Second-Party Opinion Download

Sustainalytics is of the opinion that the LG Chem Green Financing Framework is credible and impactful, and aligns with the four core components of the Green Bond Principles 2018 and Green Loan Principles 2018. This assessment is based on the following:

USE OF PROCEEDS

The four eligible categories for the use of proceeds – (i) Low Carbon Transportation, (ii) Energy Efficiency, (iii) Sustainable Water and Wastewater Management and (iv) Green Buildings - are aligned with those recognized by the Green Bond Principles. Sustainalytics considers that the eligible projects will lead to positive environmental impacts by fostering development and manufacturing of low carbon transport and improved water treatment technologies. Sustainalytics considers that the eligible projects will advance the UN Sustainable Development Goals (SDGs), particularly SDG 6, 7, 9 and 11.

PROJECT EVALUATION/SELECTION

LG Chem’s eligible projects are evaluated and selected by its dedicated Green Financing Working Group (GFWG) based on the established eligibility criteria. The GFWG consists of cross-functional representatives from the Business and Strategy, Planning and Control, Safety and Environment teams while being coordinated by the Finance Department. This process is aligned with market practices

MANAGEMENT OF PROCEEDS

The net use of proceeds will be tracked using LG Chem’s Green Bond/Loan Register, which is managed by its Treasury Team. Pending full allocation, the unallocated proceeds will be invested in cash, cash equivalents, investment grade securities, other marketable securities, short-term instruments or other capital management activities according to the LG Chem’s general liquidity management policies. This process is in line with market practices.

REPORTING

LG Chem commits to report on the allocation and impact of proceeds on the company’s website annually until full allocation of the bond. Allocation reporting will include allocation per eligible category, examples of projects financed by the proceeds, the balance amount of unallocated net proceeds, and the portion of financing and refinancing. The impact reporting will include relevant impact metrics per each eligible project category. Sustainalytics views LG Chem’s allocation and impact reporting as aligned with market practices.