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LG Chem
About the company
Grade summary
LG Chem is one of the biggest losers of ChemScore 2021, down five points compared to last year and slipping from a C to a D+. The company produces nine highly hazardous substances. Compared to some of the other companies in the ranking that might seem good, but it is still a portfolio full of problematic substances. In addition, there is no available data for the 69 percent of the company’s production that takes place outside of the EU and US, leaving the company with just three points in the Product Portfolio category. This low transparency is a big issue for investors, as it makes it hard to do a proper evaluation of the risks connected to the product portfolio. The category where LG Chem has lost the most points is Lack of Controversies, due to a fatal accident last year. In the other categories, the company places itself very much in the middle. It doesn’t really excel in anything, but is not among the worst performers either.
Opportunities for improvement
- LG Chem has one of the biggest drops in the overall score compared to last year of all ChemScore companies – partly due to the deadly gas leak causing many casualties in India. As this year’s ChemScore includes circular topics, LG Chem’s score is decreasing. The company needs to fast-track its sustainability efforts.
- The company received no point for circularity. LG Chem’s strategy of “carrying out a variety of plans to recycle batteries” is a start, but it needs to move into practice and be performed at scale. Also, the very hazardous chemical ingredients of batteries need to be reflected on and taken care of. We would like to see an evolving strategy with SMART targets.
- LG Chem has established a standard for the management of hazardous substances when developing eco-friendly products. However, the next step – designing out hazardous substances from their product portfolio – is still missing and should be added, starting with the PIC substance that LG Chem still offers. PIC, short for Prior Informed Consent, is one of the key provisions of the Rotterdam Convention, allowing the export of – often domestically restricted – hazardous chemicals to poorer countries with weaker chemical legislation, as long as the receiving country signs a consent that it understands what it is accepting and has a plan for how to handle it.
Category breakdown
LG Chem produces/uses 9 highly hazardous substances –9 SIN List chemicals, 1 PIC, and 1 HHP – 2 of which are included on the EU’s REACH Candidate List. 1 of these highly hazardous substances is either banned or severely restricted, with set dates when production needs to cease (1 Authorisation List substances, and no POPs). The company produces no persistent chemicals.
Please note that there is no available data for the 69 percent of the company’s production that takes place outside of the EU and US. Lower EU/US production means higher uncertainty with regard to the total production of hazardous chemicals, which will have a negative impact on the company’s score in this category.
LG Chem has a method in place to screen and assess the sustainability of its products and includes the intrinsic hazards of ingredients in the screening process. It does not, however, exclude substances with toxic properties from its new products. LG Chem actively markets safer alternatives both on its own website as well as on ChemSec Marketplace. The company has no true circular product, process or innovation. LG Chem does not use biobased resources. It does, however, source and treat recycled materials in a sustainable way, which is one of the key elements of a circular economy. LG Chem is not actively reducing the hazardous waste it generates.
The Korean company does not produce only sustainable products, and has no phase-out strategy for hazardous substances that go beyond regulatory compliance. It shares chemical safety information on its website and is following a credible code of conduct standard. LG Chem responded to ChemSec’s attempts to communicate around its ChemScore ranking. However, the company does not share any information about what kind of chemicals it produces in regions with low regulatory demands for transparency (e.g. Asia). LG Chem does not have a circular economy program in place, thus lacking objective and measurable circular economy targets.
Between 2011 and 2020, the company was involved in several scandals. In May of 2020, toxic styrene gas leaking out from an LG Chem plant in India killed 15 people and injured hundreds. In 2019, LG Chem was found to have colluded with four measurement agencies to rig air pollution data on its vinyl chloride emissions over the course of four years. In 2013, LG Chem was among 164 companies investigated by Korean authorities and found to have been discharging toxic chemicals into the environment via waste water.
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