving issues.
· Industrial and telecommunications cables and power measures 27
distribution materials
· Busducts, bare conductor manufacturing, magnet wires, Customer Processed 2020 proposals by type Misc.
Fail
Suppliers complaints as fail ERP, G/W
cables for industrial equipment, tubes 4% 29
· HV/EHV underground and overhead systems, submarine Quality
cable systems, nuclear power cable systems C A Product
item 9%
master
Measurement/ Setting up
Analysis a key process Defect Productivity Work 33
IATF 16949 Supplier group improvement ● 2018
18%
Internet
Intranet
· Automobile (power lines, tubes, magnet wires for automobiles) evaluation Overall status Products Defect 43% ● 2019
Management details ● 2020
Customer
Half-finished Safety
TL 9000 satisfac- information
tion Change mgmt.
products Dept. 26% 2018 2019 2020
· Telecommunication (optical communication) Raw information
CTQ mgmt. materials
Supply
Audit information
KEPIC D 2020 quality circle themes ·H V/EHV: A system to evaluate AC resistance
· Nuclear power (industrial specialty cables) Factory
of a conductor at high temperature evaluation
P code
system
Inspection Common Quality
Require-
Standard mgmt. Energy ·P ower Cable Accessory: dry type EB-A routine
Product certification information
ments mgmt. 25% test
· Globally certified by respective industries, including CPR1),
railways, blast protection, structures, and shipbuilding.
Customers
Cutting global Q-costs Holding exchange meetings with suppliers Establishing a QMS IT system at overseas Customer satisfaction survey
Q-cost is one of our key KPIs under which the To promote a win-win partnership and enhance product subsidiaries A survey will be conducted to improve customer
responsibility for quality issues is assigned and related quality, we conduct quality evaluations and provide With the aim of securing global quality competitiveness, satisfaction in business environments that are going
targets are set and managed. The Quality Control technical guidance to suppliers. Our engineers regularly responding better to customers, and establishing a contactless due to the COVID-19 pandemic.
Tower is being operated to cut Q-costs by comparing visit to check their processes and discuss points for database on quality information, a QMS IT system will be
rates of defects or losses within a given product group improvement. In addition, exchange meetings are held to established at eight subsidiaries.
between the head office and overseas subsidiaries and share best practices with suppliers and raise their quality
conducting improvement tasks. In 2020, a total of 29 awareness. Implementing LS C&S global quality management system Scope: 28 items in 5 areas
tasks were identified and carried out, reducing Q-cost to
LS C&S global quality management system ● Additional
sales ratio by 20% year on year. ● Purchasing criteria
· Customer response
· Sharing real-time information between LS C&S and its subsidiaries · Attitude in customer service
Improvement tasks carried out at overseas subsidiaries (unit: case) · Improving work efficiency and minimizing Q-costs at the enterprise level
· Price competitiveness ● Video service
· Appearance quality Service ● Diagnosis service
Job creation for local communities creating social value are mainly concentrated around the
We conduct CSR activities based on the belief that locations of our plants in Gumi, Indong, and Donghae.
corporate sustainability can be ensured along with We will continue our work to make a positive change in
the ongoing development of local communities and society and promote cooperation with the central and
wellbeing of their members. Our efforts aimed at local governments.
We signed a business agreement on job support The first beneficiary of this program is Jang Jin-su,
for those discharged from military service and their who served as a petty officer and was discharged from
settlement in Donghae City with the Headquarters of the the navy on November 30, 2020 after four years of
Republic of Korea Navy First Fleet in Donghae, Gangwon- service. Following a three-month internship that began
ONE LS C&S
do Province. This agreement, made in cooperation on January 4, 2021, Jang is now working as a technical
with our Donghae plant, aims to provide opportunities employee in charge of cable manufacturing and
Social Contribution for bright young petty officers and seamen from inspection at the Donghae plant. This program for those
Headquarters of the Republic of Korea Navy First Fleet discharged after two to five years of military service
to work and settle in Donghae City. is expected to create a win-win situation providing
job support to discharged soldiers and promoting the
LS C&S is always striving to fulfill its Strategic direction Key performance in 2020
inflow of population to Donghae City. We will continue
corporate social responsibility and grow Promoting communication with our Job creation for local our support so that this type of cooperative model for
together with local communities. stakeholders that allows businesses and the communities creating value can take firm root.
As part of these efforts, activities society to grow sustainably together · Donghae plant’s employment
program for those discharged
considering our business characteristics
Key tasks from military service
such as talent donation, sharing events
Local community support
in partnership with local communities, Sharing activities by employees
· Support for welfare organizations and
programs for nurturing future talent, and employment programs in local communities USD 717 thousand
regional and global sponsorship events · Sharing activities by employees · Volunteer activities of The signing ceremony of an agreement for job support for those discharged
are being conducted. We will continue Chamsarang Society and from military service and their settlement in Donghae City
Support for welfare organizations Sharing activities by employees Electrical safety checks in traditional markets Science class for children
We have been providing support for the development of Donation from monthly salary Based on our belief that growing together with local - LS Dream Science Class
local communities mainly in areas where our plants are All employees of LS C&S have voluntarily donated up communities is corporate responsibility, we have been The LS Dream Science Class has served as a program
located. In 2020, we assisted flood victims and the most to USD 1 from their monthly salary, and the company providing monthly electrical safety checks in traditional helping children to increase their interest on basic science
vulnerable who were impacted by the COVID-19 pandemic. matches its employees’ charitable contributions. The markets since September 2017. Employees with cable and strengthen the accessibility to education since 2013.
Donations were made in March to medical staff and those funds collected through employee donation is used to inspection expertise visit shops to check cable insulation College students majoring in science and engineering
facing economic difficulties in Daegu, Gyeongsangbuk- support children living with their grandparents, people performance, sheathing, and possible short-circuits and participate as teachers during summer and winter
do Province, one of the hardest-hit regions in Korea at the with disabilities, and senior citizens living alone. In 2020, provide repair or exchange services. They offer education vacations and teach science classes to the elementary
time, and in August to support the recovery of the victims we donated USD 38 thousand. on the risks posed by cable misuse. Such activities had school students in Anyang, Gumi and Donghae. In
following unprecedented flooding. been conducted at 300 shops in 22 traditional markets addition, a variety of cultural activities including a job
Employee volunteer groups not only in Anyang, Gunpo, Gumi, and Donghae where experience program and camp are conducted. Due to
Since 2009, a special bond has been formed between LS Employee volunteer groups at LS C&S are conducting our worksites are located but also in Busan, Daejeon, the constraints placed on group and outdoor activities
C&S and Donghae. We are striving to sustain our efforts activities on a regular basis to support the vulnerable. Gwangju and Ulsan. during the COVID-19 pandemic in 2020, an ‘LS@HOME
to contribute to local communities through designated Chamsarang Society, a volunteer group established BOX‘ consisting of science kits, face masks, and food was
donation, scholarships and sharing activities by in 1999 at the Gumi and Indong plants consists of delivered to 3,000 children in nine cities.
employees. LS C&S has been making an annual donation 600 employees, while 200 employees at the Donghae
of USD 100 thousand to the city of Donghae since 2018 worksite are working as volunteers of Jeongnanum
to support welfare centers. In July 2020, we supported Society that was started in 2009.
children who had experienced domestic violence and
donated delivery trucks to self-support programs for low- They visit local social welfare centers on a regular basis
income households. and conduct a variety of activities, including cleaning,
repairs, birthday parties, sports events, free meals, and
Our subsidiary G&P acquired a bankrupt cable free haircut services. In addition, fuel and food support,
manufacturer in Sejong City in early 2020 and restarted scholarships to child breadwinners, and stream and Electrical safety checks in
plant operations by re-hiring 20 former employees and traditional markets
cultural heritage protection are provided. At the end of
recruiting an additional 30, thus contributing to revitalizing the year, coal briquet delivery and kimchi making events 300 shops LS@HOME BOX
· Science kit: It consists of a solar powered airplane, a car
the local economy. We also made a donation of USD 100 for the vulnerable are held. (in 22 traditional markets)
detecting obstacles, and a merry-go-round powered by
thousand to the Community Chest of Korea to support temperature difference.
welfare centers in Sejong City. It was used for the ‘food Last winter, our subsidiary G&P conducted ‘briquet boiler · Food and COVID-19 hygiene goods
pack program’ to provide food and daily necessities to sharing’ activities to support the low-income elderly living
those suffering following the prolonged closures of welfare alone. A group of 20 employees visited five households
centers during the COVID-19 pandemic. We will continue to deliver briquet boilers. In addition, all employees at
our efforts to fulfill our corporate responsibility and take G&P joins our efforts of donating up to USD 1 from their
the lead in creating a culture of sharing and donation. monthly salary to create a fund for those in need.
Donation for Donghae City’s self-support programs for low-income households Support for social welfare centers and relief for the COVID-19 pandemic Electrical safety checks in traditional markets
64 LS Cable & System 2020-2021 Sustainability Report + Annual Report Overview Sustainable Management 10 Key Topics Appendix 65
Local community support by overseas subsidiaries Social contribution activities in 2020 (Domestic)
Our subsidiaries in Vietnam and China have been Volunteer and sharing activities (unit: USD)
conducting a wide range of social contribution activities
Support fund
to support the vulnerable and establish positive Activities Beneficiaries/Organizations Frequency Participants in 2020
relationships with local communities. LS-VINA and LSCV, Sponsoring events and birthday parties Aehyang Welfare Home Monthly 5 1,478
our subsidiaries in Vietnam raise funds every year to Meal box delivery to the elderly living alone;
Gumi Social Welfare Home As needed 5 2,283
house cleaning and repairs
support the socially vulnerable in Haiphon and Ho Chi
Supporting daily necessities, fuel expense, Seongshim Care Home; Hwangsang Children’s Center;
Min. Employees regularly donate to and make a visit Chamsarang and holiday gifts Ansa Community
As needed 5 916
Vietnam national go competition and the Haiphong Kimchi sharing events Local residents in need Annually 20 8,088
Coal briquet-sharing events Local residents in need Annually 15 1,241
Using overseas agencies to send COVID-19 relief goods fireworks festival, contributing to promoting human
Jeongnanum 120 senior citizens living alone and
rights and cultural exchanges with Vietnam. Society
Kimchi sharing events
child breadwinners
Annually 47 6,388
Total 27,196
LS overseas volunteer group For subsidiaries in China, LSCW located in Wuxi City
We have participated in the LS overseas volunteer group provides a support fund for the local Korean vendor Donation and sponsorship (unit: USD)
program and elementary school construction projects association and visits nursing homes for volunteering
Support fund
in developing countries, including Vietnam, India, activities. LSHQ selects employees in need and offers Activities Beneficiaries/Organizations Frequency Participants in 2020
Bangladesh, and Cambodia, to improve their educational their families monthly financial support, and delivers Contribution The Community Chest of Korea Annually - 353,860
environment. Since 2007, over 1,000 college students aid to low-income families in cooperation with the Medical staff and the vulnerable in Gyeonsangbuk-do
COVID-19 relief fund Annually - 50,551
Province / the Community Chest of Korea
and employees (a team of 25 each) have joined these Yichang City government. In particular, during the early Enterprise-wide
Flood recovery fund Flood victims / the Community Chest of Korea Annually - 88,235
programs. In addition, as part of LS overseas volunteer stages of the COVID-19 pandemic when masks were in
Children living with their grandparents;
Employee donation from monthly salary Monthly - 32,445
group activities, LS Dream School buildings with eight short supply, a total of 80,000 masks were donated to senior citizens living alone; children’s home
to ten classrooms are being constructed every year, and health departments and the Red Cross Society in China. Headquarters International relief goods (Int’l busduct sales team) Poor areas in Latin America
Three times
- 3,676
per year
a total of 14 have now been opened in Haiphong, Hai Meanwhile, our international busduct sales team used
Donation of hand sanitizers The Donghae City government Annually - 9,191
Duong, Ho Chi Min, and Dong Nai cities in Vietnam. Due overseas agencies to send COVID-19 relief goods such Donghae Plant
Donation for flood recovery The Donghae City government Annually - 1,838
to the difficulties of sending volunteer groups overseas as antibacterial wipes, hand sanitizer, and masks to poor
Coal briquet-sharing Low-income seniors in Chungju City
G&P Annually - 3,217
during the COVID-19 pandemic in 2020, we supported areas in Mexico, Columbia, and Chile. (using the employee donation from monthly salary) (Mokhaeng-dong)
(Number of companies)
A win-win cooperation fund Requiring strategic For suppliers that have signed subcontracting contracts,
establishes partnerships with suppliers
Market competition
Simple purchase
transactions cooperation
based on a long-term perspective and · Procurement process USD 40 million 1. EG 1)
classifica- PARTNER
payment is made in cash and cash equivalents on 15th
RISK MANAGEMENT
Establishing continued
day of the following month after delivery.
supports their sustainable development · Strengthening internal regulations to prevent tion Securing reliable suppliers
relationships
through a transparent procurement unfair business transactions Payment criteria
Supply networks in China, Low
process, fulfilling corporate social · A subcontracting review committee Low Importance of products (purchase price) High
Vietnam, and India Supplier
responsibility. Evaluation Amount Payment
Operating a system for win-win cooperation USD 263 million Area Description
Quality defect rate and
method
type
USD 300 thousand or less Cash (paid on 15th of the following month)
Quality System
· Supporting business stability improvement rate Subcon-
tracting Cash paid in 45 days from the delivery date or
· Joint efforts for technology development Price Price improvement rate System More than USD 300 thousand
the end of the delivery month
2. QCDS2) Basic
· Support of suppliers in expanding their Supporting major suppliers evaluation Delivery Delivery compliance rate System USD 5,000 or less Cash (paid on 24th of the following month)
Developing measures to
overseas sales using the AVL system Cooperation respond to urgent delivery Manual Non-sub- More than USD 5,000 and Cash paid in 60 days from the delivery date or
contracting USD 20,000 or less the end of the delivery
· Developing local economies Cooperation and measures taken
SMEs
Additional Common improvement tasks
Manual Cash paid in 90 days from the delivery date or
points Secondary supplier support More than USD 20,000
the end of the delivery
Operating a supplier management system
USD 5,000 or less Cash (paid on 24th of the following month)
· The AVL (Approved Vendor List) system 3. Results Improvement measures for low-performing suppliers
More than USD 5,000 and Cash paid in 90 days from the delivery date or
Large-sized
· A credit rating system USD 20,000 or less the end of the delivery
1) EG (Evaluation Group) classification: grouping suppliers for evaluation by business and companies
material characteristics Cash paid in 120 days from the delivery date
More than USD 20,000
2) QCDS: quality, cost, delivery, and service or the end of the delivery
68 LS Cable & System 2020-2021 Sustainability Report + Annual Report Overview Sustainable Management 10 Key Topics Appendix 69
Operating a system for fair business transactions Operating a system for win-win cooperation
Strengthening internal regulations to prevent Running a subcontracting review committee Supporting business stability and automotive cables. This project allows LS C&S to
unfair business transactions A subcontracting review committee is in place to ensure To help suppliers improve their cash flow, we operate make breakthroughs in a volatile business environment
Our internal regulations have been tightened to prevent a culture of fair and transparent business transactions financial support systems, including direct loans, a win- and its suppliers can develop products whose purchase
unfair business transactions. Firstly, our Guidelines for and to see that there is no violation of any related laws or win cooperation fund, a network loan, and Shinhan shared- can be guaranteed, ensuring stable sales and profitability.
Contract Signing were introduced to promote fairness regulations. The committee consists of the heads of the growth loan. We will further strengthen promotional We will continue to cooperate in product and technology
and discourage any potential standards violations Purchasing Division, the Legal Team and the Purchasing activities to benefit more suppliers. In addition, to help development with our suppliers in order to secure growth
among our employees and suppliers. Secondly, Planning Team. The risks of unfair business transactions subcontractors secure cash flow, payment is made within engines for our business sustainability.
regulations on supplier registration were strengthened are reviewed in monthly committee meetings chaired by 45 days, 15 days shorter than 60 days specified in the
to ensure that our employees responsible for purchasing the head of the Purchasing Division. Subcontracting Act. Support of suppliers in expanding their
select suppliers in a fair and transparent manner based overseas sales
Members
on a clear understanding of the selection criteria. In Direct support Not only do we help our suppliers operate their businesses
addition, our internal policy on these matters is available The heads of the Purchasing Division, We have created a fund worth USD 1 million to extend in a stable manner through financial and technological
to all of our employees and suppliers through the the Legal Team and the Purchasing Planning Team. direct interest-free loans to suppliers and elevate their support, but we also provide opportunities for them to
e-Procurement system so that any potential unfair acts technology development and equipment investment. achieve growth in expanding their overseas sales. As
can be monitored both internally and externally. part of these efforts, we share information with domestic
Topic
Indirect support suppliers on demand for raw and subsidiary materials by
Evaluation items
Procurement items ONE LS C&S
Business Product LS C&S works to integrate respect for Strategic direction Key performance in 2020
area characteristics human rights into all of our business Creating an organizational culture in which Employees participating
Product group diversity is embraced
activities in order to fulfill our corporate in programs for improving
classification
❸ Operating profit margin ❹ Net income ratio social responsibilities and communicate awareness of people with
criteria
Key tasks disabilities and prevention of
Purchase Supply/ with a variety of stakeholders.
amount Demand type Respect for employee rights sexual harassment
Drawing upon the concept of horizontal
Purchase partnership, we respect our employees
· No discrimination
· Education on human rights protection
100%
volume
❻ Total borrowings and and strive to treat them fairly.
❺ Debt ratio · No child/forced labor
bonds payable to total assets The percentage of female
To promote work-life balance, a variety
employees and managers
of support measures are in place. Labor-management relations for
We also put considerable efforts into shared growth 15.4%, 5.2%
product · Operation of a labor union
· Strategic importance creating a pleasant working environment.
groups · Labor-management communication
· Impact on QCD Our management and labor
·J oint labor-management social contribution No labor disputes
83 · Purchase volume
representatives cooperate fully based
on a sound relationship.
activities
Over the last 32 years
Respect for diversity
· Support for female employees
AVL benefits · Employment of people with disabilities
suppliers · Financial support
selected · Technical support
· Support for increasing sales
293 · Guaranteeing one year of
supply
72 LS Cable & System 2020-2021 Sustainability Report + Annual Report Overview Sustainable Management 10 Key Topics Appendix 73
No discrimination Education on human rights protection Labor union Joint social contribution activities
According to LS Group’s corporate philosophy of In order to internalize an organizational culture in which Our labor union has cooperated with the company to create Since the labor-management agreement was made in 2007,
LSpartnership and the Article 6 (Equal Treatment) of the social and cultural diversity is respected, we conducted value based on mutual trust and respect since its launch we have operated a program that all employees of LS C&S
Labor Standards Acts, all of our employees should be educational sessions on human rights. In 2020, a total of of the labor union as the Anyang branch of the GoldStar donate up to 1 dollar from their monthly salary and the
respected and treated fairly. Our Code of Ethics clearly 1,903 employees participated in programs for improving chapter of the Federation of Korean Metal Workers Trade company matches its employees’ charitable contributions. In
states discrimination against employees. no employer awareness of people with disabilities and prevention of Unions in 1967. LS C&S honors freedom of association addition, volunteer activities, such as living expense support
should not discriminate against workers on the basis sexual and workplace harassment. These topics are also and collective bargaining, guarantees the right to organize for the underprivileged, and kimchi- and coal briquette-
and form workers' organizations, and respects employees’ sharing events are conducted. Employees also participate in
of gender, or give discriminatory treatment in relation covered in other employee training programs in an effort
right to join a labor union. We communicate with each environmental cleanup activities, including the One Company
to employment, promotion, compensation, training and to raise awareness of human rights.
other not only in negotiations over working conditions, but One Stream campaign, to fulfill corporate responsibility.
retirement on the basis of nationality, religion or social
also regarding major changes in our business such as the
status. All employees are given equal opportunities, and No child/forced labor
transfer of businesses and selling of equipment. There have Worksite satisfaction survey
reward is made based on their performance. To prevent We strictly prohibit any labor by children under 15 years been no labor disputes for the last 32 years since 1989. The An annual worksite satisfaction survey is jointly conducted
any unfair act, we operate support systems, such as the old and put restriction on the employment of the youth union has 858 members as of the end of 2020. by the labor and management to diagnose and improve
help center, grievance channel, cyber reporting channel aged below 18 in accordance with the Labor Standards
a working environment and organizational culture at
and appeal against employee performance evaluation Act of Korea and the labor principles of the UN Global Labor-management communication our plants. The survey consists of the following items:
results where anyone can freely get counseling and Compact. We prevent the employment of children and The autonomy of our labor unions is guaranteed. A 1) managers; 2) supervisors; 3) communication; 4)
report in anonymity. There have been no correction adolescents through ID checks during the hiring process. variety of channels are used for labor-management organizational culture; 5) labor-management relations; 6)
requests for cases of discrimination filed over the last Our employees work only based on their free will. We do communication regarding business status and work labor union; 7) working environment; 8) job management;
three years. not unfairly restrict our employees’ mental or physical environment matters. We listen to the voices of our and 9) welfare benefits. Based on the survey results,
freedoms and will never force them to work. Exploitation employee and work together in order to improve a working improvement measures are devised for any issues identified
LS Code of Ethics and Practical Guidelines
of intermediaries is also strictly prevented. environment and welfare benefits. so that employee satisfaction at work can improve. In 2020,
worksite satisfaction slightly decreased due to a reduction in
Chapter 5. Corporate Responsibilities for Employees communication and organizational activities.
Participation Labor-
Monthly morning and Cooperation Management Labor union membership by worksite (unit: employee)
1. Nurturing talent assembly Promotion Council working-level
meetings meetings
1) The company has established, supports, and Employment of minors in 2020 2018 2019 2020
promotes a system to nurture the autonomy and
creativity of our employees. 0 case Anyang 6 6 3
Gumi 469 459 442
2) Team leaders give advice and guidance to team
Participants Participants Participants Indong 260 256 238
members in consideration of their aptitude and 2018 2019 2020
All employees Management: six Management: led by Donghae 137 142 175
abilities based on our determination to help them Employment of minors
0 0 0 persons including the head in charge of
develop into strong individuals who challenge (aged below 18) Total 872 863 858
Frequency the President labor-management
themselves. Labor: six persons affairs
Monthly
including the head of Labor: led by a
2. Treatment based on abilities and performance Worksite satisfaction survey results (unit: point)
Activities the union member fully
1) The company provides employees with equal dedicated to the
Sharing information A three-year trend of enterprise-wide satisfaction
opportunities for capacity building (training, job Frequency union
on business
rotation, promotion and work assignment) and does status, financial Quarterly 2018 74.5
Frequency
not discriminate them for reasons of academic Employees receiving training performance and
pending issues Activities Monthly/As needed 2019 75.1
background, gender, age, religion, birthplace, age,
disability, marital status, nationality, and race. 1,903 Sharing information
Activities
on business status 2020 74.1
2) The company clearly sets, discloses, and complies and performance, Discussing how to
Office Technical
with criteria for evaluating the abilities and workers workers Total and negotiating over improve working
performance of employees in order to create a systems working conditions and 2018 2019 2020
Sexual harassment prevention
culture of fair competition. conditions employee benefits 74.5 75.1 74.1
Awareness-raising on people with
1,025 878 1,903
disabilities Satisfaction Gumi 71.5 72.6 71.8
The workplace anti-bullying law by worksite Indong 76.7 76.9 75.3
※ Three courses were provided online (a total of 3 hours) Donghae 79.0 79.4 77.6
74 LS Cable & System 2020-2021 Sustainability Report + Annual Report Overview Sustainable Management 10 Key Topics Appendix 75
Support for female employees Maternity protection Employment of people with disabilities Employment of people with disabilities (unit: person)
Due to the characteristics of the cable manufacturing We provide support for maternity protection, including
1.9% 1.9%
industry, female employees are a minority at the pregnancy checkups, working hour reduction, and Consideration for employees with physical disabilities 1.8%
company, accounting for 15.4% of all employees and pre- and post-maternity leave to reduce the burden of As employees in the cable manufacturing industry are
childbirth and child care on our employees and to help 38 38
female managers for 5.2% of all managerial positions. required to be more careful about their safety and health,
36
We are making continued efforts at increasing the them balance work with family life. As our employees are the proportion of our employees with physical disabilities
26 26
24
percentage of female workforce. In the 2020 recruitment, strongly encouraged to take parental leave, the number is relatively low. However, in accordance with the Act on
female applicants accounted for 16.1% of new hires. of male employees using this benefit has been rising Employment Promotion and Vocational Rehabilitation
There is no gender pay gap and leadership training every year. In 2020, a total of 15 employees took the for Disabled Persons, we hire those who with physical
programs and child-care support for female employees leave and four employees took pre- or post-maternity disabilities at our plants. We actively support and help
are provided to create a women-friendly workplace. leaves. them successfully adjust to and do their jobs through
guidance and preparatory training so that they can stand
Female employees in managerial positions (unit: person) LS daycare center on their feet.
15.4% An LS daycare center that was established in Anyang at
15.1% 15.1%
the end of 2014 helps employees reduce the burden of Increasing the number of employees with disabilities
158 childcare and concentrate on their work. Currently, a total
153 153 through indirect employment 12 12 12
of 70 employees from LS Group subsidiaries are utilizing We have been contributing to supporting people
this daycare center. with disabilities through indirect employment in ● Direct employment
cooperation with Butyi since April 2017. The company ● Indirect employment
5.2% Space for female employees (Butyi)
5.1%
4.9%
was established to provide stable jobs to the socially
There are nursing rooms and lounges for female vulnerable, including the disabled, according to the 2018 2019 2020
● Female 35
employees at our worksites. The female employee club ‘subsidiary-type standard business system’ of the Korea
31 32
employees Arom Society is operated to provide counseling and
●F emale Employment Agency for the Disabled and the Act on
managers promote good fellowship among female employees. Employment Promotion and Vocational Rehabilitation for
Disabled Persons. Employees are selected from the day-
2018 2019 2020 Use of parental leave and returning to work
hospital center named Haeddeulnal within the Yongin
· Female employees (percentage): Regular workers, and re-employed retirees
2018 2019 2020 Mental Hospital in Korea. They receive training prior to
(office work only)
· Proportion of female mangers = The ratio of female managers to all Returning Returning Returning starting work, and all cases of trainees are managed to
managers Leave to work (%) Leave to work (%) Leave to work (%)
· Employees at the headquarters and domestic worksites only provide support them to continue working.
2 (6 employees
Female 17 14 (82%) 7 5 (71%) 8
on leave)
Parental
Number of new hires leave Male 3 3 (100%) 2 2 (100%) 7 7 (100%)
20 17 (85%) 9 7 (78%) 15 9 (-)
2018 2019 2020
Male 42 (87.5%) 40 (88.9%) 47 (83.9%) Employment period of employees returning to work after parental leave
Female 6 (12.5%) 5 (11.1%) 9 (16.1%) over the last three years
Total 48 45 56
Less than 6-12 12-18 18-24 24-36
· Employees transferred from domestic and overseas subsidiaries not included 6 months months months months months Total
6 (19.4%) 8 (25.8%) 6 (19.4%) 7 (22.6%) 4 (12.9%) 31
※ Employees who took the leave two times, the period was calculated starting from the day
Safe workplaces free of sexual harassment after the second leave.
Annual training on the prevention of sexual harassment at
workplace is provided to all of our employees. To ensure a The use of pre- or post-maternity leaves over the last three years
safe workplace, sexual harassment prevention officers are
appointed for each worksite and strict punishments are 2018 2019 2020
Compliance training for employees Operation of an in-house compliance management Support for bidding on project contracts Revising a CP handbook
We are providing customized compliance training bulletin board LS C&S is participating in a variety of international We researched and analyzed the enactment and revision
programs to our employees. Our regular training targeting As part of the efforts to help our employees understand projects as part of the efforts at achieving our vison of of international and domestic laws and recent trends in
newly-hired career and non-career employees aims to l a w s a n d re g u l a t i o n s re l a t e d to f a i r b u s i n e s s The World’s Best Cable Solution Leader. For preventing regulation, based on which our compliance rules were
help our employees internalize Rule & Responsibility, one transactions and promote compliance management, risks at project sites, we have created a checklist of changed. We plan to publish a revised CP handbook
of our core values, and fulfill corporate responsibility. we are maintaining a bulletin board* on a range of risks at each bidding stage. In 2020, training programs in 2021. Guidelines by job will be added to improve
In addition, not only enterprise-wide programs for all themes including fair competition and violation cases. on the FIDIC (Fédération Internationale Des Ingénieurs- its utilization. Meanwhile, a survey is conducted after
employees but also division-specific programs are also Practical and useful information is posted to encourage Conseils* contracts were provided to international sales employees complete their compliance training. The
operated. employees to apply it at work. To help employees better employees. survey results are considered in the following sessions
understand the postings in the board, case studies are * An International Standards Organization for consulting engineering and in order to better meet their needs and enhance the
construction
included to illustrate the postings and legal terms are effectiveness of the training.
explained in an easy-to-understand manner.
Contract and legal review Strengthening the expertise of employees in
* ‘Information for the implementation of compliance management’ on our
intranet Wels Our dedicated legal team of internal and external lawyers charge of CP
provides the support needed by our employees as they
Compliance training in 2020 2020 postings in a bulletin board Employees responsible for CP are at the forefront of
review contracts, laws, and regulations and provide legal
our efforts at fulling our corporate social responsibility.
advice in regard to risk identification. This approach is to
To strengthen their expertise, they have acquired CCP
help our employees remain fully in compliance with laws
(Certified Compliance Professional) Level 2 certification
and regulations and serve as a basis for us to prevent
and are given annual training by specialized institutions.
economic loss to the company and to society.
Compliance training Postings
7 times 11
Target Program/Frequency/Date Misc. Month Theme Related laws
* The number of inquiries in the legal review system within the company website
** The number of emails sent
80 LS Cable & System 2020-2021 Sustainability Report + Annual Report Overview Sustainable Management 10 Key Topics Appendix 81
Ethical Management
Responsibilities and obligations for Basic ethics of Fair competition
customers employees (with competitors)
Ethical management means companies Strategic direction Key performance in 2020
place ethics as their top priority and do Raising employee awareness of compliance
business in a fair and transparent manner. and promoting ethical management by Utilization of the Code of · Respect for customers · Prohibition of wrongful acts using ·F air acquisition and utilization of
conducting related activities the Conduct · Protection of customer interests one’s job position information
It allows companies to give trust and
· Provision of credible information · Honest and unbiased report ·S ecuring competitive advantages
confidence to their customers, employees, · Response to customers · Sense of decency through fair competition
Key tasks · Value to customers · Prevention of sexual harassment in the · Prohibition of collusion
competitors, suppliers and shareholders.
Strengthening the foundation for ethical Completion of case reporting workplace · r especting laws and commercial
Our actions in support of ethical · Avoidance of a conflict of interest with practices
management through the Cyber Reporting
management are not simply institutional · Reviewing the Code of Conduct and Channel the company
· Compliance with the Code of the
means for eradicating corruption and implementation guidelines for their utilization
100% Conduct
irregularities among employees, but are
basic and fundamental conditions for Operating systems for ethical management
· Counseling center Training and promotional
strengthening our competitiveness and activities
· Ethical management website
maximizing corporate value. · A total of 12 postings and
· Cyber Reporting Channel
4,127 hits Fair business transactions Corporate responsibilities for Responsibilities for the country
· Reporter protection programs
(* on the company intranet ) (with suppliers) employees and society
· Rewards for reporting
· Clean Company
· Supplier selection through an unbiased · Nurturing talent ·P rohibition of unethical and anti-social
Raising stakeholder awareness process · Reward based on performance business activities
· Ethical management training · Fair business transactions and · Guarantee of the right to sound ·C ontribution to the development of the
· Promotional activities unbiased evaluation expression country and society
· Clean business transaction process · Workplace safety and health ·P rotection of shareholder right and
· Sending of an official document for
· Support to suppliers interests
cooperation to suppliers
· Protection of the environment
· Ethics evaluation
82 LS Cable & System 2020-2021 Sustainability Report + Annual Report Overview Sustainable Management 10 Key Topics Appendix 83
Counseling center Reporter protection programs Ethical management training Sending of an official document for cooperation
A counseling center is being operated for employees We operate reporter protection programs under which To prevent any possible violation cases of the Code of to suppliers
who face ethical issues or want to know about ethical Identities of reporters, or any other information that could Conduct, ethics training is provided to new hires and Before the Chuseok and Lunar New Year’s holidays,
management. They can not only have counseling on identify them are strictly kept confidential. We protect employees to be dispatched overseas before leaving. we send an official document asking suppliers for
ethical conflicts at work but also get general information those who report violations from being disadvantaged The training programs, including the concept of ethical cooperation in eradicating practices of giving and
on ethical management and advice on how to interpret or discriminated against in their teams or business management and violation cases, are provided to receiving gifts, entertainment, and money and informing
and apply the Code through the Cyber Reporting relationships due to reporting, providing testimony, or employees at overseas branches, sales manufacturing them of our Code of Conduct and reporting channels.
Channel, phones or emails. Reports are received and submission of evidence. subsidiaries, and construction sites. We present our After the document is sent, it is also posted on the
handled confidentially, and the center does not disclose Code of Conduct, implementation guidelines, and company purchasing intranet so that all of suppliers can
Confidentiality
the personal information of anyone reporting and the internal ethical management programs to new hires and check the information.
reported details without their consent. Identities of reporters, or any other information that could distribute an ethical management guidebook to newly
identify them are strictly kept confidential. promoted team leaders. Ethic evaluation
Ethical management website An ethics evaluation has been conducted for all
Guarantee of status
To introduce ethics management and promote the Promotional activities employees on an annual basis to identify improvement
implementation of its values, a dedicated website is We protect those who report violations from being LS C&S has been posting articles on ethical management, areas for our ethical management activities. From
being maintained. A full text of the Code of Conduct disadvantaged or discriminated against in their teams or including the Code of Conduct, implementation Dec. 4 to Dec 15, 2020, an online survey was operated
business relationships due to reporting, providing testimony, or
and the pertinent programs for its implementation, guidelines and violation cases on the company intranet. for all employees. The evaluation survey consists of
submission of evidence.
including the rewards for reporting, Clean Company, In 2020, twelve articles on fair business transactions 33 questions in three categories: the basis of ethical
Cyber Reporting Channel and counseling center can in international markets, shared growth, and ethical management, implementation of corporate ethics, and
Reduction and exemption from responsibility
be found on the website along with articles on ethical management were posted. They received total 4,127 hits. ethics being practiced in our workplaces. The results are
management. Those who voluntarily report unethical acts are exempted used for strengthening ethical management training and
from responsibility or receive consideration in the disciplinary
for promotional activities and programs supporting its
response.
Cyber Reporting Channel implementation.
The Cyber Reporting Channel allows employees as well
as stakeholders, including customers and suppliers, to Rewards for reporting
make suggestions and report any unethical activities To prevent unethical acts and create a sound
they witness or disadvantages they suffer. We keep organizational culture, those who report irregularities
personal information and reporting details of all reporters such as cases of bribery are offered a reward of up
confidential. Even when reports are made anonymously, to five times of the amount of the bribe (USD 1 in
we investigate the case and provide a response as maximum). Those who voluntarily report unethical acts
quickly as possible. are exempted from responsibility and the money they
received is used for CSR activities.
Clean Company
We established a system called Clean Company that
helps employees voluntarily report any past acceptance
of money or gifts based on the criteria for our employees
to make decisions and take actions. Once they fill out
a report form and submit it to the Ethical Management
Secretariat, any money or gifts received are returned
to the givers with an explanation regarding our ethical
management policies. If there is a situation in which the
received items are difficult to return, they are donated to
social welfare facilities or to religious groups under the
name of the giver.
84 LS Cable & System 2020-2021 Sustainability Report + Annual Report Overview Sustainable Management 10 Key Topics Appendix 85
health and safety management system in · Five basic safety principles and vote on key issues. Approved items are announced continue our efforts to ensure that safety can take firm
SCL Safety Culture Ladder
2)
which potential risks can be identified and to all employees. root at worksites.
addressed. Critical accident risk management
· Four high-risk work categories Improvement measures taken
· Safety diagnoses of worksites after supplier safety diagnoses
· Safety checks at construction sites
51 cases
Strengthening supplier management in · Win-Win cooperation
industrial accident prevention efforts programs with 32 suppliers
· A safety and health consultative body and
integrated safety diagnoses 1) International certification on a safety and health
management system
· Win-Win cooperation programs
2) Certification on safety culture by Dutch organizations
An integrated diagnosis by the occupational safety and health committee An SCL evaluation
86 LS Cable & System 2020-2021 Sustainability Report + Annual Report Overview Sustainable Management 10 Key Topics Appendix 87
An integrated HSE* management system Five basic safety principles Focusing on four high-risk work processes Safety checks at construction sites
In December 2020, we established an HSE System that We analyzed accident types and critical accidents that To reduce critical accident risks at our worksites in Gumi, Special safety checks are conducted in summer and
integrates data into business administration, safety, have occurred over the last 10 years and identified key Indong, and Donghae where production and shipment winter to prevent accidents at our seven construction
health, chemicals, and common areas to implement areas for safety management. Based on this, we set five work is conducted, we identified four high-risk work sites. From Dec. 7 to Dec. 24, 2020, two power
systemic safety management and improve work basic safety principles by which all of our employees processes involving: 1) cranes; 2) forklifts; 3) rotating transmission and five power cable construction sites were
efficiency in line with the ongoing strengthening of HSE- must abide. They must always wear a safety badge equipment; and 4) fire extinguishing equipment. The investigated, with 69 improvement points identified and
related regulations. The system features inquiry into data at work as part of our efforts at raising awareness of following improvements were made: warning devices and measured.
such as safety work permissions and MSDS (Material accident prevention so that a culture of worksite safety around-view monitoring systems were installed in 140
Safety Data Sheets) and monitoring work progress in is fully established. forklifts. Non-destructive inspections of key components Winter safety management General safety management
real-time. The system allows employees to identify were performed on 207 cranes, and two outdated cranes
Fire prevention Preventive measures against fire or
harmful risks and quickly collect data at worksites via were replaced. Safety covers and interlock devices were (sand, and fire extinguishers) suffocation in a sealed space
mobile phone. We plan to phase in the system with our placed on 807 pieces of rotating equipment. Fire prevention training and Preventive measures against
suppliers as well. promotional activities falling during elevated work
Prevention of slipping accidents Preventive measures against traffic
* Health, Safety, Environment Replacing outdated cranes and
accidents
hoists; installing protection
Safety devices in rotating equipment;
and placing around-view * Power transmission construction: Shingajwa-Bugae (154kV); and Sepoong-Yulchon (154kV)
Power cable construction: Gunjang Energy (154kV); Woonjung apartment complex in Paju;
monitoring systems on forklifts
Gunsan-Daeya; Soonwhadongbinggo (154kV); and a children’s library in Sungbook-dong
Technical
improvement Replacing old dust collectors
Environ- Accident statistics
and pipes; and improving clean
23 cases ment
rooms
Based on our belief that sustainable Strategic direction Key performance in 2020
performance can be achieved only Achieving corporate sustainability through Diversified channels for
through the efforts of the people involved, the growth of our employees securing talent
we are running a variety of programs to · Internship programs, and
Key tasks open recruitment in the first/
secure and nurture creative talent.
Securing talent and ensuring unbiased HR second half
The talent we seek includes: professionals
management and welfare benefits
with outstanding job competence; Digital capacity-building
· Employment
members leading the development of the · A performance management system training
organizational culture by implementing ·U nbiased evaluation and performance- · A data analyst program:
its core values; and global leaders based compensation A total of 28 participants
· Employee benefits conducted 16 tasks.
actively responding in an ever-changing
environment. We aim to create an
Capacity building for future business Achievements in
environment in which the company and its
· Nurturing innovative leaders the LS C&S Way
employees grow together, thereby creating · Strengthening global and digital capability · Vision 2030 internalization
greater value. training: Developing web-
Achievements in the LS C&S Way based content
· Internalization of the Vision 2030
· A smart organizational culture A Team Vision Workshop for
·O ne LS C&S through communication producing results
and care Participation of all of
· Promoting employee satisfaction
96 teams at LS C&S
A safety management meeting with suppliers
90 LS Cable & System 2020-2021 Sustainability Report + Annual Report Overview Sustainable Management 10 Key Topics Appendix 91
Business Plan
Customer First One LS C&S Employment welfare system
LS C&S is always thinking about its LS C&S values benefits that Business group’s goals
Communication Communication
customers. We work to understand are shared by all. We listen to one Agreement Agreement Healthy life Cultural life Energetic life
their needs, put ourselves in their another and work together for Team’s goals
place, and stand at their side. sustainability. We are one. The One · Medical expense reimbursement for · Support for in-house club activities · Reward for long-term employees: Vacation
To strengthen customer-oriented LS C&S Prize goes to employees Individual goals employees · Money gift for anniversaries, including and cash gifts for employees with 5, 10,
management, employees with who produce substantial results · Medical expense reimbursement for family birthdays or wedding anniversaries 20, 25, 30, and 35 years of service
outstanding sales performance through support/cooperation on Creation of outcome Capacity building members of employees · Cultural events such as the provision of · Free recreational facilities such as
are awarded the Customer behalf of all LS C&S. · Free medical checkups for employees and sports game tickets and lectures for family condominiums and a Baekam training
First Prize. · Job assignment/Performance · Target setting their spouses members of employees center
target setting · Support/guidance, interim check · Sports facilities for employees · Company outings: Annually
Guts · Target adjustment/Interim check · Measurement · Healthcare rooms or clinics at worksites
Courageous
· Performance measurement · Counseling programs at the head office
Adventurous
and R&D center
Initiative Resilience · Family occasion support: Cash gifts or · Monthly in-house online training programs · Financial aid of middle school, high school
C.O.R.E. Overcoming
Proactive condolence money for family occasions of on job skills, leadership, and foreign and college tuitions for the children of
difficulties Unbiased evaluation employees such as weddings and funerals languages employees
In order to evaluate performance in a fair and objective · Dormitories or employee apartments at · Mid-/long-term educational support for · Housing loan support
local worksites graduate schools, MBA, and intensive · Discount for our sister company products
manner, we disclose our evaluation criteria and follow a · Group life and health insurances for foreign language programs (LS Networks)
pre-defined process. Coaching and progress check (in employees · Outside training programs on job skills and · Retirement gifts
Tenacity · Commuting support: Commuter bus service foreign languages · An LS daycare center
Tenacious July) are provided to help employees produce results and
· Golden baby ring gifted to the children of
Patient develop capacity. The results are released to the pertinent
Rule & Responsibility Expertise employees on their first birthday
LS C&S sticks to the principles We are professionals employees, teams, or divisions to ensure transparency and
and fundamentals for all committed to innovation and to they are allowed to raise their objections to the results.
processes. We take initiative, work challenging ourselves to go beyond
honestly, and learn lessons from the bounds of what had been
Employee welfare expenses
failures. To enhance compliance considered possible. The Expertise Performance-based compensation
with principles and basics, we Prize is designed to strengthen 2018 2019 2020
award the Rules & Responsibilities the expertise and is granted to
We operated a compensation system reflecting employee
Prize to employees with excellent employees who contribute to performance. Compensation is provided based on the Medical expenses of family Number of persons (person) 361 385 326
performance in production/ business performance through members of employees The amount paid (USD 1,000) 500 703 696
evaluation results of group and individual performances in
development. R&D activities. Number of persons (person) 365 333 267
the form of annual base salary, management incentives, School expenses
The amount paid (USD 1,000) 2,140 1,997 1,614
CORE: Job competency / GRIT: Personality trait and individual incentives.
92 LS Cable & System 2020-2021 Sustainability Report + Annual Report Overview Sustainable Management 10 Key Topics Appendix 93
Nurturing innovative leaders Agile training for executives and team leaders Employee training over the last three years
Based on the belief that innovative and future-oriented with senior employees is conducted. In addition, we We conducted a program for executives and team
leadership is essential for achieving our Vision 2030, we also provide programs to help them understand our leaders called ‘Understanding agile work processes'. 2018 2019 2020
Case studies related to work process innovations that Average training hours per employee
are providing a variety of training programs to nurture business portfolio, future growth strategies, and general 54 54 58
(including production workers)
leaders who can take the initiative in creating change and operations systems as well as to improve their job skills allow employees to concentrate on activities directedly
Executives (including heads
contributing to forging a positive organizational culture. and offer mindset training. linked to goals and results and to quick decision-making of divisions)
24 29 33
Average training
The required roles and leadership skills have been and feedback on customer requirements were used hours per Managers (from the manager
* OPEN: It stands for ownership, pioneer, energizer, and networking. 78 86 88
defined by job position and reflected in the programs.
The programs aim to nurture future talent with a sense of ownership, for discussions on how to better understand them and employee by to general manager level)
challenge spirit and positive attitude. job position
apply them to our business. In 2021, the program will be Assistant managers and
136 137 178
rank-and-file employees
A future innovation course for executives expanded to team members, providing a foundation for
Strengthening global and digital capability Training expenses (USD thousand) 2,800 2,800 2,300
This course targeting our executives from the director to internalizing agile work process.
A range of programs have been developed and provided
managing director level aims to help them gain insight to respond to a rapidly changing business environment LS Group’s Miraewon training center
into future management environments characterized by and digital innovation. LS Group’s Miraewon training center was established
globalization and digitalization. Participants were given
in 2009 to establish and propagate LS values, nurture
opportunities to deeply consider and prepare strategies Capacity building for local team leaders at leaders for future growth, and build the capacity of all
regarding the role of executives in future innovation, overseas subsidiaries employees. Since its foundation, a variety of programs
prediction of social change, new technologies and digital We provided training to 24 team leaders at LS-VINA and on values, leadership, jobs, and globalization have been
innovation, investment, and enhancement of corporate LSCV, our Vietnamese subsidiaries. This program is operated to support the development of employees.
value. aimed to help them identify and proactively address key
issues of their teams. They learned about identifying the Our HR development system
LCP (Leadership Challenge Program) roles of leaders in contributing to interactions with team B. Business management and leadership C. Job
The LCP is designed to strengthen capacity for business members and achieving results throughout the process. A. Value D. Global E. Misc.
Newly-promoted employees
operation, organization management and leadership. and leadership
Key talent Common Specialized
Five employees participated in the program for their Support for employees dispatched overseas S-ELP (Senior Executive
Executives
capacity-building as future leaders. To strengthen the competitiveness of our overseas
Leadership Prg.) EMP
leadership seminars
appointed executives
Programs for team leaders based on pre-defined criteria in the production, finance,
LCP (Leadership Challenge Prg.)
To respond to rising uncer tainty and changing
managers
environments, leaders should quickly recognize changes
General
team leaders
those returning to Korea, an on-boarding program Evening
LSpartnership
Promotional training LS-SKKU
managers
promote a positive mindset and leadership.
general
Capacity building for digital transformation
Deputy
- General manager Technology Job competency training
Quality training
Patent training
utilization starting in 2020. Sixteen tasks were selected Business roadmap
Problem-solving
Managers
- Deputy general manager academy Teamwork
(in sales, R&D,
hires as they adapt to their new environments. productivity and risks. A total of 28 employees carried Training programs after Strategic management and quality)
After the announcement of successful applicants, a out tasks for improving work processes through coaching
promotion Basic accounting
Cost analysis
‘Healing Camp’ was held at a resort in Gangwon-do from external experts and in cooperation with working- Promotional training Information analysis
managers
Assistant
- Manager
Province where they were given time to relax through level managers. Feedback from the participants will be Planning ability enhancement
Decision making
meditation and yoga. It was followed by three weeks reflected in the following programs. We plan to develop Self-leader
of introductory courses at the LS Group level and one this program in the long term to support our employees Interpersonal skills
Promotional training
employees
week at the company level. Once they are assigned to quickly and accurately make data-based decisions at
-and-file - Assistant manager Presentations
Rank
Achievements in the LS C&S Way One LS C&S through communication and care Promoting employee satisfaction
Thank-you cards from CEO Work and life balance
We strive to create a corporate culture where the LS C&S Way is centered on the company’s We sent thank-you cards from the CEO to encourage Based on our CEO’s philosophy of concentrating on working
and individuals’ vision for growth and all of our employees concentrate on their work in order to our employees who were doing their utmost to produce during office hours but leaving the office on time and getting
produce results and achieve our Vision 2030. results within the work environment under the high fatigue enough rest to restore energy, we have been promoting
and widespread limitations imposed by the COVID-19 employee work-life balance since 2015 by encouraging our
pandemic. Employees selected from among candidates employees to leave work on time and take full advantage of
recommended by the head of each Group were given words vacation days. We check the vacation utilization rate of each
of encouragement from the CEO in the cards. They were also team and inform employees who have to work overtime for
Internalization of our Vision 2030 A smart organizational culture invited to a Healing Camp so that they can create cherished unavoidable reasons so that they can use alternative holidays
Training for all of our employees Improvement in work processes, meetings and reporting memories with their families. and flexible work hours instead. We will continue these efforts
The year 2020 was meaningful for LS C&S as our Vision We have been conducting a range of activities designed to to allow our employees to demonstrate their abilities and
2030 was announced to help the company to take another create an environment in which employees can concentrate Organizational culture meetings of Business Group heads grow with the organization while pursuing happiness in their
leap forward over the coming decade. Only when all of on, take pride in, and feel a sense of accomplishment In order to effectively improve an organizational culture, it is personal lives.
our employees understand and voluntarily implement the about their work. In particular, we have devised smart work essential for management to show consistent leadership,
desired actions can this vision be realized. To help them methods and improved work processes to promote efficiency seize the initiative, and set an example. The heads of the Diagnoses of an organizational culture
Business Groups met on a quarterly basis to discuss how We are conducting an organizational culture survey on an
internalize the vision, we created a course consisting of and strengthen competitiveness within the organization:
to improve our work processes and the communication and annual basis to measure the satisfaction of our employees. A
modules including on the necessity of the vision, its strategic With the introduction of RPA (Robotic Process Automation),
cooperation between organizations and to hear the opinions comprehensive analysis is made in regards to leadership, how
direction, and enterprise-wide and Group-wide vision. We simple and repetitive jobs have been automated. A campaign
of their Group members. These meetings aim to spark a we work, systems and working environments to create a more
also illustrated our core values and action promises. has been operated to simplify meetings and reporting. Online
virtuous cycle in which best practices and requirements are energetic and capable organization.
meetings are held using WebEX, and Time Timers are utilized
reflected in improvement activities, ultimately leading to
at meetings.
raised corporate competitiveness. Organizational competence/ organizational vitality/corporate
culture improvement index — Organizational competence
An example of a Team Vision Workshop
and corporate culture improvement slight improved (an
Mission increase of one point each) while organizational vitality was
Becoming facilitators to support our employees to the same as in the previous year. Among the elements on the
achieve the company vision organizational competence index, the score for organizational
Training for all of our employees direction significantly rose four points which is attributable to
Team vision the announcement of our Vision 2030. Vacation, an element
Business Insight Creator on the corporate culture index, also surged four points.
Team-based activities to produce results
As part of the efforts at achieving our vision by internalizing Organizational competence (Unit: points) 2019 2020
its goals, strategic direction, and core values, a Team Vision Core values (C.O.R.E.)
2018 54 • Organizational 65 69
workshop was held for all of 96 teams at LS C&S to help Rule & direction
Customer First One LS C&S Expertise 2019 56
them find and address improvement points at the team level. Responsibility • Leadership 60 61
2020 57 capacity
Each team member conducted a diagnosis on their own • System capacity 45 45
before the workshop, discussed the direction of their team, Satisfying Maximizing Fulfilling
Concentrating
customer synergies corporate Organizational vitality (Unit: points)
established a team vision with other members, and made working efforts
needs through through social
for innovation
actions promises. In addition, a C.C. (Core Communicator) differentiation communication responsibilities 2018 72 • Organizational 61 61
effectiveness
was appointed for each team to encourage team members 2019 72
• Work 72 73
to pursue changes in their perception, mindset, and Team action promises 2020 72 effectiveness
Our Vision 2030 campaign for improving an organizational culture
• Relationship 83 83
organization by promoting team vision. We will continue Let’s effectiveness
Let’s have
these efforts to bring change to the company and each a business
Let’s take concentrate
Let’s take Corporate culture improvement (Unit: points)
a tea break on working
employee. insight report
once a day and during office
a global
evaluation expert training 2018 65 • Company norms 76 80
1) C.C. (Core Communicator): Core Communicators represent employees and see each hours to • Vacation 78 82
meeting once course! 2019 66
encourage them to make changes by taking the initiative, and promoting and other’s faces! increase office • Team meals 73 75
a month!
facilitating positive change. They are generally known as C.A., but at LS C&S C.C. productivity!
is used to emphasize communication.
2020 67
96 LS Cable & System 2020-2021 Sustainability Report + Annual Report Overview Sustainable Management 10 Key Topics Appendix 97
The international community and our Strategic direction Reducing environmental impact in the Period 2020. 11. 27 ~ 2021. 09. 12
Legal Team
stakeholders have been continuously Achieving sustainable growth by complying product use and disposal stage
with global standards and taking the lead in · Plastic recycling Certification
calling for green business activities to Compliance Team DQS Inc.
environmental preservation · Waste management agency
mitigate environmental challenges such
as global warming, other forms of climate * Our domestic and overseas subsidiaries operate an environmental
Key tasks Environment management at worksites Labor Relations/HSE Department management system certification process on their own.
change, and resource depletion. Based · Water resource management · Domestic: G&P, LS EV Korea, LS Alsco
Advancing a green management system · Overseas: LSCW, LS-VINA, LSCV, LSGM, LSCI, LSEVP, LSCP
on the awareness of our corporate social · Pollutant management
· Environmental management policies/
responsibility toward the environment, · Chemicals management
organizations/systems/investment/ HSE Planning/Diagnosis
HSE Office
we apply pollutant management standards Management of the full product cycle Team Environmental facility investment
that surpass the legal requirements. Key performance in 2020 Following a massive environmental investment in 2019,
To realize our value of Customer First, Reducing environmental impact in the cable we have invested in facilities to prevent air pollution
Using renewable energy for Environmental planning Procurement HSE Team
design and raw material procurement stage and manage harmful chemicals to minimize related
we continue to provide eco-friendly cable power generation
· Green product research and development risks. Dust collectors 2) that inhibit the emissions of
products and solutions, thus contributing Health and safety planning Indong HSE Team
· Management of hazardous materials and 35.7 GWh materials causing air pollution during the stranding
to a sustainable future for our customers. chemicals
Donghae HSE Team process of power transmission and submarine cables
· Green purchasing
Scope 1·2 GHG emissions have been newly installed or improved. In addition,
● Established in 2020
A decrease for safety equipment for transfers has been repaired. We
Reducing environmental impact in the
product manufacturing stage 3 consecutive years have not simply responded to more stringent laws and
· Using renewable energy for power regulations, but are conducting business activities based
generation on the perception that environmental issues are a matter
· Energy saving and GHG emission reduction A new system for monitoring of survival for companies and for nations.
harmful chemical substance 2) A device that collects and removes particles of solid or liquid floating
in the air
98 LS Cable & System 2020-2021 Sustainability Report + Annual Report Overview Sustainable Management 10 Key Topics Appendix 99
Management of the full product cycle Green product research and development (chemical monitoring system) in our HSE system in
To reduce our environmental footprint across the During product research and development, environmental 2020. It allows us to obtain chemicals information
overall process of the product value chain, we consider impact is considered at each stage of the design of purchased raw materials and closely check their
environmental impact during product design, production, review (DR) process. In the planning stage, customer harmfulness and regulatory information, thus preventing
logistics, construction, use, and disposal. Since a range requirements and regulations are reviewed. In addition, potential risks.
of elements, including environmental impact and quality, we are developing products that can increase energy
Our chemical review and approval process
are determined at the design stage, we reflect HSE- efficiency, recycle resources and energy and replace
related laws and customer requirements in product hazardous materials. With the currently increasing R&D/Production/
HSE Purchasing
design to fulfill our corporate responsibility toward the Extended Producer Responsibility, we are working on QA
Proposal
Importing/
CCA2) review/
· Development of highly- · Resource saving design · Supplier management · Energy saving/GHG Purchasing
Development Domestic response
efficient products · Application of eco- · Green purchasing emissions materials
· Product development in friendly materials · Increased productivity
the new energy industry through process Environ-
improvement mental 1) The Act on the Registration Reporting chemicals
Internal approval and Evaluation of Chemicals management status
impact
Response to 2) The Chemicals Control Act
review
PQ1) and
Product life cycle audit
External certification
Green purchasing
Since issues triggered in a supply network can impact
the entire value chain, the corporate social responsibility
Design transfer for production
Raw material
Product Logistics/ Use of products/ Disposal/ required of suppliers is greater than ever. For the
collection and
manufacturing Construction Maintenance Recycling environmental impact assessment of our supply chain,
processing
we are conducting supplier evaluation in the areas of HSE
Pilot product evaluation
systems and leadership, environmental management
1) Prequalification: A preliminary examination of bidding qualifications status at worksites, and hazardous materials and
Value offered by LS C&S
chemicals management. Our worksites in Gumi, Indong,
Construction Collection/ and Donghae are regularly providing environment-related
Suppliers LS C&S Customers
companies/Clients Recycling industry Management of hazardous materials and technical support to their on-site suppliers. Meanwhile,
chemicals in products a waste disposal company management process is in
· Resource · Business creation · Logistics/ · Product stability · Waste reduction As legal and customer requirements, including EU’s place to prevent any possible violation of environmental
· Green partnership · Raw material/energy construction-related · Service stability · Increased resource
RoHS and ELV Directives and the Act on Resource regulations, including onsite inspection, contract signing
saving energy and cost · Energy loss recycling rate
· Waste/waste water/ saving reduction during Circulation of Electrical and Electronic Equipment and and registration, and post-check.
emissions reduction power transmission Vehicles, are increasingly strengthened, an enterprise-
· Easy maintenance
wide chemical review and approval process is being
· Customers’ Scope
3 GHG emissions operated. In addition, to respond to stricter regulations
reduction and strengthen product stability, we introduced a CMS
100 LS Cable & System 2020-2021 Sustainability Report + Annual Report Overview Sustainable Management 10 Key Topics Appendix 101
Reducing environmental impact in the product manufacturing stage Reducing environmental impact in the product use and disposal stage
Using renewable energy for power generation the request of customers, we also provide information Plastic collection and recycling Waste management
We introduced renewable energy for power generation on our responses to climate change through the CDP There is a rising demand for resource recycling due to To minimize wastes and protect the environment, we
in order to respond to the requirements of international (Carbon Disclosure Project) Supply Chain. We have increasing volumes of waste. To fulfill our responsibility, keep in place a waste disposal process from product
customers and the government’s climate change policy. internally calculated some of our Scope 3 emissions we signed a voluntary agreement on plastic waste development to final disposal and continue our efforts
In the first quarter of 2021, we made a bid for KEPCO’s since 2013 and plan to obtain third-party verification to collection and recycling with the Ministry of Environment at increasing our waste recycling rate. Wastes generated
Green Premium program and purchased 35.7 GWh of ensure the accuracy and objectivity of the results. and have been proactively participating in its EPR 1)
during our HV/EHV and optical communication cable
electricity generated as renewable energy, which makes programs. In addition, we are sharing materials manufacturing processes are made of plastic such as
Scope 1·2 GHG emissions and intensity
up 50% of the power consumed in our plants in Donghae (unit: tCO2eq; tCO2eq/sales (KRW 1 million))
information with recycling companies to promote the HDPE and PVC, and they are categorized into general
and Indong (optical communication). It accounts for recycling of plastic from power/communication lines and wastes. In 2020, wastes totaled 11,767 tons, a decrease
20% of our annual power consumption of 188 GWh 2018 2019 2020 packaging. Our XLPE recycling technology was developed of 58 tons from the previous year. Recycled wastes
(as of 2019). We plan to increase the use of electricity Scope 1 36,595 30,663 29,530 in 2020. It is currently partially applied to shaped filters rose by 64 tons year-on-year to reach 11,018 tons. Our
generated by renewable energy even further. Scope 2 105,638 94,652 92,376 in submarine cables and we are working to expand the recycling rate increased slightly as generated wastes
Total 142,233 125,315 121,907 scope of its application. were recycled to the greatest extent possible.
Energy use and GHG emissions Intensity 0.043 0.039 0.037 1) Extended Producer Responsibility
Waste disposal process
The current status of energy use
Voluntary collection and recycling of plastic from power/
About 97% of this energy is used at our worksites, and is Scope 3 GHG emissions (unit: tCO2eq) communication cable wastes in Korea (unit: ton, %) Raw materials Production Waste generation
mostly attributable to the consumption of major energy · Setting targets to reduce · Separating and recycling
23.00%
sources, including electricity, LNG, and steam. By energy 2018 2019 2020 wastes wastes
20.65% · Establishing waste · Transferring wastes to
source, electricity accounts for the largest share at 73%, Waste disposal 1,767 2,843 2,107 17.82% reduction programs storages
5,741
followed by 22% for LNG and 5% for steam. As on-site Fuel/energy
5,430 4,522 4,317 4,688
production
management and participation are essential for energy 4,063 Waste disposal Waste transport Waste storage
Leased assets 7,030 18,412 11,897
saving, employees in charge of each type of equipment are
·C
onducting preliminary · Signing a contract with · Storing wastes by type/
designated and awareness-raising efforts are being made. ※ Calculation is internally made based on domestic and international criteria. physical inspections and an authorized transport characteristics
checking permission details company · Abiding by the pre-defined
●P
lastic collected and ·C
hecking whether wastes · Tracking the transport storage period
Energy use and intensity (unit: TJ; TJ/sales (KRW 100 million)) recycled (ton) are properly treated and
Energy saving and GHG emissions ●P
lastic collected and disposed
recycled (%) ·C
onducting physical
2018 2019 2020 To reduce energy use at worksites, we are steadily making inspections and evaluation
Fuel 656 547 525 equipment investments to meet the annual target while
2018 2019 2020
Electricity 1,999 1,802 1,772 strengthening on-site energy management. In 2020, we Wastes generated and intensity (unit: ton; ton/production volume (1,000 tons))
Plastic used in power/
Steam 159 135 119 completed a total of seven tasks, including replacing communication 22,799 22,700 24,961
cables
Total 2,814 2,484 2,416 outdated compressors in SCR and identifying waste 2018 2019 2020
Plastic collected and
Intensity 0.084 0.077 0.074 elements through patrol inspections, resulting in a decrease 4,063 4,688 5,741 Designated wastes* 2,021 2,134 1,947
recycled (ton)
of 1,020 tons of annual GHG emissions. General wastes** 10,298 9,690 9,820
※ Electric energy conversion factors: 9.6MJ/kWh Plastic collected and
17.82 20.65 23.00
(loss from power transmission and distribution and production included) recycled (%) Total 12,319 11,825 11,767
※ Calculation was made for finished products sold to end-customers only. Intensity 32.1 32.3 33.3
Misc. Replacing outdated
The 2020 recycling volume will be aggregated in the second half of 2021.
The current status of GHG emissions 19.1% compressors in SCR * Designated wastes: waste oil, waste organic solvent, paint waste, and waste acid
(Improvement in air Total investment 28.8% ** General wastes: cable scrap, waste synthetic resins, rubber wastes, and residential wastes
At LS C&S, Scope 1 and 2 GHG emissions are calculated, loss; and repair of
boiler steam supply
USD 797 thousand Plastic packaging collection and recycling in Korea (unit: ton)
verified by a third party, and reported to the government
pipes) GHG emissions Waste disposal (unit: ton)
on an annual basis. Emission sources include the energy 2018 2019 2020
reduction
consumed by the head office, R&D centers, the Seoul
Improving drying 1,020 tCO eq 2
Plastic packaging
collected
233 229 - 2018 2019 2020
office, sales agencies, and worksites in Gumi, Indong, systems and Conducting joint
implementing an patrol inspections Required recycling Incineration 756 1,263 1,362
and Donghae, and some processes. The reported 178 181 -
unused steam pipe and identifying waste volume Landfill 434 348 344
emissions data is publicly disclosed at ngms.gir.go.kr (the shut-off system elements
Recycled volume 225 278 - Recycling 11,107 10,954 11,018
National Greenhouse Gas Management System). Upon 24.7% 27.4%
※ The 2020 recycling volume will be aggregated in the second half of 2021.
Recycling rate (%) 90.0 92.6 93.6
102 LS Cable & System 2020-2021 Sustainability Report + Annual Report Overview Sustainable Management 10 Key Topics Appendix 103
Water resources flowchart Primary air pollutant emissions Primary water contaminants discharged and intensity Use of harmful chemicals (unit: ton)
(unit: kg; kg/production volume (1,000 tons)) (unit: kg; kg/production volume (1,000 tons))
· Gumi/Indong:
Source of supply Nakdonggang River
Total Total Use of harmful chemicals
· Donghae: Dalbang
Public water Dam 23,837 1,324 11,5422)
Industrial water
supplies
16,383 976
15,213
439,760 tons 22,886 tons 656 6,1841)
LS C&S
1,313
Manufacturing processes
APPENDIX
Consolidated Statements of Financial Position
LS Cable & System Ltd. And Subsidiaries (Unit: USD Million) LS Cable & System Ltd. And Subsidiaries (Unit: USD Million)
To readers of LS Cable & System 2019 - 2020 Sustainability Report + Annual Report
2018 2019 2020
Cash flows from operating activities (154) 38 164
Cash generated from (used in) operations (108) 79 192 Introduction
Interest received 1 3 2 Korea Management Registrar (KMR) was commissioned by LS - Training and Education: 404
Dividends received 3 5 6
Cable & System to conduct an independent assurance of its 2019 - Diversity and Equal Opportunity: 405
Interest paid (29) (31) (33)
Income taxes paid (22) (17) (2) - 2020 Sustainability Report + Annual Report (the “Report”). The - Freedom of Association and Collective Bargaining: 407
Cash flows from investing activities (40) (49) (100) data and its presentation in the Report is the sole responsibility of - Local Communities: 413
Decrease (increase) in financial deposit 7 3 1 the management of LS Cable & System. KMR’s responsibility is to - Supplier Social Assessment: 414
Decrease (increase) in other receivables (12) 17 0.3
perform an assurance engagement as agreed upon in our agreement - Customer Health and Safety: 416
Proceeds from disposal of financial assets at fair value through other comprehensive income - - 0.2
Proceeds from disposal of property, plant and equipment 23 1 1 with LS Cable & System and issue an assurance statement. - Socioeconomic Compliance: 419
Proceeds from disposal of intangible assets - 2 -
Proceeds from disposal of other investment assets - 0.1 - Scope and Standards As for the reporting boundary, the engagement excludes the data and
Loss of control over subsidiaries 35 27 28
LS Cable & System described its sustainability performance information of LS Cable & System’s partners, suppliers and any third
Payment for acquisition of investments in subsidiaries, associates and joint ventures (74) (48) (48)
Payment for acquisition of property, plant and equipment (54) (56) (73) and activities in the Report. Our Assurance Team carried out an parties.
Payment for acquisition of intangible assets (0.4) (7) (9) assurance engagement in accordance with the AA1000AS v3 and
Decrease (increase) in derivative financial instruments 34 13 -
KMR’s assurance standard SRV1000. We are providing a Type KMR's Approach
Others 2 - -
Cash flows from financing activities 190 110 87 2, moderate level assurance. We evaluated the adherence to the To perform an assurance engagement within an agreed scope of
Proceeds from (Repayments of) short-term borrowings (excluding CP) 9 16 98 AA1000AP (2018) principles of inclusivity, materiality, responsiveness assessment using the standards outlined above, our Assurance
Repayments from short-term borrowings (CP) (825) (605) (92) and impact, and the reliability of the information and data provided Team undertook the following activities as part of the engagement:
Proceeds from short-term borrowings (CP) 946 544 92
using the Global Reporting Initiative (GRI) Index provided below. The
Repayments from long-term borrowings - (65) (46)
Proceeds from long-term borrowings 56 61 37 opinion expressed in the Assurance Statement has been formed at • reviewed the overall Report;
Proceeds from issuance of debentures 216 276 212 the materiality of the professional judgment of our Assurance Team. • reviewed materiality assessment methodology and the assessment
Repayment of bonds issued (203) (104) (200)
report;
Repayments of currents lease liabilities - (5) (7)
Confirmation that the Report was prepared in accordance with • evaluated sustainability strategies, performance data management
Dividends paid (8) (8) (9)
Decrease (increase) in derivative financial instruments - - 3 the Core Options of the GRI standards was included in the scope system, and processes;
Others (1) (1) (1) of the assurance. We have reviewed the topic-specific disclosures • interviewed people in charge of preparing the Report;
Net increase in cash and cash equivalents (4) 99 152 of standards which were identified in the materiality assessment • reviewed the reliability of the Report's performance data and
Cash and cash equivalents at beginning of the year 106 102 213
process; conducted data sampling;
Effects of exchange rate changes on cash and cash equivalents (0.1) (1) 0.01
Cash and cash equivalents at end of the year 102 200 365 • assessed the reliability of information using independent external
• GRI Sustainability Reporting Standards sources such as Financial Supervisory Service’s DART and public
• Universal standards databases.
• Topic specific standards
- Management approach Limitations and Recommendations
- Economic Performance: 201 KMR’s assurance engagement is based on the assumption that the
- Procurement Practices: 204 data and information provided by LS Cable & System to us as part
- Anti-Corruption: 205 of our review are provided in good faith. Limited depth of evidence
- Anti-Competitive Behavior: 206 gathering including inquiry and analytical procedures and limited
- Materials: 301 sampling at lower levels in the organization were applied. To address
- Energy: 302 this, we referred to independent external sources such as DART and
- Water and Effluents: 303 National Greenhouse Gas Management System (NGMS) and public
- Emissions: 305 databases to challenge the quality and reliability of the information
- Effluents and Waste: 306 provided.
- Employment: 401
- Labor/Management Relations: 402
- Occupational Health and Safety: 403
112 LS Cable & System 2020-2021 Sustainability Report + Annual Report Overview Sustainable Management 10 Key Topics Appendix 113
GRI Standards
1. Universal Standards
Conclusion and Opinion Competence and Independence
Topic Disclosure Page Assurance
Based on the document reviews and interviews, we had several KMR maintains a comprehensive system of quality control including
GRI 102: General Disclosures ●
discussions with LS Cable & System on the revision of the Report. documented policies and procedures in accordance with ISO/
102-1 Name of the organization 12 ●
We reviewed the Report’s final version in order to make sure that our IEC 17021·2015 - Requirements for bodies providing audit and
102-2 Activities, brands, products, and services 12, 14-15 ●
recommendations for improvement and revision have been reflected. certification of management systems. This engagement was 102-3 Location of headquarters 12 ●
Based on the work performed, it is our opinion that the Report carried out by an independent team of sustainability assurance 102-4 Location of operations 12 ●
applied the Core Option of the GRI Standards. Nothing comes to our professionals. KMR has no other contract with LS Cable & System 102-5 Ownership and legal form 26 ●
attention to suggest that the Report was not prepared in accordance and did not provide any services to LS Cable & System that could 102-6 Markets served 18-19 ●
Organizational
with the AA1000AP (2018) principles. compromise the independence of our work. Profile 102-7 Scale of the organization 12-13 ●
102-8 Information on employees and other workers 12, 89-95 ●
Inclusivity May 2021 Seoul, Korea 102-9 Supply chain 66-70 ●
LS Cable & System has developed and maintained different 102-10 Significant changes to the organization and its supply chain About this Report ●
stakeholder communication channels at all levels to announce and 102-11 Precautionary Principle or approach 27-29 ●
fulfill its responsibilities to the stakeholders. Nothing comes to our 102-13 Membership of associations 13 ●
attention to suggest that there is a key stakeholder group left out 102-14 Statement from senior decision-maker 4-7 ●
Strategy
in the process. The organization makes efforts to properly reflect 102-15 Key impacts, risks, and opportunities 22-23 ●
opinions and expectations into its strategies. 102-16 Values, principles, standards, and norms of behavior 81 ●
Ethics and integrity
102-17 Mechanisms for advice and concerns about ethics 81-83 ●
Materiality 102-18 Governance structure 26 ●
LS Cable & System has a unique materiality assessment process to 102-22 Composition of the highest governance body and its committees 26 ●
decide the impact of issues identified on its sustainability performance. 102-23 Chair of the highest governance body 26 ●
We have not found any material topics left out in the process. 102-24 Nominating and selecting the highest governance body 26 ●
Governance 102-30 Effectiveness of risk management processes 27 ●
LS Cable & System prioritized material issues to provide a 102-35 Remuneration policies 26 ●
comprehensive, balanced report of performance, responses, and CEO 102-36 Process for determining remuneration 26 ●
future plans regarding them. We did not find anything to suggest 102-37 Stakeholders’ involvement in remuneration 26 ●
102-40 List of stakeholders groups 31-33, 35 ●
that data and information disclosed in the Report do not give a fair
102-41 Collective bargaining agreements 115 ●
representation of LS Cable & System’ actions. Stakeholder
102-42 Identifying and selecting stakeholders 31-35, 115 ●
engagement
102-43 Approach to stakeholder engagement 31-35 ●
Impact
102-44 Key topics and concerns raised 34-35 ●
LS Cable & System identifies and monitors the direct and indirect
102-45 Entities included in the consolidated financial statements 20-21 ●
impacts of material topics found through the materiality assessment,
102-46 Defining report content and topic Boundaries 34-35 ●
and quantifies such impacts as much as possible.
102-47 List of material topics 34-35 ●
102-48 Restatements of information About this Report ●
Reliability of Specific Sustainability Performance Information
102-49 Changes in reporting About this Report ●
In addition to the adherence to AA1000AP (2018) principles, we
Reporting practice 102-50 Reporting period About this Report ●
have assessed the reliability of economic, environmental, and
102-51 Date of most recent report About this Report ●
social performance data related to sustainability performance. We
102-52 Reporting cycle About this Report ●
interviewed the in-charge persons and reviewed information on
102-53 Contact point for questions regarding the report About this Report ●
a sampling basis and supporting documents as well as external
102-54 Claims of reporting in accordance with the GRI Standards 111-112 ●
sources and public databases to confirm that the disclosed data is
102-56 External assurance 111-112 ●
reliable. Any intentional error or misstatement is not noted from the
data and information disclosed in the Report.
114 LS Cable & System 2020-2021 Sustainability Report + Annual Report Overview Sustainable Management 10 Key Topics Appendix 115
GRI Standards
2. Topic-specific Standards
GRI 306: Effluents and 306-2 Waste by type and disposal method 101 ●
202-1 The ratio of entry level wage to legal minimum wage is 135%.
Waste 306-3 Significant spills 103 ●
205-1 None of our worksites were found to have risks of any corruption cases according to the analysis results.
306-5 Water bodies affected by water discharges and/or runoff 102 ●
We are striving to promote transparent and fair competition. However, some violation cases that occurred before implementing our compliance
GRI 307: Environmental 206-1/419-1 programs are still under investigation and subject to lawsuits. For further details, please refer to our 2020 audit report. Going forward, we will
307-1 Non-compliance with environmental laws and regulations 115 ●
Compliance further strengthen our efforts to promote compliance activities of our employees and prevent any violations that could lead to market disruptions.
GRI 400: Social topics ● Our water resources are from the Nakdong River for the Gumi/Indong plants, the Paldang Dam for the Anyang plant, and the Dalbang Dam for the
303-2
401-2 Benefits provided to full-time employees that are not provided to temporary or part-time employees 91 ● Donghae plant. They are purified by the K-Water and provided through water supply offices in each area.
GRI 401: Employment
401-3 Parental leave 74 ● 306-3/307-1 There were no cases of harmful substance leakage and environmental violations in 2020.
GRI 402: Labor/ 402-1 We disclose key information and major changes regarding management and employee welfare in real time through our website.
402-1 Minimum notice periods regarding operational changes 115 ●
Management Relations 405-2 Employees with the same positions and jobs are equally paid. There is no wage discrimination for reason of gender.
403-1 Workers representation in formal joint management–worker health and safety committees 85 ● 411-1 There were no violations involving the infringement of the rights of local residents during the reporting period.
GRI 403: Occupational Types of injury and rates of injury, occupational diseases, lost days, and absenteeism, and When deciding new investment, including the establishment of a worksite, acquisition, and joint venture, we review and consider local labor
403-2 87 ●
Health and Safety number of work-related fatalities 412-3 practices. As of now, there have been no human rights issues. However, if newly invested worksites do not meet the international human rights
403-4 Health and safety topics covered in formal agreements with trade unions 85 ● standards, actions will be immediately taken to address these issues.
116 LS Cable & System 2020-2021 Sustainability Report + Annual Report
Date of Publication July 15, 2021 (Korean Version June 14, 2021)
Publisher Roe Hyun Myung
Company LS Cable & System
Design The Moments
Production management The Sustainable Management Secretariat
Wan Seob Ju, Byung Ok Kim, Woo Jin Choi
Ju Young Dong, Hee Jung Kim
Contributors
Working Committees
Technology Management Team Min Soo Ko, Gwang Jin Heo
Quality management Team Ho Eun Kim, Ki Hun Kim
Communications Team Dong Hee Keum, In Sil Lee
Purchasing Planning Team Soon Il Jung, Hyun Gyu Park
Labor Relations/HSE Department Kyun Woong Yang, Dong Gyu Lee
Human Resources Team Sung Joon Kim, Seoung O Lee
Compliance Team Young Jun Oh, Jung Rae Kim
Internal Audit & Consulting Team Chang Won Choi, Jin Young Hyun
Corporate Culture & HRD Team Seung Geun Ahn, Min Jin Kim
HSE Planning & Inspection Team You Hwan Lee, Seong Hun Woo, Hyun Woo Noh
Others
Corporate Strategy Team Ung Sik Chae, Ji Hwa Chung, Chang Bae Yoo
Business Management & Yong Gyu Choi, Min Jun Ahn, Min Hyoung Lee
Planning Team
Business Information Yong Phal Yoo
Management Team
Accounting Team Ji Eun Choi
Investor Relation Team Kyoung Su Oh
Human Resources Team Tae Hyun Kim
Legal Team Jae Woon Lee
Business Support Division Jung Won Han
HSE Office Jin Tag Lee, Sang Wook Park, Jeong Wook Jang
Sung Jae Byun, Seong Kyu Jeong
Jun Young Kang, Dong Woo Kim, Ji Hoon Go
HSE Planning & Inspection Team Kwang You Cho
Platform Technology Research Whan Ki Kim, Yu Ho Rho
Center
Covergence Modular Product Un Kyoo Park, Eun Jeong Yang, Hyun Woong Kim
Research Center
Global LV/MV Research Center Young Ho Kim, Jung Ji Kwon, Won Young Kim
In-Company Venture_GreenPR Jung In Shin
LSCW Yong Jin Yoo
LSHQ Sang Gab Lee
LS-VINA Seung Jin Han
LSCV Min Hye Jo
LSGM Seung Kyeom Kim
LSCI Han Yong Park
LSCP Bong Jun Cha
LS EV Korea Byoung Joon Kim
G&P Jong Hyuk Yoon This report is printed with soy ink and printed on paper made of materials from
well-managed, FSC®-certified forests and other controlled sources.
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