Grade summary

LG Chem receives a C- grade in ChemScore 2023. The company produces 20 SIN List substances and four persistent chemicals, but only 39 per cent of its global production is disclosed. LG Chem actively conducts life-cycle assessments and offers eco-friendly materials, of which two safer alternatives are advertised on ChemSec’s Marketplace. However, a clear commitment to not include hazardous chemicals in new products is lacking. Similar statements are also missing for circular and recycled products.

On a more positive note, LG Chem uses old cooking fats and palm oil by-products to manufacture neopentyl glycol and has reduced its hazardous waste, which increases the company’s score. While it reports a declining share of harmful chemicals in its product portfolio since 2020, a clear phase-out plan with circularity targets is needed for an improved ranking in ChemScore.

How did we come to this score?

Opportunities for improvement

1. Map and phase out persistent chemicals
   LG Chem produces or uses at least four persistent chemicals. These substances are known as “forever chemicals” due to the fact that they do not break down in nature. These chemicals — which are linked to many negative health effects — instead build up over time, creating consequences that are becoming increasingly detrimental. Not only for human health and the environment but also for investors.Companies reliant on such chemicals risk stranded assets now that the regulatory speed is accelerating. They are also exposed to significant liability risks since more chemical companies are being sued for contamination and bodily injury. LG Chem should therefore identify all uses, as well as publish the share of revenue and production volume of persistent chemicals (or products that contain them). The company should publish a time-bound phase-out plan for each persistent chemical and a realistic road map with clear KPIs to track progress.

2. Reduce hazardous portfolio
   Scientists agree that chemical pollution has crossed a planetary boundary and become an urgent global crisis, threatening both ecosystems and human health. Since LG Chem has 20 hazardous chemicals in its product portfolio, a key improvement point for the company is to reduce this number. LG Chem should therefore identify all uses, as well as publish the share of revenue and production volume of hazardous chemicals (or products that contain them).

It should also publish a reduction road map of each hazardous chemical together with an annual progression report. Ideally, the company should commit to having a toxic-free product portfolio within the next decade. If the company decides to continue producing a hazardous substance, it needs to present a rationale for its essential use and prove that no feasible alternatives are available at present. In such a case, the company should also state the share of the R&D budget spent on finding a safer alternative for that particular substance.

3. Prevent further controversies
   Over the last five years, LG Chem has been involved in incidents leading to a number of fatalities and should re-design or dramatically improve its Environment, Health and Safety strategy. This would help the company to better avoid incidents and make sure that controls – functioning even when human errors occur – are in place. If an accident or spill should happen, it is important that LG Chem identifies the cause and publishes a document on strategies that will be implemented to avoid similar occurrences in the future. It is possible to prevent human suffering and environmental pollution when producing chemicals, but it requires a thorough Environment, Health and Safety system.

Category breakdown