LG Chem Supplier Code, Responsible Sourcing Policy and Sustainable Supply-Chain Framework: Establish mineral due diligence, Scope 3 accounting and low-carbon materials controls

What’s Required

LG Chem’s supplier framework is a high-complexity private regulatory system. It combines chemical-sector environmental controls with battery-material supply-chain due diligence and product-carbon data requirements. Unlike a generic supplier code, the framework has strong implications for upstream mining, processing, raw materials, responsible minerals, product carbon footprinting, recycled and bio-based materials, and Scope 3 governance.

The framework is built around:

• LG Chem Supplier Code of Conduct.

• Responsible Sourcing Policy.

• responsible supply-chain programme.

• supplier due diligence requirements.

• OECD-aligned responsible business conduct.

• responsible minerals governance.

• CMRT and EMRT data collection.

• Scope 3 emissions accounting.

• product carbon footprint and customer disclosure requirements.

• LETZero eco-friendly product portfolio.

• recycled, bio-based and biodegradable materials.

• climate and carbon-neutrality strategy.

• supplier audits, visits and corrective action mechanisms.

LG Chem’s responsible supply-chain page states that the company is committed to building a transparent and responsible supply chain that respects human rights, the environment and ethical business practices. It also states that LG Chem established its Responsible Sourcing Policy in 2020 and expanded its scope from minerals to the entire supply chain in 2025, in line with the OECD Due Diligence Guidance for Responsible Business Conduct.

This is a significant governance shift. LG Chem is no longer treating responsible sourcing as only a minerals or conflict-minerals issue. It is expanding due diligence to the wider supply chain, which means suppliers must be prepared to provide risk, origin, environmental, human rights and compliance information across deeper tiers.

1. Supplier Code of Conduct as the contractual baseline

LG Chem’s Supplier Code of Conduct establishes the baseline supplier compliance framework. The code requires suppliers to understand and comply with its requirements and recognises compliance as a significant factor in supplier transactions with LG Chem. It also states that suppliers should cooperate with surveys, company visits and corrective measures requested by LG Chem.

This creates a procurement-enforced compliance system.

Supplier obligations include:

• compliance with applicable laws and standards.

• labour and human rights requirements.

• environmental protection.

• health and safety controls.

• ethical business conduct.

• management systems.

• cooperation with audits, visits and surveys.

• corrective action implementation.

• communication of requirements to employees and suppliers.

• upstream cascade of LG Chem requirements.

The Supplier Code’s acknowledgement structure is important because it turns supplier compliance into a transaction condition. A supplier is not only asked to behave responsibly. It must recognise the code as a material factor in doing business with LG Chem and cooperate with monitoring.

2. Environmental obligations and chemical-sector operating controls

LG Chem suppliers operate in a chemicals and advanced materials context, where environmental controls are technically demanding. Suppliers may provide petrochemical feedstocks, additives, solvents, battery raw materials, packaging, catalysts, industrial equipment, logistics, waste services or processing support.

Supplier environmental obligations may include:

• compliance with environmental laws and permits.

• emissions management.

• hazardous substances control.

• chemical handling procedures.

• air emissions controls.

• wastewater treatment.

• waste and hazardous waste management.

• resource efficiency.

• energy management.

• pollution prevention.

• emergency response capability.

• environmental management systems.

For suppliers in chemicals and battery materials, these obligations are not administrative. They affect site operations, transport permits, product quality, customer claims, worker safety, regulatory compliance and product life-cycle impacts.

3. Responsible sourcing and OECD-aligned due diligence

LG Chem’s Responsible Sourcing Policy is one of the strongest elements of the framework. The policy states that LG Chem uses tools such as the Conflict Minerals Reporting Template and Extended Minerals Reporting Template provided by the Responsible Minerals Initiative to collect information on mineral origin.

LG Chem’s updated Supplier Code states that suppliers must identify, mitigate and resolve supply-chain risks in the production, processing and mining stages of materials supplied to LG Chem. It also states that suppliers are required to develop and implement policies aligned with the OECD Due Diligence Guidance for Responsible Business Conduct and the due diligence targets and regions defined in the annex.

This creates a multi-tier due diligence system covering:

• mining.

• processing.

• refining.

• smelting.

• raw-material sourcing.

• mineral origin.

• human rights risk.

• environmental risk.

• supplier risk mapping.

• corrective action.

• risk mitigation and termination where necessary.

This is particularly material for battery materials and advanced materials because upstream supply chains may include lithium, cobalt, nickel, manganese, graphite, copper, aluminium and other relevant minerals. Suppliers must be able to trace upstream inputs and provide documentation beyond tier one.

4. Responsible minerals and battery-material supply-chain governance

LG Chem’s battery-material and advanced-material businesses create strong exposure to responsible minerals. Suppliers involved in relevant minerals may face heightened due diligence requirements.

Supplier obligations may include:

• CMRT reporting for 3TG minerals.

• EMRT reporting for cobalt, mica and other extended minerals.

• smelter and refiner identification.

• country-of-origin information.

• OECD due diligence implementation.

• risk assessment for conflict-affected and high-risk areas.

• supplier policies on responsible minerals.

• audit evidence from recognised assurance systems.

• corrective action for non-conforming smelters or refiners.

• upstream supplier mapping.

The regulatory logic is clear: LG Chem cannot credibly sell battery materials or advanced materials into electric vehicle, electronics and industrial markets unless mineral origin and responsible sourcing data are reliable. Suppliers become compliance data providers for LG Chem’s customers and regulators.

5. Scope 3 emissions accounting and supplier data expectations

LG Chem publicly states that, given the increasing importance of Scope 3 emissions management and sustainability disclosure demands, it reviewed global standards and calculation boundaries for Scope 3 emissions and applied its own calculation standards to estimate emissions for 11 categories at domestic business sites.

This has direct supplier implications. Scope 3 accounting for a chemicals company depends heavily on purchased raw materials, feedstocks, logistics, capital goods, waste treatment, product use and downstream processing.

Suppliers may need to provide:

• Scope 1 emissions from supplier operations.

• Scope 2 electricity and energy emissions.

• material-specific carbon intensity data.

• feedstock emissions factors.

• product carbon footprint inputs.

• logistics emissions data.

• waste-treatment data.

• renewable electricity evidence.

• process-specific emissions information.

• mass-balance or chain-of-custody records.

• emissions reduction plans.

For strategic suppliers, generic company-level emissions data may not be sufficient. LG Chem may need product-specific or site-specific data to respond to customers seeking lower-carbon chemicals, battery materials, plastics, recycled products or bio-based inputs.

6. Product carbon footprint and customer-facing disclosure pressure

LG Chem operates in value chains where customers increasingly request product carbon footprints. Automotive, electronics, battery, packaging and consumer goods customers need low-carbon inputs and verified data to support their own Scope 3 reporting.

Supplier data may be used to calculate:

• cradle-to-gate product carbon footprints.

• carbon intensity of cathode materials.

• carbon intensity of petrochemical feedstocks.

• emissions factors for plastics and polymers.

• carbon impact of recycled materials.

• carbon impact of bio-based materials.

• logistics emissions.

• customer-specific supply-chain data.

This creates a data architecture obligation for suppliers. They must be able to provide emissions data by material, product family, production site, process route or batch where required. Weak supplier data can undermine LG Chem’s product-level disclosures and customer claims.

7. LETZero, circular materials and low-carbon product supply chains

LG Chem’s LETZero brand integrates eco-friendly materials, including recycled products made from reprocessed waste plastics, bio materials made from bio-based renewable materials and biodegradable materials.

This creates circular and renewable feedstock governance requirements.

Suppliers supporting LETZero or similar portfolios may need to provide:

• recycled feedstock origin data.

• waste-plastic sourcing documentation.

• recycled-content evidence.

• bio-based feedstock origin data.

• certification records.

• mass-balance documentation.

• chain-of-custody information.

• contamination and quality data.

• lifecycle emissions data.

• biodegradable material evidence.

• compliance with customer product specifications.

This is a private regulatory system because circular claims require traceability. A supplier cannot simply state that a material is recycled or bio-based. It must provide evidence that the material origin, accounting method, certification and quality controls support LG Chem’s customer-facing claims.

8. ISCC PLUS and certification-based procurement

LG Chem has used certification systems such as ISCC PLUS for bio-balanced and circular products. Earlier, LG Chem reported that the company acquired ISCC PLUS certifications for bio-balanced products, supporting the competitiveness of green products.

Certification creates additional supplier obligations.

Suppliers may need to support:

• chain-of-custody verification.

• certified feedstock sourcing.

• mass-balance accounting.

• audit evidence.

• transaction documentation.

• sustainability declarations.

• product batch traceability.

• certification renewal processes.

For chemical and plastics supply chains, certification often becomes a market-access tool. Customers may require certified circular or bio-based inputs, and LG Chem must ensure that upstream suppliers can support the certification chain.

9. Supplier audits, monitoring and corrective action

LG Chem’s Supplier Code indicates that suppliers must cooperate if LG Chem requests surveys or visits to audit compliance and must respond to corrective measures based on audit results.

Monitoring may include:

• supplier self-assessments.

• document reviews.

• site visits.

• responsible sourcing questionnaires.

• CMRT and EMRT review.

• environmental and safety checks.

• product carbon data review.

• certification audits.

• corrective action plans.

• supplier requalification.

• escalation for unresolved risks.

High-risk suppliers, including mineral suppliers, battery-material suppliers, raw-material suppliers, chemical suppliers and suppliers in high-risk regions, are likely to face stronger monitoring.

10. Upstream cascade requirements

LG Chem’s supplier governance explicitly extends upstream. The Supplier Code acknowledgement requires suppliers to devote efforts to requesting compliance from their own employees and suppliers. The updated responsible sourcing framework also requires suppliers to identify, mitigate and resolve risks in production, processing and mining stages.

Cascade requirements may include:

• passing LG Chem standards to sub-suppliers.

• collecting mineral origin data.

• obtaining smelter and refiner information.

• collecting emissions data from upstream suppliers.

• validating recycled or bio-based feedstock origin.

• collecting certification evidence.

• implementing corrective action upstream.

• reporting risks and mitigation measures.

• avoiding unapproved or high-risk sourcing channels.

This creates multi-tier private regulation. Upstream miners, refiners, processors, recyclers and feedstock suppliers may not contract directly with LG Chem, but their performance determines whether direct suppliers can remain eligible.

Important Deadlines

Key timelines include:

• 2020: LG Chem established its Responsible Sourcing Policy.

• 2025: LG Chem expanded the Responsible Sourcing Policy from minerals to the entire supply chain, aligned with OECD due diligence guidance.

• 2025: LG Chem published its nineteenth sustainability report, the 2024 Sustainability Report.

• Annual: sustainability reporting and ESG data disclosure cycles.

• Annual or periodic: Scope 3 emissions calculation and disclosure updates, with LG Chem reporting Scope 3 calculation for 11 categories at domestic business sites.

• Ongoing: Supplier Code compliance, supplier surveys, site visits and corrective actions.

• Ongoing: CMRT and EMRT-based responsible minerals data collection.

• Ongoing: customer-driven product carbon footprint and circular materials documentation.

• Long-term: climate and carbon neutrality strategy, including carbon reduction, circular economy and low-carbon product expansion.

Current Status

The framework is active, expanding and increasingly comprehensive. The most important recent development is the 2025 expansion of LG Chem’s Responsible Sourcing Policy from minerals to the entire supply chain.

The framework is strongest in:

• responsible sourcing due diligence.

• responsible minerals governance.

• Supplier Code compliance.

• upstream risk identification and mitigation.

• Scope 3 emissions accounting.

• eco-friendly materials and circular feedstocks.

• product carbon footprint readiness.

• certification-based circular and bio-based products.

It is especially relevant because LG Chem operates at the intersection of chemicals, plastics, advanced materials and battery-material supply chains. These sectors face rising pressure from automotive, electronics and consumer goods customers for verified low-carbon, traceable and responsibly sourced materials.

Penalties for Non-Compliance

Enforcement is procurement-driven.

Potential consequences include:

• corrective action requirements.

• increased audit or survey scrutiny.

• supplier requalification requirements.

• reduced sourcing volumes.

• exclusion from strategic supply programmes.

• loss of preferred supplier status.

• exclusion from circular or low-carbon product supply chains.

• rejection of materials or documentation.

• contract escalation.

• supplier replacement.

• termination for persistent or material non-compliance.

The strongest penalty is loss of commercial access. A supplier unable to provide responsible sourcing, mineral origin, emissions, certification or circularity evidence becomes a risk to LG Chem’s customer relationships and regulatory readiness.

Examples of Known Violations

This analysis does not identify specific public violations by named LG Chem suppliers. Realistic failure modes include:

• incomplete CMRT or EMRT responses.

• failure to identify smelters or refiners.

• lack of OECD-aligned due diligence procedures.

• missing mineral origin data.

• weak environmental or safety controls.

• incomplete Scope 3 emissions data.

• inconsistent product carbon footprint assumptions.

• unsupported recycled-content claims.

• missing chain-of-custody records.

• unverified bio-based feedstock documentation.

• failure to cooperate with LG Chem surveys or visits.

• poor corrective action implementation.

• failure to cascade requirements upstream.

• inconsistent supplier boundary definitions.

These failures can affect supplier eligibility, customer disclosures, product claims and participation in LG Chem’s low-carbon or responsible-sourcing supply chains.

Resources

• https://www.lgchem.com/sustainability/supply-chain/responsible-supply-chain

• https://www.lgchem.com/upload/file/sustainability/LGChem_Code_of_Conduct_for_Suppliers_EN.pdf

• https://www.lgchem.com/upload/file/sustainability/LGChem_Responsible_Sourcing_Policy_EN.pdf

• https://www.lgchem.com/sustainability/sustainability-strategy/esg-data

• https://www.lgchem.com/upload/file/sustainability-reports/2024_LGChem_Sustainability_Report_ENG.pdf

• https://www.lgchem.com/sustainability/sustainability-strategy/eco-product_letzero