Risk Management System
Risk Management Process
1 Risk Identification
LG Energy Solution operates a company-wide risk management system to identify and mitigate risks and increase sensitivity to potential risks that may evolve into crises. All employees are well informed of our Risk Management Policy and use it as the basis of their work. We pinpoint risks in various areas by analyzing our mid- to long-term strategies and work processes and conducting interviews. Further, in order to prevent risks and mitigate damage in the event of a crisis, we focus on assessing changes in the business environment when developing medium-to long-term strategies and business plans.
2 Crisis Response
To prevent the escalation of crises and quickly normalize situations, LG Energy Solution established corporate crisis management regulation. In the event of a crisis, our corporate crisis response system is initiated chaired by company Emergency Committee. The relevant department should immediately share the outbreak of crisis with the Risk Management Committee of the headquarters. When responding to key risks, the first priorities are the life and safety of customers, local communities, and members.
3 Post-crisis Management
Once the crisis is over, the risk management organization monitors the process of implementing measures to prevent recurrence and verifies the results. The organization also lists up inventory in emergencies and impacts, develops scenarios including the decision-making process of the company Emergency Committee, and conducts mock training sessions to improve its crisis response capabilities. Furthermore, we prevent the recurrence of similar crisis by updating our manuals and systems for crisis response and horizontally carrying out improvements.
4 Strengthening Risk Management System
LG Energy Solution acquired certification on the business continuity management system (BCMS, ISO 22301) for the headquarters and domestic manufacturing plant in December 2021. We plan to obtain additional certifications for our overseas business sites by establishing practical risk management frameworks at facility level and enhancing our risk management activities.