TO MAKE THE WORLDGREENER AND SUSTAINABLE
THROUGH OURINNOVATIVE TECHNOLOGYSAMSUNG SDI 2023 Sustainability Report

SAMSUNG SDI SUSTAINABILITY REPORT 2023

OVERVIEWSUSTAINABILITY MANAGEMENTSUSTAINABILITY MAIN THEMESAPPENDIX

02

ABOUT THISREPORT

Reporting Principles

This Report was prepared in accordance with the Global Reporting Initiative (GRI) Standards 2021, and discloses a range of sustainability data in reflection of theIndustry Classification System of the Sustainability Accounting Standards Board (SASB) and the recommendations of the Task Force on Climate-related Financial
Disclosure (TCFD).

Reporting Period

This Report illustrates Samsung SDI’s sustainability management activities and achievements during the 2022 fiscal year (Jan. 1, 2022 ~ Dec. 31, 2022). This may
extend to the first half of 2023 for the timeliness and materiality of the information contained, and to the recent three years (2020~2022) for some data whose
multi-year trajectory is required to help readers properly understand such data.

Reporting Scope

The scope of this Report spans the economic, social and environmental information of Samsung SDI and its associates. Financial data is stated on a consolidated
basis in accordance with K-IFRS, and annotations were added when variations occurred in reporting scope and boundary.

Reliability of the Report

This Report contains financial data audited by KPMG Samjong Accounting Corp., as well as non-financial data assured by the Korea Management Registrar for its
compliance with the principles of inclusivity, materiality, responsiveness and impact

Reporting Cycle

Reporting cycle ㅣ Annually

Most recent report ㅣ June 2022

For inquiries on this Report, please contact us below: Sustainability Management Office, Business Management Office, Samsung SDI+82-31-8006-3100 ㅣ sustainability@samsung.com ㅣ 150-20, Gongse-ro, Giheung-gu, Yongin City, Gyeonggi Province, Korea [17084]

SAMSUNG SDI SUSTAINABILITY REPORT 2023

OVERVIEWSUSTAINABILITY MANAGEMENTSUSTAINABILITY MAIN THEMESAPPENDIX

03

CONTENTSOVERVIEWSUSTAINABILITY MANAGEMENT

CEO's Message

05

Sustainability Management Strategic Framework

172030 Company Vision

07

Environment Management Implementation System

22

Company Overview
Business Overview

06
08

SUSTAINABILITY MAIN THEMES

Sustainability Management Operational Framework
Risk Management System
Joining Global Initiatives

19
24
26

APPENDIX

1. Infinite Safety

29

Materiality Assessment

87

3. Partnership with Value-Chain Partners and Community

52

Sustainability Performance91

2. Move to Net-Zero

4. Accountability in Value-Chain

5. Credibility in Corporate Governance

6. Transparency in Stakeholder Engagement

39
59
71
81

Financial Performance89

GRI Standards 2021 Index

100

TCFD Index

104

SASB Index
UN SDGs

GHG Verification Opinion

Independent Assurance Statement

103
105
107
109

SAMSUNG SDI SUSTAINABILITY REPORT 2023

04

OVERVIEW
CEO's Message

Company Overview

SUSTAINABILITY MANAGEMENT
2030 Company Vision

SUSTAINABILITY MAIN THEMESAPPENDIX

Business Overview

OVERVIEW

CEO's Message

05

2030 Company Vision

07

Company Overview
Business Overview

06
08

SAMSUNG SDI SUSTAINABILITY REPORT 2023

05

CEO's
Message

OVERVIEW
CEO's Message

Company Overview

SUSTAINABILITY MANAGEMENT
2030 Company Vision

SUSTAINABILITY MAIN THEMESAPPENDIX

Business Overview

Dear Stakeholders of Samsung SDI,
In 2022, we were presented with ever greater uncertainties in the global business

At Samsung SDI, we firmly believe in the value of diversity and inclusion in every

global supply chain disruptions.

religion or nationality is strictly prohibited across all our global operations, and every

landscape amid the sustained COVID-19 pandemic, the spread of protectionism, andNonetheless, all of us at Samsung SDI, from employees to partners, strongly aligned
ourselves towards our commitment to ‘Super-gap’ technology competitiveness, thearea of our business conduct. Any form of discrimination on the grounds of gender,
individual is provided with equal opportunity to pursue growth as one united team.

We look forward to your bountiful encouragement and support as we stride towards

best quality, and profitable qualitative growth, and such worthy efforts allowed us‘making the world greener and sustainable through our innovative technology’ andLast year, we reached yet another significant milestone in laying the groundwork to

Thank you.

to surpass KRW 20 trillion in revenue and post KRW 1.8 trillion in operating profit.

bolster our ESG management in a systematic and ongoing way. To drive our sustain-

ability efforts, we announced our long-term sustainability management strategy andestablished the Sustainability Management Committee within the Board. Moreover,
we declared our commitment to ‘Environment-Friendly Management’ and joined

RE100, a global renewable energy initiative, to do our part in tackling the global climate crisis.

Our top priority for 2023 will be to disseminate ESG management across our supply chains and the whole of our value chain. From this year on, we will disclose our

Scope 3 emissions, other indirect greenhouse gas emissions generated along a company’s value chain, and we will assess ESG risks across all our global operations andsupply chains.

Meanwhile, Samsung SDI will earnestly strive to fulfill our social responsibility for theenvironment, safety and compliance. We will also gain greater trust through promotion of mutually-beneficial cooperation with our partners and a harmonious co-existence with our local communities, genuinely reaching out to our stakeholders on
an ongoing basis.

becoming a global top tier company by 2030.

Yoonho Choi

President & CEO, Samsung SDI

SAMSUNG SDI SUSTAINABILITY REPORT 2023
CEO's Message

06

Company
Overview

Samsung SDI at a Glance

Since its foundation back in 1970,
Samsung SDI produces and sells rechargeable batteries used for electricvehicle, IT device, and Energy Storage

System (ESS) applications as well as
materials for semiconductors anddisplays. We commit to securing super-gap technology through transformation and innovation to shapea sustainable, eco-friendly futuresociety.

Company
nameCEO

Samsung SDI Co., Ltd
Yoonho Choi

Establishment January 1970

150-20, Gongse-ro,
Headquarters Giheung-gu, Yongin City,
Gyeonggi Province, Korea
Total No.
of shares
outstanding(commonshares)Total workers

Shareholders
with 5% ormore
ownership(as of Dec.
31, 2022,
commonshares)

68,764,530 shares

SUSTAINABILITY MANAGEMENTOVERVIEW

Global Network

Samsung SDI’s global network
consists of 31 locations in total,
including the Headquarters, theR&D Center, production facilities and sales bases.

National Pension Service:
5,449,458 shares (7.92%)

BlacKRock Fund Advisors:
3,444,030 shares (5.01%)

MunichDresdenBraunschweig

China

Tianjin
Xi’an
Wuxi

United Kingdom

Korea

Giheung
Cheongju
Gumi

Shanghai
Beijing
Shenzhen
Hongkong

Manchester

1
Production Subsidiaries
12
Sales Subsidiaries/Offices
13
R&D center
5
As of April 2023
31

APPENDIX

Business Overview

Germany

Headquarters

Cheonan
Ulsan
Suwon

USA

Auburn Hills, MI
Kokomo, IN
San Jose, CA
Boston, MA

Japan

Tokyo

Austria

Premstaetten

TaiwanTaipei

Hungary

India

Vietnam

Noida

Goed

Hanoi

Malaysia

Serembanlocations in total

Financial Performance(Based on 2022 consolidated financial statements, unit: KRW 100 million)■ Europe■ Sales■ Operating income■ China■ Net income

201,241■ North America■ Korea

13%

18,08020,394

6%

24%

External Assessments Made on Samsung SDI
1)

2)

Received A in ESG ratingin 2023 for 4 consecutive
years

Listed on the DJSI Worldfor the 18th time in 2022

4)5)

■ Southeast Asia

42%
Sales
지역별
15% Breakdown매출 비율
by Region

30,716

Samsung Electronics:
13,462,673 shares (19.58%)

2030 Company Vision

Company Overview

SUSTAINABILITY MAIN THEMESGLOBAL100
Ranked 63rd in 2023,
listed for 6 consecutive
years

CLEAN200
Ranked 38th in 2023,
listed for 5 consecutive
years

3)

2022 Climate Change
Score: A1) Supervised by MSCI

(Morgan Stanley Capital International)

2) Supervised by S&P Dow Jones andRobecoSAM

3) Supervised by the CDP(Carbon Disclosure Project)4), 5) Supervised by Corporate Knights

SAMSUNG SDI SUSTAINABILITY REPORT 2023

07

2030
Company
VisionSUSTAINABILITY MANAGEMENTOVERVIEW
CEO's Message

Company Overview

2030 Company Vision

SUSTAINABILITY MAIN THEMESAPPENDIX

Business Overview

Samsung SDI established a new 2030 vision to evolve into a global top-tier company by 2030. Everyone at Samsung SDI move towards the vision of ‘To make the world greener
and sustainable through our innovative technology’

VisionStatement

TO MAKE THE WORLD GREENER AND SUSTAINABLE
THROUGH OUR INNOVATIVE TECHNOLOGY
Battery

Electronic
Materials

2030 Global Top Tier
Battery Company

Global Top
Materials Specialist

TECHNOLOGYINNOVATIONPROFITABLEGROWTHOPERATIONALCOMPETENCYSUSTAINABILITY
LEADERSHIP

Secure super-gap
technology anddifferentiated products

Pursue profitable
qualitative growth

Strengthen global operational
competency and create apremier corporate culture

Bolster ESG management
and seek win-win
partnerships

Business
Goal

Mission &Strategy

SAMSUNG SDI SUSTAINABILITY REPORT 2023

08

Business
Overview

SUSTAINABILITY MANAGEMENTOVERVIEW
CEO's Message

Company Overview

2030 Company Vision

SUSTAINABILITY MAIN THEMESAPPENDIX

Business Overview

Automotive Battery
Business SummaryMarket Outlook

tive sales in 2022, Samsung SDI is leading the charge in the transition to xEVs by develop-

war, and inflationary pressure stalled the growth of the overall automotive market. Still

As the sales of xEVs continued to grow rapidly to account for over 10% of global automoing innovative battery technology. We secure super-gap technology competitiveness anddifferentiate products to position ourselves as an xEV battery leader, and supply high-efficiency, high-capacity Li-ion batteries to global automotive OEMs to help minimize theenvironmental impact of internal combustion engine vehicles.

Application
EV

Electric Vehicle (EV)We deploy materials that deliver optimal service life and high-capacity fea-tures and design optimized battery components to pursue innovation in

In 2022, the sustained pandemic, supply chain disruptions caused by the Russo-Ukraine

yet, xEV sales continued to increase to surpass 10% of total automotive sales. In Europe,

tightening carbon emissions regulations drive the continuous growth of the xEV market
while the IRA (Inflation Reduction Act) of the US is expected to spur the nation’s xEV mar-ket. In China, it is forecast that new energy vehicles will make up 30% of new vehicles in

2023. Global EV makers plan to launch a range of new EV models in line with the initiatives
undertaken by key countries to phase out internal combustion engines. Naturally, the xEVmarket will maintain its growth momentum, with annual xEV sales exceeding 46 million
by 2028 to account for nearly 46% of the total automobile market.

extending the driving range of EVs.

PHEV

Plug-in Hybrid Electric Vehicle (PHEV)

As it is essential to strike the right balance between energy density required

for electric-mode driving and power density that supports the engine oper-

Global xEV Battery Demand Outlook1)
xEV battery demand outlook (GWh)ation, we are in constant search for the optimal point of balance by staying
ahead of the competition in developing battery technology.

1,004

2023E

1,520

2024E

2,097

2025E

1) EV and PHEV combined* Source: Samsung SDI forecast (as of May 2023)

2,633

2026E

3,158

2027E

3,664

2028E

SAMSUNG SDI SUSTAINABILITY REPORT 2023

09

Business
Overview

SUSTAINABILITY MANAGEMENTOVERVIEW
CEO's Message

Company Overview

2030 Company Vision

SUSTAINABILITY MAIN THEMESAPPENDIX

Business Overview

ESS Energy Storage System
Business SummaryMarket Outlook

our EV battery business to ESS battery to secure high market shares and deliver reliable

late the economy slowing down amid the continued pandemic, and the Russo-Ukraine

Samsung SDI applies our technology and manufacturing process tested and proven in
product quality. This ensures that we leverage our best-in-industry battery design compe-

tency and standardized modules to create a diverse product portfolio across the utility,commercial & industrial, residential, UPS and telecom sectors and deliver end-to-end ESS
solutions that cater to varying customer needs.

Application

Utility

We contribute to ensuring the stability of power grids in the power supply
system spanning from power generation to transmission and distribution,and to standardizing renewable energy power generation.

InstallationㅣBuildings, factories, etc.

We improve the stability of power operation and the availability of self-consumption by lowering day-time maximum loads in commercial buildings
including office spaces, public institutions, schools and hospitals.

Residential

war heightened interest in energy security to accelerate the global transition to renewableenergy. This resulted in sustained demand growth in ESS installations that are essential
for energy supply/demand management, and the global LiB ESS market is expected toachieve a CAGR of 15%, expanding from 103 GWh in 2023 to 210 GWh in 2028. Notably,
sizable market growth is expected in the US, China and Europe where large-scale, govern-

InstallationㅣSolar/Wind generation plants, substations, etc.

Commercial & Industrial (C&I)

Countries around the world are increasing investments in green infrastructure to stimu-

InstallationㅣDetached and row houses

We ensure 24/7 supply of eco-friendly energy through alignment withment-led green policy initiatives are being undertaken. The US signed the IRA into law tosignificantly increase investment support for ESS projects, and China set a national goalfor ESS installation and is raising the proportion of renewable energy generation. Europe
is also formulating its own plan to support renewable energy through the Green Deal

Industrial Plan. Meanwhile, Korea and Taiwan are planning for government-driven initiatives to distribute utility ESSs, and these emerging markets are also expected to boost inline with expanding datacenter construction and the resulting growth in UPS demand.

Global LiB-ESS Demand Outlook
Total ESS demand outlook (GWh)photovoltaic(PV) power systems. This in turn increases residential energy
self-consumption rates while reducing electric bills.

UPS

InstallationㅣFactories, financial institutions, IT companies (servers), etc.

We help protect data centers from unexpected operational disruptions by

ensuring reliable power quality and continuity while minimizing total power

103

119

137

155

176

210

consumption and reducing facility investments.

Telecom

InstallationㅣBase stations, repeaters

We deliver lifetime performance as well as reduced weight, smaller volume
and higher energy density, and bring a dramatic reduction in maintenanceexpenses through the use of Li-ion batteries.

2023E

2024E

2025E

* Source: Samsung SDI forecast (as of May 2023)

2026E

2027E

2028E

SAMSUNG SDI SUSTAINABILITY REPORT 2023

10

Business
Overview

OVERVIEW
CEO's Message

Company Overview

SUSTAINABILITY MANAGEMENT
2030 Company Vision

SUSTAINABILITY MAIN THEMESAPPENDIX

Business Overview

Small-Sized Li-ion Battery
Business SummaryMarket Outlook

are categorized into cylindrical and pouch forms. These batteries are expanding their ap-

uncertainties across the market, the small-sized Li-ion battery demand for 2023 is fore-

Samsung SDI engages in the development and sales of small-sized Li-ion batteries thatplication into broader areas, powering such mobile devices as smartphones, laptops, andAs the lifting of COVID-19 lockdowns and the resulting global economic downturn add tocast to rise by 20% year-on-year to 16 billion cells1). While the 2022 growth was negative

power tools in line with the growing market needs for portability, ranging from wearablesin the IT sector due to sluggish demand for the three primary devices of smartphones,

fast commitment to technology innovation, we maintain solid market dominance in thedigital transformation progressing at full scale, the growth potential of IoT, metaverse, andand micro mobility. On the back of our quality-first management philosophy and steadglobal small-sized Li-ion battery market.

Application

Small-sized Li-ion batteries are categorized into batteries that power the three major IT

devices of mobile phones, laptops and tablets as well as wireless earbuds and to batteries
that supply power to power tools, e-bikes, e-scooters, electric vehicle(EV)
CylindricalPower tools, gardening tools, vacuum cleaners, e-bikes, e-scooters,
electric vehicle(EV)Pouch

Smartphones, tablets, wearables, wireless earbuds

laptops, and tablets, the total demand is set to grow continuously in line with 5G-enabled

other new market segments, and increases in demand for wireless earbuds and otherwearables. In the power application market, we will witness lackluster demand for power
tools that are driven by the US. Still, mobility electrification will accelerate with the policy
support provided by governments worldwide. EV startups and car OEMs will boost their
EV manufacturing, and demand for micro mobility including e-bikes and e-scooters willrise mainly in Europe, leading the growth of the cylindrical battery market.

Global Small-sized Li-ion Battery Demand Outlook
Small-sized Li-ion battery demand outlook(unit: million)

15,9652023E

18,6232024E

20,9642025E

1) Based on demand in our 2023 business plan
* Source: Samsung SDI forecast (as of May 2023)

22,8882026E

24,29525,309

2027E

2028E

SAMSUNG SDI SUSTAINABILITY REPORT 2023

11

Business
Overview

OVERVIEW
CEO's Message

Company Overview

SUSTAINABILITY MANAGEMENT
2030 Company Vision

SUSTAINABILITY MAIN THEMESAPPENDIX

Business Overview

Electronic Materials
Business SummaryMarket Outlook

we have established our competitiveness in electronic materials business on the strengthpressure, and international conflicts, this will dampen the market demand for electronic

Since the development of EMCs for the semiconductor manufacturing process in 1994,
of our core technology and expert competency. Samsung SDI mainly engages in the development and sales of semiconductor and display materials. Not only do we bolster

our leadership in the established market, but we also remain committed to securing ourcompetitive advantage for such next-generation cutting-edge materials for QD, OLED, EUV
lithography market.

Application

Semiconductor

We produce patterning materials (SOH, SOD, and slurry) used to form semi-

conductor wafer patterns as well as packaging materials (EMC) that protect
semiconductors and chips from the external environment.

Display

Our electronic materials are mainly adopted for LCD, OLED and other dis-play panels. These materials are sold in the form of films or base composite
materials, and include films such as POL (polarizing film), FOCA and process materials such as OLED materials and color Photo Resist (color PR).

As the global economic growth is expected to decline amid the worldwide inflationary

materials in 2023. While positive signals are observed in the semiconductor market fromthe long-term demand perspective in the wake of the emergence of ChatGPT, companies
may find it difficult to exhaust their inventory for the time being amid the sharp drop in

demand, and the related materials market won’t be experiencing sizable growth. The display market is forecast to maintain its negative growth from the previous year or inch up

slightly while OLED-related market growth will be solid in line with the increasing adoption of OLED for IT and TV products and the size of such products becoming ever larger.

Outlook on the Electronic Materials Market with Samsung SDI’s Presence
Semiconductor materials
Display materials(unit: USD billion)

5.2

2023E

7.2

2025E

10.2

2030E

* Source: Samsung SDI forecast (as of May 2023)

10.8

2023E

12.1

2025E

13.5

2030E

SAMSUNG SDI SUSTAINABILITY REPORT 2023

OVERVIEW
CEO's Message

12

Business
Overview

Company Overview

SUSTAINABILITY MANAGEMENT
2030 Company Vision

SUSTAINABILITY MAIN THEMESAPPENDIX

Business Overview

2022 Business Highlight

All-Solid-State Battery

Automotive Battery
Indiana, US

Energy Storage System

Small-Sized Li-ion Battery

Electronic Materials

Securing DC box solutions

Expanding our cylindrical

Leading the market with FOCA

St. Joseph county(GM)Kokomo(STLA)

Completing an all-solid-statebattery pilot line

Further tapping into markets
in the Americas

In March 2023, we completed a 6,500

Samsung SDI partnered with GM (Gen-line at the SDI R&D Center. This facili-

joint venture in the US. With a goal of㎡-sized all-solid-state battery pilot

ty dedicated to all-solid-state battery

manufacturing will drive our efforts
to secure manufacturing technology
as well as producing industry-leading

research outcomes for all-solid-statebattery.

eral Motors) to establish an EV battery

initiating mass-production in 2026,
we will invest more than USD 3 bil-lion to build a plant with over 30GWh
in annual capacity. Following our firstjoint venture formed with Stellantis,
this partnership will create our second

battery production facility in the US tofurther drive our efforts to tap into the
US market.

with best-in-class safety

performance for the SBB

battery line in Malaysia

and initiating the developmentof inorganic photoresists

Samsung SDI secured battery DC box

To cater to the recent growth in cylin-

We launched competitive products on

safety criteria set out in today’s global

invested KRW 1.7 trillion in expanding(Foldable Optical Clear Adhesive) tech-solutions that satisfy the most rigorous

standards. In so doing, we increased
the installed battery capacity within

the SBB (Samsung Battery Box), andintegrated all devices required for operation to improve our competitiveness from the TCO perspective.

drical battery demand, Samsung SDI

our cylindrical battery line in Malaysia.
The 2nd plant where our PRiMX cylindrical battery will be manufactured

broke ground in July 2022 and is set
for completion in 2025.

the strength of our exceptional FOCA

nology, leading the display materials
market in 2022.

We also initiated the developmentof inorganic photoresists (PR) noted
for its potential for sizable growth in
the next-generation semiconductor

market, and are currently engaging insample evaluation.

SAMSUNG SDI SUSTAINABILITY REPORT 2023

13

Business
Overview

SUSTAINABILITY MANAGEMENTOVERVIEW
CEO's Message

Company Overview

2030 Company Vision

R&D

SUSTAINABILITY MAIN THEMESAPPENDIX

Business Overview

R&D Approach

R&D Organizational Systemsafe products, Samsung SDI is proactively engaging inwithin respective business divisions to reinforce its global technology leadership through close collaboration across busi-

In response to the growing needs for eco-friendly and
R&D to build differentiated technology competitive-

ness. We also drive our R&D efforts to move ahead inembracing new products and technologies with a focus on battery, IT devices, and semiconductor/display
electronic materials. Not only do we set the trend in the

rapidly-evolving technology landscape, but we strive tosecure future growth drivers. Furthermore, our R&D op-

erations aim to bolster our expertise in researching anddeveloping battery materials and to contribute to ESG
management by further exploring recyclable materials
to ensure the reliable supply of raw materials.

R&D Expenditures1)

8,083(unit: KRW 100 million)

8,776

10,764

Samsung SDI operates the SDI R&D Center tasked with establishing platform performance as well as R&D organizations
ness divisions. Small-Sized Li-ion and Automotive and ESS Business departments are located at the Giheung worksite toimprove efficiency in battery development. The Electronic Materials Business has moved into the Samsung Future Technology Campus to generate synergy through joint material R&D endeavors. To tailor our R&D on new battery technology todifferent regions of the world, we opened overseas R&D centers in Munich, Germany (SDIRE, SDI R&D Europe) in July 2022,

in Boston, the US (SDIRA, SDI R&D America) and in Shanghai, China (SDIRC, SDI R&D China) , paving the way to strengthen
our global R&D capabilities.

R&D Organizational Structure

Organization

Short-term,
product-driven

SAIT

SDI Development Office

SDI R&D Center

Develop products

Secure platform performance

Research future battery
technology

Product development forcommercialization

Next-generation materials &technology platform

Frontier research & new
business technology seeding

Function
R&R

Mid/long-term,
innovation-driven*Samsung Advanced Institute of Technology

Open Innovation

Our strategic industry-academia cooperation program aims to help Samsung SDI secure next-generation battery technol2020

2021

2022

1) Excluding governmental subsidies, on a consolidated basis

ogy and nurture top-notch talent. The second such program spanning 2022 to 2026 welcomed KAIST as a new member in
addition to Seoul National University, POSTECH, Hanyang University, Sungkyunkwan University, and UNIST who attended

the first program. Besides, we continue to partner with domestic and overseas universities leading in battery research to
set us apart from the competition in technology development while operating R&D centers in the US, Europe and China toreinforce our R&D capabilities.

SAMSUNG SDI SUSTAINABILITY REPORT 2023

14

Business
Overview

SUSTAINABILITY MANAGEMENTOVERVIEW
CEO's Message

Company Overview

2030 Company Vision

SUSTAINABILITY MAIN THEMESAPPENDIX

Business Overview

Battery R&D Activities
All-Solid-State Battery

Samsung SDI is developing all-solid-state batteries which deploy solid electrolytes in place of liquid

ones normally used for conventional batteries with an aim to improve battery safety and energy density.
With our success in designing and synthesizing solid electrolytes, we have led the way in technology

development by manufacturing all-solid-state battery prototypes. We also developed anode-less allsolid-state battery technology with improved cycle life through the adoption of independently-config-

ured solid electrolyte materials and lithium anodes to demonstrate best-in-industry energy density andperformance.

Our 6,500㎡-sized S-Line initiated its construction at the SDI R&D Center in March 2022 as our all-solid-

state battery pilot line and completed in March 2023. This pilot line will enable us to start the productionof small-sized sample cells and conduct performance, materials, parts, and process tests. We will secure

the technology to manufacture larger cells and scale up our manufacturing towards the commercialization of all-solid-state battery.

Cobalt-free Battery

Cobalt, a key raw material for battery production, is instrumental in ensuring battery safety and perfor-

mance. Its high prices and geographical concentration, however, also gives rise to supply/demand risk.
To mitigate such risk, we are exploring cobalt-less cathodes with reduced cobalt content or cobalt-freecathodes for our high-capacity battery production. Samsung SDI is developing NMX material which
does not contain cobalt and still retains the strengths and basic properties of existing cathode materials
to the fullest possible extent. Applying NMX that is eco-friendly and price-competitive while mitigating
the risk of raw material supply/demand for battery mass-production will surely assist Samsung SDI in

Patent Management

Samsung SDI leverages patents to safeguard our technology and develop
market-leading products and services while managing patent-related risks

that may occur in business conduct. We proactively file and register our patent applications on our proprietary technology across major countries in con-sideration of our markets and production locations, and prevent technology
associated with trade secrets from being leaked by registering such technology as trade secret and managing them accordingly. We have remained steadywith our patent registration efforts since the early days of business to establish a wide-ranging patent portfolio covering the full spectrum of rechargeable

battery and electronic materials, and have put our patents to work in bringing
market-leading innovative products to market. As to next-generation technology, not only do we develop our internal technology capabilities, but also

partner with leading universities and research institutes in Korea and over-seas to secure patents in promising future technology areas. For exceptional
external patents, we increase our freedom to operate either through patent
licensing or patent acquisition. Meanwhile, we minimize patent risk throughrigorous verification of competitor patents in the product development process. Our patent competitiveness gained as such ensures that we continue

and expand stable business relationships with our customers and suppliers.
As of the end of 2022, Samsung SDI’s pool of patents included 5,782 patents in
Korea and 13,415 patents overseas.

securing competitiveness in the EV and ESS battery markets.

Patents Registered on a Cumulative Basis

Battery Recycling

Korea

The burgeoning EV market will naturally lead to increases in the generation of end-of-life batteries,
which draws our attention to minimizing the resulting environmental impact. To expand resource reclamation through battery recycling, we opened the Recycling Research Lab exclusively responsible forresearching ways to recycle end-of-life batteries within our R&D Center in May 2022. Work is on-going

to increase the recovery of battery materials and reclaim eco-friendly materials, and the Lab will also
engage in technology cooperation with partners and in industry-academia collaborations to develop

new recycling technology. This, in turn, will help us continuously raise the proportion of recycling suchcore battery raw materials as cobalt, nickel, and lithium.

Country

US

China

Japan

EuropeOthers

Total

Unit

cases

cases

cases

cases

2020

5,070

4,022

2,038

1,410

2021

5,231

3,976

2,042

1,336

2022

5,782

4,107

2,326

1,435

cases

4,113

4,410

4,743

cases

17,636

17,73519,197

cases

983

740

804

SAMSUNG SDI SUSTAINABILITY REPORT 2023

15

Business
Overview

SUSTAINABILITY MANAGEMENTOVERVIEW
CEO's Message

Company Overview

2030 Company Vision

SUSTAINABILITY MAIN THEMESAPPENDIX

Business Overview

Advancing the smart factory initiative

Samsung SDI has consistently advanced the smart factory initiative to leverage auto-

process does not affect product quality. Work is also underway to render our system

duction efficiency and product quality. The Manufacturing Execution System (MES)

their failure and take preventive maintenance measures. Going forward, Samsung SDI ismation systems in boosting our manufacturing competitiveness by improving our probrings dramatic improvements for large, high-speed data processing. We developed

the next-generation MES optimized for EV battery production, and have rolled out
this system across our entire global operations starting with new locations in 2022. We

also expanded factory logistics throughout the entire process ranging from the raw
material warehouse to shopfloor and the finished goods warehouse and are advancing ATS (Automated Transfer System) functionality to improve transfer efficiency. We

ultimately aim for unmanned plant operations. With this goal in mind, we equipped
all our locations with a system to monitor production operations in real time to au-

tomatically control equipment so that worker-induced variation in the manufacturing

Parts(materials)’
quality information

Facilityof equipment control and quality analyses through AI-enabled big data analytics and toleverage digital twin technology for factory logistics forecasting and production optimization simulation throughout the entire lifecycle from raw materials to finished products. Inline with the addition of new overseas locations to our global network, we provide immersive job training enabled by the application of VR/AR and work to establish a real-time remote collaboration system to help our shopfloor staff with capacity building. In so doing,

we aim to establish smart factories optimized for battery production and continuously
boost our manufacturing competitiveness in the process.

Domestic and overseas
production facilities

Quality

Production
simulation

Product
simulation

Development/Design
Parts/materials
부품/소재information정보

implementing our intelligent smart factory strategy to improve the accuracy and speed

Battery manufacturing plant

Development/Design
Partners

functionality more intelligent to detect the operational status of equipment to predict

Design/spec Information

Plant logistics

Logistics
simulation

Digital Twin (Virtual factory)

Facility

Quality

Data Lake, AI analysis,
Digital Twin analysis

Parts(battery)’quality information

Customers

Operation
Optimization

Plant logistics
Manufacturing/Quality
Information

Customers’ design
information

SAMSUNG SDI SUSTAINABILITY REPORT 2023

16

OVERVIEW
Sustainability Management Strategic Framework

SUSTAINABILITY MANAGEMENT
Sustainability Management Operational Framework

SUSTAINABILITY MAIN THEMES
Environment Management Implementation System

APPENDIX
Risk Management System

Joining Global Initiatives

SUSTAINABILITY MANAGEMENT
Sustainability Management Strategic Framework

17

Environment Management Implementation System

22

Sustainability Management Operational Framework
Risk Management System
Joining Global Initiatives

19
24
26

SAMSUNG SDI SUSTAINABILITY REPORT 2023

OVERVIEW
Sustainability Management Strategic Framework

17

Sustainability
Management
Strategic
Framework
Value-chain

Risk

SUSTAINABILITY MAIN THEMESSUSTAINABILITY MANAGEMENT
Sustainability Management Operational Framework

Environment Management Implementation System

APPENDIX
Risk Management System

Joining Global Initiatives

Managing Our Value Chain from the ESG Viewpoint

Conducting rechargeable battery business is associated with a plethora of ESG issues across the entire value chain. This presents both opportunities to create eco-friendly value in the productuse phase and non-financial risks that may occur in other phases of the value chain. To respond to such risks and opportunities, Samsung SDI establishes and implements its sustainability
management strategy to consistently deliver greater value to internal and external stakeholders.

Raw material mining and manufacturing

Battery manufacturing

・Geographic concentration of key raw
materials with high ESG risks1)・Increasing business impact from supply
chain ESG risk

・Stronger demand for calculating anddisclosing product carbon footprint
・Expanding regulations on workplace labor/human rights issues

Need to establish a supply chain (including our own worksites)
due diligence/third-party verification system

Manufacturing of finishedproducts and product use

・Customer demand to increase the use ofrenewable energy
・Growing demand for better productquality in line with increasing social issues
raised in relation to battery safety

Disposal (resource circulation)

・Increasing demand for raw material
recovery technology and the quality ofrecycled raw materials
・Required to disclose the ratio of recycled
metal usage

Need to reduce greenhouse gas emissions and product carbon footprint

Need to develop technology to reclaim raw materials from end-of-use batteries and scraps and to input recycled raw materials
back into the mass-production process
・Use products as a key tool to create a
net-zero society through increased global
demand for eco-friendly mobility andthe expanded ESS installations for energy
supply/demand management

Opportunity

1) U.S. Geological Survey, 2022, Mineral commodity summaries 2022: U.S. Geological Survey

・Reduce raw material costs by establishinga scrap recovery system and end-of-lifebatteries closed-loop process

SAMSUNG SDI SUSTAINABILITY REPORT 2023

OVERVIEW
Sustainability Management Strategic Framework

18

Sustainability
Management
Strategic
Framework
Corporate·business
aspiration

Standards for
employee’s
decisionmaking andbusiness conduct

Areas of Action to
Attain the Vision andStrategic Approaches

SUSTAINABILITY MAIN THEMESSUSTAINABILITY MANAGEMENT
Sustainability Management Operational Framework

APPENDIX

Environment Management Implementation System

Risk Management System

Joining Global Initiatives

Sustainability Management Strategic Framework

In March 2022, Samsung SDI established the vision of becoming a ‘Super-gap ESG IMPACT Leader’ and six focus areas(I, M, P, A, C, T) to secure sustainability leadership.

Super-gap ESG IMPACT Leader

VisionBUILT-IN

Strategic
Approach

Improve productcompetitiveness throughenvironmental & social
value embedded into
products

Infinite Safety

Move to Net-ZeroOccupational Health & Safety

Product Safety

LOCK-IN

Strengthen value chain
partnerships throughESG dissemination
along supply
chains

WITH-IN

Create sustainable social
value throughstakeholder-centered
management

P

Accountability in
Value-Chain

Credibility inTransparency in

Action for Climate Crisis

Value-Chain Partnership

SCM Risk Management

Advanced BOD

Proactive Communication

Circular Economy

Togetherness with Community

Labor/Human Rights

Ethics & ComplianceTransparent Disclosure

Focus
Area

artnership with
Value-Chain Partners
and Community

Corporate
Governance

Stakeholder
Engagement

SAMSUNG SDI SUSTAINABILITY REPORT 2023

19

Sustainability
Management
Operational
Framework

OVERVIEWSUSTAINABILITY MANAGEMENT

Sustainability Management Strategic Framework

Sustainability Management Operational Framework

SUSTAINABILITY MAIN THEMES
Environment Management Implementation System

APPENDIX
Risk Management System

Joining Global Initiatives

Sustainability Management GovernanceSamsung SDI created the Sustainability Management Committee under the Board of Di-

rectors in January 2022, and Sustainability Management Office under the direct leadershipof the Chief Financial Officer(CFO) in February to bolster our company-wide sustainability

management governance. We also launched the Sustainability Management Council as a

C-level consultative body led by the CEO to reinforce the role of top management. In early
2023, we created the ESG Part under the support team of each business division to disseminate ESG management at each level of the Company.

Chair of the
Sustainability
Management
Committee

Mee Kyung Lee

The Sustainability Management Office serves to support the operation of the Sustainability
Management Committee and the Sustainability Management Council, and works closelywith the ESG Part of respective business divisions, overseas corporations, and relevant departments to expand and bolster sustainability management across the board.
BOD

Sustainability Management
Committee1)

Management

Sustainability Management
Council2)

Sustainability
Management Office

ESG Working Group

Business
Division

Overseas
Corporation

Relevant
Department

ESG Part
1) Convene on a semi-annual basis in principle, and may convene more frequently on an as-needed basis
2) Convene on a quarterly basis

CFO and Head of
the Sustainability
Management
OfficeJong Sung Kim

At the core of sustainability management lies ‘sincerity’, and thegoal of sustainability management is to pursue ‘sustainable prosperity’. This means that we not only reduce carbon emissions andprotect the environment but also commit to innovation to simultaneously elevate social value and economic value. Samsung SDI defined a new vision in 2022 to emerge as a ‘global top-tier company
in 2030’ and presented our key strategies to realize this vision thatare anchored on ESG management along with ‘Super-gap’ technology competitiveness, the best quality, and profitable qualitative
growth. Our sustainability reports drive our efforts to transparently
communicate our performance to build trust with stakeholders
while identifying potential risk and opportunity and reflecting theminto our management strategy. We will go beyond merely abiding
by external regulations for ESG management towards building
a corporate culture that aligns the whole of the organization toachieving the Net Zero 2050 initiative, doing our part in advancing
sustainability for the entire planet earth.
ESG leadership is absolutely essential in achieving our company-wide
2030 vision ‘to make the world greener and sustainable through ourinnovative technology’. Samsung SDI engaged in a wide spectrum ofactivities to bolster ESG management for the past year, and will continue with such activities in the years ahead. In the Environmental
area, we joined the RE100 to contribute to the global commitment tocombat the climate crisis, and are stepping forward with our project
undertakings to maximize the impact of our efforts for GHG emissions
reduction and resource circularity. In the Social area, we are working
to promote the safety and human rights of our employees, establish
a culture of diversity and inclusion, ensure ESG management for partners, and perform supply chain due diligence, fulfilling our corporatesocial responsibility in so doing. In the Governance area, we continue
to advance our Board of Directors by improving its diversity, expertise,and independence while bolstering ethics and compliance management. As the head of the Sustainability Management Office, I will domy utmost to make ESG management a key factor for Samsung SDI’s
unrivaled competitiveness.

SAMSUNG SDI SUSTAINABILITY REPORT 2023

20

Sustainability
Management
Operational
Framework

OVERVIEW
Sustainability Management Strategic Framework

SUSTAINABILITY MAIN THEMESSUSTAINABILITY MANAGEMENT
Sustainability Management Operational Framework

Environment Management Implementation System

APPENDIX
Risk Management System

Joining Global Initiatives

Activities of the Sustainability Management Committee in 2022

Activities of the Sustainability Management Council in 2022

Date

Date

Agenda・Appointing the Chair of the Sustainability Management Committee
・Reporting the sustainability management action plan for 2022

Apr. 26, 2022

- Establishing ESG strategy, aligning the sustainability management
implementation system, increasing recycling, etc.

・Reporting the sustainability report publication plan in 2022
・Reporting IR trends

Jul. 4, 2022

Jul. 28, 2022

・Joining the UN Global Compact

・Reporting the result of sustainability report publication

・Reporting the progress made in preparation to join the RE100- Renewable energy transition goal, net zero status of customers, etc.

・Reporting IR trends
・Joining the RE100- Simulating the attainment of the RE100 goals, worksite-specific RE100
goals, etc.

・Reporting strategic tasks for environmental management- Goals and plans for each of the environment management eight tasks

・Reporting UNGC-related action plans- Top management’s public endorsement, ESG due diligence on worksites

Oct. 25, 2022

and supply chains

・Reporting the key achievements of ESG management in 2022

- Joining the RE100, committing to environmental management,
conducting supply chain due diligence, etc.

・Reporting IR trends- Share prices, key investor interests, etc.

・Mid/long-term sustainability management strategy
・Sustainability management action plan for 2022

・Impact of EU’s environmental regulations on battery businessJul. 13, 2022 ・Progress made by the environmental management taskforce team・Publication of the sustainability report- Share prices, shareholder status, key investor interests, etc.

- Share prices, key investor interests, etc.

Sep. 8, 2022

Arp. 13, 2022

AgendaOct. 13, 2022

・ESG management lectures provided by external lecturers

・Sustainability management performance in 2022 and key sustainability
management plans for 2023

・Progress made by the environmental management taskforce team

SAMSUNG SDI SUSTAINABILITY REPORT 2023

21

Sustainability
Management
Operational
Framework

OVERVIEW
Sustainability Management Strategic Framework

SUSTAINABILITY MAIN THEMESSUSTAINABILITY MANAGEMENT
Sustainability Management Operational Framework

Environment Management Implementation System

APPENDIX
Risk Management System

Joining Global Initiatives

Incorporation of ESG Performance in Executives andOrganizations Assessment

Company-wide ESG Training

our ESG management performance and reinforce the top management’s responsibility.

triates at overseas corporations on importance of ESG management and Samsung SDI’s

We have assessed ESG performance on all our executives since 2022 to effectively manage

Samsung SDI provided online training twice in 2022 to domestic employees and expa-

In setting individual MBOs for executives at the beginning of each year, ESG Index is in-

mid/long-term strategy for ESG management. This training was completed by 6,310

cluded in their KPIs, and their ESG performance is incorporated in the year-end executive

performance appraisal outcomes, which are aligned with top management remunerationaccordingly. In order to elevate ESG executive capabilities by business unit, we are also

preparing to share ESG goals, measure and assess ESG performance by organization, andplan to assess and align the with financial incentives.

employees out of 6,658 and by 6,281 employees out of 6,563 in the first and second half

respectively. This served to raise their understanding of ESG management and build com-pany-wide consensus on Samsung SDI’s ESG management. We plan to make efforts toraise employees' awareness of ESG management in various ways.

Samsung SDI ESG Training
DateFirst half of2022

Training Content

・Basic ESG training- Meaning and origin of ESG management- Necessity of ESG management

・Samsung SDI’s mid/long-term strategy for ESG management
Second half of2022- External ESG environment- SDI’s mid/long-term ESG strategy: Vision, strategic approach,focus areas, operational system- SDI’s ESG management implementation task: Action for climate crisis,
Circular economy, SCM risk management, Labor/human rights,
Togetherness with community, Advanced BOD

SAMSUNG SDI SUSTAINABILITY REPORT 2023

22

Environment
Management
Implementation System

OVERVIEWSUSTAINABILITY MAIN THEMESSUSTAINABILITY MANAGEMENT

Sustainability Management Strategic Framework

Sustainability Management Operational Framework

APPENDIX

Environment Management Implementation System

Risk Management System

Joining Global Initiatives

Promotion of Environment Management Strategy

To recognize the severity of climate change and the environmental crisis and join in on the concerted efforts to rise to such challenges, we launched a company-wide environmental management taskforce in January 2022. We also publicly committed to environmentally friendly management to implement strategic tasks for environmental management while joining the
RE100 in October 2022. We are undertaking eight strategic tasks under the two overarching themes of ‘climate change adaptation’ and ‘resource circularity’, and review progress made foreach task on a quarterly basis through the Sustainability Management Council supervised by the CEO. Tasks under Action for Climate Crisis include fully transitioning to renewable energy,
expanding products certified to carbon footprint standards, reducing direct GHG emissions, and switching to zero-emission vehicles for our entire corporate fleet vehicles.

Samsung SDI’s Strategic Task for Action for Climate Crisis

Action for Climate Crisis

ThemesTasks

100% Transition to
Renewable Energy

Expanding Carbon
Trust-certified products

Reducing direct
GHG emissions

Shift to zero-emission vehicles
for all business vehicles

Fully shift to renewable energy
power for all worksites by 2050
through the increased useof renewable energy at key
locations

Expanding Carbon
Trust-certified products bymeasuring and reducing ourcarbon footprint

Reduce direct GHG emissions
by lowering LNG use

Make a 100% switch tozero-emission vehicles poweredby Samsung SDI batteries forbusiness vehicles by 2030

Transition to renewable energy

Carbon Trust-certified products
on a cumulative basis

Direct GHG emissions
reduction targets

Transition to zero-emission
vehicles

26%

68%

76%

100%

Targets

2023

2024

2025
2023

2025

2030

2050

2products■ Reduction target(Unit: 10 kiloton)

40%

100%

2023

2025

2030

24

4products
8products

20%

1

2023

4
2025

2030

SAMSUNG SDI SUSTAINABILITY REPORT 2023

23

Environment
Management
Implementation System

OVERVIEWSUSTAINABILITY MAIN THEMESSUSTAINABILITY MANAGEMENT

Sustainability Management Strategic Framework

Sustainability Management Operational Framework

APPENDIX

Environment Management Implementation System

Risk Management System

Joining Global Initiatives

Promotion of Environment Management Strategy

Under the resource circularity theme, we are working to expand the recovery of resources through battery recycling, minimize waste to landfill, reduce water consumption through increased
water reuse, and minimizing the use of disposables. Such activities to maximize resource circularity will help us establish an eco-friendly ecosystem.

Samsung SDI’s Strategic Task for Circular Economy
Circular Economy

ThemesTasks

Expanding battery
recycling

Minimizing the landfill ofwaste

Use of recycled metals

Establish a closed-loop systemfor process scraps andend-of-life batteries andexpand the use ofrecycled metals

4%

12%

22%

Achieve Zero Waste toLandfill certification byminimizing waste tolandfill

Reducing water
consumption

Reduce water
consumption byincreasing reuse

Minimize the consumption of
single-use products

Worksites with ZWTL Platinum
Validations

Reuse of water

Reduction of the use of
disposables and plastics

1) All domestic worksites2) All domestic and overseas
worksites(six domestic worksites andsix overseas corporations)

26.2%

31.7%

45.4%

Reduce the use of
single-use products andplastics to zero

80.0%

zero

Achievedisposables
and plastics used at the in-housecafeteria and office spaces

12

Targets

2022

6

2023

Convert single-use cups tomulti-use cups for storesoperating at worksites

2023

2025

2030

20231)

20252)

2023

2025

2030

2050

SAMSUNG SDI SUSTAINABILITY REPORT 2023

24

Risk
Management
SystemOVERVIEWSUSTAINABILITY MAIN THEMESSUSTAINABILITY MANAGEMENT

Sustainability Management Strategic Framework

Sustainability Management Operational Framework

Environment Management Implementation System

Company-wide Risk Management System

APPENDIX
Risk Management System

Joining Global Initiatives

Samsung SDI’s Board of Directors comprehensively manages a range of risk that may oc-

In addition, we build company-wide consensus on our key risks to create a culture ofand makes major decisions. We established an internal control system for systemic risk

to risk in their own working environment. Risk factors associated with product safety

cur in the business environment concerning operations, finance, and workplace safety,

management to specify area-specific risk policies and potential risk categories. Responsible departments engage in preemptive management and regular assessment for respective risks, and the results and response strategies are eventually reported to the Board of
Directors either through the Management Committee or the Sustainability Management

Committee. Our key business has changed in its nature to win large-scale project orders
and supply our products over extended periods of time, and it is increasingly paramountthat we manage potential risks in the order-landing and supply phases. This prompted
us to create and operate the Risk Management Team as a dedicated organization for thesystemic management of project-related risks. Our risk management function for respective business divisions is structurally independent of business departments and is operated as such.

risk management at all levels so that our employees identify and preemptively respond& quality, injuries, and compliance are incorporated in executive and manager performance appraisal metrics, and appraisal outcomes are reflected in determining theircompensation. Employees, who immediately report quality risk that may arise through-out our entire operations spanning manufacturing, purchasing, and sales, are recognizedwith the Quality Hero award to encourage proactive risk identification and reporting. We

has operated the S-Partner system to monitor and manage ESG risks that may occur inthe supply chain, and to provide a safe workplace, our system allows employees to immediately report potential risk factors that may give rise to injuries. For compliance risk,

our Compliance Program Management System (CPMS) assists employees in obtaining
information on risk prevention themselves and submit their whistleblowing reports forwork-related compliance issues.

BOD
Management Committee

Business Management Office(Planning Team, Finance & Accounting Team, Risk
Management Team, Financial Management Team)

Sustainability Management Committee1)

Quality Assurance
Office, Purchasing
Team, HR teamSustainability
Management Office

Purchasing Team,
Sustainability
Management Office

Global Safety &Technology Center,
People teamCompliance Team,
Legal & IP Team,
Audit Team

Response to climatechangeSupply chain ESG
management

Safety, infectious
diseases, etc.

Ethics & Anti-Corruption,compliance, information
security, etc.

New business,
contract-winning,
investment, etc.

Market, credit,
liquidity, etc.

Quality, supply/
demand of raw
materials, security, etc.

Strategic Risk

Financial Risk

Operational Risk

1) Convene on a semi-annual basis in principle, and may convene more frequently on an as-needed basis

Non-financial Risk

SAMSUNG SDI SUSTAINABILITY REPORT 2023

25

Risk
Management
SystemOVERVIEW
Sustainability Management Strategic Framework

SUSTAINABILITY MAIN THEMESSUSTAINABILITY MANAGEMENT
Sustainability Management Operational Framework

Environment Management Implementation System

APPENDIX
Risk Management System

Joining Global Initiatives

Key Risk Impact and Our Response
Risk

Definition and Description

Disruptions in the ・A surge in demand for products/services– EV, ESS, etc. - that contribute to Net-Zero society
supply/demand
may trigger increases in raw material pricesof key raw
・Competition is accelerating in supply/
materials

demand as the reserve of mineral resources isconcentrated in specific geographies and such
resources are supplied by a handful of companies

Supply chain risk
associated with
the IRA (Inflation
Reduction Act) of
the US

Demand forincreasing
recycled content
for battery
production

Business Impact

・Rising raw material prices and intensifying competition in supply/demand ・Secure raw materials in the mid/long-termof raw materials give rise to increasing battery manufacturing costs, andthrough J/V with key raw material partners,
this may impact our financial performance. When such risks are present for
equity investment, LTA and other diverse
long time, this may lead to price increases for EVs and others and dampen
meansdemand on the end user side
・Recycle key metals reclaimed from end-oflife batteries in collaboration with partners
who possess top-notch battery recycling
technology

・The IRA took effect, stipulating that tax breaks
・We need to significantly increase the proportion of battery components
are available for EVs that meet a set proportion of
manufactured in North America for our battery products to be sold in thebattery components and critical minerals coming
US (100% in 2029 and afterwards) and the proportion of critical minerals
from the US or countries which signed an FTA withsourced in the US or countries with an FTA with the US or recycled in North
the US
America (80% in 2027 and afterwards)
・In particular, EVs that containing just a portion ofcritical minerals or materials sourced from China
and other ‘countries of concern’ do not quality for
subsidies and tax breaks

・Currently, our supply chains include Chinese partners, and it is urgent
to diversify our supply chains for graphite whose global supply is mostly
dependent on China

・Critical minerals – lithium, cobalt, nickel, andgraphite – that are consumed as battery raw
materials are resources that can’t be extracted
indefinitely and are giving rise to water pollution,soil contamination, GHG emissions, and otherenvironmental issues in the extraction andrefining process

・The proposed Batteries Regulation of the EU regulates the minimum
levels of recovered nickel, cobalt, lithium, and other critical minerals used
for battery production* 96 months after the Regulation comes into force: 16% for cobalt, 6% forlithium, 6% for nickel* 156 months after the Regulation comes into force: 26% for cobalt, 12% forlithium, 15% for nickel

・As such, the demand is growing to recycle key
battery raw materials, and EU and other countries
are tightening their regulations

Our Response

・Failure to comply with the above requirements may lead to serious
damage to our orders and sales

・To cater to global regulations governing resource circularity andstakeholder needs, customers strongly demand that battery companies
increase the recycling of cobalt, nickel, lithium, and other key battery raw
materials as a precondition in awarding orders

・Failure in abiding by the proposed EU Batteries Regulation and meetingcustomer demands for recycling will lead to decreases in orders and sales,
which makes it imperative that we raise the recycled content of key battery
raw materials

・We will meet the requirements concerning
the proportion of battery components by
establishing battery plants in the US andencouraging our key partners to enter the
North American market
・As to critical minerals, work is underway
to develop and implement detailed plans
to diversify our sourcing across North
America and US’ FTA partners while
reducing our reliance on China

・We are building a closed-loop system toreclaim cobalt, nickel, lithium and otherraw materials from the scraps generated
from the manufacturing process inpartnership with external companies
specializing in this specific field, and are
expanding this system across our overseas
operations
・To recover raw materials from end-of-lifebatteries that are disposed of, we will
partner with customers to establish an
end-of-life battery recovery system

SAMSUNG SDI SUSTAINABILITY REPORT 2023

26

JoiningGlobalInitiatives

OVERVIEW
Sustainability Management Strategic Framework

SUSTAINABILITY MANAGEMENT
Sustainability Management Operational Framework

SUSTAINABILITY MAIN THEMES
Environment Management Implementation System

APPENDIX
Risk Management System

Joining Global Initiatives

Samsung SDI voluntarily engages wide-ranging global initiatives to bolster sustainability management. This allows us to share ideas and take action on a host of topics, from renewableenergy and social responsibility to battery value chain, conflict minerals and ecosystem protection. Going forward, Samsung SDI will cement our ESG leadership on par with global standards in the Environmental, Social, and Governance areas.

˙RE100 (Renewable Energy 100%)

Samsung SDI joined RE100 in October 2022 and committed to transitioning to fullrenewable energy by 2050. We aim to achieve RE100 at all overseas corporations by2025, and at all domestic operations by 2050.

˙UNGC (United Nations Global Compact)

Samsung SDI joined the UN Global Compact to strengthen corporate social re-sponsibility in July 2022, and enunciated the 10 UNGC principles in the areas ofhuman rights, labor, environment, and anti-corruption.

˙GBA (Global Battery Alliance)

We joined the GBA that aims to establish sustainable battery value chains in March

2023. We will participate in the GBA’s Battery Passport development efforts to thoroughly prepare for the battery passport which is expected to become mandatory.

˙CDP Supply Chain

Samsung SDI joined the CDP Supply Chain in March 2023. This allows us to es-

˙RMI (Responsible Minerals Initiative)

Samsung SDI joined the RMI (Responsible Minerals Initiative) to make concerted ef
ef-

forts with the global community to improve mineral sourcing practices in May 2020.
As a member of the RMI, we step up our efforts to make improvements on supply
chain due diligence.

˙‘Cobalt for Development’ Project

In September 2019, Samsung SDI partnered with Samsung Electronics, BMW, andBASF in undertaking the Cobalt for Development Project for the betterment of working conditions and communities in the vicinity of cobalt mines in the Democratic Republic of the Congo.

˙Ban on Deep Seabed Mining Initiative

In March 2021, Samsung SDI became the first in the battery industry to call for mor-

atoriums on deep seabed mining (DSB) in conjunction with BMW, Volvo and Google
among others to protect the marine ecosystem.

tablish a system to secure greenhouse gas emission information of value chain
partners.

˙Joined in 2022 and 2023

˙Joined in 2021 and before, and continue to engage

SAMSUNG SDI SUSTAINABILITY REPORT 2023

27

OVERVIEW
1. Infinite Safety

2. Move to Net-Zero

SUSTAINABILITY MANAGEMENT
3. Partnership with Value-Chain Partners and Community

APPENDIXSUSTAINABILITY MAIN THEMES
4. Accountability in Value-Chain

5. Credibility in Corporate Governance

6. Transparency in Stakeholder Engagement

SUSTAINABILITY MAIN THEMES
1. Infinite Safety29

3. Partnership with Value-Chain Partners and Community

52

2. Move to Net-Zero

4. Accountability in Value-Chain

5. Credibility in Corporate Governance

6. Transparency in Stakeholder Engagement

39
59
71
81

SAMSUNG SDI SUSTAINABILITY REPORT 2023

OVERVIEW
1. Infinite Safety

28

SUSTAINABILITY MANAGEMENT

2. Move to Net-Zero

3. Partnership with Value-Chain Partners and Community

Key Figures
Area

Infinite Safety1)
Indicator

Occupational
Health &SafetyArea

Unit

Employee injuries(accident)(No. of employees injured/ No. of employees X 100)In-house partner injuries(accident)(No. of employees injured/ No. of employees X 100)

Improvement tasks identified throughworkplace safety audits3)

Move to Net-Zero1)
Indicator

Action for
Climate Crisis

0.021

0.007

%

0.019

0.035

0

cases

tCO2e/KRW 100
million (sales)

Indirect emissions

tCO2e

tCO2e

%

%

%

* Saved 6,340 tCO2e by reducing LNG use** Reduced 88,900 tCO2e by purchasing renewable energy certificates

Area

2022

0.014

Direct·indirect GHG emissions
intensity

CircularUse of recycled metals4)
Economy andEnvironmental Waste recycling rate
Impact4)
Management Water reuse rate

2021

%

Unit

Direct emissions

2020

635

2020

12.4

183,925

1,215,603
-

82

-

314

373

2021

2022

11.6

225,594

1,347,936
2

8.3

1,418,616**

92

22.7

Partnership with Value-Chain Partners and Community2)

Value-Chain
Partnership

Togetherness
withCommunity

242,116*

93

23.0

2020

2021

2022

Signing of the Fair Trade
Agreement6)

No. of companies

110

111

112

Participation in CSR activities7)

CSR expenditures8)%

KRW 100 million

587

99.1
67.7

810

93.6
87.4

5. Credibility in Corporate Governance

868

96.8
89.2

6. Transparency in Stakeholder Engagement

Accountability in Value-Chain
Indicator

Unit

2020

2021

2022

SCM RiskManagement1) Third-party audits on cobalt
smelters and refiners9)

%

92

96

96

Certified S-Partners

Labor/Human
Rights2)Area

No. of companies

Employee grievances submitted10) cases

Female managers%

Credibility in Corporate Governance

Advanced
BOD2)

75

72

1,193

1,245

1,402

11.2

12.0

13.0

Unit

2020

2021

2022

Ratio of female directors

%

14.3

14.3

14.3

Ratio of independent directors%

Average attendance in BOD meetings %Employees who completed ethics &compliance training2)
Ethics &Compliance55

Indicator

No. of persons

Disciplinary actions taken for corruption
No. of persons
identified through audits1)11)

Partners whose contract was
No. of companies
terminated in relation to corruption2)

Compliance review activities2)

Unit

KRW 100 million

4. Accountability in Value-Chain

2

Indicator

Financial activity support5)

Area

APPENDIXSUSTAINABILITY MAIN THEMES

cases

57.1
93.5

57.1

93.7

57.1

100

12,063

12,59812,547

13

1

4

0

0

0

22

26

22

1) Scope of the Index: Domestic and overseas production facilities
2) Scope of the Index: Korea
3) Reviews scaled down amid COVID-19
4) Calculated since 2021
5) Sum of direct support, the win-win fund raised, and special support
6) Based on the shared growth agreement signed between Samsung SDI and first-tier partners
7) Calculated including participation in volunteer activities, donations in cash and in kind made by employees at the headquarter8) Sum of management costs and cash costs(donations). Data restatements were made for 2020 and 2021 due to change incalculation formula9) Smelters and refiners participating in third-party audit programs are included10) Grievance handling rate is 100%
11) Data changed for 2020 and 2021 due to the addition of overseas corporations to the scope

SAMSUNG SDI SUSTAINABILITY REPORT 2023

OVERVIEW
1. Infinite Safety29

2. Move to Net-Zero

SUSTAINABILITY MANAGEMENT
3. Partnership with Value-Chain Partners and Community

APPENDIXSUSTAINABILITY MAIN THEMES
4. Accountability in Value-Chain

5. Credibility in Corporate Governance

6. Transparency in Stakeholder Engagement

INFINITE SAFETY
1.

Occupational Health & Safety
Appointed theChief Safety
Officer

Created VR safety
training rooms

Product Safety
Established amobile safetysystem(M-EHS)

2022 KEY ACHIEVEMENTS

Introduced
big data andAI analytics
techniques for thequality analysis
systemSecured thermal
propagation
prevention
technology

SAMSUNG SDI SUSTAINABILITY REPORT 2023

30

OVERVIEW
1. Infinite Safety

2. Move to Net-ZeroOccupational Health & Safety
Our Approach and Management Plan

In response to the Serious Accidents Punishment Act which took effect onJanuary 27, 2022, Samsung SDI bolsters our safety accident prevention system to reduce all injuries and accidents occurring in the workplace to zero.

We ensure our executives take full responsibility in this regard: responsible

SUSTAINABILITY MANAGEMENT
3. Partnership with Value-Chain Partners and Community

4. Accountability in Value-Chain

Appointing a C-level executive for safety operations

In February 2022, Samsung SDI appointed the Chief Safety Officer. The

CSO represents the Company in relation to health and safety opera-

tions, and has the authority and responsibility for heading our EHS
organization, personnel, and budget while serving as the final deci-sion-maker in this regard. The CSO also engages in overall commandand oversight concerning work suspension and subcontracting.

executives are appointed in performing on-site reviews and making neces-

Dedicated EHS organization

to reinforce our health and safety management system, including but not

ed us to establish a dedicated EHS organization and realign our organi-sary improvements. Efforts are also made on an on-going basis at all levels

limited to monitoring blind spots that go unnoticed across manufacturing

operations, preventive consulting for the Serious Accidents Punishment

Act, and special training for risk assessment personnel. Furthermore, we

engage in continuous communication and improvement for the safety ofour partners. We operate the health and safety council between contractors and subcontractors and establish the mobile G-EHS system to guarantee the right to suspend work, provide safety training, and engage in TBM(Tool Box Meeting) registration and verification.

Health and safety goal

Zeroinjuries andaccidents1) every year

Reinforcing the Board’s responsibility for health and safety

Every April, our Board of Directors meets to regularly receive reports on
general business management, finance, and other operational issues,
which includes ‘reporting health and safety plans’ as matters submitted for consideration pursuant to Article 12, Clause 2, Paragraph 20of the Regulations for the Operation of the BOD. This mandates ourBoard to review our health and safety policy, its organizational composition and role, key activities of the occupational health and safetycommittee and the partner council, budget and facility status, and performance for the past year and plans for this year.

1) Criteria: All forms of incidents that damage the body/life of people from simple injuries that
result in lost workdays to fatal accidents. Scope: SDI employees, employees of on-site partners,
and employees of all partners working at Samsung SDI’s operations

The increasing social demand for rigorous safety management promptzation to create personnel and support functions. The EHS & Infra Team
under the Global Safety & Technology Center was split into the Global

EHS Team and the Global Construction/Infra Team to serve as a specialized unit in their respective area. With the Global EHS Team leading
the charge, Safety and Environment Groups from respective worksites

work together to further boost communications to keep our employees
and partners safe from accidents and raise our safety awareness.

Safety Management Organizational Chart

INTERVIEW

6. Transparency in Stakeholder Engagement

Deokyeong Lee, Professional,
Safety & Environment Group, Global EHS TeamQ I s there any change in awareness on safety culture among Samsung
SDI employees?

At Samsung SDI, awareness is improving on safety culture, and in fact, a safe-

ty culture assessment conducted on employees showed that our score roseby nearly 10% from the previous year. The assessment covered a total of eightcategories, and significant improvements were made in the categories of ‘topmanagement’s commitment and investment’ and ‘risk factor identificationand emergency exercise’. This indicates that our employees recognize senior

management is prioritizing safety and environment and is making ample in-vestments in this regard. I will fulfill my responsibility for safety and environment to bring positive change in employees’ perceptions on safety culture.

Q What are the key achievements made in the safety management aspect in 2022?

Our health and safety management activities were reinforced at all areas.
Major activities include executives taking responsibility for health and safety

operations, monitoring of blind spots on the manufacturing floor, consulting

to prepare for the Serious Accidents Punishment Act, specialized risk as-

sessment training, and VR safety training center operation. This resulted in
in-house partners.

Global Safety & Technology Center(CSO)

Support Group

5. Credibility in Corporate Governanceyear-on-year decreases in injuries and accidents affecting our employees andSustainability Management Committee

Global EHS TeamAPPENDIXSUSTAINABILITY MAIN THEMES

People Group

Safety and Environment Group

Cheonan Safety and Environment Group
Ulsan Safety and Environment Group
Gumi Safety and Environment Group

Cheongju Safety and Environment Group

Giheung·Suwon Safety and Environment GroupQ What are the areas that we should reinforce to embed safety culture
into our operations?

To embed safety culture into our day-to-day routine, we will first reinforce

communication with our shopfloor operations. Secondly, we will praise bestpractices and offer appropriate rewards, and thirdly, we will expand activities

that directly engage our employees. Under our ‘Safety Talk’ program, respon-sible executives will visit the manufacturing floor to collect feedback fromworkers and make improvements while selecting and awarding best prac-

tices for accident prevention to raise safety mindset among employees. We
will also promote our health and safety activities through TBM contests andhealth and safety bulletin boards.

SAMSUNG SDI SUSTAINABILITY REPORT 2023

31

OVERVIEW
1. Infinite Safety

2. Move to Net-Zero

SUSTAINABILITY MANAGEMENT
3. Partnership with Value-Chain Partners and Community

4. Accountability in Value-Chain

Occupational Health & Safety
Building an Advanced Safety Culture

To elevate employees’ safety awareness and executive capabilities, we

occupational health and safety awareness. Our diverse training curricu-

training and maximize the benefits of such training, we have createdManagers, new hires, employees handling hazardous substances, andthose assigned to specific or new tasks are supported in receiving tai-lor-made training on a quarterly basis depending on their job category
or level and work processes. In 2022, we provided risk assessment personnel at our domestic operations with professional risk assessment

training to elevate their risk assessment performance to identify andimprove hazard/risk factors in the work environment. This training con-sisted of theory and practice to allow participants to learn risk assessment methodologies and prepare assessment reports on real-life cases,
further improving their assessment capabilities as a result.

Disseminating a safety culture

Each year, Samsung SDI performs safety culture assessments on employees. Currently, our employees are in the phase of voluntary participation, and we are working to bolster field-driven safety culture man-agement to move onto the next phase where employees encourage
and respect each other. A case in point is our senior management taking

responsibility for on-site safety management by visiting our worksites.

To encourage our employees to participate and take interest in safety
VR safety training rooms across six domestic and six overseas worksites

since October 2022 to provide them with an opportunity to experience
VR-assisted safety training. The participants need to wear Oculus gog-gles and may choose either experience-based training to virtually ex-

serve as our EHS procedures. With the help of our Legal & IP Team anda third-party law firm, 28 such regulations and 40 standards were verified to prevent the omission of amended regulatory provisions anddetailed procedures. Based on review results, 25 company-wide reg-ulations and 20 worksite-specific standards were amended and were

publicly registered at our internal standard regulation management
system (PMM) for all employees to access.

Operating the integrated EHS system

new content is being produced. This new mode of safety training will

tify risks and manage employee health, chemical consumption and KPIs

videos. Such training will be conducted on a semi-annual basis, andsurely increase engagement and satisfaction on the part of employees

to prevent safety incidents and regulatory non-compliance in the real-life work environment.

VR safety training content
Type

Experience
Viewing

Content① Cell on fire/smoking, ② Being jammed in the lift,③ Being jammed in the roller, ④ Fall from height,⑤ Collision with the forklift① Handling battery, ② Handling chemicals,③ Handling heavy objects

Samsung SDI operates an integrated company-wide EHS system to iden-in addition to ensuring regulatory compliance. This system consists of 54
modules across the eight categories of safety and environment, health,chemicals, disease prevention, partner companies, audit and common

areas. To manage VR safety training and on-site safety management led

by executives introduced in 2022, seven modules were added to the sys-tem. Our EHS system is operated in accordance with such international

standards as ISO 14001 and ISO 45001, and all our domestic and overseas
operations received surveillance audits in October 2022 to maintain theircertification as verified by the certification body.

Reinforcing our shop floor safety certification

To keep our shop floor employees safe, Samsung SDI implements the
manufacturing work certification program. This ensures that in per-sure workplace safety, this in turn drives our employees to change theirforming work involving the direct operation of shopfloor equipment,

perceptions on safety. We will pursue a wide array of activities to create

only those workers who completed relevant job training in advancea field-centered safety culture that engages all employees with leaders

could take error correction measures. This program is classified into

taking the lead. This extends beyond our own operations and we continoperate to disseminate our advanced safety culture.

amended our company-wide regulations and worksite standards thatperience safety accidents or viewing-based training to watch training

They identify inconsistencies and communicate with employees to en-ue to team up with our employee families and communities where we

6. Transparency in Stakeholder Engagement

Establishing and amending the EHS procedures
Providing VR safety training experiencelum consists of more than 240 courses for employees to choose from.

5. Credibility in Corporate Governance

Workplace Safety Management

Providing occupational health and safety training

We provide health & safety training to all our employees to elevate their

APPENDIXSUSTAINABILITY MAIN THEMES

three to four grades depending on the worksite, and employees who
VR safety training rooms

worked for the set period of time become eligible for taking paper andpractice skill tests and should score 80 points or more to pass the test.

SAMSUNG SDI SUSTAINABILITY REPORT 2023

OVERVIEW
1. Infinite Safety

32

2. Move to Net-Zero

SUSTAINABILITY MANAGEMENT
3. Partnership with Value-Chain Partners and Community

SUSTAINABILITY MAIN THEMES
4. Accountability in Value-Chain

Expanding the performance appraisal for
manufacturing management supervisors

Our management supervisors, who are responsible for shopfloor
safety, are regularly assessed for their EHS competency to provide asafe work environment free from any injuries and/or accidents. These
supervisors receive EHS assessments on 34 items across four categories. In 2022, such assessments were made six times in total (twice foreach of the Ulsan, Gumi, and Cheongju worksites). While our Cheonan
worksite did not receive assessment due to the spread of COVID-19
within its operations, regular ESH assessment resumed in January2023 in line with the relaxed COVID-19 lockdowns.

4 Evaluation Areas of EHS Management
Accidents andNon-compliance

EHS activities

Behavioral
analysis andevaluation

Building an emergency response system

EHS
participation

Each of our domestic and overseas worksites implements emergency
response management regulations to establish a standardized response system to brace for any emergency. Scenarios are produced
under 13 emergency situations (fires, explosions, earthquakes), andcompany-wide exercises are held at least once a year and internal
ESH drills are conducted at least once a month. Our in-house firefighting units are under operation 24/7 in case of an emergency.

6. Transparency in Stakeholder Engagement

Supply Chain Safety Management

Occupational Health & Safety
In the L1 entry grade, employees need to work for the 3-month OJT period in line with the relevant SOP before taking the test. In L2, employees engage in basic work including replacing materials and consumables, cleaning, and equipment check. As this program is designed togradually elevate the performance level of employees, employees ingrades beyond L2 move onto work requiring advanced skills, including
taking action for defects and quality issues.

5. Credibility in Corporate Governance

APPENDIX

Assessing partners for safety performance

Workplace Safety Risk Assessment
Improving potential process-related risks

Samsung SDI consistently identifies and improves potential process-related risks at domestic and overseas worksites. Potential process-related risks identified as such are uploaded on our computer
system to be shared across the board. In 2022, a total of 261,689 potential process-related risks were identified by our manufacturing
workforce at all levels, and this translates into 31.1 risks per employee,
which exceeded the set target (12 risks per employees) by 259.2%.
Since January 2023, best practices have been posted on the Safety
Culture bulletin board to further elevate the quality of improvements
made and prevent similar accidents from occurring.

Workplace risk assessment

We perform risk assessment across our domestic and overseas operations as part of our self-initiated preventive system to identify and improve work-related hazard/risk factors on employees’ own initiative.
Annual regular risk assessments are made on the entire processes andtasks and the results are registered on our computer system for all employees to access. Improvement tasks are also registered to eliminate
the hazard/risk factors identified to track improvement results.
In addition, risk assessments are conducted on an as-needed basis forchange management when machinery, equipment, raw materials, or
chemicals are newly introduced or modified to preemptively assess
potential risk from such change and prevent the risk of accidents occurring.

To prevent occupational injuries that may arise in subcontracting, wehave continued to perform safety assessments on our partner companies since 2020. Such assessments are made for work performedin locations controlled, operated, or managed by Samsung SDI. For
partner companies permanently operating at our domestic worksites,
they received safety assessments twice in the first and second half ofthe year respectively, and new construction partners were assessed
before bidding for a contract. In 2022, a total of 199 safety performance assessments were made, and six of construction partner companies failed to meet the safety criteria set by Samsung SDI and could
not bid for any contract. In 2023, we will establish the Partner-EHS system to allow partner companies to directly register their safety self-assessment results and Samsung SDI to check such results, laying thefoundation for web-based communication with partner companies.

Health and safety grievance handling mechanism
for partners

Samsung SDI heeds the voice of partner employees and makes necessary improvements through wide-ranging communication channels such as the occupational health and safety committee and thehealth and safety council between contractors and subcontractors. In
2022, 30 grievances were submitted to the occupational health andsafety committee and 29 grievances to the health and safety council
across our domestic operations, and improvement measures weretaken for all of these grievances. In July 2022, we established the
M-EHS as our mobile safety system to facilitate communication on
construction safety. As of the end of 2022, nearly 12,000 people joined
the M-EHS, and all construction workers accessing Samsung SDI’s
worksites can use the system to check the work permit of their company, apply for individual safety training, and make registrations andverifications on their emergency contact list, right to suspend work,
and TBM (Tool Box Meeting). Specifically, we continue with TBMs
prior to starting work for their benefits in maximizing the preventionof injuries in a short period of time, recognizing risk and proper work
methods, learning emergency response measures, and building consensus among co-workers.

SAMSUNG SDI SUSTAINABILITY REPORT 2023

33

OVERVIEW
1. Infinite Safety

2. Move to Net-Zero

SUSTAINABILITY MANAGEMENT
3. Partnership with Value-Chain Partners and Community

APPENDIXSUSTAINABILITY MAIN THEMES
4. Accountability in Value-Chain

5. Credibility in Corporate Governance

6. Transparency in Stakeholder Engagement

Occupational Health & Safety
Bolstering Chemical Substances Management

Operating a chemical substances management system

Our Global Environment, Health & Safety (G-EHS) system, developed

to respond to domestic and international regulations related to chem-

ical substances, ensures that chemicals are inspected for possible
conflict with applicable laws and regulations and are managed fortheir use at our worksites. Any and all chemical substances that enter

our worksites in Korea and abroad should receive EHS impact assessments, and should be verified for legal measures required following
their entry into our worksites before purchases are made.

Operating the internally regulated substances
grading and approval system

The scope of our internally regulated substances includes carcinogens, reprotoxic chemicals and other substances harmful to the human body aswell as legally regulated substances. We prioritize highly toxic substances((SVHCs, CMR, PAHs) based on their hazards and manage them accordingly to keep our employees safe and protect them from work-related illnesses. In accordance with our internal substances grading and approvalsystem, internally regulated substances are graded into A, B, and C, andchemicals are verified for their inclusion in the prohibited substances list,

applicable substitution and mitigation plans, and protective measuresprior to their entry and consumption at our worksites. Furthermore, risk
assessments are conducted on chemicals that are put into the process inconsideration of their hazards, exposure levels, and work characteristics,
and assessment results are used to check the work environment including sealing conditions. Total inspections are also performed on chemical

substances every quarter to identify the overall status of chemical handling and regulatory compliance concerning the Material Safety Data
Sheet (MSDS) as well as the installation of warning signs.

Employee Healthcare
Grading and Approval of Internally Regulated Substances1)
Prohibited
Substances
Controlled
Substances

Grade A
Grade B
Grade C

Prohibited from entry
into worksites

Substance
Approval
Committee

Developsubstitution/
mitigationplans andprotective measures

Approve entry
into worksites
and use1) Classified into Grade A, B, and C according to their level of hazards

Managing in-process hazards

In the event of change in the production process or the addition of newmaterials in the early phase of new R&D project undertakings, ad-hoc

measurements are made on hazards to safeguard the health and safety of our employees. In particular, we commission third-party profes-

sional organizations to perform semi-annual work environment mea-

surements on processes that handle hazards. Here, we apply internal

Health promotion activities

To promote healthcare and disease prevention for our employees, we

provide regular health check-ups, work environment measurements,

health promotion activities, and workplace hygiene management.
While these health promotion activities were implemented at the in-dividual worksite level, they have been scaled to the company-widelevel for standardization and systemic operation since 2023.

We developed health promotion plans for 2023 in collaboration with
the People Team and the Mental Health Secretariat. We also motivate

employees diagnosed with specific medical conditions and/or obesity

to care for their health through healthcare apps, and publish monthly
health newsletters to draw their attention to healthcare. We reviewed

comprehensive check-up items for their adequacy to support early disease detection and accuracy improvement, and perform due
diligence on health check-up centers to provide our employees withhigh-quality medical services.

standards that are more stringent than legal standards to hazards, ex-

Preventing work-related illnesses

facilities. For carcinogenic, reprotoxic or mutagenic substances thatburden, we conduct regular on-site investigations and surveys on the

posure to substances requiring special management, and ventilation
require special management, we apply our internal standards that are
below 10% of the legal threshold. In case there are processes that exceed our internally-set exposure limits, continuous process improve-ments are made by sealing affected equipment or even by replacing
and/or mitigating chemicals. In addition, local exhaust and ventilation
devices receive inspections and assessments at least once a year tokeep our employee safe from the exposure to chemical substances.

To prevent musculoskeletal diseases and alleviate employees’ work
entire operations. We also change work methods based on additional
close examinations and analyses to improve our work environment.

In 2023, we will expand the network of our Medifit centers operated for
disease prevention from two (Cheonan, Gumi) to all our six worksites
in Korea.

SAMSUNG SDI SUSTAINABILITY REPORT 2023

34

OVERVIEW
1. Infinite Safety

2. Move to Net-Zero

SUSTAINABILITY MANAGEMENT
3. Partnership with Value-Chain Partners and Community

APPENDIXSUSTAINABILITY MAIN THEMES
4. Accountability in Value-Chain

5. Credibility in Corporate Governance

6. Transparency in Stakeholder Engagement

Product Safety
Our Approach and Management Plan

Samsung SDI puts product safety and quality before all else. Guided by

Quality management system

quality management system along the entire product lifecycle to raise

global standards as ISO 9001 and IATF 16949 throughout the entire

our motto ‘All for nothing without quality’, we continue to bolster ourour employees’ quality-first mindset at all levels. We advance rigorous
verification from development all the way to mass-production, andkeep our data-based monitoring system up and running to upgrade
our preliminary risk verification system.

As we believe that the quality of our partners directly translates into
the quality of our products, we focus on disseminating Samsung SDI’s

We operate our quality management system in compliance with suchprocess from product design and manufacturing to shipment andcustomer satisfaction, and perform internal reviews on our entire
global operations. Since we achieved IATF 16949 certification, we havereceived regular surveillance audits performed by third-party organizations.

quality-first mindset to ensure exceptional quality across the board

Quality management principle

ners.

essential that all employees are aligned towards the quality first princi-

while engaging in activities to improve the product quality of our partTo elevate customer satisfaction, we realigned our VOC (Voice of Customers) collection and analysis system to make necessary improvements in a more swift and accurate manner.

Our Electronic Materials Business launched its PQ (Partner Quality)

Part to identify pre-detection tools that help avoid escaped defects
and ensure the tailor-made management of polarizing film partners.
As a result, the number of quality-related VOCs raised by customers
has bee on the decline.

To secure best-in-class quality on the back of top-tier technology, it isple. This is why Samsung SDI established the Quality Management 10

Commandments that embody our overarching principles for quality
management in the areas of product development, production, ship-

ment and customer quality management. These Commandments are
made available in postings and banners across our operational sites,
and were translated into English, Chinese, Vietnamese, and Hungarianfor our overseas operations to ensure all our employees develop their
quality-centered mindset.

Quality Management 10 Commandments

SAMSUNG SDI SUSTAINABILITY REPORT 2023

35

OVERVIEW
1. Infinite Safety

2. Move to Net-Zero

SUSTAINABILITY MANAGEMENT
3. Partnership with Value-Chain Partners and Community

4. Accountability in Value-Chain

Product Safety
Advancing the Product Safety and Quality Process
Putting safety first to preemptively ensure quality

to prevent defective items from escaping. In 2023, we aim to deploy aprove the risk of battery fires and to prioritize safety in securing quali-

dict and preemptively isolate defects and prevent defective products

We perform FMEA (Failure Mode and Effect Analysis) to identify and im-

ty. Possible improvements are reviewed early on in the development
phase to deliver robust products.

We preemptively perform mass service life/storage verifications inwider variety of statistical process control models to automatically prefrom being shipped in so doing.

production process, and will review optimal verification conditions to

Establishing uniform mass production quality
across global operations

We also verify our key process items in a way that tests their limits infunction-specific, segmented approach to bolstering our core quali-

the development phase to detect any potential issues in the massstrengthen our detection of low-voltage defects.

the development phase to ensure safety even under worst case situations. We track down changes along a product’s lifecycle throughnon-destructive testing and other means to verify the safety of products in their degraded mode. We will further advance such verifications in 2023.

Advancing the statistical process control system

Our statistics-based process management system allows us to prevent potential quality risks underlying in our processes and products.
Anomaly signs for key management factors are monitored and con-trolled in real time throughout the entire process from receiving parts

In line with the expansion of our global production, we are taking aty throughout all our global operations. We are working to establish

a more robust inspection system by rendering inspections automated and more efficient and innovating our process and shipment in-spections in the process across all our locations. To ensure unrivaled
competitiveness in delivering exceptional quality, we also bolstered

our process anomaly control capabilities and implemented meticu-

lous anomaly management. Furthermore, we reinforced the quality

We also review hazardous substances and amend our product environmental regulation response guidelines at least twice a year toprovide our partners with training to help them properly manage

such substances. We receive and manage environmental documents
containing materials data sheets and detailed hazardous substanceanalysis reports1) submitted by partners through the material data andgreen procurement section of our partner portal (SRM). In line with thegrowing demand for product environmental performance, Samsung
SDI applies hazardous substance content standards that are evenmore rigorous than domestic/overseas environmental regulations,and will preemptively and voluntarily reduce our consumption ofpotential regulated substances. Specifically, our Electronics Materials
Business that manufactures products for semiconductors and displays ensures that in the event that harmful substances are containedin the raw materials to be used for its new products, such substances

are reduced or eliminated starting from the development phase to assist customers in promoting the safety of their employees and making
their products eco-friendly.

1) Issued by ISO 17025 certification bodies

form advanced raw material assessments to bolster raw materials

our internal standards aligned with such global environmental regu-

introduced for automated training on the images of product defects

tion, Authorization, and Restriction of Chemicals (REACH) regulations.

and fundamentally eliminate defects as a result.

item optimization to strengthen our global verification capabilities

running on a big data analytics platform to promptly detect, analyze,

address and prevent quality anomalies. AI analytics functionality was

6. Transparency in Stakeholder Engagement

Bolstering quality assurance capabilities

Responding to hazardous substances contained in
products

In 2022, we established our next-generation quality analysis system

5. Credibility in Corporate Governanceof electrodes that form one of our core processes through verification

formed to fundamentally avoid the shipment of defective products.

to shipping products, and automatic data trend analyses are per-APPENDIXSUSTAINABILITY MAIN THEMES

Samsung SDI rigorously manage our products in accordance withlations as the EU Restriction of Hazardous Substances Directive (EURoHS) for electric and electronic devices and the Registration, Evalua-

Our Electronic Materials Business established infrastructure to perverification. For instance, concentration treatment improved the effectiveness of its amplification detection performed on the existing
analysis equipment. Work is also on-going to predict defects through

FMEA, introduce new assessment methodologies, and upgrade existing assessment methodologies to distinguish product quality. Suchcontinued efforts to bolster our quality assurance capabilities will drive
our commitment to delivering reliable quality for customers.

SAMSUNG SDI SUSTAINABILITY REPORT 2023

OVERVIEW
1. Infinite Safety

36

2. Move to Net-Zero

SUSTAINABILITY MANAGEMENT
3. Partnership with Value-Chain Partners and Community

APPENDIXSUSTAINABILITY MAIN THEMES
4. Accountability in Value-Chain

5. Credibility in Corporate Governance

6. Transparency in Stakeholder Engagement

Product Safety
Bolstering Battery Safety

Reinforcing safety reviews on products underdevelopment

Deploying a fire extinguishing agent direct spraysystem for ESS

Advancing battery safety management

lifecycle ranging from Beginning of Life (BOL) to End Of Life (EOL)ESS fire extinguishing agent direct spray system that achieves early fireend safety management standards in the manufacturing process, andSamsung SDI predicts changes in battery condition throughout theiras early as from the battery development phase to make products

even safer. Product safety is verified at the time of shipment throughnon-destructive testing among others, and preemptive detection is

performed on product safety risk that may occur as battery cells degrade during the use phase. Furthermore, some of the product safetyassessment items are subject to conditions more rigorous than theones assured in the early development phase to accurately identify thelimit of product performance and exceed the set assurance requirements. Our efforts for product safety start even from the development
phase to make sure we do not manufacture batteries that are not qualified for their safety performance.

To ensure the safety of cells that go into ESS products, we deploy our

suppression by spraying fire extinguishant primarily on the cell interior/exterior areas detected for incidents. This system was applied to

new overseas ESS projects by communicating with customers on its

system configuration and design/material specifications, and the system is installed in a way that activates automated, targeted spraying

onto the affected cells when an incident occurs. For ESSs already established and up and running, we identify risk factors associated withenvironment, monitoring, and manufacturing history for our domestic
customers, select sites to deploy our direct spray system, and moveonto installation following pre-installation review.

Mechanism of Fire Extinguishing Agent Direct Spray System for ESS Applications

1. A cell event (heat/smoke) occurs
Spraynozzles

2. to heat/flames to open the holeNozzle’s injection parts melt due

BMS detection (temperature/

3. voltage) or smoke detection
at the top of the rack

M-BMS

Smoke detector (located in thefront of the center of the rack)

M-BMS

System
BMS

all the way to customer delivery. We establish and comply with frontapply more rigorous safety management criteria starting from theprocesses where battery performance can be demonstrated to prevent fires caused by collisions, falls and short circuits. We voluntarily

installed firefighting equipment that exceeds statutory requirements,
and SDI firefighting units and the process control center operate a
24/7 simultaneous surveillance system. In delivering finished battery

products to customers, we abide by international airborne/seaborne
transport regulations from packaging to shipping so that our products
are safely delivered to customers.

Input into the fire detection

4. signal receptor → The agent

valve opens and the agent moves

Agent
Insulation sheet

Samsung SDI’s safety management spans from battery production

Receptor

Pressure
gauge

Valve

Regulator※ Adjust the spraypressure※ The valve opens

5. Spray primarily to the event cell

SAMSUNG SDI SUSTAINABILITY REPORT 2023

37

OVERVIEW
1. Infinite Safety

2. Move to Net-Zero

Product Safety

Securing thermal propagation prevention technology

While the increasing energy density of battery cells raises the likelihood ofthermal propagation, customers raise their voice for the need for thermal

propagation prevention. Against this background, Samsung SDI imple-

mented a technology development project to prevent thermal propagation from the cell all the way to the module and the pack level. In June
2022, a thermal propagation taskforce was created to perform FTA (Fault

Tree Analysis) on cells and modules to look into the causes of defects andfailures and to identify four factors associated with the prevention of heatpropagation. This allowed us to secure thermal propagation prevention
technology with the minimum possible price increases and structuralmodifications, and to propose thermal propagation prevention solutions for respective product development projects. Such thermal propagation prevention technology was made possible by improving thethermal resistance of cells, applying surface insulation between cells,
shortening thermal runaway times, and designing appropriate coolingsystems. We will establish the safety performance of prismatic stack cells
differentiated from that of pouch cells to secure our competitive edge inlanding orders. We will also promote our thermal propagation prevention technology to raise awareness on the safety of prismatic stack cells

among OEMs and vehicle consumers, alleviating their concern over fires.

Promoting Customer-centric Product Safety
and Quality Management
Proactively addressing VOC

To ensure our competitive edge in product quality, we keep track ofcustomer defect rates, VOCs and other customer-related metrics as
our KPIs. In 2022, we segmented our VOC response process to define

R&Rs in each stage and upgraded our quality management systemfrom the IQMS to Q-Portal to shorten our response times. The new
Q-Portal system follows the 8D1) response process to cater to our grow-ing EV customer base.

SUSTAINABILITY MANAGEMENT
3. Partnership with Value-Chain Partners and Community

SUSTAINABILITY MAIN THEMES
4. Accountability in Value-Chain

We also introduced a statistics-based management program to takestock of the trends of VOC occurrences, pending issues at respective

manufacturing sites, and major defects occurring for each productwhile upgrading the system to automatically submit weekly VOC
status reports to senior management. Furthermore, we introduced

a reporting system to create Risk Priority Numbers (RPN) for each issue and report issues based on their importance to ensure prompt

reporting and communication to top management and relevant

departments and to elevate our execution in responding to such is-sues. In 2023, we will supplement this approach for its shortcomings

through case studies and initiate its regular implementation. We also
worked to align and advance our VOC handling process between the

Headquarters and overseas corporations in line with our global man-ufacturing expansion. Since March 2022, our Hungarian corporationthat produces EV batteries has operated the VOC Committee joinedby personnel from the HQ and local technicians to support immediatecustomer response for newly-submitted VOC, analyze their accuratecauses, and develop fundamental solutions in a systemic manner. The
VOC Committee has been also up and running at our corporations in

the Americas since March 2023 to cater to local customers. In 2023, we
will advance our quality management system and establish a relevant
system to expand our response to eco-friendly vehicle business for

Small-sized Li-ion Battery Business while creating a database of re-quirements made by EV customers and their implications to develop apotential/recurring defect risk review system. Furthermore, we secureand train customer response personnel at overseas corporations inline with our Global-Standard Operating Procedure (G-SOP) to improve their performance to that of our customer response system atthe Headquarters, and ensure approval is promptly granted on new

products and products moving onto mass-production. For Electronic
Materials Business, quality experts are dispatched to better respondto the quality issues raised by overseas customers, and we identify
quality issues in real time and create a database based on these issues
through our Focus 119 quality issue management system.

1) 8
 Discipline: A process designed to address quality issues raised by customers
by identifying root causes, taking corrective action, and developing preventive
measures5. Credibility in Corporate Governance

APPENDIX
6. Transparency in Stakeholder Engagement

Managing and improving customer satisfaction

At Samsung SDI, each business division performs customer satisfac-

tion surveys to collect customer complaints and feedback on a variety
of items concerning R&D capabilities, service, and delivery in addition

to quality performance. The VOC gathered as such is communicated to
relevant departments through meetings and is reflected in evaluating
our level of quality and service and setting the course for improvement.

Our Small-sized Li-ion Battery Business conducted CSI (Customer Sat-isfaction Index) surveys on 22 key customers in April and September
2022 to verify effective improvement measures and identify improvements made in customer satisfaction, and launched improvementtaskforce activities for six customers whose satisfaction was low due toquality issues among others. The survey performed in April served togo over complaints from respective customers and perform baseline
reviews, and improvement plans were developed for each complaint

category through collaboration among relevant departments andthen were communicated to customers by visiting their sites. The 2nd
survey was conducted in April following five to six months of improve-

ment activities to check improvement in customer satisfaction. Thisrevealed that satisfaction among customers for which improvements
were made rose by nearly 12.2% from 69.9 points in the first survey

to 78.4 points in the 2nd survey, and overall customer satisfaction im-proved by over 3.5% from 84.7 points to 87.7 points. In 2023, we willdefine our masterplan to reduce market defects to 1ppm to expand

the presence of our cylindrical type battery in the eco-friendly vehicle
market, and engage in internal feedback and improvement activities
for customer inline and low-voltage defects to consistency pursue

greater customer satisfaction. Electronic Materials Business resumed

its customer satisfaction survey in 2022 following its suspension in2020 and 2021 amid COVID-19. The survey used an updated question-

naire to compare its product competitiveness against industry peers

and was conducted on 24 key customers for 12 electronic material
items in the five categories of product quality, issue response, technol-

ogy response, delivery/supply, and development performance. This
showed that the division was more exceptional than industry peers for

10 items and was equal to its peers for two items. Customer satisfaction survey results are shared among relevant departments to develop
and implement improvements to secure competitiveness.

SAMSUNG SDI SUSTAINABILITY REPORT 2023

38

OVERVIEW
1. Infinite Safety

2. Move to Net-Zero

SUSTAINABILITY MANAGEMENT
3. Partnership with Value-Chain Partners and Community

APPENDIXSUSTAINABILITY MAIN THEMES
4. Accountability in Value-Chain

5. Credibility in Corporate Governance

6. Transparency in Stakeholder Engagement

Product Safety
CET(Customer Environment Test)

Extending the Scope of Quality Improvement Management

Our CET (Customer Environment Test) aims to minimize risk that may

Supporting overseas corporations with quality
improvement

Supporting partners with quality improvement

stability of our products. For existing or new customers wishing to use

quality competitiveness across our domestic/overseas production

ples by 10 to 30 times to perform intensive inspections on the items

occur when customers use our battery while ensuring the performanceour battery cells for their new projects, we investigate in advance theconditions and environments where their products will be deployed
and review whether our cells are appropriate for their new projects,

whether it being a battery pack or an application. In so doing, Sam-sung SDI ensures that customers properly use our products for theirbattery pack or application while preventing potential risk factors that
may affect the market and end consumers.

As the share of mobility applications (e-scooter, e-bike, etc.) continued
to increase in 2021 and 2022, we raised the bar for waterproof performance ratings and kept our products from entering high-risk applica-tion markets. It is worth noting that our CET implementation reached100% in 2022 by reviewing CET implementation by shipment case sothat products that did not receive CET verification would not be madeavailable on the market. We will continue with our CET implementation well into 2023.

In consideration of the importance of e-mobility products, we took aproject-based approach rather than implementing CET for key applications to address relevant risks more preemptively. In 2023, we will

redefine products subject to CET and project undertaking respectively
to bolster our risk response.

Samsung SDI bolsters our quality gate implementation to secure

corporations. Function-specific one-on-one matching mirror organizations were created between the Headquarters and each corporation

to provide systemic support for these corporations to pursue quality

management on their own initiative, along with evaluation testing

automation and the improvement of process inconsistencies. As partof such efforts, work/infrastructure/standard inconsistencies were improved to secure uniform quality, and process inspection monitoring
was automated to improve the efficiency of testing POS and its meth-odology to strengthen the overall inspection system. We will continue

to pursue automation, efficiency improvement, and advancement of
our inspection system in line with the expansion of our overseas corporations to ultimately deliver best-in-class quality.

Our Electronic Materials Business is working to elevate the quality capabilities of local overseas personnel to improve quality satisfaction

for overseas customers. Meetings are operated with manufacturing,

technology, and quality personnel from our Cheongju worksite totransfer their know-how in polarizing film manufacturing to local staff
and expatriates, along with discussions for problem solving, to improve the work skills of our employees at overseas corporations.

In 2022, we further raised the bar on our incoming inspections. In addition to regular sampling inspection, we increased the number of sam(appearance, measurements, properties, etc.) that raise issues in our

process. This enabled us to prevent quality issues from occurring andaffecting our manufacturing process. In tandem with this, we encour-

aged our partners to improve their quality to avoid defects, and helped
supplement their shipment gate for improved outgoing quality. Furthermore, we reinforced our permanent inspection activities concern-

ing new partner qualifications, engineering changes, and quality issues

to identify processes that may have critical impact on battery quality
and ensure partners engage in intensive review and improvement.

Cross-checking quality with partners from semi-finished parts to fin-ished products also helped share each other’s viewpoints and encourage partners to improve quality. With Samsung SDI taking the lead, aquality innovation taskforce was operated for partners with unsatisfactory quality performance to help take their quality assurance sys-

tem to the next level. Our Electronic Materials Business realigned its
operations to perform new SQE (Supplier Quality Engineering) workin addition to raw material quality assurance to help its raw material
partners improve their fundamentals. Dedicated SQE personnel will
be appointed to assist partners in improving their process and pre-emptively identifying risk. For polarizing film business, the PQ (Partner
Quality) Part was created in 2022 to be exclusively responsible for outsourcing partners, and engineers were designated for each partner for
tailor-made partner management.

SAMSUNG SDI SUSTAINABILITY REPORT 2023

OVERVIEW
1. Infinite Safety

39

2. Move to Net-Zero

SUSTAINABILITY MANAGEMENT
3. Partnership with Value-Chain Partners and Community

SUSTAINABILITY MAIN THEMES
4. Accountability in Value-Chain

5. Credibility in Corporate Governance

APPENDIX
6. Transparency in Stakeholder Engagement

MOVE TO NET-ZERO
2.

Action for Climate Crisis
Joined theRE100 and publicly
committed toeco-friendly
management

Calculated Scope 3
emissions

Circular Economy and Environmental
Impact Management

Achieved Carbon
Trust carbon
footprint
certifications

2022 KEY ACHIEVEMENTS

Expandedbatteries closedloop system to
Malaysia/
Hungary

Achieved
Zero Waste toLandfill(ZWTL)
Platinumcertifications

SAMSUNG SDI SUSTAINABILITY REPORT 2023

40

OVERVIEW
1. Infinite Safety

2. Move to Net-Zero

SUSTAINABILITY MANAGEMENT
3. Partnership with Value-Chain Partners and Community

SUSTAINABILITY MAIN THEMES
4. Accountability in Value-Chain

5. Credibility in Corporate Governance

APPENDIX
6. Transparency in Stakeholder Engagement

Action for Climate Crisis
GovernanceSamsung SDI created the Sustainability Management Committee under the Board of Directors in January2022, and Sustainability Management Office under the direct leadership of the Chief Financial Officer(CFO)in February to bolster our company-wide sustainability management governance. We also launched theSustainability Management Council as a C-level consultative body led by the CEO to reinforce the role of top
management.

Governance for Climate Crisis Response
BOD

Sustainability Management
Committee

Management

Sustainability Management
Council

The Sustainability Management Committee, composed of four independent directors, is the highest gover-nance body to make decisions on overall matters related to action for climate crisis. In 2022, the Committee
met five times to make key decisions for climate change adaptation to join the RE100, publicly commit toenvironmentally friendly management, and select and implement strategic tasks for environmental management.

Sustainability Management
OfficeThe Sustainability Management Council under the supervision of the CEO is the largest meeting body super-

vised by our CEO and is mandated to report, discuss, review, and decide on all issues and tasks associatedEnvironmental Management
Task Forcewith Samsung SDI’s sustainability management. The Council convened three times in 2022, starting with its

first meeting in April, to go over the eight tasks implemented by the environmental management taskforce
for their progress and issues.

ESG Working GroupThe Sustainability Management Office identifies climate-related risks and opportunities, develops company-wide response strategy in alignment with our business strategy, and supports the operation of the Sustainability Management Committee and the Sustainability Management Council. The Office closely cooperates with the ESG Part of our business divisions, overseas corporations, and relevant departments to expand
and bolster sustainability management at all levels.

The Global Construction/Infra Team under the Global Safety/Technology Center engages in a host of activities for climate change adaptation, including the collection and management of GHG emissions data, GHG

Business
Divisionemissions reduction, renewable energy transition, and energy saving efforts.

ESG Part

Overseas
Corporation

Global Safety& Technology
CenterSAMSUNG SDI SUSTAINABILITY REPORT 2023

OVERVIEW
1. Infinite Safety

41

2. Move to Net-Zero

SUSTAINABILITY MANAGEMENT
3. Partnership with Value-Chain Partners and Community

APPENDIXSUSTAINABILITY MAIN THEMES
4. Accountability in Value-Chain

5. Credibility in Corporate Governance

6. Transparency in Stakeholder Engagement

Action for Climate Crisis
Strategy

Analysis of Risk and Opportunity Factors
Type

FactorCurrent Regulation
Emissions Trading Schemes& Policy

Transition
Risk
Risk

Opportunity

Short-term Mid-term Long-term

Stakeholder

Our Response

Governments

・Develop and implement direct GHG emissions reduction strategies
・Join RE100 and switch to renewable energy for power consumption across all worksites by 2050

Low

Mid

High

Mid

High

High

EU Corporate Sustainability
Reporting Directive

Mid

High

High

Low

Low

Low

Customers’ demand for productcarbon emission reduction

Low

Low

Low

High

High

High

Customers, Partners

Mid

High

High

Customers, Partners

Reputation

Call for climate-related risks assessment
and disclosure

Low

Low

Low

Shareholders/Investors,
Customers

Acute

Typhoons, floods, heat waves, and fires

Low

Low

Low

・Develop and disclose strategies to respond to the climate crisis, including carbon neutrality strategies
・Disclose information on response to the climate crisis in accordance with the CDP and
TCFD recommendations

Chronic

Abnormal temperature, drought,
sea level rise

Low

Low

Low

Customers, Partners,
Employees, Communities

High

High

High

・Prevent low productivity by increasing energy efficiency of cooling and air conditioning system andincrease water reuse
・Consider chronic risks when changing the business plan or reviewing new worksites

Mid

Mid

Mid

Customers, Partners,
Shareholders/Investors

・Expand a scrap recovery system and end-of-life batteries closed-loop process
・Reduce water consumption by increasing reuse

Carbon Border Adjustment Mechanism

Emerging
Regulation &PolicyProposal for an EU Regulation concerning
batteries and waste batteries

Technology

Expansion of R&D in low carbon
technology and productMarketPhysical
Risk

Financial Impact1)

Product/Service
Resource efficiency

Increasing demand for renewableenergy transition

Increasing sales by securinglow-carbon products

Operation cost reduction throughresource efficiency improvement

Customers, Partners,
Investors

・Join RE100 and switch to renewable energy for power consumption across all worksites by 2050
・Establish an LCA system and implement carbon footprint reduction plans with partners

EU regulators, Customers, ・Join RE100 and switch to renewable energy for power consumption across all worksites by 2050
Partners, Investors
・Establish an LCA system and implement carbon footprint reduction plans with partners
EU regulators, Customers,
・Calculate Scope 3 emissions and establish reduction target
Partners, Investors
Customers, Partners

・Invest in and commercialize technology to make low-carbon and high-efficiency products

・Secure the ability to respond to markets’ and customers’ requirements due to the climate crisis
・Establish an LCA system and implement carbon footprint reduction plans with partners

・Join RE100 and switch to renewable energy for power consumption across all worksites by 2050
・Implement the Environmental Management Task Force’s tasks

Customers, Partners,
・Check workplace emergency response manuals on an on-going basis
Employees, Communities ・Bolster facility safety, subscribe to emergency insurance plans, etc.

Customers, Partners,
Shareholders/Investors

・Establish an LCA system and expand carbon footprint certified products・Invest in and commercialize technology to make low-carbon and high-efficiency products

1) Risks and opportunities are categorized into short-term(2023~2025), mid-term(2026~2030), and long-term(2031~) based on the duration of their impact. (e.g. The impact of GHG emissions trading schemes may increase in line with decreasing allowances.)SAMSUNG SDI SUSTAINABILITY REPORT 2023

OVERVIEW
1. Infinite Safety

42

2. Move to Net-Zero

SUSTAINABILITY MANAGEMENT
3. Partnership with Value-Chain Partners and Community

SUSTAINABILITY MAIN THEMES
4. Accountability in Value-Chain

5. Credibility in Corporate Governance

APPENDIX
6. Transparency in Stakeholder Engagement

Action for Climate Crisis
Our Response to Risks and Opportunities– Reducing GHG Emissions

Transitioning to renewable energy

Conserving energy use

agement and reduction as well as transparent disclosure to swiftly andour entire domestic and overseas operations by 2050. In October 2022,

tion by switching to high-efficiency equipment and recycling waste

Samsung SDI caters to stakeholder needs through GHG emissions man-proactively respond to the global climate crisis. In October 2022, wepublicly committed to environmentally friendly management and announced our strategic tasks to counter the climate crisis. We have sinceprogressed towards implementing these tasks by fully transitioning
to renewable energy, reducing direct GHG emissions, switching to zero-emission vehicles for our corporate fleet vehicles, and expanding carbon footprint certification. We have participated in the Korea Emissions
Trading Scheme since 2015, and our Hungary corporation has joined

the European Emissions Trading System since 2021, meeting our obligation to submit emissions data and managing our progress towards

the set goals. We improve the transparency of our disclosures throughour CDP commitments, and we were awarded an A- rating in 2022. In

2023, we plan to become a CDP Supply Chain member to manage ourSamsung SDI set a goal of fully transitioning to renewable energy for

we joined the RE100 (Renewable Energy 100%) in recognition of ourambitious renewable energy transition plan. To attain this goal, weare exploring a wide array of options to purchase Renewable Energy
Certificates (REC) and sign PPAs (Power Purchase Agreement) among
others. In 2021 and 2022, we purchased additional RECs to offset someof the power consumed at our corporations in Hungary and Tianjin,

China. From 2023, Cheonan and Ulsan worksite began the renewableenergy transition through green premium purchases

We aim to fully shift to renewable energy for power consumption at all

our overseas corporations by 2025. Guided by our overarching goal ofreaching 100% in renewable energy transition by 2050, we will makegradual switches – 68% by 2025, 76% by 2030, and 90% by 2040.

Category

Unit

Direct emissions

tCO2e

Other indirect emissions

tCO2e

Total emissions

Indirect emissions

2021

20221)

tCO2e

1,809,471

2,864,667

tCO2e

1,347,936

1,418,6163)

225,594
235,941

242,1162)

1,203,935

1) 2022 emissions were reported as market-based GHG emissions that reflect theconsumption of renewable energy. Our location-based GHG emissions that do
not reflect the consumption of renewable energy amounted to 2,953,550tCO2e.
2) Saved 6,340 tCO2e by reducing LNG use
3) Reduced 88,900 tCO2e by purchasing renewable energy certificatesenergy to join in the global climate efforts and respond to climate reg-ulations. We set our energy conservation goals for key energy sourcesby 2050; we identified key conservation tasks to reach these goals andare working towards these goals at every level of the Company.

In 2022, we provided all our worksites with energy technology supportand rolled out best practices to maximize the impact of our energy
conservation efforts. We switched to high-efficiency equipment andimproved our operational efficiency with a focus on equipment consuming a large amount of energy in. In addition, dehumidifier management standards were relaxed and Testing, Adjusting and Balancing(T.A.B) was performed for air conditioning to optimize our energy use.

Our taskforce composed of energy experts assessed the energy con-sumption of our new and expanded production lines in Korea andabroad to eliminate losses and continuously pursue improvements.

partners’ GHG emissions and forge even closer partnerships.

Company-wide GHG Emissions

In response to global climate change, we reduce our energy consump-

Use of Renewable Energy
Category

Unit

Use of renewableenergy%2022
Performance

2023
Goal

2025
Goal

9.3

26.0

68.0

SAMSUNG SDI SUSTAINABILITY REPORT 2023

OVERVIEW
1. Infinite Safety

43

2. Move to Net-Zero

SUSTAINABILITY MANAGEMENT
3. Partnership with Value-Chain Partners and Community

APPENDIXSUSTAINABILITY MAIN THEMES
4. Accountability in Value-Chain

5. Credibility in Corporate Governance

6. Transparency in Stakeholder Engagement

Action for Climate Crisis
Key Achievements in Energy Savings by Worksite
Business
Division

Smallsized
Li-ionBattery

Automotive & ESS

Electronic
Materials

Worksite

Activity

Achievement

CheonanIntroduced charger/
discharger AC power
recovery devices

Reduced power
consumption

Tianjin
Malaysia
Ulsan/
Xi’an/
Hungary
Hungary
Gumi
Wuxi

Changed the energy
source of dry ovens

Reduced the operationof compressors

Reduced costs
Improve power
lossesLowered the temperature
Reduced powerof washing water in the
consumption
washing process

Optimized theoperational efficiency
of dehumidifiers

Introduced
high-efficiency
refrigerators

Reduced air
conditioning
operational
expenses
Improved
the efficiencyof powerconsumption

Improved the operational
efficiency of RTO1) by
Cut fuel
replacing its heat storage consumption
materials

1) Regenerative Thermal Oxidizer

CASE

Lowering thetemperature ofwashing waterin the washingprocess to reduce
power consumption
CASE

Switching tohigh-efficiency
refrigerators to
improve power
efficiency

At our Ulsan, Xi’an and Hungarian worksites, washing water in washing equipment used following assembly is managed at the hightemperature of 70℃ to improve the cleaning capability of the chemicals contained, which results in a sizable amount of heater

power consumption. To reduce such power consumption, optimizing the temperature of washing water was required so that thewater would hot enough not to cause any quality issues. The cleaning performance of washing water was analyzed in different
temperature ranges, and the temperature was decreased from 70℃ to 25℃ in supplying the water. Real-life tests showed that thistemperature reduction did not result in any significant difference in cleaning performance. The reduction made in heater loads forwashing water as a result was translated into the annual power savings of 15,080MWh.

At our Gumi worksite, old refrigerators resulted caused continued increases in maintenance cost, and power expenses for cooling air
conditioning equipment rose as well. With the previous air-cooled refrigerators, the refrigerator and the cooling tower were separated, and this necessitated condensation fans to cool down the heat with air. In contract, water-cooled refrigerators with the integrated

cooling tower use cooling water to remove the heat and do not require any separate chiller for conditioning equipment. Switching

to water-cooled refrigerators and improving air conditioning made refrigerators 2.4 times more efficient while saving 5,768MWh in
annual power bills. Switching to a new cooling system also stabilized both temperature and humidity levels over time.
New refrigerator(cooling tower-integrated)

Cooling coil replacement

CHWS

Outdoor air cooling available inwinter (refrigerator off)
Operation halted(recyclable)

CHWR

Direct expansion refrigerator* Installed 2 units per air conditioner
High-efficiency water-cooled refrigerators

Refrigerant

Refrigerant

Air conditioner

SAMSUNG SDI SUSTAINABILITY REPORT 2023

OVERVIEW
1. Infinite Safety

44

2. Move to Net-Zero

SUSTAINABILITY MANAGEMENT
3. Partnership with Value-Chain Partners and Community

APPENDIXSUSTAINABILITY MAIN THEMES
4. Accountability in Value-Chain

5. Credibility in Corporate Governance

6. Transparency in Stakeholder Engagement

Action for Climate Crisis
Reinforcing the energy management system at theworksite level

Building infrastructure for EVs and electric buses

Following the deployment of the EES (Equipment Engineering System)at our Cheonan worksite, we did the same for our Ulsan worksite in
2022 to improve our energy management efficiency. Work automation
made possible with the EES – heat exchanger efficiency management,
filter differential pressure management, and load management fortransformers and circuit breakers - allowed us to efficiently manage ourenergy use. We also leverage our S-GEMS to manage the energy consumption of our worksites and their energy saving projects. Going forward, we will continue to identify operational issues and accumulate big
data on energy standards to render our management system even more
efficient. Between March and September 2022, we engaged in taskforce
activities to pursue the structural innovation of our power consumption
and identified major improvement tasks including one on ‘reclaiming
and recycling exhaust air collected from dehumidifying air’. These tasks
are implemented in a way that supports their company-wide application in line with identical criteria. For our overseas production facilities in
Hungary, Xi’an, and Malaysia, we regularly engaged in skill-up training byidentifying energy saving tasks and calculating their benefits.

Global Company-wide Energy Investments andAchievements in Reducing Energy Use
Category

Total investments
Fuel saving activities

Electricity & steam saving activities
Total reductions made
-Fuel reduced

Unit2020 2021 2022

cases

2,869 4,710 4,692
98
78
61

TJ

1,640 1,741 1,905

KRW million
cases
TJ

667

595

404

396

247

277

1,244 1,494 1,628
Savings -Electricity & steam reduced TJ
gener- Total savings generated
KRW 100 million 195
213 313ated
KRW 100 million-Fuel savings generated
44
28
43-Electricity & steam savings
KRW 100 million 151
185 270
generated

Samsung SDI joined the K-EV100 led by the Ministry of Environment tofully transition to zero-emission vehicles for all our owned and leased
corporate fleet vehicles by 2030, and has since gradually progressed
towards this commitment. According to the recommendations by the
Ministry of Industry, Trade and Energy to establish EV chargers, we expanded charging areas at each of our worksites to ensure these areas
account for 2% of their total parking lots by 2023.

Zero-emission Vehicles Deployed and Our Goals
Category

Total zero-emission
vehiclesPassenger cars forbusiness
Passenger cars for
executives

Buses

Transition rate

Unit

2022 Performance

2023 GoalNo. of vehicles

1629

No. of vehicles

2

2

%

11

20

No. of vehicles

19

No. of vehicles

1

34

Test-drive of an eco-friendly high-floor electronic bus

3

Expansion of EV Charging Areas in 2022
Worksite

Unit

CheonanNo. of spaces

15

No. of spaces

4

Giheung
Ulsan

Cheongju
Total

No. of spaces

No. of spaces

No. of spaces

Expansion of Charging Spaces

8

12

39

EV charging area at our Giheung worksite

SAMSUNG SDI SUSTAINABILITY REPORT 2023

45

OVERVIEW
1. Infinite Safety

2. Move to Net-Zero

SUSTAINABILITY MANAGEMENT
3. Partnership with Value-Chain Partners and Community

APPENDIXSUSTAINABILITY MAIN THEMES
4. Accountability in Value-Chain

5. Credibility in Corporate Governance

6. Transparency in Stakeholder Engagement

Action for Climate Crisis
Rigorous Scope 3(Other indirect emissions) management

As reducing carbon emissions across the whole value chain is increasingly recognized as an instrumental part of the global efforts to achievecarbon neutrality, Scope 3 management is gaining prominence as a
key agenda among businesses. To actively join in on the global en-

Scope 3(Other Indirect Emissions) in 20221) : 1,203,935 tCO2e
789,059(Unit: tCO2e)deavors for climate change adaptation, Samsung SDI has launched aninternal taskforce along with ESG, procurement, logistics, HR/generalaffairs departments to bolster our Scope 3 GHG emissions manage-

103,527

ment capabilities.

This started with establishing our emissions calculation methodology

118,927
95,269in line with the GHG Protocol’s Scope 3 accounting standards. While

we made disclosures on four out of 15 Scope 3 categories, we significantly extended our coverage to 12 categories that are highly associated with our business in calculating and disclosing our GHG emissions.

Samsung SDI will feed emissions calculation data into setting our

get initiative) and other global requirements as well as internal/exter-

12,097

nal stakeholder requirements. In tandem with this, we will work withpartners to identify and implement reduction tasks and further ourefforts to increase the accuracy of emissions calculation by extending
the scope of calculation and securing emissions factors.

35,23433,810

Scope 3 reduction goals in reflection of the SBTi (Science-Based Tar-

Purchased
goods andservices2)

Capitalgoods3)

Fuel- andenergyrelated
activities4)

Upstream
Waste
transportation generated
andin
distribution5) operations

6,726

7,446

Businesstravel6)

Employeecommuting7)

104
Upstreamleasedassets24
Downstream End-of-lifetransportation treatment
andof sold
distribution8) products

1) Excluded 10) Processing of sold products, 11) Use of sold products, and 14) Franchises from the 15 GHG Protocol categories
2) Calculated for the top 90% of the raw/subsidiary material purchase expenses
3) Calculated for the top 90% of the equipment purchase expenses
4) Fuel- and energy-related activities not included by Scope 1 and 2 (domestic and overseas operations)5) Calculated for the top 80% of the transport/logistics service expenses
6) Domestic and overseas worksites, but not included land transport used overseas
7) Commuter buses operated at domestic worksites8) Calculated for the top 80% of the transport/logistics service loads

1,713

Downstream Investments
leased assets

SAMSUNG SDI SUSTAINABILITY REPORT 2023

46

OVERVIEW
1. Infinite Safety

2. Move to Net-Zero

SUSTAINABILITY MANAGEMENT
3. Partnership with Value-Chain Partners and Community

APPENDIXSUSTAINABILITY MAIN THEMES
4. Accountability in Value-Chain

5. Credibility in Corporate Governance

6. Transparency in Stakeholder Engagement

Action for Climate Crisis
Our Response to Risks and Opportunities - Managing the Environmental Impact of Products
LCA(Life Cycle Assessment) implementation

Samsung SDI performs LCA (Life Cycle Assessment) to analyze the environmental impact generated along
a product’s life cycle from raw material extraction and product use to disposal and recycling. This bases ourefforts to explore ways to improve any adverse impact on the environment and respond to EU’s Batteries Regulation. We will also gradually expand products certified for their carbon footprint performance to calculate
and transparently disclose our carbon footprint left behind along the entire lifecycle. To this end, we will strive

to build internal capabilities for carbon footprint calculation and work with partner companies to reduce ourcarbon footprint.

Achieved Carbon Footprint certification for batteries

Samsung SDI plans to achieve Carbon Trust carbon footprint certification for major products, and in June
2023, we achieved Carbon Trust certification based on our carbon footprint calculations made on 49.5Ah(module) and 4.8Ah(cell) products. Carbon emissions were calculated along the entire lifecycle from the extraction of raw materials to their processing and disposal in accordance with the PAS 2050 developed in theUK, and the EU PEFCRs (Product Environment Footprint Category Rules) applied to battery products. While

proportions in each stage varied by country of sale, the pre-production stage that extracts, produces, anddistributes raw materials accounted for 50% and over in most cases. This alerted us to the needs for managing emissions in our partners’ manufacturing and extracting stage as well as our own manufacturing stage.

Meanwhile, discrepancies were witnessed in the use stage as electricity emission factors differed by country,
which affected the proportion of emissions throughout the entire life cycle.
Extraction, production,and distribution of
raw materials
Manufacturing

49.5Ah(module)
Carbon Trust Certification‘Carbon Footprint Calculation’ ➡

4.8Ah(cell)

70.7%
54.5%

15.6%
17.5%

Distribution

Use

Disposal

0.5%

11.3%

1.8%

1.9%

24.3%

1.7%

SAMSUNG SDI SUSTAINABILITY REPORT 2023

OVERVIEW
1. Infinite Safety

47

2. Move to Net-Zero

SUSTAINABILITY MANAGEMENT
3. Partnership with Value-Chain Partners and Community

APPENDIXSUSTAINABILITY MAIN THEMES
4. Accountability in Value-Chain

5. Credibility in Corporate Governance

6. Transparency in Stakeholder Engagement

Action for Climate Crisis
Risk Management

Metrics and Targets

stand their impact, and moves on to develop response strategies based on their impact on our operations andGuided by our overarching goal of reaching 100% in renewable energy transition by 2050, we will make gradu-

Samsung SDI’s risk management process starts with identifying and assessing climate-related risks to undermake decisions accordingly. In line with the ISO 14001 environmental management system standard to which
all our operations were certified, relevant departments from EHS, infrastructure, marketing and procurement

functions identify climate change impacts associated with external regulations and trends, internal organiza-

We aim to fully shift to renewable energy for power consumption at all our overseas corporations by 2025.
al switches – 68% by 2025, 76% by 2030, and 90% by 2040 – and this will allow us to reduce our GHG emissions
by 77% by 2050 compared to BAU levels.

tional activities, and products. When risks and opportunities are identified, the ESG Strategy Group and the
ESG Working Group analyze and prioritize them in consideration of their financial impact, the timepoint of

their physical occurrence, and our current response levels. This is reported to the company-wide Sustainabil-

ity Management Council that meets regularly on a quarterly basis to discuss response strategies and actionplans, and critical risks are reported and agendas are proposed to the Sustainability Management Committee

Renewable Energy Transition Goal

for its decision-making. Climate-related, country-specific regulatory risks are included in our company-widebusiness decision-making process for their integrated management.

Internal Process for Risk Management
Risk identification
and assessment

Identify company-wide risks based on ISO 14001
Identify risk/opportunity factors and conduct impact assessments
Review priorities and develop response strategies/implementation plans

Risk and opportunity
management

Transition to
Renewable
EnergyReport to the Sustainability Management Council
Report to the Sustainability Management Committee and make a decision
Implement at the business divisions and relevant departments
Monitoring at Sustainability Management Office

GHG
Emissions
Reductionaccording toTransition to
Renewable
Energy

68%

76%

90%

100%

59%

60%

70%

77%

2025

2030

2040

2050

SAMSUNG SDI SUSTAINABILITY REPORT 2023

48

OVERVIEW
1. Infinite Safety

2. Move to Net-Zero

SUSTAINABILITY MANAGEMENT
3. Partnership with Value-Chain Partners and Community

APPENDIXSUSTAINABILITY MAIN THEMES
4. Accountability in Value-Chain

5. Credibility in Corporate Governance

6. Transparency in Stakeholder Engagement

Circular Economy and Environmental Impact Management
Our Approach and Management Plan

The expanding battery market may give rise to a surge in the gener-

Closed-loop processeffect in relation to the processing and recovery of such batteries. We

from the scraps generated from our manufacturing process, we work with third-party companies specializing in this specific area to retrieve cobalt,

ation of end-of-life batteries, and environmental regulations will takestrive to increase resource recovery through recycling and reuse to
move ahead in responding to such upcoming changes and to mitigate

the environmental impact of end-of-life batteries from the viewpoint ofbattery lifecycle. We are establishing a closed-loop process to reclaim
mineral resources from process scraps and end-of-life batteries, andThe closed-loop process is designed to reclaim mineral resources either from process scraps or from end-of-life batteries. To recover mineral resources

nickel, lithium and other minerals from process scraps. In recovering mineral resources from batteries used and discarded by end consumers, we willteam up with customers (car OEMs) to establish an end-of-life battery recovery system.

Samsung SDI’s Resource Recovery Process

will roll out this process across our global operations. Furthermore, we

Scraps from the plant

will pursue process innovation to reduce recycling expenses by 2030
and secure our cost competitive edge as a result.

New productBattery(made of recycledmaterials)

Cathodematerials

Materials
supplier

ConsumerEnd-of-life battery

Recoverycompany

CustomerCo

Ni

Cobalt, nickel, etc.

Reuse
company

End-of-life battery

Recycling
companySAMSUNG SDI SUSTAINABILITY REPORT 2023

OVERVIEW
1. Infinite Safety49

2. Move to Net-Zero

SUSTAINABILITY MANAGEMENT
3. Partnership with Value-Chain Partners and Community

APPENDIXSUSTAINABILITY MAIN THEMES
4. Accountability in Value-Chain

5. Credibility in Corporate Governance

6. Transparency in Stakeholder Engagement

Circular Economy and Environmental Impact Management
Recycling and Reuse

Our progress towards recycling

Samsung SDI is establishing a process scrap recovery system across
our overseas locations in Malaysia and Hungary as well as in Cheonanand Ulsan in Korea to retrieve valuable mineral resources. Scraps generated from our plants are collected by companies specializing in scrap

recycling to retrieve nickel, cobalt and other minerals. The resources
reclaimed as such are transported to our battery material partners andSamsung SDI’s Plant Scrap Collection Locations
Present(as of Dec. 31, 2022)
Extension Plan

are fed back into the manufacturing of raw and subsidiary materials

that are eventually supplied to Samsung SDI. In 2023, we will establish

this system across even more overseas locations in Tianjin and Xi’an in
China to expand our recycling volume.

Our Goal in Using Recycled Metals1)
Category

Use of recycled metals

1) Cobalt, nickel, and lithium

Unit
%

2022
Performance

2

2023
Goal

4

Hungary

US

Korea〮 Cheonan〮 Ulsan

2025
Goal

12

China

〮 Tianjin〮 Xi’an

Our progress towards reuse

Malaysia

We are exploring the possibility of reusing end-of-service EV batteries for
ESS and other applications. As part of R&D efforts to this end, we are participating in an ‘end-of- service EV·ESS battery recycling industrialization

project’ led by Jeollanam-do and a ‘reused, refurbished battery-powered,renewable energy-aligned MWh-capacity ESS technology development
and demonstration’ project designed to review renewable energy-aligned
ESS for battery reuse. Our plan is to examine the technical conditions andfeasibility requirements to be met to reuse end-of-life batteries throughR&D and demonstration project outcomes on battery reuse.

Present(as of Dec. 31, 2022)

Korea(Cheonan, Ulsan),Malaysia, Hungary

Extension Plan

2023 China(Tianjin , Xi’an)

2025 USSAMSUNG SDI SUSTAINABILITY REPORT 2023

OVERVIEW
1. Infinite Safety

50

SUSTAINABILITY MANAGEMENT
3. Partnership with Value-Chain Partners and Community

2. Move to Net-Zero

APPENDIXSUSTAINABILITY MAIN THEMES
4. Accountability in Value-Chain

5. Credibility in Corporate Governance

6. Transparency in Stakeholder Engagement

Circular Economy and Environmental Impact Management
Waste Management

Water Resources Management

Samsung SDI takes the waste-to-resource approach to increase recycling and minimize the waste generated from

Samsung SDI strives to reduce our water consumption. In 2022, we recycled discharged effluents and reused the

Minimizing waste generation and ensuring their safe treatment

our domestic and overseas operations. In 2022, we obtained the ‘Zero Waste to Landfill (ZWTL)’ certification1) for

our domestic plants to raise our profile and brand value as an environmentally friendly business. In 2023, we will

earn ZWTL Platinum Validation for all our domestic operations including our Suwon worksite and Gold or higher

Validation for our overseas corporations to ZWTL. To ensure reliability in contracting our waste treatment and thelawful treatment of waste within our worksites, we request outsourcing companies to submit their confirmation

on regulatory compliance to verify that they abide by applicable laws, and communicate our regulatory compliance opinions to these companies to make sure that waste is processed in a legally appropriate manner. Mean-

while, we fully recycle all end-of-life batteries generated from our R&D and process operations as well as scraps
generated from our manufacturing process with the help of recycling companies. Going forward, we will explore

ways to recycle batteries used and discarded by customers and end consumers and introduce appropriate recycling methods.

1) Giheung and Cheongju worksites received Platinum Validation, and Ulsan and Gumi worksites received Gold Validation

Our Progress and Goals towards Waste Management
Category

Intensity-based reduction in waste generation(Baseline 2020)

Waste recycling rate1)

Unit%

2022 Performance

%

-38.3
93

2023 Goal-5.1-

PlatinumGold2022 Performance 2023 Goal
Giheung andCheongju

Cheonan, Ulsan,
and Gumi

Giheung, Cheongju, Gumi,
Cheonan, Ulsan, and Suwon

Tianjin, Wuxi5), Xi‘an, Hungary,
Malaysia, and Vietnam

water discarded when process-specific continuous water quality measurements are made. We also reduced ourwater consumption by improving the efficiency of our deionized water manufacturing equipment. We set our
mid/long-term goal of reusing water between 2023 and 2050 and are making progress towards the water saving

tasks identified each year. In 2022, we reviewed alternatives to hazardous chemicals used for wastewater treatment at our domestic operations. This allowed us to switch from sulfuric acid and caustic soda to their substitutes
at our wastewater treatment facility and make improvements on our use of harmful chemicals. To preserve thequality of water, we raise the bar in operating and managing the wastewater treatment facilities up and runningat our worksites to minimize the discharge of water pollutants. Our internal water pollutant discharge standards

are 30~50% more stringent than legally-permissible ones, and we introduce and operate discharge monitoring
devices to ensure the water pollutants generated from our operations do not exceed our internal standards.

Our Progress and Goals towards Water Management2025 Goal-1080

Our Progress and Goals towards Zero Waste to Landfill Validations
Category

Managing our water use and wastewater discharge

Category

Unit

Water reuse rate

2)

Water withdrawal reduction

3)

Intensity-based reduction in waterpollutant4) discharge (Baseline 2020)

Water Pollutant Discharge
Giheung worksite(left) and Cheongju
worksite (right)
earned Platinum
Validations

Category

Waterpollutants

BOD
COD
SS

Unit

%

2023 Goal

2025 Goal

29.2

89.0

208.0

23.0

10 thousand tons
%

2020

kg

11,977kg

46,785kg

2022 Performance

98,9072021

27,447

115,144
43,288

-42.1

2022

14,098100,537

48,654

26.2

-18.9

31.7
-33

1) Waste recycled/discharged2) Water reused/consumed, Cumulative
reduction goals for 2025 were upward
adjusted3) Compared to the estimated amount4) Sum of BOD, COD, and SS discharged5) Achieved Platinum validations in
February 2023

SAMSUNG SDI SUSTAINABILITY REPORT 2023

OVERVIEW
1. Infinite Safety51

2. Move to Net-Zero

SUSTAINABILITY MANAGEMENT
3. Partnership with Value-Chain Partners and Community

APPENDIXSUSTAINABILITY MAIN THEMES
4. Accountability in Value-Chain

5. Credibility in Corporate Governance

6. Transparency in Stakeholder Engagement

Circular Economy and Environmental Impact Management
Pollutant Management

Employee Engagement

To reduce the air pollutants that stem from our business operations, we

To keep pace with the government’s accelerating and intensifying green

Environmental management campaigns that engage
our employees

campaigns primarily for in-house cafeterias and stores operating at ourcontribute to our eco-friendly management and net zero journey in

Reduction the emission of air pollutants

apply internal air pollutant emission standards that are more stringent
than legally-mandatory ones, and install and operate optimized air pollution control equipment at each of our emitting facilities. Pollutantsreleased to the atmospheric environment following their treatment are

regularly assessed and monitored for their compliance with our internal standards, and are continuously managed for their emission trajectory. To minimize the generation of particulate matters and mitigate
our environmental impact on nearby communities, we switched to

low-NOx burners for boilers used at our worksites. We also shifted fromorganic to inorganic fuels for some of our manufacturing processes aspart of our sustained efforts to reduce the emission of air pollutants.

Our Progress and Goals towards Air Pollutants Management
Category

Intensity-based reduction in air
pollutant1) emission (Baseline 2020)

1) Sum of NOx, SOx, and PM emitted

Air Pollutants Emission
CategoryAirpollutants

NOx
SOx

PM

Unit

Unit
%

2022
Performance

-65.0

2023
Goal

-9.1

2025
Goal

-17

policy to regulate the use of disposables among others, we launchworksites to encourage our employees to stop using take-out plastic
and plastic supplies. In 2022, we found that plastic single-use items wereconsumed in large quantities at the office. In response, we ensured thatbottled water and single-use paper cups were not made available in theoffice environment and instead recommended employees to opt for

personal tumblers and mugs. We also ensured that the purchase of bot-

tled water and beverages as well as single-use paper cups would not besettled as business expenses. We made sure businesses operating at ourworksites replace plastic straws with paper ones and stop providing plas-

tic bags to reduce the consumption of plastic and disposables. Looking
ahead, we will continue to further boost our employees’ voluntary partic-

ipation and cooperation with our environmental protection initiative to
cut down on the use of disposables.

Our Progress and Goals towards Reducing the Use of Disposables
Category

2020

2021

2022

kg

70,11458,47539,548kg

63,32946,34944,554kg

Minimizing the use of disposables

3,480

1,871

1,281

In-house
cafeteria
Office2022 Performance

Bottled water Achieved zero (May)

Bottled water Achieved zero (June)
Paper cupStoresoperating Plastic straw
at ourworksites Plastic bag

Achieved zero (Sep.)

Replaced with paper
strawsStopped offering2023 Goal

Continue toachieve zero
disposables usedat the in-housecafeteria andoffice spaces

Convert singleuse cups tomulti-use cups

We launch campaigns that engage our employees so that they could
their daily lives. In 2022, a company-wide idea contest was held togather together a host of ideas for carbon reduction including energy

saving and resource recycling and to award innovative and actionable ideas. We also launched an end-of-life battery collection cam-paign which is closely aligned with our core business. Our employees
brought their products containing used Li-ion batteries, which werethen delivered to recycling organizations or safely disposed of depending on their recyclability. We will share our commitment to eco-friendly

management with all our employees and drive their voluntary participation in environmental management.

SAMSUNG SDI SUSTAINABILITY REPORT 2023

52

OVERVIEW
1. Infinite Safety

SUSTAINABILITY MANAGEMENT

2. Move to Net-Zero

3. Partnership with Value-Chain Partners and Community

SUSTAINABILITY MAIN THEMES
4. Accountability in Value-Chain

5. Credibility in Corporate GovernanceP
ARTNERSHIP WITH
VALUE-CHAIN PARTNERS
3.

AND COMMUNITY

Togetherness
with Community

Value-Chain Partnership
Expanded thewin-wincooperation
organization

Improved partners’
manufacturing
capabilities

Signed theautonomous
agreement to narrow
the gap between
large businesses
and SMEs

2022 KEY ACHIEVEMENTS

JoinedSamsung-wide
CSR Programs

APPENDIX
6. Transparency in Stakeholder Engagement

SAMSUNG SDI SUSTAINABILITY REPORT 2023

OVERVIEW
1. Infinite Safety

53

2. Move to Net-Zero

SUSTAINABILITY MANAGEMENT
3. Partnership with Value-Chain Partners and Community

SUSTAINABILITY MAIN THEMES
4. Accountability in Value-Chain

Value-Chain Partnership

Hayoung Choi, Professional,
Coexistent Operation Group, Coexistent Cooperation Office

Q How did you support Samsung SDI for its joint growth efforts andAs a global leader, Samsung SDI pursues joint growth with partners based on win-win partnership, and complies with fair trade principles to promote

free competition while helping partners boost their competitiveness to pave the way for sustainable growth. We also implement three joint growth
missions to progress farther ahead with partners, creating a mutually-cooperative ecosystem along the way.

Definition of partnersof joint growth with partners, we reorganized the Coexistent Cooper-

into first-, second-, and third-tier partners. First-tier partners directly

direct leadership of the Business Management Office while creating a
sublevel organization to support innovation consulting. Innovation

consultants will assist partners in identifying issues and improvementtasks across their entire operations including quality, manufacturing,and innovation to boost their overall competitiveness.

Samsung SDI manages our supply chains by classifying partners
engage in our product manufacturing and business execution, andsecond- and third-tier partners provide raw/subsidiary materials. We

specifically define the suppliers of key raw materials and components

as primary partners, and provide them with a range of support. In selecting and managing partners, we perform paper-based assessment
and due diligence to ensure transparency and fairness.

Win-Win Cooperation Promotion System

support to boost manufacturing competitiveness and financial/management

support to ensure stable operations. We would like to point out that we exshortages which exacerbated amid the pandemic and hire outstanding talent.

Along with our annual training provided under the Consortium for HRD Abil-

ity Magnified Program, we also teamed up with the Industrial Bank of Korea
to support partners’ job fair booth operation and online recruitment, andsigned a multilateral MOU with the Korea Polytechnic College to implementthe ‘Learning-based Matching’ program. We also created the ESG Part under

our Purchasing Team to provide partners with ESG support in reducing their
GHG emissions and fulfilling social responsibility, and implement on/offline
training programs to help partner employees with ESG capacity building.

Q Is there any memorable feedback from partners in relation to win-win
cooperation activities?

As we recently resumed in-person communications with partners, this pro-

rechargeable battery industry and SDI’s management approach. Our partners

were particularly enthusiastic when our CEO directly engaged with them

Create a virtuous cycle and promote win-win cooperation within the ecosystem
Expand the basis for sustainable growth

Expand the generation of performance inproductivity/quality innovation

Collaborate in building an ESG management
systemBuild a support system for hidden
champions

Expand open communication channels

Nurture global operational experts

activities to lay the basis for partners’ sustained growth, spanning technology

vided greater opportunities to share ideas with partners on the outlook of the

Growth into a Global Leader through Win-Win Cooperation

Boost the competitiveness of partners

partners for their ESG capacity building in 2022?

The Coexistent Cooperation Office engages in a wide range of win-win growth

panded support for partners’ recruitment efforts to help them tackle labor

Expanding the win-win cooperation organization

ation Office, our win-win cooperation organization, into one under the

6. Transparency in Stakeholder Engagement

INTERVIEW

Our Approach and Management Plan

As our expanding global presence further highlights the importance

5. Credibility in Corporate Governance

APPENDIX

Facilitate technology/contest/development
proposals

Comply with fair trade principles

Establish and broaden the fair trade
ecosystem

Advance our compliance monitoring
systemthrough Q&As and interactive communication. Face-to-face communication

with our top management surely helped our partners concur on our approach
to win-win cooperation.

Q Tell us about Samsung SDI’s approach to bolstering win-win cooperation with partners.

While we have focused on developing win-win programs and supporting key
partners primarily to lay a stronger basis for win-win cooperation, we will shift
gears to vertically expand our win-win cooperation network and establish a

win-win ecosystem. Our culture of win-win cooperation will extend from primary first-tier partners to all first-tier partners who do business with SDI andeven second- and third-tier partners.

SAMSUNG SDI SUSTAINABILITY REPORT 2023

54

OVERVIEW
1. Infinite Safety

2. Move to Net-Zero

Value-Chain Partnership
Partner Code of Conduct

Samsung SDI established the Samsung SDI Partner Code of Conduct

in reflection of the RBA (Responsible Business Alliance) Code of Con-

duct which sets out how businesses should fulfill social responsibility along their supply chains, and shares the Code with partners andrequests their compliance with the Code. We guide our partners tovoluntarily abide by the Code in their day-to-day routines throughannual trainings, meetings, notices, and varying channels while pub-licizing our policy and improving awareness among internal/external
stakeholders including customers, investors, senior management
and the procurement department.

Operating the Samsung SDI Partners’ Association

The Samsung SDI Partner Association (SSP) aims to maintain mu-

tually-beneficial partnerships, pursue joint growth, and promotewholesome development in line with the spirit of co-existence andco-prosperity. The SSP consists of the subcommittees of materials,
components, and equipment and is launched every two years. As of2022, the 10th SSP was up and running in its first year. A total of 47
partners joined the 10th SSP to share industry prospects in Korea andabroad as well as Samsung SDI’s business outlook and strengthen
strategic partnerships. Key activities in 2022 include the virtual SSP
general assembly, SSP executive/manager seminars, overseas benchmarking for SSP executives, and subcommittee meetings. Shared
Growth Day was also hosted to share innovation best practices, award

top-performing partners, exhibit products, and hold procurement
consultations with Samsung affiliates to promote joint growth.

SUSTAINABILITY MANAGEMENTAPPENDIXSUSTAINABILITY MAIN THEMES
4. Accountability in Value-Chain

3. Partnership with Value-Chain Partners and Community

5. Credibility in Corporate Governance

6. Transparency in Stakeholder Engagement

Establishing Fair Trade

Laying the Basis for Partners’ Growth

To establish transparent transaction practices, we make it a rule to use

Samsung SDI has provided win-win cooperation consulting since 2020

Fair trade principles

the standard contract form in doing business with partners, and observe

the four action principles stipulated and amended by the Fair Trade
Commission to promote compliance with subcontract regulations.

4 Action Principles
Executionof desirable
agreements

Fair selection andregistration ofpartners

Operation of unfair
trade practice
prevention andmonitoring
systems

Issuance andretentionof writtenagreements

Samsung SDI commits to establishing fair trade practices not only

in our transactions with first-tier partners but also in transactions
made among first-, second-, and third-tier partners, and furthers ourefforts to bolster competitiveness across the whole of the industry.
We support partners to enter into the fair trade agreement among

themselves and encourage them to improve their payment criteria
so that payments could be made in cash within 30 days and throughthe win-win payment system. We also encourage the use of the standard subcontract agreement between first-tier and second-tier part-

ners, and expand our joint growth activities including ESG support
and open bidding for key areas of work.

Performance in Supporting the Signing of the Fair Trade Agreement
Samsung SDI – First-tierpartners
First-tier – Second-tierpartners

Second-tier – Third-tierpartners

Unit

2020

2021

2022

cases

129

136

157

No. ofcompanies
cases

110
40

111
45

to support partners to improve the efficiency of their business opera-

tions. Consultants who are former Samsung SDI executives draw ontheir extensive field experience, management knowhow and expert
knowledge to offer management advice to meet the specific needs ofSupporting the signing of the fair trade agreement

Category

Management consulting for partners

112
54

partners. This assists partners in improving their management competency and boosting their overall competitive edge in the areas ofproductivity, quality innovation, strategy, and marketing to join us on
our joint growth journey. In 2022, 17 management advisory tasks were

implemented for 14 partners. We also implement the Voice of Partners(VOC) program to collect feedback and complaints from partners andmake necessary improvements.

Management Advisory
Development/Quality

New product development, technology strategy, technology development
roadmap, New material/process/facility development

Management

Overseas production facility operation, audit process, Operational
manufacturing system, SCM KPI operation

Development/Business strategy

New business/product development strategy formulation, Productcompetitiveness/differentiation improvement plan

Quality/Marketing

Quality assurance strategy setting & development process development,
Development and mass-production quality assurance system development

SAMSUNG SDI SUSTAINABILITY REPORT 2023

55

OVERVIEW
1. Infinite Safety

2. Move to Net-Zero

Value-Chain Partnership
Assisting partners with talent recruitment

Leveraging the training system and infrastructure available at theSamsung SDI Training Center, we assist partners with their employee
capacity-building. The training curriculum consists of 29 courses on

job skills, quality management, process management, and businessadministration. In 2022, training was provided to 1,249 employees

from 103 partners through 60 courses. We also help partners with re-cruitment and talent development training so that our partners hire
talented individuals armed with both job skills and desired personal-

ity characteristics. In 2022, our recruitment and development support

program helped create jobs for 49 persons at two partners. In response

to global regulations governing supply chain ESG management andstakeholder needs, we provided environmental management training
to help partners bolster their ESG capabilities. This training covered the

topics of net zero trends and business approaches, ESG management,

occupational health and safety management, and response to productenvironmental regulations, which was completed by 180 persons from78 partners.

Providing financial support for partners

We team up with financial institutions to implement financial support

programs for partners and contribute to their stable business oper-

ations in so doing. We raised KRW 130 billion joint growth funds with
the Industrial Bank of Korea, and the interest income generated goes tohelp second- and third-tier partners as well as first-tier partners pay interest on their loans. In 2022, 62 partners were provided support worth
KRW 101.4 billion through the funds.

SUSTAINABILITY MANAGEMENT
3. Partnership with Value-Chain Partners and Community

SUSTAINABILITY MAIN THEMES
4. Accountability in Value-Chain

5. Credibility in Corporate Governance

APPENDIX
6. Transparency in Stakeholder Engagement

Boosting Win-Win Cooperation

Operating the benefit sharing system

We engage in supply chain manufacturing innovation tasks to support

laborate in diverse ways to attain the set common goal, and share theThe benefit sharing system aims to facilitate win-win cooperation with

Improving partners’ manufacturing capabilities

partners to bolster their manufacturing capabilities. In 2022, we worked

with Sangsin EDP which produces CDIs (Current Interrupt Device) for cylindrical battery and undertook on-site innovation activities at the company’s

request to establish a reliable supply chain system in preparation for vol-ume increases. We set a goal of improving quality defect rates and implementing the 3R5S initiative to ensure reliable quality, and performed on-

SMEs. Under this program, companies placing and landing orders col-benefits generated accordingly. In the first and second half of 2022, we

identified seven tasks with seven partners and worked together withthem to implement these tasks. This helped partners reduce defects,

increase production quantity per man hour, and improve quality, boosting their productivity and manufacturing competitiveness as a result.

and Samsung SDI’s manufacturing experts. Key improvements identified

Signing the autonomous agreement to narrow thegap between large businesses and SMEs

new material for equipment parts, and changing oil components for over-to narrow the gap between large businesses and SMEs with the Korea

site reviews and identified tasks with the help of a third-party consultancy
and implemented include reducing lot replacement times, switching to a

all equipment efficiency improvement, and standardizing raw material slitting and changing insulation design dimensions for defect improvement.

Innovation Task Execution Outcomes in 2022
Category
No. of tasks identified

No. of tasks completed

Overall
Qualityequipment
defect rates
efficiency improvement
improvement
7

7

7

6

1) 1 task not completed due to delays in technology development

3R5S
3

3

Total
17

161)

Supporting win-win smart factory development

Since 2021, we have supported our small/mid-sized partners to build

In November 2022, Samsung SDI signed the autonomous agreement

Commission for Corporate Partnership and our partners. Under thisagreement, we will operate joint growth partnership programs valued
at KRW 155.2 billion over the next three years. This program will help ourpartners across wide-ranging areas including joint investment technol-ogy development, smart factory distribution and operation, and pro-ductivity improvement. In fact, we signed the ‘agreement to resolve thewage gap through innovation’ back in 2019 to reduce wage disparities
between large businesses and SMEs and pursue mutual growth. We willcontinue with our joint growth efforts by working even closer with ourpartners and offering them with effective assistance.

their smart factory in conjunction with Samsung Electronics and Samsung Electro-Mechanics with an aim to boost their shop floor compet-

itiveness. This helps them deploy ICT-connected operational systems
and manufacturing automation systems for their manufacturing facility while elevating their innovative manufacturing mindset and boosting quality and productivity. We have supported eight partners since2022 and will complete this program in August 2023.

Ceremony to sign the autonomous agreement tonarrow the gap between large businesses and SMEs

SAMSUNG SDI SUSTAINABILITY REPORT 2023

OVERVIEW
1. Infinite Safety

56

2. Move to Net-Zero

SUSTAINABILITY MANAGEMENT
3. Partnership with Value-Chain Partners and Community

APPENDIXSUSTAINABILITY MAIN THEMES
4. Accountability in Value-Chain

5. Credibility in Corporate Governance

6. Transparency in Stakeholder Engagement

Togetherness with Community
Our Approach and Management Plan

Samsung-wide Programs

abling People’, is making the world a better place and helps children

Six Samsung affiliates including Samsung SDI operate Samsung SW

Samsung SW Academy for Youth

Samsung Junior SW Academy

and adolescents dream a big dream and unleash their full potential

Academy for Youth to offer a year of theoretical and practical train-

cation that combines software and artificial intelligence to help teen-

ated employee-involving programs aligned with our unique businesscompetitiveness in the job market. Trainees learn algorithms, coding,Samsung SDI, guided by its CSR vision of ‘Together for Tomorrow! Enwith Samsung's core competencies and resources. In 2022, we opercharacteristics, and our flagship teen education programs that support capacity-building for our future generations in conjunction with
Samsung affiliates.

Going forward, we will partner with Samsung affiliates to jointly op-

erate Samsung’s leading CSR programs and bolster the expertise andsocial contribution of respective programs.

1)

ing to help youth wishing to become SW developers improve their
web technology and more in the introductory course, and develop

real-world capabilities to use AI, IoT, and other 4th Industrial Revolution technologies in the advanced course. A total of 4,732 persons

completed training from the first to the seventh batch, and 3,575 ofthem landed a job in the IT, financial and other diverse sectors with
76% employment rate as of the end of 2022. In 2023, nearly 2,100 students of the 8th and 9th batches are learning at the Academy.
1) S amsung SDI, Samsung Electronics, Samsung Display, Samsung
ElectroMechanics, Samsung SDS, and S-1

CSR Goal

Provide learning opportunities to

Launched back in 2013, Samsung Junior SW Academy provides eduagers develop competency in merging knowledge from different fields
to meet the talent needs of the emerging AI era. This assists current

school teachers in receiving training during school vacation twice ayear to improve their SW and AI competency while offering learning

content, educational programs, and practice kits developed in partnership with educational experts to help schools provide high-quality SW and AI education. Students also receive special lectures andmentoring from Samsung employees to design their future career
pathways. Nearly 3,600 teachers and 150,000 teens joined this growthjourney along with Samsung Junior SW Academy as of 2022.

3 million

elementary/junior/high school students nationwide over thenext

decadeunder the Blue Elephant program

Samsung SW Academy for Youth

Samsung Junior SW Academy

SAMSUNG SDI SUSTAINABILITY REPORT 2023

57

OVERVIEW
1. Infinite Safety

2. Move to Net-Zero

SUSTAINABILITY MANAGEMENT
3. Partnership with Value-Chain Partners and Community

SUSTAINABILITY MAIN THEMES
4. Accountability in Value-Chain

5. Credibility in Corporate Governance

APPENDIX
6. Transparency in Stakeholder Engagement

Togetherness with Community
Samsung Dream Class

Stepping Stone of HopeBlue Elephantcamps back in 2012, Samsung Dream Class launched the online plat-rather than by their own family, should live on their own when they turncreased use of smartphones and IT devices, Samsung affiliates have

Initially started as a combination of afterschool classes and summer

form-based Samsung Dream Class 2.0. This provides three types oflearning content - career path guidance to help teens discover theirtalent and dream and explore various career pathways, future competency development in the areas of global communication, coding,mathematics, and reasoning, and finally, school curriculum learningessential for bringing one’s dream to life.

Teens raised at care facilities, community homes or foster care homes,
18 years old as their statutory protection period terminates. Samsung
Stepping Stone provides teens preparing for their self-reliance withresidence and customized learning. In collaboration with local governments and NGOs, we offer them residential spaces – one room per per-son – for up to two years and support them with self-reliance programs
covering education and job information. Samsung operated eight cen-ters in Busan, Daegu, Gangwon, Gwangju, Gyeongnam, Chungnam,
Jeonbuk, and Gyeonggi, and opened another center in Gyeongbuk inApril 2022. In 2023, new centers will open in Jeonnam and Chungbuk

to establish a network of 11 ‘Samsung Stepping Stone of Hope’ centers
nationwide.

As cyber violence affecting teens is spreading further amid the inworked to prevent cyber violence among teens since 2020. The Blue El-

ephant project was inspired by such commitment: the color blue symbolizes calmness and stability and elephants are known for their behavior to group together to protect themselves from predators. Under

the Blue Elephant program, we help teens learn how to prevent andcope with cyber violence, provide psychological counseling for victims

to regain their emotional stability and recover, and launch campaigns
to eliminate cyber violence.

The Blue Tree Foundation and Samsung provided 660,000 elementary, junior, and high school students with online and offline prevention

training as of 2022 on a cumulative basis, along with support for academic research to resolve cyber violence issues. In 2022, we engaged

in wide-ranging activities – on-site preventive training and campaigns,

online forums, employees’ talent donation, and discussions for theamendment of the school violence prevention law – in search of more
effective ways to keep cyber violence at bay.

Samsung Dream Class

Stepping Stone of Hope MOU signing with ChungbukCampaign to protect teens from cyber violence in 2022

SAMSUNG SDI SUSTAINABILITY REPORT 2023

58

OVERVIEW
1. Infinite Safety

2. Move to Net-Zero

SUSTAINABILITY MANAGEMENT
3. Partnership with Value-Chain Partners and Community

APPENDIXSUSTAINABILITY MAIN THEMES
4. Accountability in Value-Chain

5. Credibility in Corporate Governance

6. Transparency in Stakeholder Engagement

Togetherness with Community
Employee-involving Programs
Dream Walking School Forest

Hands-on Environmental Education Book

SDIHU Samsung SDI Newborn Baby Program

zero emissions and resolve particulate matter pollution, bringing us one

we donate environmental education books that we directly develop. In

where it is based to provide gifts to newborn babies under the ‘Sam-

Samsung SDI implements wide-ranging CSR programs to achieve net
step closer to a sustainable future. CO2, particulate matters (PM), and other air pollutants give rise to increases in average global temperature andcause global warming as a result, posing highly critical social challenges

of undermining the health and living environment of our future generations. Dream Walking School Forest aims to create forests that help reduce
particulate matter emissions for elementary schools in the vicinity of our

As part of our educational donation initiatives for children and teens,
2022, over 1,600 employees volunteered to produce a pop-up book on
the importance of water and water circulation. The copies of this bookwere donated to children at local children centers across the nation. In

2023, we will distribute environmental education books with updated
content to help our future generations value mother nature.

worksites through the funds raised in proportion to the steps taken by ourHands-on Nanum Green Campaign

consists of outdoor forestation in the first year, indoor forestation in the

program: our employees volunteer to make beaded jump ropes out

employees. This program is operated for three years for each school andsecond year, and environmental training in the third year. In 2022, a totalof 6,933 Samsung SDI employees participated in this program for 32,261

hours for Yangcheong Elementary School in Cheongju. This helped pre-vent hazardous gases and particulate matters from penetrating from the

Our Hungary corporation partners with a group of mothers in Gödsung SDI Newborn Baby Program’. Mothers made eco-friendly sup-plies for newborns with recycled and naturally-derived materials andpackaged special gift boxes from SDIHU and donated them more than

450 families since Feb, 2021. Going forward, we will explore even more
CSR programs in the mutually-beneficial journey that we take alongwith our communities.

As an eco-friendly energy company, Samsung SDI runs an upcyclingof recycled waste plastic and donate them to children at local children
centers nationwide. In 2022, nearly 1,000 employees joined this program to help kids stay healthy all while caring for the environment.

outside to create a safe and pleasant environment for 457 students and
33 school staff, and was also effective in reducing harmful gases and PM

SDIHU Samsung SDI Newborn Baby Program

SDIBS Samsung SDI Running and Walking Week

levels across the local community.

Our Austria corporation celebrated the ‘Samsung SDI Running andWalking Week’ for five days between September 23 and 30 2022. Thisidea was initiated amid COVID-19 which banned all sports events
since 2020 and was done in the years 2020, 2021 and 2022. Our employees walked or ran in their personal time and the company donated 1 euro for every 1 km that was walked or ran. The 1.262,00 euros

raised as such was donated to the Styrian pediatric cancer treatment
School Forest signboard hanging ceremony at Yangcheong Elementary School in
Cheongju

Hands-on Environmental Education Book

body council which helps children with cancer.

SAMSUNG SDI SUSTAINABILITY REPORT 2023

OVERVIEW
1. Infinite Safety59

2. Move to Net-Zero

SUSTAINABILITY MANAGEMENT
3. Partnership with Value-Chain Partners and Community

SUSTAINABILITY MAIN THEMES
4. Accountability in Value-Chain

5. Credibility in Corporate Governance

APPENDIX
6. Transparency in Stakeholder Engagement

A
CCOUNTABILITY IN
VALUE-CHAIN
4.

SCM Risk Management
Created the
ESG Part under the
Purchasing
Team

Expanded
third-party audits
on conflict mineralsmelters &refiners

Labor·Human
RightsTalentDevelopment

Organizational
CultureBlind surveys on
employees related
to human rights
risks

HostedTech & Career
Forum

Facilitatedcommunication
with employees

2022 KEY ACHIEVEMENTS

SAMSUNG SDI SUSTAINABILITY REPORT 2023

60

OVERVIEW
1. Infinite Safety

2. Move to Net-Zero

SUSTAINABILITY MANAGEMENT
3. Partnership with Value-Chain Partners and Community

APPENDIXSUSTAINABILITY MAIN THEMES
4. Accountability in Value-Chain

5. Credibility in Corporate Governance

6. Transparency in Stakeholder Engagement

SCM Risk Management
Our Approach and Management Plan

Managing Partners’ Sustainability

fication system to preemptively manage safety, environmental, ethics,

Samsung SDI has been operating the S-Partner Certification system

To establish responsible supply chains, we operate the S-Partner Certihuman rights, and other ESG risks that may occur along our supply

chains. We also provide training on regulatory amendment trends
concerning labor and environmental issues to support our partners tofaithfully fulfill their social responsibility. In line with the emerging social challenges of environmental pollution and human rights violationthat stem from the raw material extraction process, we perform risk assessments on our mineral supply chains and step forward to join global conflict mineral initiatives along with our customers and partners.

Creating an ESG organization for procurement
operations

In 2022, we created the ESG Part under the Procurement Strategy
Group to systematically fulfill our supply chain social responsibility.

This new organization sets the course and takes action in improving

ESG risks that affect our domestic and overseas partners in alignment
with our new sustainability management strategy. Its priority tasks

include managing supply chain carbon emissions and advancing
third-party due diligence to respond to global ESG regulations as well

as bolstering partners’ ESG capacity building to lay the operational

S-Partner Certification systemproceeds to on-site audits performed by third-party professionals andsince 2009 to ensure the sustainability of our supply chains. This sys-

are required to submit their improvement plans within one month,

tem allows us to assess and certify partners for their compliance with
our Code of Conduct in line with the standards recommended by suchinternational organizations as the RBA (Responsible Business Alliance), the ILO, and the ISO. Biennial assessments are performed on

major partners who provide us with raw/subsidiary materials with afocus on labor, ethics, environment, and health & safety risks. Since theoutbreak of COVID-19, compliance with COVID-19 prevention guidelines and implementation of their specific rules were added to thehealth assessment category. The S-Partner Certification Assessment

process begins with self-assessments made by partners, and thenfollow-up measures. For issues identified from on-site audits, partners
and re-audits are performed on those who fail to meet mandatorycompliance requirements or the set score threshold to achieve certification. Meanwhile, the zero-tolerance principle is applied to criticalcategories including child labor, forced labor, pollutant discharge, andenvironmental approval to demand thorough compliance on the partof partners. In 2022, on-site audits were conducted on 23 domestic and12 overseas partners, and 37 overseas partners received paper-based

audits instead amid COVID-19. In 2023, we plan to conduct audits on
39 domestic and 28 overseas (Malaysia, Vietnam, Japan, Thailand, andothers) partners.

S-Partner Certification Assessment Process
New & major
partners

Self-assessment

foundation.

1) New partners: 70 points, existing partners: 80 points

Compliance withmandatory requirements
and the score1)
thresholdOn-site audit

Re-auditnoyes

Certification
awardedSAMSUNG SDI SUSTAINABILITY REPORT 2023

OVERVIEW
1. Infinite Safety

61

SUSTAINABILITY MANAGEMENT

2. Move to Net-Zero

3. Partnership with Value-Chain Partners and Community

APPENDIXSUSTAINABILITY MAIN THEMES
4. Accountability in Value-Chain

5. Credibility in Corporate Governance

6. Transparency in Stakeholder Engagement

SCM Risk Management
Progress made on S-Partner Certification Assessment
Certification Assessment Outcomes
Category
Domestic

Overseas

Total

Certification terminatedNew partner

2020

Re-audit
Total

Certification terminatedNew partner
Re-audit

2021

24
2

2022

26
4

3

20
3

3

0

29

33

23

-

5

4

26

37

-

45

0

0

Total

26

42

49

New partner

2

9

7

Certification terminatedRe-audit
Total

Partners who failed to meet thecertification criteria

Certification Assessments andCorrective Actions Taken
Category(unit: No. of companies)

Partners who are subject toassessment
Partner
assessments Partners who received actual
assessments
Partners identified as in need
Corrective
actions taken of improvement
for identified Partners who submitted
issuesimprovement plans
Partners whose contract was terminated due
to corruption

50

63

3

65

3

55

0

75

0

72

0

0

(unit: No. of companies)

2020

2021

2022

59

751)

721)

55

38

23

63
55
0

1) Paper-based audits were performed on 37 overseas partners

75
38
0

S-Partner Certification Audit results andimprovements identified in 2022

The S-Partner certification audits performed in 2022 revealed thatno significant incidence of non-compliance occurred in such essential categories as ban on forced labor, ban on child labor, wages andcompensation, environmental approval, hazardous substances management, and occupational safety. For cases of non-compliance iden-tified through audits, we ensure immediate improvements are madeor improvement plans are developed and implemented dependingon the significance of the issue at hand and possible improvements.

We will expand the number of participants in our partner training conducted on S-Partner requirements and strengthen on-site audits for

categories with higher incidences of non-compliance such as occupational safety and hazardous substances management.

Compliance by Certification Audit Category in 20221)■ Labor ■ Health & safety ■ Environment■ Ethics ■ Management System ■ Overall

Domestic partners

91.2 84.7 89.6 79.4 84.4 88.6

Overseas partners

Performing audits on partners of overseas corporationsin 2022

S-Partner audits help us identify and prevent risk on the partnersof our overseas corporations as well as our domestic operations. In

2022, S-Partner audits were performed on the suppliers of key raw/
subsidiary materials at our Vietnamese corporation in July and at our

Malaysian corporation in October. Personnel from the Headquarters
and these corporations teamed up with third-party professionals to

conduct audits in the categories of labor, health/safety, ethics, envi-

ronment, and management system. The audit findings revealed thatsome partners were in need of continuous in-process environmental
improvements and safety-related on-site improvements as well as
worker training. There were also partners who lacked documented
regulations governing the rules of labor and disciplinary procedures(Unit: %)91.3 84.0 91.0 76.0 81.7 87.7

72

CASE

or had incidences of excessive overtime work. These partners prepared and submitted their improvement plans based on audit results,

and will be monitored for their implementation of improvement measures. Such audits jointly conducted by employees from the Head-quarters served to nurture audit personnel at the corporation level,
laying the basis for respective corporations to take the lead in oper-

ating the overall management process spanning partner selection,
audits, and follow-up measures.

2301) Compliance rates verified through on-site audits

S-Partner certification assessment on partners

SAMSUNG SDI SUSTAINABILITY REPORT 2023

OVERVIEW
1. Infinite Safety

62

SUSTAINABILITY MANAGEMENT

2. Move to Net-Zero

3. Partnership with Value-Chain Partners and Community

SUSTAINABILITY MAIN THEMES
4. Accountability in Value-Chain

5. Credibility in Corporate Governance

APPENDIX
6. Transparency in Stakeholder Engagement

SCM Risk Management
Responsible Minerals Sourcing
Responsible sourcing policy

Risk due diligence systemerals in a sustainable and ethical way and establish responsible sourcing practices

strengthen the chain of custody while identifying risks along our mineral supply chains and implementing risk mitigation plans

Samsung SDI stipulated our responsible minerals sourcing policy to source minacross our supply chains. In compliance with the OECD Due Diligence Guidance for

Responsible Supply Chains of Minerals from CAHRA, we strictly ban the use of minerals sourced in a way that could cause adverse impact from the socio-environmental
aspects in relation to funding armed groups, serious human rights violation, health orsafety risks, and environmental destruction.

Supply chain risk management for minerals

To manage potential risks along our mineral supply chains, we implement our man-agement system established in line with the 5-Step Framework of the OECD Due
Diligence Guidance for Minerals. We conduct regular surveys to ensure supply chain

traceability and identify socio-environmental risks, and recommend all our smelter& refiners to verify they are conformant with the RMAP (Responsible Minerals As-

surance Program) of the RMI (Responsible Minerals Initiative). We also receive due

diligence performed by independent third-party organizations for our supply chain
sourcing of such critical minerals as cobalt, nickel, and lithium.
Step 1
Establish
management
systems

Adopt a policy
for responsible
mineral supply
chains andestablish amanagement
system, provide
internal capacitybuilding training

Step 2
Identify &assess risks

Step 3
Managerisks

Step 4
Conduct due
diligence

Conduct
upstream
surveys, perform
risk assessments
on supply chains
and suppliers

Report risk
assessment
results to senior
management,
develop andimplement risk
mitigation plans

Perform
third-party
supply chain
audits, support
suppliers to
become RMAPconformant
under the RMI

Step 5
Publicly reporton duediligence
Disclose due
diligence results
and activities
throughsustainability
reports and on
our website

We operate a risk due diligence system which applies to all our suppliers of raw and subsidiary materials. Based on this, wewith suppliers.

Samsung SDI’s Supply Chain Risk Due Diligence Process
S-Partner Assessment(1st Filter)

Smelter & Refiner/Country of Origin(2nd Filter)

Grievance Mechanism(3rd Filter)

Risk assessment
On-site Audit
Paper-based partner
assessment

Smelter &refiner survey
Third-party
audit

Country oforigin survey
Third-party
audit

NGO reports, media
coverage, stakeholder
requirements

Serious non-compliance1): Child labor / severe human rights violation / serious non-compliancein the environmental and health safety aspects
Non-compliance with the supplier code of
conduct from the aspects of labor, health &safety, environment and ethics2)

Non-verified smelters & refiners / countryof origin Smelters & refiners not auditedby third-parties

Other ESG-related issues andnon-compliance1) Serious non-compliance: In the event of serious non-compliance, suppliers are required to take immediate improvement measures, and even to suspend
their supply when needed through reviewing the severity of the issue at hand and other relevant information2) Non-compliance with the code of conduct: Refer to general non-compliance with the supplier code of conduct that could be improved, and progress ismonitored through the submission of improvement plans or audits

SAMSUNG SDI SUSTAINABILITY REPORT 2023

OVERVIEW
1. Infinite Safety

63

2. Move to Net-Zero

SUSTAINABILITY MANAGEMENT
3. Partnership with Value-Chain Partners and Community

APPENDIXSUSTAINABILITY MAIN THEMES
4. Accountability in Value-Chain

5. Credibility in Corporate Governance

6. Transparency in Stakeholder Engagement

SCM Risk Management
Responsible minerals management

In line with the mounting importance of socio-environmental risk
management in the mineral extraction and sourcing process, the ne-

cessity for supply chain management is rising for even more diverse
minerals. Samsung SDI includes in our scope of management all minerals for which human rights violation or environmental destruction

issues are raised in the extraction and sourcing process in addition to

3TG (Tin, Tantalum, Tungsten, and Gold) mined in the Democratic Re-

public of the Congo and its adjacent countries to ensure we comply
with the principles of responsible minerals sourcing. For 3TG conflictminerals, we make sure that all our partners source minerals exclusive-ly from smelters & refiners certified to be conformant with the RMAP
(Responsible Minerals Assurance Process). As to cobalt, 21 out of 23

smelters & refiners became RMAP-conformant, up by three from theprevious year.

Proportion of RMAP-conformant smelters and refiners■ Conflict minerals ■ Cobalt

100

33

100

78

100

(Unit: %)91

Samsung SDI’s List of Cobalt Smelters and Refiners
No. Cobalt Smelters & Refiners

Country

2

DRC

1

Dynatec Madagascar Company

3

Zhejiang Zhongjin Greatpower Cobalt Co.,Ltd

5Ganzhou Tengyuan Cobalt New Material Co., Ltd.

4
6
7
8
9

10

11

12

13

14

15
16

17

18

19

20

21

2020

2021

2022

22

23

Chemaf Etoile

Madagascar
China

Gangzhou Yi Hao Umicore Industry Co.

China

Gem (Jiangsu) Cobalt Industry Co., Ltd.

China

Guangdong Jiana Energy Technology Co., Ltd.
Hunan Yacheng New Materials Co., Ltd.

China
China
China

Hunan CNGR New Energy Science & Technology Co., Ltd. China

Jiangsu Xiongfeng Technology Co., Ltd.

Jiangxi Jiangwu Cobalt industrial Co., Ltd.

Jingmen GEM Co., Ltd.

NORILSK NICKEL HARJAVALTA OY

Kamoto Copper Company

Lanzhou Jinchuan Advanced Materials
Technology Co., Ltd.

New Era Group Zhejiang Zhongneng Cycle
Technology Co., Ltd.

Quzhou Huayou Cobalt New Material Co., Ltd.

SungEel HiTech Co.,Ltd.

Tianjin Maolian Science & Technology Co., Ltd.

Umicore Finland Oy

Umicore Olen

ZheJiang Huayou Cobalt Co., Ltd.

Zhuhai Kelixin Metal Materials Co., Ltd.

China

China

China

Finland

DRC

China
China

China

Korea

China

Finland

Belgium

China

China

Third-party audits

To ensure traceability along our mineral supply chains and verify so-

cio-environmental risks, Samsung SDI has conducted third-party audits since 2022 on our supply chains of minerals including cobalt, nickel, and lithium that are consumed as key battery raw materials.

In 2022, such independent audits were completed on nine partners

from first-tier partners to smelters & refiners, including three cathodesuppliers, three precursor suppliers, and three smelters & refiners.

According to audit findings, none of the minerals we consumed weresourced through ASM (Artisanal and Small-scale Mining) or frommines at increased risk for human rights violation and environmental
destruction. Most of our partners, however, were found to be in need of
improvement for their mineral supply chain policy, risk management

system, due diligence, and overall responsible mineral management
process. We will provide guidance so that our partners develop andimplement improvement plans for non-conformant areas identified.

In 2023, we will conduct third-party audits on smelters & refiners, anduse the supply chain mapping results generated as such in expanding
our third-party audits to include mines.

Third-party Mineral Supply Chain Audit Plans
Tier 1: Cathodeactive material(cobalt, nickel, andlithium)

2022 ~ June 2023

Tier 2: Precursor(cobalt and nickel)
After July 2023

Tier 3: Smelters andrefiners(cobalt and nickel)

Mines (cobalt, nickel, and lithium)SAMSUNG SDI SUSTAINABILITY REPORT 2023

OVERVIEW
1. Infinite Safety

64

2. Move to Net-Zero

SUSTAINABILITY MANAGEMENT
3. Partnership with Value-Chain Partners and Community

SUSTAINABILITY MAIN THEMES
4. Accountability in Value-Chain

5. Credibility in Corporate Governance

APPENDIX
6. Transparency in Stakeholder Engagement

SCM Risk Management
Managing Supply Chain Procurement Risks
Managing supply chain procurement risks

Supply chain risks include risks that may occur in the parts procure-

Diversifying our sourcing in North America andestablishing production locations

Responding to the strike staged by the Korea Cargo
Workers Unionat partners themselves. Samsung SDI’s purchasing risk management

2022 gave rise to the increasing demand to move away from China inand the resulting stoppage caused disruptions to the supply of raw

ment process as well as environmental and social risks that may arise
follows the 4-step process. The Purchasing Team identifies purchas-

ing-related risks in line with the IATF169491 process and investigatesrisks that may affect Samsung SDI. The risks investigated are assessed

for the severity of the resulting impact and their probability of occur-

rence, followed by the development of risk-specific short/mid/longterm response strategies. In addition, our history database containing

risks that occurred previously helps us assess and manage risks expected to arise in the future.

sourcing critical materials and producing battery components. In re-sponse, Samsung SDI is diversifying our sourcing of critical minerals
towards North America and countries who entered into an FTA with
the US while establishing battery production locations in North America. Work is underway to develop and implement plans to respond to

IRA requirements by ensuring the locally-based supply of raw materials on the part of our partners.

Our efforts to establish a local procurement systemin the EU

Managing Purchasing Risks

The EU is increasingly calling for businesses to pursue localization

Identify
Risk
ManageRisk
History

The Inflation Reduction Act (IRA) which took effect in the US in August

within the EU region for battery raw/subsidiary materials and criticalminerals consumed for their EV production, as evidenced in the EUAssess
Risk

Respond toRisk1) International quality management system standard for the automotive industry,
jointly developed by the IATF(International Automotive Task Force) and theISO(International Organization of Standardization)

UK TCA1) and the CRMA2). Samsung SDI is increasing our sourcing of

key raw/subsidiary materials in the EU, and consulting local partners
to secure critical minerals in the EU region.

1) EU-UK TCA (Trade and Cooperation Agreement) : EVs made in the EU andexported to the UK are eligible for tariff exemption on the condition that theirbattery components originate in the EU2) CRMA (Critical Raw Materials Act): Regulations that aim to diversify the sourcesof strategic raw material import to gradually expand EU’s own capacity for the
extraction, processing, and recycling of these strategically important materials andnot to exceed 65% in its consumption of each strategic raw material from a single
third country by 2030 to reduce EU’s dependence on such raw materials.

In November 2022, the Korea Cargo Workers Union staged a strike,materials. Samsung SDI secured stocks in advance in our in-houseand external warehouses as well as vehicles and drivers operable evenduring the walkout. Until the strike ended on December 9 that year, weoperated a situation room and activated a daily cargo volume checksystem.

SAMSUNG SDI SUSTAINABILITY REPORT 2023

65

OVERVIEW
1. Infinite Safety

2. Move to Net-Zero

Labor·Human Rights
Our Approach and Management Plan

Samsung SDI endorses the fundamental conventions of the ILO (International Labor Organization), the UN Universal Declaration of Hu-

man Rights, the OECD Guidelines for Multinational Enterprises, theUN Global Compact’s 10 principles, the RBA (Responsible Business

Alliance)’s Code of Conduct and other globally-recognized labor/human rights standards while abiding by the laws and regulation ofcountries and regions where we operate. We respect universal humanrights, the freedom of association, and political/religious/personal

freedom while strictly prohibiting discrimination and harassment on
the grounds of gender, race, religion, disability, origin, and sexual mi-

nority. We will take appropriate action to prevent and mitigate adverse
human rights impact that may affect our varying stakeholders.

Respect for Human Rights

Protecting diversity and prohibiting discrimination

Samsung SDI respects the diversity of employees and strives to offer

all our employees equal opportunity. We ban discrimination on the
grounds of gender, nationality, race, religion and cultural backgroundin recruitment, assessment, promotion, and compensation. We also

manage a range of diversity metrics including the proportion of female
managers to further nurture our female workforce. To minimize conflict while maximizing synergy among diverse employee groups, we
encourage that organizational leaders and their members debate diversity issues on a semi-annual basis and more often.

SUSTAINABILITY MANAGEMENT
3. Partnership with Value-Chain Partners and Community

APPENDIXSUSTAINABILITY MAIN THEMES
4. Accountability in Value-Chain

5. Credibility in Corporate Governance

6. Transparency in Stakeholder Engagement

Non-compliance withhuman rights standards

ZERO

Preemptively managing labor/human rights risks

Raising human rights awareness at all levels

ers in our business conduct, we identify worksites located in vulner-

wide-ranging channels, from e-mails submitted anonymously or under

To prevent potential human rights risks that may affect our stakehold-able human rights/labor conditions to make sure risk factors do notoccur. Our worksites are verified for their compliance with humanrights standards concerning child labor and compulsory labor, work-

ing hours, wages and benefits, humanitarian treatment, anti-discrimination/harassment, and freedom of association either under the su-

pervision of the Headquarters or through self-checks. In response to

the amendments made to applicable laws, we give notices and makenecessary institutional improvements to continuously advance human rights protection.

For 15 overseas corporations, regular self-assessments are made eachyear to ensure compliance with local labor regulations for working
hours, and wages, non-discrimination, forced labor, labor contract,

and maternity protection to preemptively identify and manage risks

to underscore the importance of advancing human rights and compliance management.

We conduct company-wide blind surveys to prevent human rights
risks for employees at our entire domestic operations. The blind sur-vey is supervised by the Headquarters and covers the topics of verbal/

physical violence, alcohol consumption, sexual harassment, mental
health, safety accidents, and communication. The results are commu-

nicated to respective worksites to base their efforts to perform internalverifications to develop and implement measures and prevent andaddress human rights risks in so doing.

Blind Survey Process
Plan the survey

Review
implementation

Develop thequestionnaire
Make improvements

We receive whistleblowing reports on human rights issues throughone’s real name to phone and department head/HR reports. When a con-cern is submitted, this is addressed depending on the severity of the issue
at hand in compliance with internal guidelines including those governing

disciplinary actions. To raise human rights awareness and prevent any po-

tential human rights risk, we provide company-wide human rights training
to prevent sexual harassment, improve perceptions on disability, and build aculture of mutual respect in response to the enforcement of the Anti-Bullying

Law. Our training curriculum is updated each year to keep up-to-date withhuman rights-related regulatory amendments, human rights impacts identified internally, and changing employee needs. In addition, training materials

on the topics of sexual harassment prevention and a culture of mutual re-spect, implementation guides for employees, and other basic-level humanrights guideline materials are made available on the It Basic bulletin boardof our in-house website. This provides our employees with information on

behavioral precautions and proper responses in preventing verbal violence
and improving drinking practices on an on-going basis to elevate theirawareness on the importance of protecting and respecting human rights.

Grievance handling channels and their operation

In operating internal online/offline grievance handling channels, we extended

the scope of concerns raised to include grievances, requests, and suggestions

on working conditions, which exceeds the requirements set in the UN Global
Compact’s 10 principles. Such grievances can be submitted anonymously,

and relevant principles including the prohibition of retaliation against whistleblowers are specified in the ‘obligation to comply with the employee code

SurveyAnalyze results andinvestigate

of conduct’ to ensure the transparent and fair operation of grievance handlingchannels. Work-related grievances or suggestions for improvement raised by
employees either anonymously or under their real names as they wish are

handled within 24 hours in principle, and relevant departments ensure prompt
response to respective issues. In 2022, a total of 1,402 grievances and inquiries
were submitted and were all handled.

SAMSUNG SDI SUSTAINABILITY REPORT 2023

66

OVERVIEW
1. Infinite Safety

2. Move to Net-Zero

SUSTAINABILITY MANAGEMENT
3. Partnership with Value-Chain Partners and Community

APPENDIXSUSTAINABILITY MAIN THEMES
4. Accountability in Value-Chain

5. Credibility in Corporate Governance

6. Transparency in Stakeholder Engagement

Labor·Human Rights
We also established a separate internal online whistleblowing chan-nel. If concerns are raised over human rights violation, we handle

them promptly in accordance with our grievance handling process set
in line with the grievance mechanism of the UN Guiding Principles on
Business and Human Rights (UNGPs) and continue with monitoring
to prevent their reoccurrence while eliminating potential risk factors.

Employees’ Representative Body

At Samsung SDI, two domestic and five overseas ‘Labor Unions’ are up

and running. In Korea, our ‘employee code of conduct’ stipulates that
we respect the freedom of association, the right to collective bargaining,
and the right to collective action. To put the health and safety of our employees first in building mutually-beneficial, cooperative labor relations,

we uphold the three basic labor rights in making negotiations on working conditions, and sign collective and wage agreements based on theagreed-upon negotiation outcomes. Pursuant to the Act on the Promo-tion of Workers’ Participation and Cooperation, our six domestic and four
overseas ‘Works Council’ convenes at least once every quarter depend-ing on the characteristics of each worksite, and labor representatives to
the Council are elected by employees themselves through direct secretvoting. The Council makes decisions on the agenda items proposed byrespective worksites, which span grievances and HR system improve-ments in addition to issues related to working conditions. Our overseas
corporations operate labor unions and/or councils in conformity withlocal labor laws to abide by applicable laws and regulations, and engage

in consultations to improve working conditions through communication
based on mutual respect between labor and management.

Providing a Great Work Place
Striking the right work-life balance

We provide a wide array of support programs for our employees tostrike the right work-life balance and fully engage in their work. For
instance, we have introduced flexible hours to enable employees tomanage their own work schedule as well as reduced work hours. We

also allow our employees to work from home up to four days a week
when possible. We abolished minimum work hour requirements in

2022 and have since introduced hourly annual leave to give our employees greater autonomy with their work schedule arrangement.

Our work-life balance support programs apply equally to all employ-ees including both contract and dispatched employees, irrespective ofgender, to meet their childbirth and childcare needs. In 2022, we improved our parental leave program so that our employees could split

their entire parental leave period which includes one-year statutory

leave and one-year leave that we additionally provide into two. Ourparental leave program was also made more flexible by extending theage limit to 12 years old while the statutory age limit is eight year old.
Furthermore, we have expanded paternal leave from legally guaranteed 10 days to up to 15 days.

At Samsung SDI, facilities are up and running across our operations to

support work-life balance, including maternity protection rooms open
for pregnant and breastfeeding employees and in-house daycare

centers. On Family Day encourages employees to leave early twice amonth. On this day, shuttle bus schedules are brought forward so that

employees can go home early and invest in their self-development orspend quality time with their family.

Improving the quality of life

We operate a range of benefit programs to help improve the quality oflife for our employees. In 2022, we expanded support for Samsung SDI

e-Library accessible both on online and mobile platforms to provide
our employees with a broader spectrum of leisure options and self-development opportunities. With an extensive collection of books, thiscreates an environment where our employees can read books at any
given time and location. Furthermore, we eliminated the limit im-

posed previously on the size of housings when our employees apply
for housing loans taking into account the shifting residential trends.
Housing loans and financial support for family events• Operate a loan program for employees who have yet topurchase a home to support their housing purchase• Provide financial support for employees’ family events

Selective welfare & benefits program• Grant welfare points that employees can redeem to use for
their favored activities, be it health management, leisure or
self-development

Leisure• Provide discounts for the Caribbean Bay/amusement parks• Provide memberships to condominiums and resorts nationwide
Educational expense support/in-house daycare centers• Provide tuition support for employees’ children• Operate daycare centers at each worksite

Psychological support• Provide professional counseling through the Counseling Center• Operate the mental health clinic

Health management• Support all employees to receive health check-ups• Support to pay medical expenses for employees and theirspouse for specific medical conditions, injuries or childbirth• Operate fitness centers and physiotherapy clinics

SAMSUNG SDI SUSTAINABILITY REPORT 2023

67

OVERVIEW
1. Infinite Safety

2. Move to Net-Zero

SUSTAINABILITY MANAGEMENT
3. Partnership with Value-Chain Partners and Community

4. Accountability in Value-Chain

Talent Development
Securing Top Talent

We operate tailor-made training courses: we first verify individual job com-equal opportunity to all applicants irrespective of their backgrounds. We

universities in the Americas, Europe, and other regions. In so doing, wethat are irrelevant to individual merit, and also hire on an as-needed basis

to bring in top-notch talent who can contribute their accumulated industry

experience. Furthermore, we strive to increase the diversity of our workforce
by recruiting employees with disabilities and of national merit.

We engage in campus recruiting not only in Korea but also at leading
recruit top-tier talent in respective fields to establish our global com-

petitiveness. In addition to offline recruiting, we leverage a range ofchannels, including metaverse job fairs and online one-on-one virtual

recruiting, to reach even closer to global talent and secure competent
individuals worldwide.

Securing industry professionals

Nurturing future talent

and abroad and raise our profile as an employer. In 2022, the Tech &nurture talent who will help us build ‘super gap’ technology compet-

We work on multiple fronts to identify talented individuals in Korea
Career Forum led by top management was held in Korea and the US

to provide job seekers with PhDs who will be the leaders of tomorrowwith an opportunity to better understand our business and their potential work descriptions. We also attended the InterBattery Job Fair inan effort to secure industry professionals.

6. Transparency in Stakeholder Engagement

Nurturing job experts
Securing global talentfocus on competency in recruiting new hires without considering factors

5. Credibility in Corporate Governance

Employee Training and Performance Appraisal

Recruiting talent from diverse backgrounds

Samsung SDI ensures fairness and transparency in our recruitment to give

APPENDIXSUSTAINABILITY MAIN THEMES

Samsung SDI operates bachelor/master/doctoral degree courses toitiveness. In partnership with leading universities in Korea and overseas, we undertake industry-academia projects and pursue open

innovation through internships and scholarships to expand opportunities for academia and industry to progress forwards together.

petency levels across all job categories, including development, technolo-gy, manufacturing, sales & marketing, and management support, and thenanalyze areas of expertise in need of development by job category and byindividual employee. Our employees set their own learning plans based on

analysis results and their capacity-building needs while Samsung SDI pro-vides internal/external job training and online learning available year-roundthrough our in-house training system (SDI Edu Park) to assist employees inbolstering their job expertise. Our EA (Education Agent) program also supports field-driven training in parallel. Our SDI Technology Education Program (STEP) provides technical training to meet our specific needs by job

category. In 2022, this systemic technical training, made available in each of

the development, process & equipment, quality categories, was conducted

on 68 courses and attended by 2,726 employees. Department-level special-ized job training is also available, including learning cells and in-house seminars along with EAs, and such training was attended by 14,609 employees.
In addition to in-house training, we also conduct master/PhD degree aca-

demic training through our partnership with educational institutions to nurture job experts in the development and technology areas. We assist em-

ployees in acquiring internationally/nationally-recognized qualifications in
the fields of manufacturing, quality, purchasing, finance, workplace safety,

and infrastructure as part of our multi-faceted efforts to support all employees to evolve into experts in their own fields. Such job training is followedby surveys to identify participants’ satisfaction with training. Respondents

provide their feedback on learning outcomes (training content, transfer oftraining, etc.) and lectures (course, lecturer, etc.) on a scale of one to five,and survey results are used to analyze the effectiveness of our training andTech & Career Forum

MOU signing to nurture talent with battery expertise

continuously improve our training courses.

SAMSUNG SDI SUSTAINABILITY REPORT 2023

68

OVERVIEW
1. Infinite Safety

2. Move to Net-Zero

Talent Development
Bolstering global capabilities

The growing global market and our worldwide business expansion

underscores the importance of employees’ global capabilities. This
prompted us to expand support for employees to acquire language

certificates for English and Chinese and more. In addition to the Foreign Language Residence Hall (5-8 weeks) and intensive courses (1week) under operation as our global capacity-building courses, we developed easily accessible language courses for employees who can’tbe removed from their duties for extended periods of time to takecourses across varying time ranges, from early morning and lunchtime
to nighttime and weekends. This ensures individual employees complete courses based on their own personal schedule and conditions

to bolster their global capabilities. In 2022, 7,322 employees attended
such courses, and the proportion of employees acquiring advanced
language certificates rose from 32% in 2021 to 34% in 2022.

SUSTAINABILITY MANAGEMENT
3. Partnership with Value-Chain Partners and Community

4. Accountability in Value-Chain

job competencies and nurture technical experts. This Expert training

programs that meet the needs of employees and in selecting leaders

produced nine experts in 2022 and 54 experts on a cumulative basis
to date. To effectively operate the training curriculum from theoreticalan opportunity to work at one of our overseas corporations for a set
period of time so that they could enhance their working-level global

capabilities. For personnel working at overseas corporations, we of-fer introductory training and leadership training held in Korea to help
them with capacity-building.

Operating the Technology Training Center

Our Technical Training Center provides equipment/process techni-

cal staff with systemic training to develop common competencies

and key personnel.

Retiree support system and program

modules that are deployed in real-life conditions. Best practices devel-

outplacement services that help employees prepare for their after-re-

own training kit containing equipment made of core components andoped to address equipment errors that occur in the field are identified

and disseminated across the board, along with the ‘component tech-

nology expert course’ to resolve issues through self-initiated learningon core equipment components. The ‘process & equipment expert
course’ is also provided to help resolve equipment-related challenges

and chronic process quality issues so that we could assist our employees in developing unsurpassed expertise in their field. Our Technology

Training Center continues to uncover new content and develop technical training courses, driving Samsung SDI’s efforts to secure next-generation technology competitiveness and improve productivity.

petency assessments conducted in line with Samsung’s standard com-experts and others) to secure top talent: we provide employees wither fairness, we also refer to other diverse feedback in operating training

understanding to hands-on practice, each trainee is provided with theircontinue to provide training on such strategically important languagcorporations are located. We operate the work abroad program (field

6. Transparency in Stakeholder Engagement

baseline to determine compensation and promotion. To ensure great-is conducted from introductory to practical levels to help strengthen

Performance appraisal systemes as Hungarian, Vietnamese, and Malay used in countries where our

5. Credibility in Corporate Governanceand technical expertise. Tailor-made level-specific technical training

To preemptively cater to increases in expatriates working at overseas
corporations and in employees traveling overseas for business, we

APPENDIXSUSTAINABILITY MAIN THEMES

Our annual employee performance management is aligned with competency requirements and with performance appraisals made basedon individual MBO. Leaders and their members set mutually-agreed

work goals and capacity-building plans, and the year-round frequent

feedback process facilitates members’ goal attainment and supports
their capacity-building. This also comes with the appeals process for
employees who disagree with their performance review to appeal theirperformance appraisal to make our performance appraisal system

more acceptable. Our peer review program was designed to facilitate
collaboration and communication among employees working togeth-

er through mutual feedback. For leaders who have significant influence
within a given organization, we perform 360-degree leadership assess-ments and provide feedback. Such assessment results provide theSamsung SDI operates the Career Consulting Center (CCC) to provide
tirement life. These services consist of individual assessments and life/

career designs that leverage standardized analytics, outplacement

training, career consulting, and job matching support made possible
through the Center’s extensive network. The Center informs employees

nearing their retirement of outplacement services through its online
bulletin board and handouts as specified in the Elderly Employment
Act. This ensures that employees gain information in advance on outplacement services and seek further information through interviews

when needed while using such services to meet their distinctive needs.

Outplacement Support Services
Life/career design
Perform highly reliable analyses on occupational values, preferences, andjob competences to use the results for training and consulting
Career consulting
Provide counseling, coaching and mentoring to help set and attainindividual outplacement goals

Outplacement support training
Explore diverse career alternatives, including moving to another company
or starting one’s own business, depending on individual assessment
outcomes, competences, and preferences

Job matching
Match applicants’ needs with businesses and educational institutions inneed of talent in a customized manner

SAMSUNG SDI SUSTAINABILITY REPORT 2023

OVERVIEW
1. Infinite Safety

69

2. Move to Net-Zero

SUSTAINABILITY MANAGEMENT
3. Partnership with Value-Chain Partners and Community

SUSTAINABILITY MAIN THEMES
4. Accountability in Value-Chain

5. Credibility in Corporate Governance

APPENDIX
6. Transparency in Stakeholder Engagement

Organizational Culture
INTERVIEW

Haewon Park, Professional,
Employee Engagement Group, People TeamQ W
 hat are the most noticeable changes in SDI’s corporate culture in 2022?

The most noticeable one would be increased communication between the

Company and employees. We established a company-wide online broadcast
system for top management to provide quarterly updates on our business

operations and heed the voice of employees to identify necessary improvements. We also hold lunch discussions led by senior management to gather
feedback from field operations and our reverse mentoring program named

Gen.Z mentoring under which young employees become mentors for top

management. Such changes produced tangible outcomes as we saw a

14-point year-on-year increase in the item ‘Our senior management takes thetime to collect employee feedback and resolve their grievances’ in the SCI survey conducted in September 2022.

Q Is there any specific characteristic of Samsung SDI’s corporate culturethat makes you feel proud?

I would like to point out that a family-friendly culture has been established as

an integral part of our corporate DNA. We have a range of support programs –absence, leave, and reduced work hours – to support work-life balance, andour semi-monthly Family Day ensures our employees leave early to enjoy
leisure with their family and friends. To promote employees’ sense of belong-

ing and pride, each worksite hosts family invitation events on Children’s Day,

Creating an Advanced Organizational Culture
Building a top-tier organizational culture

Samsung SDI aims to create an organizational culture that aligns all our employees towards shared growth through communication and collaboration. To this end, we operate the Change Agents (CA) program to plan and execute corporate culture improvement tasks at the department level onan annual basis, and appointed 298 CAs in 2022. These CAs roll out department-level activities to create a top-tier organizational culture, and facilitate
motivation and engagement to drive employees for performance generation in line with the five goals of fair appraisal, team member development,
open communication, improved work efficiency, and better collaboration. Such CA activities help our competent global talent improve their work
satisfaction and better assimilate themselves to their new environment.

5 Organizational Culture Goals and Activities to Create a Top-tier Organizational Culture
Fair appraisal• Improve appraiser competency through strengthened appraisal training•E stablish the procedural fairness of the appraisal process and improve the acceptance of appraisal outcomes by
expanding appraisal interviews concerning interim appraisals for process management and feedback

Team member development•S elect department-level EAs (Education Agent) to provide customized job-specific training and promote learning led
by working-level staff such as learning cells and in-house seminars•C reate a career market for employees looking to relocate to apply for the department of their choosing to aid in
employees’ career development

Open communication• Expand discussion infrastructure to facilitate the free-flowing exchange of ideas and create a culture of debate• Facilitating communication through regular town hall meetings between top management and all employees

Improved work efficiency• Identify and award best practices of improving work efficiency to disseminate a culture of encouraging employees tofully engage in high value-added work•C reate efficient meeting practices by reducing meeting durations and unnecessary attendance and streamlining
meeting materials

Active dollaboration• Expand interactions among relevant departments to create a culture of cross-departmental collaboration•O perate a collaboration project process to engage relevant departments to select their collaboration projects and toaward those who successfully resolve project challenges

along with ‘Family Outing’ as another family invitation program.

Q P
 lease tell us about how you’re going to improve Samsung SDI’s corporate culture and what your priorities will be.

Corporate culture doesn’t change overnight. We will continue to improve theway we communicate and work, and provide a wide spectrum of employee experience programs to help them lead a healthy and flourishing life at
Samsung SDI.

SAMSUNG SDI SUSTAINABILITY REPORT 2023

70

OVERVIEW
1. Infinite Safety

2. Move to Net-Zero

SUSTAINABILITY MANAGEMENT
3. Partnership with Value-Chain Partners and Community

SUSTAINABILITY MAIN THEMES
4. Accountability in Value-Chain

5. Credibility in Corporate Governance

APPENDIX
6. Transparency in Stakeholder Engagement

Organizational Culture
SCI and HCI surveys

Each year, we conduct SCI (Samsung Culture Index) surveys on employees to identify the strengths and weaknesses of our corporate

culture and make necessary improvements. Our SCI score has been
above 70 points for the past three years. In 2022, the SCI assessment

model was updated to create the three main categories of Engagement, Collaboration, and Pride. Questions in each of these categories

help us evaluate our corporate culture for employees’ job satisfaction
based on their work engagement and personal growth as well as for

department/corporate satisfaction based on cooperation and respect.
This is followed by the improvement activities to ensure we build awholesome corporate culture.

In addition, annual HCI (Happiness Care Index) surveys are performed

to help employees with mental health management. This enabled our
employees to self-check their status of mental health concerning indi-vidual happiness and stress management and to verify the results andmanagement guides. If necessary, they may receive one-on-one Mind
Care Service provided by professional counselors.

Facilitating Communication and Collaboration
Communication with employees

Executive communication workshop

ees, our key executive members host ‘Open Talk’ as our town hallsible only when top management takes the initiative, we hosted the exec-

To facilitate communication between top management and employmeeting. Employees who can’t physically attend these meetings may

watch live broadcast meetings on their PCs and participate throughtext messaging. Through ‘Open Talk’, we share Samsung SDI’s policy

and vision on an on-going basis while resolving employee grievanceson an as-needed basis and covering such topics as ways to implement

communication and collaboration, a culture of efficient working, professionalism, and Samsung SDI’s mid/long-term vision from 2022. In
addition, weekly lunch discussions serve to collect and respond tovarying employee feedback, and Leaders Channel, as our monthly

department head meeting, provides an opportunity to communicate
Samsung SDI’s management and institutional operation and share theWith the belief that genuine organizational communication is made posutive communication workshop in April 2022 to drive our senior management to change their communication mindset. The workshop was joinedby all executive members including key executives to share their ideas on
the roles leaders should assume for communication, including setting
the stage to participate and speak up, hearing out, proactive improvement, and feedback. This was accompanied by a special lecture given byexternal experts and subgroup discussions to identify ways to promote

free-flowing communication and build a sustainable corporate culture in
so doing. Going forward, Samsung SDI will strive to create and facilitate aculture of communication that helps build consensus at all levels.

information with respective department members. In tandem with this,Facilitating a culture of collaboration

understanding with Gen Z employees as well as leadership training toprojects to disseminate a culture of collaboration among employees

we operate Gen.Z mentoring, a mentoring program to promote mutual

help leaders develop their communication skills, working to disseminate a culture of free-flowing communication along the way.

Each year, relevant departments engage in a variety of collaborationand fuel our growth into a global top-tier business. Collaboration
serves to gather together experience and knowledge from different

functions to generate never-before-possible performance and synergy while encouraging employees to take interest in and explore work
performed outside their own organization to develop their individualcompetency. We host events at the 4th quarter of each year to share
the progress made and outcomes generated under the collaboration

projects undertaken for the past one year. Each project is assessed
Gen.Z mentoring

against such criteria as collaboration, competitiveness, creativity andchallenging spirit, and exceptional ones are awarded.

SAMSUNG SDI SUSTAINABILITY REPORT 2023

OVERVIEW
1. Infinite Safety71

2. Move to Net-Zero

SUSTAINABILITY MANAGEMENT
3. Partnership with Value-Chain Partners and Community

APPENDIXSUSTAINABILITY MAIN THEMES
4. Accountability in Value-Chain

5. Credibility in Corporate Governance

6. Transparency in Stakeholder Engagement

C
REDIBILITY IN
CORPORATE GOVERNANCE
5.

Advanced BOD
Created theSustainability
Management
Committee underthe Board

50% in the
proportion of
females out of
independent
directors (two out
of four)Protecting
Shareholder
Rights and Interests
Announced ourshareholder return
policy2022 KEY ACHIEVEMENTS

Ethics & Compliance
Opened awhistleblowing
website for ethics& compliancemanagement

Created the
Global Privacy Officeunder theLegal & IP TeamSAMSUNG SDI SUSTAINABILITY REPORT 2023

OVERVIEW
1. Infinite Safety

72

SUSTAINABILITY MANAGEMENT

2. Move to Net-Zero

3. Partnership with Value-Chain Partners and Community

APPENDIXSUSTAINABILITY MAIN THEMES
4. Accountability in Value-Chain

5. Credibility in Corporate Governance

6. Transparency in Stakeholder Engagement

Advanced BOD
Our Approach and Management Plan

The Board of Directors makes decisions on matters stipulated by applicable regulations and the Articles of Incorporation, matters delegated by the general shareholder meeting, and key issues related to Samsung SDI’s basic management
policy and business execution. We separate CEO and Chair roles and the Chair is appointed among directors – both executive and independent directors – through the decision made by the Board to ensure transparent governance.

Members of the BOD1)On March 15, 2023, Mee Kyung Lee, an expert in environmental management, was appointed as a director at the 53rd General Shareholder Meeting to improve the diversity of the Board and strengthen the expertise of our ESG management.

Executive Director

Name

Young Hyun Jun

CareerChair of the BOD

Name

Yoonho ChoiFirst appointment Mar. 24, 2017
Role within
the BOD

GenderExpertiseMaleOverall management

First appointment Mar. 17, 2022

GenderExpertise

Male

General management

CareerCEO and President, Samsung SDI

NameJong Sung Kim

CareerExecutive Vice President, Business Management Office, Samsung SDI

Role within
the BOD

Role within
the BOD

GenderExpertiseMaleOverall management

Member of the Management Committee

1) Board members as of Mar. 15 2023

* New appointment: Mee Kyung Lee was appointed as an independent director at the 53rd General Shareholder Meeting held on Mar. 15, 2023
* Directors assuming multiple positions: Jong Sung Kim, an executive director, serves as a non-executive director at Samsung Display, Won

Wook Choi, an independent director, serves as an independent director at LIG Nex1, and Mee Kyung Lee, an independent director, serves as
an independent director at HYBE

* Average BOD tenure: 2.9 years as of Jun. 30, 2023

Oh Kyong Kwon

CareerProfessor of Electronic Engineering, Hanyang University
Chair of the Compensation Committee, and the Independent
Director Candidates Recommendation Committee
Member of the Audit Committee, the Related Party Transactions Committee,
and the Sustainability Management Committee

First appointment Mar. 18, 2020

Name

Duk Hyun Kim

First appointment Mar. 18, 2020
CareerRole within
the BOD

Chair of the Management Committee

First appointment Mar. 17, 2021

Name

Role within
the BOD

Chair of the BOD
Member of the Management Committee

Independent Director

Name

Role within
the BOD
Name

Won Wook Choi

Role within
the BOD

GenderExpertise

Male

Electrical and electronics industry

FemaleLaw and human rights

GenderExpertise

Male

Accounting and tax

Professor at School of Business, Yonsei University
Chair of the Audit Committee
Member of the Related Party Transactions Committee, the Independent Director
Candidates Recommendation Committee and the Sustainability Management
Committee
Mee Kyung Lee

First appointment Mar. 15, 2023
CareerExpertise

Attorney, Jin-Sung (law firm)
Chair of the Related Party Transactions Committee
Member of the Compensation Committee, the Independent
Director Candidates Recommendation Committee, and the Sustainability
Management Committee

First appointment Mar. 18, 2020
CareerGenderGenderExpertise

President, Korea Green Foundation

FemaleClimate change and environment

Chair of the Sustainability Management Committee
Member of the Audit Committee, and the the Compensation Committee

SAMSUNG SDI SUSTAINABILITY REPORT 2023

OVERVIEW
1. Infinite Safety73

2. Move to Net-Zero

SUSTAINABILITY MANAGEMENT
3. Partnership with Value-Chain Partners and Community

APPENDIXSUSTAINABILITY MAIN THEMES
4. Accountability in Value-Chain

5. Credibility in Corporate Governance

6. Transparency in Stakeholder Engagement

Advanced BOD
Appointment of the BOD
Board Composition Policy
Independence

Diversity

Expertise

Exclude those who engaged in the Company’scommercial matters for the recent 2 years, family
members of the Company’s largest shareholder andexecutives, and employees working at corporations
that have major interests in Samsung SDI from theappointment of independent directors
Proactively consider diversity factors in nominating
director candidates, including gender, race, religion,
ethnicity, nationality, cultural backgrounds, andexpertise
Consider extensive knowledge and experience in theareas of management & economy, law, electronicengineering, risk management, and ESG strategy
among others

Establishing the independence and transparencyof the Board

To ensure the independence of the Board of Directors, the Board andthe Independent Director Candidates Recommendation Committee
select qualified director candidates following their review on thesecandidates for any potential disqualifications as set forth in applicableregulations (Article 382, Clause 3 and Article 542, Clause 8 of the Commercial Act). Specifically, we ensure that independent director candidates meet our independence requirements and exclude those whocurrently engage in Samsung SDI’s commercial matters or have done
so for the past two years, Samsung SDI's largest shareholder and his/her spouse and direct descendants/ascendants, executives’ spouse

Improving the expertise of the Board

corporations (customers and suppliers) that have major interests inexperience in the areas of management & economy, law, electronic

and their direct descendants/ascendants, and employees working at

Samsung SDI. The final appointment of directors is made by gaining
approval at the general shareholder meeting.

Independent directors constitute a majority of the Board (four in-dependent directors) to hold senior management in check in theirbusiness execution and make objective and reasonable decisions.

To prevent any possible conflict of interest and ensure that the Board
remains independent of senior management and controlling shareholders, our directors are limited in entering into transactions with theCompany in conformity with Article 398 of the Commercial Act. Fur-thermore, Article 10 of the Regulations for the Operation of the BOD
stipulates that directors who have special interest in specific agenda
items can’t exercise their voting rights.

Improving the diversity of the Board

We establish the diversity of the Board to build balance into its compo-

sition. In selecting director candidates, diversity factors – gender, race,
religion, ethnicity, nationality, and cultural backgrounds – are consid-

ered so that we have a balanced composition in terms of backgrounds
and expertise. We prioritize those candidates who contribute theirbroader views and embrace diverse stakeholder perspectives to promote objective decision-making. Our Board diversity policy is specified in our sustainability reports and corporate governance reports. As

part of our efforts to improve the diversity of the Board, we brought inone more female independent director to our Board in March 2023.

We appoint independent directors for their wealth of knowledge andengineering, risk management, and ESG strategy in addition to their
qualifications as stipulated by applicable laws and the Articles of Incorporation so that our business decisions are made based on expertise across diverse areas.

We provide independent directors with information on agenda items

prior to Board and committee meetings so that they can sufficiently
review such information and faithfully fulfill their management andoversight roles. We also regularly share with them our quarterly business status and outlook, and actively cater to their requests for information in relation to business decision-making. We also provide themwith training to help better understand our business and improvetheir expertise on Board operations. In 2022, all our independent directors received training on industry outlook, risk management, un-derstanding financial statements, and identifying the status of business operations.

Training Provided to Independent Directors
Date

Training Topic

Aug. 21, 2022

• I ntroducing our Hungary Corporation and touring
its battery production line
• Introducing our Austria corporation and touring its
battery production line

Apr. 26, 2022

• EV battery market outlook and our responses• Understanding financial statements

SAMSUNG SDI SUSTAINABILITY REPORT 2023

OVERVIEW
1. Infinite Safety74

2. Move to Net-Zero

Advanced BOD

Committee

Board meetings are categorized into regular meetings held at least
once every quarter and ad-hoc meetings held when the need arises.

Board agenda items are decided by a majority of the directors pres-ent and voting for, given the quorum is reached (a majority of the total
number of directors). In 2022, seven regular meetings and one ad-hoc

meeting were held to deliberate and decide on a total of 39 agenda
items.

Attendance in BOD Meetings Held in 2022 (%)

Average attendance

Executive Independent
Director
Director
100

100

Total

100

BOD subcommittees

To help the Board efficiently and professionally fulfill its roles andresponsibilities, we operate the six committees of the Management
Committee, the Audit Committee, and Related Party Transactions

Committee, the Independent Director Candidates Recommendation

Committee, the Compensation Committee, and the Sustainability
Management Committee under the Board.

In January 2022, the Sustainability Management Committee was cre-ated to make decisions on our sustainability management strategy
and key activities for the purpose of bolstering our ESG management.

In 2023, all committees, except for the Management Committee werecomposed of independent directors only to ensure objective andtransparent decision-making.

3. Partnership with Value-Chain Partners and Community

BOD Subcommittees

Operation of the Board

Category

SUSTAINABILITY MANAGEMENT

3 independent
directors

Management
Committee

3 executive
directors

Related Party
Transactions
Committee

Compensation
Committee

Independent
Director
Candidates
Recommendation
Committee
Sustainability
Management
Committee

4. Accountability in Value-Chain(as of Apr. 2023)

Composition Role

Audit Committee

3 independent
directors
3 independent
directors• Conduct accounting and work audits• Perform work in accordance with the
Articles of Incorporation and BOD
regulations and decisions• Deliberate and decide on mattersdelegated by the BOD• Ensure transparency in related party
transactions and compliance with fairtrade regulations• Deliberate on the remuneration limits
imposed on registered directors• Deliberate on other matters delegatedby the BOD

3 independent
directors• Nominate independent director• candidates

4 independent
directors• Deliberate and decide on strategies,
policies and major activities related tosustainability management• Deliberate on shareholder return policies
in advance

BOD Performance Appraisal and Remuneration
Independent director appraisal

Our independent directors receive regular performance appraisals

each year for their activity. Such appraisals are conducted fairly in ac-

cordance with the set internal criteria which include both quantitativeand qualitative indicators, and appraisal results are reflected in deciding their reappointment.

Independent Director Appraisal System
Quantitative Indicator
BOD meeting attendance, numberof deliberations made on agenda
items, activities at the associatedsubcommittees

APPENDIXSUSTAINABILITY MAIN THEMES

Qualitative Indicator
Expertise and understanding ofSamsung SDI’s business5. Credibility in Corporate Governance

6. Transparency in Stakeholder Engagement

Board remuneration

The Compensation Committee deliberates on the appropriatenessof limits on director remuneration, and the limit is determined at

the general shareholder meeting pursuant to Article 388 of the Commercial Act. Remuneration for respective directors is paid within theapproved boundary in consideration of the work assumed and theoutcomes of fulfilling their given Remuneration for executive direc-

tors consists of position-specific base salary and performance-based
bonus. Performance-based bonus is calculated in consideration offinancial performance indicators (sales, net income, and stock prices)and non-quantitative indicators related to environmental and social

performance (safety, labor relations, insolvency, corruption, security,and compliance). Remuneration for independent directors consists ofbase pay, benefits, and diverse expenses paid to perform their work

as independent directors. While remuneration for independent directors is not aligned with their performance appraisal results to ensure

the independence of their decision-making, full consideration is giv-

en to the level of compensation paid by industry peers as well as risk,
responsibility and time involved in performing their work to provide
reasonable compensation.

Breakdown of BOD Remuneration in 20221)
Category

Net payments made

Unit

2022

KRW million

6,344

Total remuneration for independent
directors

KRW million

358

Average remuneration per independent
director

KRW million

Total remuneration for executive directors KRW million
Average remuneration per executive
director

KRW million

5,986

1,901

90

1) The total remuneration include executive directors who resigned during the fiscal
year of 2022.

SAMSUNG SDI SUSTAINABILITY REPORT 2023

OVERVIEW
1. Infinite Safety75

2. Move to Net-Zero

SUSTAINABILITY MANAGEMENT
3. Partnership with Value-Chain Partners and Community

SUSTAINABILITY MAIN THEMES
4. Accountability in Value-Chain

5. Credibility in Corporate Governance

APPENDIX
6. Transparency in Stakeholder Engagement

Protecting Shareholder Rights and Interests
Increasing Shareholder Value

Facilitating Shareholder Communication

Shareholder composition and status

Announcing our shareholder return policy

and 1,617,896 preferred shares. Out of these, 65,433,139 shares carryour shareholder return policy in January 2022 to pay 5%~10% of our

Samsung SDI’s shares issued include 68,764,530 common shares,

voting rights, excluding 3,331,391 common shares owned by Samsung SDI and 1,617,896 preferred shares. Each and every shareholder
is given equal voting rights based on the type and number of shares
they own.

■ Shares without voting rights(treasury shares)

3,331,391
(5%)

Total

68,764,530■L argest shareholder and relatedparties (largest shareholder:
Samsung Electronics)■ National Pension Service■ Blackrock Fund Advisors■ Other

45,753,361(66.54%)

Total

68,764,530

next three years between 2022 and 2024.

This ensures that we maintain a minimum level of shareholder return

even when our free cash flow decreases due to investment expancash flow.

65,433,139(95%)

Shareholder Status (based on common shares)

free cash flow each year on top of KRW 1,000 basic dividends over thesion, and raise our dividend payouts in proportion to improving free

Total Number of Shares (based on common shares)■ Shares with voting rights

To improve the visibility of our shareholder return, we announced

14,117,681(20.53%)5,449,458(7.92%)

3,444,030(5.01%)

IR activities

To reach out closer to our shareholders and investors, we hold regularconference calls for earnings releases based on tentative earnings andfor investor relations reports every quarter. We also actively engage in
IR activitie for domestic and foreign investors.

We make our corporate website available in English for foreign shareholders, and provide information on our financial status, credit ratings, earnings reports, annual audit reports, and sustainability reports

among others. Our quarterly earnings calls are made accessible bothin Korean and English webcasts for all shareholders, which are also

posted on our website. In addition, materials associated with hosting

Dividend Details

2022

Category

Unit

2020

2021

Dividends per share(common shares)

KRW

1,000

1,000

Dividend payout
ratio

%

669.4

669.4

689.5

0.2

0.2

0.2

Cash dividends

KRW 100
millionDividend yield

%

11.6

5.7

1,000KRW+FCF 5%
1,030

3.5

the general shareholder meeting are made available on our website
so that our shareholders may sufficiently review agenda items prior totheir decision-making.

SAMSUNG SDI SUSTAINABILITY REPORT 2023

76

OVERVIEW
1. Infinite Safety

2. Move to Net-Zero

SUSTAINABILITY MANAGEMENT
3. Partnership with Value-Chain Partners and Community

SUSTAINABILITY MAIN THEMES
4. Accountability in Value-Chain

Ethics & Compliance
Our Approach and Management Plan

Compliance Systemreviews, and other relevant activities. TCMs, newly appointed in 2022

ethics and compliance risks in line with Samsung’s management

managers and take responsibility for team-specific on-site complianceprinciple that values regulatory and ethical compliance. Our compli-

ance program spans a range of areas, including subcontracting, trade

mainly among working-level personnel, support compliance chief
management.

secrets, anti-corruption, insider trading, data privacy, safety & environ-Compliance control regulations

monitoring and training on ethics, anti-corruption, and compliance toregulations that specify basic procedures for our employees to follow

ment, labor, cartel, and win-win cooperation. We also continue withminimize any potential risk of non-compliance that may arise in thecourse of our employees’ business conduct.

Compliance Management System
Dedicated compliance organization

The Compliance Team under the direct leadership of the CEO serves

We operate the Compliance Control Regulations as the highest-levelin business conduct as well as overall matters in conformity with theCommercial Act. These Regulations govern the operation of the com-pliance control system, authorities and obligations of the Compliance
Officer, and employees’ compliance obligations and compliance con-trol activities. The Compliance Officer reviews whether our operations

conform to these Regulations and assesses the Regulations for theireffectiveness, and reports the results to the Board each year.

as our dedicated compliance organization. The Compliance Team isCompliance system operation

Compliance Officer attends all Board and committee meetings to sup-(CPMS) to encourage voluntary participation in compliance manage-

headed by the Compliance Officer appointed by the Board, and theport Samsung SDI’s decision-making on compliance matters.

We appoint the compliance chief managers in department head positions and working-level team compliance managers (TCM) to create department-level compliance implementation units to establish
and disseminate a field-driven compliance culture. Compliance chief

managers assume ownership for compliance management within

their own department and encourage members to abide by compli-

ance systems and guidelines and participate in compliance training,

6. Transparency in Stakeholder Engagement

Compliance Management Operations

Samsung SDI operates distinctive dedicated organizations for systemic ethics and compliance implementation to manage and prevent

5. Credibility in Corporate Governance

APPENDIX

Samsung SDI operates the Compliance Program Management Systemment and raise employees’ compliance mindset. In 2022, we create a
dedicated section for overseas corporations within the CPMS and added relevant content to make this system more accessible and useful forour overseas corporations. We also operate a separate technical data

request system to prevent possible regulatory non-compliance on thepart of our employees in relation to technical data.

Samsung SDI operates a compliance programs to prevent the risk ofregulatory non-compliance. We implement a 24/7 system to reportcontacts made with industry peers to prevent cartel from occurring.

Our internal deliberation committees are also up and running in respective areas to collect feedback from relevant departments andpromote close communication. The external sponsorship deliberation committee reviews anti-corruption risks in advance and reports

quarterly deliberation results to the Audit Committee. In 2022, all ouroverseas corporations established their own sponsorship deliberationcommittee to reinforce their anti-corruption risk management process. We also created the related transaction deliberation committee

to advance our related transaction risk management process and improve transparency in doing business with affiliated companies.

Furthermore, we operate assessment and award programs to incentivize employee’s voluntary implementation of compliance manage-

ment and establish compliance management as an essential part ofour corporate culture. The compliance index is considered in executive

performance assessment, and its detailed assessment items include
compliance training and test, message dissemination, self-check, andvoluntary theme-based department reviews. The SDI Global Annual
Awards has been hosted since 2022 where our CEO directly recognizes

employees and/or departments for their contribution to creating andestablishing a compliance culture. In 2023, compliance assessment
items – employees’ implementation of their compliance obligations
and our compliance system and completion of compliance training –were included in conducting organizational assessments on businessdivisions to ensure these compliance metrics are tied to employee
incentives.

SAMSUNG SDI SUSTAINABILITY REPORT 2023

77

OVERVIEW
1. Infinite Safety

2. Move to Net-Zero

Ethics & Compliance
Compliance review and monitoring

SUSTAINABILITY MANAGEMENT
3. Partnership with Value-Chain Partners and Community

4. Accountability in Value-Chain

confidential manner and remain strictly anonymous. In 2023, we re-organized our website and the CPMS to make whistleblowing moreconvenient.

Each year, regular reviews are made for departments at increased risk forCompliance management training

reflect the results in future trainings. We analyze internal/external trends

latory non-compliance, we focus on diverse tailor-made, specialized

non-compliance to verify their regulatory and contractual obligations andand perform non-routine reviews on regulations governing trade secrets,

subcontracting, and win-win cooperation to prevent and manage rele-vant risks. For areas requiring year-round risk management, compliancereviews are integrated as requirements in the decision-making process
to prevent regulatory non-compliance. Each compliance implement unit
also performs voluntary department-level, theme-based reviews under

the supervision of compliance chief managers and TCMs to ensure corrective measures are taken autonomously to address identified risks. In
2022, compliance reviews were conducted on domestic subsidiaries to
identify and improve risks along with separate training. We also bolsteredcompliance controls at overseas corporations. The Compliance Team atthe Headquarters provided on-site consulting for corporations in the

To advance compliance management and prevent the risk of regu-

training programs that cater to the distinctive needs of departments
and individual employees. In conducting company-wide online com-pliance training, we also provide training customized for different job
categories to make such training more engaging and increase theeffectiveness of training. For departments at increased risk for regulatory non-compliance, we segmented courses for different levels of
trainees to maximize their effectiveness. To establish a self-directedcompliance culture at overseas corporations, we created an in-housepromptly recognize and prevent regulatory non-compliance and risk
factors. One may report all forms of regulatory non-compliance, including violation of fair trade regulations, trade secret infringement,

and false/exaggerated advertising. Such whistleblowing reports canbe submitted through a range of channels, from the CPMS and our

website to e-mail, phone, and fax, and all reports are handled in a

Purpose and composition

The Samsung Compliance Committee (the ‘Committee’ hereinafter)
was launched in 2020 to bolster compliance oversight and control at

Samsung’s seven major affiliates1) and advance integrity management
as Samsung’s core value.

The Committee is guaranteed its independence and autonomy as

an independent organization created outside of Samsung SDI, and is

mandated to review and manage the risk of regulatory non-compliance for Samsung SDI and other major affiliates. The Committee consists of six outside members including its chair and one internal mem-

ber, and outside members are appointed for their expert knowledge
and experience in compliance oversight.

Major activities

pliance awareness at all levels. Our CEO regularly communicates our

Samsung SDI operates a compliance whistleblowing mechanism to

Samsung Compliance Committee

them in bolstering their compliance management capabilities.

compliance training to employees of our primary partners to assistat overseas corporations to disseminate a culture of compliance man-Compliance whistleblowing channels

6. Transparency in Stakeholder Engagement

1) Samsung SDI, Samsung Electronics, Samsung Electro-Mechanics, Samsung SDS,
Samsung C&T, Samsung Life Insurance, Samsung Fire & Marine Insurance

Expanding communication on complianceagement across the board.

5. Credibility in Corporate Governancecompliance training process led by local personnel. We also provide

Americas, Hungary, and Malaysia for compliance review. We establishedcompliance units and introduced the internal compliance review system

APPENDIXSUSTAINABILITY MAIN THEMESWe engage in a wide array of communication activities to raise comcommitment to compliance both internally and externally, and exec-

utives share compliance messages with their department members
on a regular basis. The Compliance Team regularly provides employ-

ees with compliance information, and sends the quarterly SDI Compliance Letter containing noteworthy media articles on complianceissues as well as regulatory enactments and amendments to independent directors. In 2022, we published the Compliance Oversight

Regulations to help employees easily access and use our compliance management regulations and guidelines, and circulated themamong executives, compliance chief managers, and TCMs.

The Committee meets regularly with compliance officers from Samsung affiliates on a monthly basis, and also convenes ad-hoc meetings
when necessary. The Committee reviews affiliates for their externalsponsorships and related transactions, and receives reports on affili-

ates’ violation of regulatory compliance obligations through separate
whistleblowing channels including post, e-mail, and third-party organizations. The Committee has its own website to post annual reports,
details of the meetings held, and external statements and to receive

relevant reports. The Committee engages in a wide array of activities

by hosting discussions joined by affiliate CEOs, providing compliancetraining to high-level affiliate executives, and holding discussions
among compliance experts.

SAMSUNG SDI SUSTAINABILITY REPORT 2023

OVERVIEW
1. Infinite Safety78

2. Move to Net-Zero

SUSTAINABILITY MANAGEMENT
3. Partnership with Value-Chain Partners and Community

APPENDIXSUSTAINABILITY MAIN THEMES
4. Accountability in Value-Chain

5. Credibility in Corporate Governance

6. Transparency in Stakeholder Engagement

Ethics & Compliance
Ethical Management System

Ethical Management Operations

Samsung SDI operates the Audit Team under the direct leadership

Samsung SDI continues with year-round monitoring with a focus on

Dedicated ethics organizationof the CEO to advance ethical management. We continuously review
ethics and anti-corruption issues to establish a transparent corporate

culture. Our domestic and overseas operations receive ethics and an-ti-corruption evaluations and compliance audits, and the results are
regularly reported to the Audit Committee under the Board each year.

Ethics management guidelines

Ethics review and monitoring

Ethics training

departments that interact with partners to prevent corruption in-Training content was produced in nine languages to provide online

volving partners, and launches full investigation when issues or whistleblowing reports are substantiated. As the Serious Accidents Punishment Act came into force in January 2022, we conducted intensive

reviews on our six domestic worksites for their risk of accident occurrence and management system to make necessary improvements.

We implement guidelines to prevent and counter corruption in rela-

Whistleblowing mechanism

dards and behavioral guidelines concerning corruption to establish aternally and externally to ensure the fair and prompt resolution oftion to ethical management, and present clear determination stancorporate culture of integrity.

Ethics Management Guidelines

1. Transactions
Acceptance of bribes and entertainment, lending & borrowing,
harmful effects on business partners, preferential treatment forbusiness partners, equity investments
2. Company money and assets
Embezzlement, theft of assets

3. Work discipline
Habitual neglect of duty, lending & borrowing among employees
based on hidden motives, harmful effects among employees,
outside work
4. Other
Data leaks, etc.

We have a variety of whistleblowing programs up and running incorruption-related concerns. We operate wide-ranging whistleblow-

ing channels, from our in-house ethics management system andthird-party whistleblowing websites to e-mail and phone dedicated towhistleblowing, to make whistleblowing more convenient. In 2022, we
opened a new whistleblowing website accessible by our employees
and external stakeholders to facilitate whistleblowing on ethics andcompliance management. This website specifies our management
principles and types of corruption and regulatory non-compliancesubject to whistleblowing, and supports nine languages in total in-cluding Korean, English, Chinese, and Hungarian taking into accountaccessibility for locally-hired personnel working at overseas corporations as well as our domestic employees. We seek consent for reports

submitted under one’s real name in relation to personal data collec-

tion and its provision to third-parties, and whistleblowers may raise
their concern anonymously if they wish.

We provide ethics and anti-corruption training at least once a year.

training, and such training was conducted for all our domestic andoverseas employees. As to offline training offered to new hires and fulltime recruits with previous work experience in Korea, we have extended its scope to newly hired contract employees and have operated aregular training system since 2022.

SAMSUNG SDI SUSTAINABILITY REPORT 2023

79

OVERVIEW
1. Infinite Safety

2. Move to Net-Zero

SUSTAINABILITY MANAGEMENT
3. Partnership with Value-Chain Partners and Community

APPENDIXSUSTAINABILITY MAIN THEMES
4. Accountability in Value-Chain

6. Transparency in Stakeholder Engagement

5. Credibility in Corporate Governance

Ethics & Compliance
Information Security

Samsung SDI is reinforcing our information security system to safe-

subject to even more rigorous management by appointing the Nation-

working-level security operations, and are establishing self-directed,

ly sophisticated security threats. As our technology portfolio includes

ty organization at the Headquarters, in conjunction with information

between SAs and our information security organization.

guard our critical assets and key information in response to increasingautomotive battery technology that is considered as national coretechnology, we operate the industrial technology leakage prevention
and management system. We also implement regular information security reviews and awareness building activities to prevent risks associated with information security.

Information security policy

Our information security policy consists of basic principles and their implementation guidelines for Samsung SDI and employees to follow, and weoperate and manage our security performance measurement index. Our
information security policy defines all tangible/intangible information assets

owned or generated by Samsung SDI, and applies to all outsiders who visit
Samsung SDI including partner employees as well as our own employees.
We keep our information security policy up-to-date by reflecting applicablelaws in Korea and overseas and security measures associated with new infor-

mation technology and new security threats each year, and the amendments
made are posted on our in-house online bulletin board so that they are communicated at all levels.

Information security management organization

We appoint the Chief Information Security Officer (CISO) in accor-

dance with the Act on Promotion of Information and Communications
Network Utilization and Information Protection. Our critical information assets that fall into the category of national core technology are

al Core Industrial Technology Security Officer. Our information securisecurity managers appointed at domestic and overseas worksites,

operates the Information Security Working Group to share and handle
issues related to information security.

Information security management system

We installed digital CCTVs and established an access control management system to safeguard facilities within our worksites and con-trol third-party access. All our worksites are accessible by authorized

employees only, and visitors are required to make access requests
prior to their visit to gain permission for entry in accordance with our

Visiting Arrangement System. We operate a rigorous exit inspection
system to ensure our critical assets and information are not takenout of our worksites without authorization. We deploy a range of IT

systems to keep our critical information secure, including a blocking

system to detect external security threats early on, a control system toblock unauthorized outgoing transmissions, and an encryption system that enables viewing only on company PCs. To prevent IT system

hacking and service outage, we test system each year to ensure theset incident response process works properly by conducting exercises under hacker attack simulation scenarios. We also operate a disas-

working-level security management practices through collaboration

Raising awareness on information security

To elevate employees’ awareness on information security, we provide

all employees with information security training each year and makethem sign the information security pledge. We conduct monthly simulation-based malicious code e-mail tests and leverage in-house broadcasts, campaigns, and other varying channels to keep our employees

vigilant against such threats. In particular, professional training is con-ducted each year for information security personnel to internalize information security capabilities. Our ‘security report reward program’
encourages employees to submit reports when they identify the risk of

security-related incidents. Furthermore, we provide partners with annual security training to raise the security awareness of their employees and help prevent data leaks.

E mployees Who Completed
Information Security Training
7,639

8,786

(Unit: No. of persons)

10,502ter recovery system so that normal system operation is possible evenin the event of natural and man-made disasters, and conduct annual
mock drills to ensure the well-functioning operation of this system.

Each year, we appoint SAs (Security Agent) who keep close tabs on

2020

2021

2022

SAMSUNG SDI SUSTAINABILITY REPORT 2023

80

OVERVIEW
1. Infinite Safety

2. Move to Net-Zero

Ethics & Compliance
Data Privacy

Samsung SDI recently established a new part specializing in data

privacy, Global Privacy Office, to operate our data privacy policy andmanagement system pursuant to applicable laws so that we can safe-

guard the personal data of our employees, customers and visitors andkeep personal data breaches at bay. In addition to the safety measuresprescribed by the Personal Information Protection Commission, we

have also adopted technical and managerial protection measures tosecure the safety of personal data.

Data privacy policy

To protect personal data and rights and interests of our employees,

SUSTAINABILITY MANAGEMENT
3. Partnership with Value-Chain Partners and Community

4. Accountability in Value-Chain

data processing devices and image data.

our corporate system to prevent any unauthorized collection of data

ment Guidelines contain provisions on matters related to our image

Data privacy management organization

In December 2022, we established the 'Global Privacy Office' with exper-

Our Personal Data Internal Management Plan aims to ensure that
personal data is not lost, stolen, leaked, falsified, damaged, or misused through systemic personal data management. The Plan defines

the roles and responsibilities of the Chief Privacy Officer and covers
matters on technical, managerial, physical safeguards and internal

reviews for personal data as well as response procedures to be undertaken in the event of an issue occurring. This Plan applies to ourown employees as well as partner employees who handle personaldata, and is available on the internal work system accessible for all
employees handling personal data.

without prior consent. For visitors, our Visiting Arrangement Systemapplies the prior consent process for those who make visit applications to fully abide by the Personal Information Protection Act.

tise in data privacy under the Legal & IP Team to ensure systemic and progal & IP Team as the Chief Privacy Officer (CPO) to thoroughly perform allsures could be taken depending on the severity of the issue at handfessional data privacy operations. We also appointed the head of the Lework stipulated under the Personal Information Protection Act and manage our systems containing personal data. The Global Privacy Office is

responsible for overall data privacy operations, ranging from establishingstrategies and operating policies for data privacy and establishing andbolstering relevant processes to addressing and supporting data privacy-related legal affairs and conducting data privacy training and review.

processing, the duration of use, and safeguards among others. Pursuagement Plan to systematically protect and manage personal data.

collection and use of personal data prior to registering such data inIn the event personal data breaches occur due to non-complianceincluding the account of employees handling personal data, the time

tection Act, we also have established a Personal Data Internal Man-

6. Transparency in Stakeholder Engagement

As to customers’ personal data, we verify the consent given on thecustomers and visitors, Samsung SDI has implemented a Privacy Poliant to Article 29 (Duty of Safeguards) of the Personal Information Pro-

5. Credibility in Corporate GovernanceIn addition, Image Data Processing Device Operation and Manage-

Data privacy management systemcy to specify the items of personal data collected, the purpose of data

APPENDIXSUSTAINABILITY MAIN THEMESOur Chief Privacy Officer performs monthly reviews on access logs,
and location of access, the subject of data handled, and the detailsof tasks undertaken, to manage the personal data handling work

performed by employees responsible for handing such data. Whenemployees handling personal data download personal data, this isthoroughly verified for justifications for such downloads. Furthermore, internal reviews are made at least once a year on the implementation of our internal management plan governing access rights

management, access log storage and review, and encryption measures as well as our compliance with the data privacy policy.

The Privacy Office checks any change in the items of personal datacollected by the Company and the entities to which such personal

data is provided. Such changes are reflected each year in gaining
consent to collect and use personal data.

with our data privacy policy, disciplinary and other personnel meaand according to our internal regulations. Such breaches could be
subject to punishment pursuant to the Personal Information Protection Act and other applicable regulations.

Data privacy training

We provide training at least once a year to our employees who handle
personal data at Samsung SDI as well as employees who handle personal data at partners who have signed outsourcing contracts with us toprocess personal data to improve their understanding on data privacy.

Training topics are chosen in reflection of internal/external issues including regulatory amendments made concerning personal data privacy. In
2022, 370 persons (296 Samsung SDI employees handling personal data

and 74 outsourcing company employees handling personal data) com-pleted training on understanding the Personal Information Protection
Act and compliance provisions to follow in handling personal data.

Data Privacy Training Content in 2022

Training for employees who
handle personal data

Understanding the Personal
Information Protection Act(basic concepts,
latest trends, etc.)

Compliance provisions for
personal data handling(guidelines, prevention ofleaks and exposures)

SAMSUNG SDI SUSTAINABILITY REPORT 2023

81

OVERVIEW
1. Infinite Safety

2. Move to Net-Zero

SUSTAINABILITY MANAGEMENT
3. Partnership with Value-Chain Partners and Community

SUSTAINABILITY MAIN THEMES
4. Accountability in Value-Chain

TSTAKEHOLDERRANSPARENCY IN
6.

ENGAGEMENT

Operated theofficial blog/
Facebook page/YouTube channel

Disclosedtransparently

2022 KEY ACHIEVEMENTS

5. Credibility in Corporate Governance

APPENDIX
6. Transparency in Stakeholder Engagement

SAMSUNG SDI SUSTAINABILITY REPORT 2023

OVERVIEW
1. Infinite Safety82

2. Move to Net-Zero

SUSTAINABILITY MANAGEMENT
3. Partnership with Value-Chain Partners and Community

APPENDIXSUSTAINABILITY MAIN THEMES
4. Accountability in Value-Chain

5. Credibility in Corporate Governance

6. Transparency in Stakeholder Engagement

Expanding Stakeholder Communication
Our Approach and Management Plan

Samsung SDI defines our key stakeholders as customers, shareholders, investors, employees, partners, communities, civic organizations, industry associations, universities, research institutes, governments, and media. We operatecommunication channels to efficiently gather varying feedback from respective stakeholder groups and effectively reflect such feedback in our business operations to forge even closer partnerships with internal/external stakeholders.
Stakeholder

Communications in 2022

Ways to Increase Value

Customers• Customer visits• QBR(Quarterly Business Review) meetings• QTR(Quarterly Technical Review) meetings• Website• Enhance product safety, eco-friendliness and other quality aspects• Swiftly provide information across wide-ranging communication channels

Shareholders &investors• IR earnings conference calls• IR NDR• IR website and company phone number• General shareholder meetings• IR conferences and year-round meetings• Disclosures• Establish sound governance• Increase shareholder return through improved corporate value• Improve business competitiveness

Employees• Works Council• Counseling Center• Change Agent• SDI talkPartners• Purchasing portal system• SSP(Samsung SDI Partner’s Association)

Communities &
civic organizations• Community councils• CSR activities• Sisterhood ties

Industry associations/
universities/
research institutes• Management briefings• Satisfaction surveys• Global SDI Pick!
• Newsletters• Exchange meetings with partners• CEO and executives’ visits to partners• Memberships at associations and societies• R&D (Open Innovation)• Joint cooperation programs• Create a working environment with safety and respect for human rights• Create an advanced corporate culture• Support employees with capacity building• Improve the quality of life by operating benefit programs• Establish the principles of fair trade and operate the benefit sharing system• Improve business competitiveness through win-win cooperation consulting andtechnology/personnel/financing support• Increase ESG management performance• Participate in CSR activities to contribute to help solve community issues• Revitalize the local economy• Prevent adverse environmental impact• Support R&D• Expand industry-academia cooperation

Governments• Participation in government-led projects• Joint cooperation programs• Participate in governmental policies and abide by laws
• Faithfully pay taxes• Transparently disclose information

Media• Prompt, transparent, and accurate disclosures• Press releases and newsletters on our products, technologies and markets• Ensure prompt and transparent communication with the media• Disclose accurate and diverse information

SAMSUNG SDI SUSTAINABILITY REPORT 2023

83

OVERVIEW
1. Infinite Safety

2. Move to Net-Zero

SUSTAINABILITY MANAGEMENT
3. Partnership with Value-Chain Partners and Community

SUSTAINABILITY MAIN THEMES
4. Accountability in Value-Chain

5. Credibility in Corporate Governance

APPENDIX
6. Transparency in Stakeholder Engagement

Expanding Stakeholder Communication
Key Communication Channels

We operate a range of communication channels to promptly communicate the latest news of Samsung SDI while identifying and reflecting stakeholder needs. In addition to content on industry trends and useful daily information,
we also share content that manifests Samsung SDI’s distinctive characteristics.

Official blog

Official YouTube channel

highly useful information acrosssung SDI’s business, products, and technology. Vlog produced by our employees to share their work life andOur official blog serves to provide
the different categories of Samsung

SDI, our products, and employees.

Our YouTube channel provides wide-ranging stakeholders an easy-to-understand and intriguing view of Samcontent on job descriptions help reach out closer to job seekers to provide them with useful information.

This channel is filled with a wealthof information covering various topics that interest stakeholders.

Official Facebook page

Our Facebook page provides an

Company Overview

Battery Lab

SDI’s history

Job Description

Employee Vlog

SDI Jungbotong

overview of diverse information

shared through our wide-ranging
communication channels, and enables us to promptly communicate

information on our business andcurrent status.

SAMSUNG SDI SUSTAINABILITY REPORT 2023

OVERVIEW
1. Infinite Safety84

2. Move to Net-Zero

SUSTAINABILITY MANAGEMENT
3. Partnership with Value-Chain Partners and Community

APPENDIXSUSTAINABILITY MAIN THEMES
4. Accountability in Value-Chain

5. Credibility in Corporate Governance

6. Transparency in Stakeholder Engagement

Transparent Disclosure
Sanctions Imposed Concerning Our Meal Service Contract and Improvements Made
Case overview

In relation to our employee meal service contract with Samsung Welstory, we were ordered on August 27, 2021 by the Fair Trade Commission to take corrective action and pay fines (KRW 4.369 billion) on charges of violating Article

45, Clause 1, Paragraph 9 of the Monopoly Regulation and Fair Trade Act, and we paid the fines in November that year. Presently, administrative proceedings are pending for this measure. As to the corrective action ordered by theCommission, a decision was made to grant a stay of execution on January 27, 2022. We would like to note that there is no risk of criminal punishment concerning this case since neither Samsung SDI nor our employees were notcharged with arrested for criminal offences in relation to our employee meal service contract.

Improvements made concerning our employee meal service

In filing a revocation lawsuit, Samsung SDI is strongly arguing that our employee meal service contract with Samsung Welstory was entered into at arm's length and that it is difficult to accept the decision made by theCommission. Irrespective of the revocation lawsuit, we introduced competitive bidding for our in-house cafeteria operations under the supervision of our Board of Directors while improving and supplementing our
related transactions process with an aim to alleviate concerns over our employee meal service contract and promote win-win cooperation.

1. Introducing competitive bidding for our in-house cafeteria

2. Improving our related transactions deliberation process

Under the supervision of the Board and in line with the principle of improving employee welfare and bene-

Our existing process, which was led by the Related Party Transactions Committee under the Board of Di-

ency, fairness, and adequacy of pricing. Between September 2021 and the end of 2022, competitive bidding

plemented. In September 2022, the related transactions deliberation committee was established to bolster

fits, we established a competitive bidding process to avoid private contract signing while boosting transparwas completed for six in-house cafeterias operated at our entire domestic operations.

Competitive bidding started with the dormitory cafeteria at our Cheonan worksite in September 2021, andwas implemented at the in-house cafeteria of our Cheongju worksite in April 2022. In November that year,
in-house cafeterias at four of our worksites in Giheung, Cheonan, Ulsan, and Gumi also chose their meal
service provider through competitive bidding. As such, employee meal service companies were chosen

through competitive bidding, and the entire process was made publicly available both internally and externally. In making assessments in each stage, external experts and members of our Works Council participated to make this process more objective.

rectors and the Board itself making deliberations and granting approvals, was partially improved and supour risk management for related transactions. The committee collects feedback from relevant departments

concerning our transactions entered into with companies that are subject to Article 47 of the Fair Trade

Act as well as our transactions entered into with companies in the construction, SI, advertising, logistics
and other industries that are under intensive monitoring for their potential for receiving unjustified favors

from affiliated companies. The committee also reviews private contracts for their procedural legitimacy andtransactional transparency. Furthermore, the committee ensures that major transactions subject to its review switch to competitive bidding to raise the proportion of competitive bidding as a result.

In October 2022, we created the vendor registration deliberation committee to prevent the reckless registrations of new vendors for infrastructure procurement and services and to ensure transparency in registering andmanaging vendors. When one of our affiliates registers as a new vendor, this is reviewed for the risk for relatedtransactions from the vendor registration phase to improve transparency in doing business with our affiliates.

SAMSUNG SDI SUSTAINABILITY REPORT 2023

OVERVIEW
1. Infinite Safety85

2. Move to Net-Zero

SUSTAINABILITY MANAGEMENT
3. Partnership with Value-Chain Partners and Community

APPENDIXSUSTAINABILITY MAIN THEMES
4. Accountability in Value-Chain

5. Credibility in Corporate Governance

6. Transparency in Stakeholder Engagement

Transparent Disclosure
Sanctions Imposed Concerning Subcontracting and Improvements Made
Case overview

In relation to the non-issuance of paper documents in requesting technical data, Samsung SDI was ordered on May 3, 2022 by the Fair Trade Commission to take corrective action (reoccurrence prevention order) and pay fines(KRW 270 million) on charges of violating Article 12, Clause 3, Paragraphs 2 and 3 of the Fair Transactions in Subcontracting Act, and paid the fines on July 25 the same year. It is difficult to accept the measure made by theCommission, so administrative proceedings are pending in relation to it, and three hearings were held as of the end of March 2023.

Improvements made concerning subcontracting

1. Supplementing the technical data request system

We invested in supplementing our existing system (KRW 250 million in total investment) to ensure that we

2. Providing regular and year-round training on subcontracting regulations(concerning technical data)

sign the technical data request agreement and the non-disclosure agreement, and that receiving and dis-

We continued with company-wide promotional activities (postings made using Knox, manual distribution)

integrated the essential procedures required for regulatory compliance – prior consultations, request is-ment, development, quality, and manufacturing technology among others).

posing of technical data can be performed through the system. The updated technical data request systemsuance and agreement signing, and technical data receipt/return/disposal – so that our employees could
consecutively perform such work through the system. This resulted in rigorous controls being placed on
possible regulatory non-compliance associated with technical data requests. We also perform year-roundmonitoring and compliance review.

In addition, we deployed necessary features on the system to prevent the risk of regulatory non-complianceand operate an ‘end-to-end process’ for technical data request and request paper issuance. This ensures thefull online issuance and retainment of technical data requests (agreement) and received data through thesystem. Specifically, this system functionally mandates that technical data requests (agreement) be signedin the initial phase of generating the material approval sheet, and in the event that the agreement is notentered into, progressing to the next step is made impossible. This means that at Samsung SDI, prior con-sultations and agreement signing have become a mandatory prerequisite to receiving partners’ technicaldata that are receivable only through the system.

and provided offline/online regular and year-round training to users from relevant departments (procureOver the past three years, we provided 10,138 employees with technical data training on 19 occasions, including three company-wide postings, nine offline trainings, and seven online trainings.

SAMSUNG SDI SUSTAINABILITY REPORT 2023

86

OVERVIEW
Materiality Assessment

Financial Performance

SUSTAINABILITY MANAGEMENTSUSTAINABILITY MAIN THEMES

Sustainability Performance

SASB Index

GRI Standards 2021 Index

TCFD Index

UN SDGs

APPENDIXGHG Verification Opinion

Independent Assurance Statement

Materiality Assessment

87

Sustainability Performance

91

APPENDIX
Financial Performance89

GRI Standards 2021 Index

100

TCFD Index

104

SASB Index
UN SDGs

GHG Verification Opinion

Independent Assurance Statement

103
105
107
109

SAMSUNG SDI SUSTAINABILITY REPORT 2023

OVERVIEW
Materiality Assessment

87

Financial Performance

SUSTAINABILITY MANAGEMENTSUSTAINABILITY MAIN THEMES

Sustainability Performance

SASB Index

GRI Standards 2021 Index

TCFD Index

UN SDGs

APPENDIXGHG Verification Opinion

Independent Assurance Statement

Materiality Assessment

Samsung SDI conducted double materiality assessment in accordance with the GRI (Global Reporting Initiative standards 2021), EU’s CSRD (Corporate Sustainability Reporting Directive), and IFRS (International Financial ReportingStandards)’s Exposure Draft for sustainability disclosures. We identified ESG topics material to Samsung SDI based on understanding on our business context, and looked into each ESG topic for their inside-out impact – how ourbusiness operations impact economy, environment, and people (employees, customers, end-users, and value chain workers) - and for their outside-in impact – how respective ESG topics impact the financial aspect of Samsung

SDI. This was followed by impact assessments conducted on internal/external experts who have in-depth understanding of Samsung SDI and ESG. Assessment results received Board’s final review and approval, and this led us toarrive at eight key ESG topics.

Double Materiality Assessment Process
Process

Objective and Activity

Detailed Process and Consideration

OutputUnderstand thebusiness context

Understand Samsung SDI’s business operations andrelationships and sustainability contexts to completely
identify significant actual and potential sustainability impact

・Business operations in general: Mission, business model/strategy, products and services, location, type of workers, etc.
・Business relationship: Main business, customer/supply chain characteristics, etc.
・Sustainability context: Economic, environmental, and social issues associated with industry, activity, and location as
well as laws and regulations

Identify stakeholders

Create a pool of topics

Choose topics fit for our corporate and industry
characteristics and whose disclosure is required bystakeholders

・Analyze major disclosure guidelines (GRI, SASB, etc.)
・Analyze major ESG rating standards (MSCI, DJSI, etc.)
・Analyze material ESG topics reported by industry peers
・Analyze internal ESG management data including sustainability strategy and focus areas

List 22 topics

Characterize topics

Identify topics for their impact characteristics (positive/
negative, actual/potential), and determine how to assess
these topics depending on their type identified

・Understand policies/regulatory requirements, media articles, global disclosure and assessment standards,
internal news, and shareholder/investor requirements for each topic
・Identify inside-out impact: Characterize topics: Identify the subject of impact (economy, environment, people) andcategorize impact into positive/negative and actual/potential impact

Develop impact assessment
tools

Assess topics fortheir impact

Select material topics

Survey internal/external experts who deeply understandSamsung SDI and ESG to prioritize topics

Set priorities for reporting topics to the Sustainability
Management Committee under the Board

Inside-out(Social andenvironmental impacts)

・Topic assessment criteria: Scale, scope, remediability, and likelihood

・Topic assessment criteria: Probability of resource input, stakeholder dependence,
Outside-in(financial impacts)
probability of change in business model and strategy, impact on financial expenses
・Quantitatively analyze impact assessment results
・Group material topics for disclosure based on assessment results
・Review and approval at the Board level

Produce impact assessment
results and priorities

Choose material topics andgroup disclosure topics

SAMSUNG SDI SUSTAINABILITY REPORT 2023

OVERVIEW
Materiality Assessment

88

Financial Performance

SUSTAINABILITY MANAGEMENTSUSTAINABILITY MAIN THEMES

Sustainability Performance

SASB Index

GRI Standards 2021 Index

TCFD Index

UN SDGs

APPENDIXGHG Verification Opinion

Independent Assurance Statement

Materiality Assessment
Materiality Assessment Results
ESG Material Topic

E

S

Identified
ImpactKey Impact

Impact on

Establishing a closed-loop resource circulation system to ensure
effective battery disassembly/recycling designs and to recycle
reclaimed materials helps mitigate environmental impact and expand
the circular economy ecosystem.

Impact level1)

GRI Index

Related Focus
Area

Page

●●●●●

301-2

Move to Net-Zero

48-49p,
94p

Social/Environmental
impactFinancial impact

Environment,
economy●●●●●Building a battery
circular economy

Positiveactual

GHG emissions

Negativeactual

GHG emissions generated from the overall value chain cause thenegative impact of climate change, and may incur management costs
to respond to emissions trading schemes and other regulations.

Environment,
economy

●●●●●

●●●●●

305-1~5

Move to Net-Zero

40-42p,
45p, 93p

Renewable energy
transition

Positiveactual

Environment,
economy

●●●●●

●●●●●

302-1, 3Move to Net-Zero

42p, 47p

Product environmental
LCA and andenvironmental
impact mitigation

Expanding renewable energy not only helps proactively address
climate change but also contributes to landing orders and improving
business relationships with global leading customers demandingtransition to 100% renewables.

Positiveactual

Assessing and mitigating environmental impact, including carbon
emissions generated from a product’s lifecycle, helps respond to the(draft) EU Batteries Regulation and meet relevant requirements fromglobal car OEMs and other key customers.

Environment,
economy

●●●●○

●●●●●

Non-GRI

Move to Net-Zero

46p

Energy efficiency
management

Positiveactual

Improving the efficiency of energy used in the entire manufacturing
process brings positive impact to operational efficiency andprofitability.

Environment,
economy

●●●●○

●●●●○

302-1, 3, 4

Move to Net-Zero

42-44p,
93p

Supply chain
sustainability/riskmanagement

Positiveactual

Managing potential environmental/social risk factors that may affectpartners helps manage value chain risk and prevent/mitigate negative
impact.

People,environment

●●●●○

●●●●●

308-1~2,
414-1~2

Accountability in
Value-Chain

60-64p,
96p

Health/safety accidents
affecting employees(high-consequence
injuries and others)

Negativeactual

Health and safety accidents involving employees bring negative
impact on employee retention and may lead to business disruptions
and suspension, making it impossible to continue with reliable
manufacturing operations.

People,economy

●●●●●

●●●●○

403-1~9

Infinite Safety30-33p,
92p

Product safety andquality accidents(recalls and others)

Negativepotential

Exposure to product safety issues and lack of quality management
efforts may result in direct/indirect damage to public health andsafety.

People,economy

●●●○○

●●●●○

416-1~2

Infinite Safety

34-38p,
93p

1) ●●●●● Very High●●●●○ High●●●○○ Moderate●●○○○ Low●○○○○ Very Low

SAMSUNG SDI SUSTAINABILITY REPORT 2023

OVERVIEW
Materiality Assessment

89

Financial Performance

SUSTAINABILITY MANAGEMENTSUSTAINABILITY MAIN THEMES

Sustainability Performance

SASB Index

GRI Standards 2021 Index

TCFD Index

APPENDIX

UN SDGs

GHG Verification Opinion

Independent Assurance Statement

Financial Performance

53rd as of Dec. 31, 2022
52nd as of Dec. 31, 2021
51st as of Dec. 31, 2020
(unit: KRW)

Consolidated Statement of Financial Position
Category
AssetsTotal current assets

Cash and cash equivalents

Trade and other receivables, net
Inventories, net

Other investments
Other assets

Current derivative assets

Total non-current assets

Trade and other receivables, net

Investments in equity-accounted investees
Tangible assets, net

Intangible assets, net
Investment property
Deferred tax assets

Other non-current investments, including
derivatives
Other non-current assets
Derivative assets

Employee benefits assets

Total assets

End of 53rd

End of 52nd

End of 51st

9,651,702,375,329

7,444,907,068,203

5,657,405,165,394

2,933,814,798,893

2,195,425,598,789

1,870,381,153,317

2,614,271,849,898
3,204,515,834,716
534,662,104,634
335,800,401,510
28,637,385,678

2,325,692,348,376
2,487,316,318,701
164,541,358,730
258,708,109,360
13,223,334,247

1,545,974,321,801
1,810,785,260,639
167,037,269,633
256,395,938,005
6,831,221,999

20,605,822,795,798

18,388,285,928,733

15,876,827,101,435

8,940,282,254,638

7,885,424,300,376

7,143,396,948,925

814,931,162,728

798,911,068,282

793,573,297,061

6,879,322,583

8,965,469,798,907
147,558,866,183
168,913,513,518

13,538,047,881

7,635,995,590,121
150,410,177,327
140,864,868,927

25,279,489,150

6,128,099,170,818
150,502,139,591
96,846,429,192

1,245,883,336,770

1,572,410,115,693

1,358,684,147,489

6,070,437,854

84,847,019,169

73,815,596,651

137,715,011,245
172,119,091,372

105,884,740,957-

106,629,882,558-

Category

Advance received

353,726,970,697

Short-term borrowings

2,851,183,213,651

2,510,216,802,997

2,427,504,179,850

Provisions

331,508,975,774

302,682,229,936

302,373,534,504

Derivative liabilities

Total non-current liabilities

Trade and other payables

Long-term advance received
Long-term borrowings

Employee benefit liabilities, net
Derivative liabilities
Provisions

Deferred tax liabilities

5,033,084,187,511
697,531,224,825
50,623,504,840

2,330,249,501

4,175,207,887,065
265,947,483,830
35,429,209,729

17,761,781,525

28,783,093,680

3,191,672,237,752
210,040,906,245
1,344,199,495

2,297,040,000,000

2,107,760,803,273

1,484,319,604,943

82,319,778

10,016,686,557-

1,893,923,422,183

1,653,383,731,438

1,377,439,006,167

2,005,409,849

91,878,306,036

9,358,262,362

93,311,709,876

38,705,231,267

79,823,289,635

10,636,493,682,081

Equity attributable to owners of the
ParentCompany

16,485,723,513,578

14,704,264,131,372

12,977,616,019,092

5,001,974,693,202

5,001,974,693,202

5,001,974,693,202

1,003,816,893,169

1,174,235,557,799

Capital stock

Capital surplus
Other capital

8,006,938,827,488

6,461,285,795,016

4,983,633,140,961

Non-controlling interests

Income taxes payable

229,613,880,891

126,201,165,219

44,391,708,778

Total liabilities and equity

1,809,091,871,927

57,510,091

39,131,549,681

13,040,023,014,999

Total current liabilities

3,269,446,524,533

78,688,354,316

Total liabilities

Total shareholders’ equity

21,534,232,266,829

4,285,754,045,541

End of 51st

211,277,273,149

25,833,192,996,936

Trade and other payables

End of 52nd

230,132,847,224

Unearned revenue

30,257,525,171,127

Liabilities

End of 53rd

Accumulated other comprehensive income
Retained earnings

Total shareholders’ equity

356,712,130,000(345,131,583,767)

10,468,351,380,974
731,778,642,550

17,217,502,156,128
30,257,525,171,127

356,712,130,000(345,131,583,767)

8,175,305,378,713

356,712,130,000(345,131,583,767)
545,959,019,790

8,516,473,334,138

7,418,101,759,867

15,196,699,314,855

13,358,926,888,116

492,435,183,483

25,833,192,996,936

381,310,869,024

21,534,232,266,829

SAMSUNG SDI SUSTAINABILITY REPORT 2023

OVERVIEW
Materiality Assessment

90

Financial Performance

SUSTAINABILITY MANAGEMENTSUSTAINABILITY MAIN THEMES

Sustainability Performance

SASB Index

GRI Standards 2021 Index

TCFD Index

APPENDIX

UN SDGs

GHG Verification Opinion

Financial Performance

53rd from Jan. 1, 2022 to Dec. 31, 2022
52nd from Jan. 1, 2021 to Dec. 31, 2021
51st from Jan. 1, 2020 to Dec. 31, 2020
(unit: KRW)

Consolidated Statements of Comprehensive Income
Category

53rd

52nd

51st

Revenue

20,124,069,515,854

13,553,220,248,796

11,294,770,446,035

Gross profit

4,220,746,681,810

3,077,618,179,682

2,380,553,013,075

Cost of sales
Selling, general and administrative expenses
Operating income
Other income

Other expenses

15,903,322,834,044
2,412,733,668,608
1,808,013,013,202
62,998,019,043

206,316,945,755

10,475,602,069,114
2,010,042,579,185
1,067,575,600,497
51,960,888,011

93,328,475,158

8,914,217,432,960

1,709,217,654,651
671,335,358,424
50,205,002,985

147,740,368,241

Financial income

1,390,645,972,964

547,619,989,802

528,826,123,713

Share of profit of equity accounted investees

1,039,696,669,877

530,041,919,350

292,710,207,317

Financial expenses

Profit before income taxes
Income tax expenses
Profit for the year

Other comprehensive income

Items that will never be reclassified to profit or loss
Remeasurements of defined benefit liability

1,442,761,340,601

1,663,335,322,229

2,039,361,447,986

1,250,401,560,241(82,073,743,779)

232,418,639,469(139,877,439,687)
87,645,868,605

Unrealized net changes in fair value of FVOCI
financial assets(166,678,916,451)

Items that are or may be reclassified to profit or loss

(57,803,695,908)

Related tax

Change in equity of equity-method accounted
investees
Change in gain on translation of foreign
operations

Effective portion of unrealized changes in fairvalues of cash flow hedges
Related tax

440,534,600,273

2,652,275,388,730
612,913,940,744

412,933,761,988
629,464,562,852(5,968,133,542)

312,538,060,698

591,925,690,538

172,444,336,134

Profit attributable to:

53rd

1,899,484,008,299

Owners of the Parent Company
Non-controlling interests

Owners of the Parent Company
Non-controlling interests

Earnings per share

Ordinary share – Basic earnings per share

Preferred share – Basic earnings per share

52nd

767,576,148,694

1,169,801,394,611

574,723,493,870

1,793,592,722,080

719,623,908,425

17,492

8,593

86,273,401,013

29,191
29,24151st

1,879,866,123,093

80,600,165,630

Total comprehensive income attributable to:Sales by Business Division

59,405,681,279

Category

136,609,851,168
4,557,253,690

73,814,357,496(18,965,929,907)(9,615,209,282)

191,618,539,908

60,009,573,086(67,984,703,341)

17,423,534,765

1,937,145,763

Total comprehensive income

630,966,297,526(74,151,287,687)

397,045,923,383

Category

17,542

56,242,803,656

47,952,240,269

8,643

803,410,633,660(3,040,695,933)

17,859,070,952

Independent Assurance Statement

77,204,169,889

238,564,516,062(26,482,304,334)(50,560,667,352)(33,853,803,490)

77,530,704,627(unit: KRW 100 million)
53rd

52nd

51st

Energy solution

175,663

109,469

87,288

Total

201,241

135,532

112,948

Electronic materials

25,57826,063

25,660SAMSUNG SDI SUSTAINABILITY REPORT 2023

OVERVIEWSUSTAINABILITY MANAGEMENT

Materiality Assessment

91

Financial Performance

Sustainability Performance

SUSTAINABILITY MAIN THEMESGRI Standards 2021 Index

SASB Index

TCFD Index

UN SDGs

APPENDIXGHG Verification Opinion

Independent Assurance Statement

Sustainability Performance
Economic Performance
Production

Business Division
Energy solution
Electronic Materials

Small-sized battery

1)

Automotive battery
ESS

Polarizing film

Unit

Million cells
Million cells
Million cells
1,000 m2

1) Data for 2020 and 2021 was restated based on the annual report

Taxes Paid by Country and Continent
Category

Unit

Japan

KRW

Korea

Americas and Europe

China and Southeast Asia

2020

1,576
77.1
14.8

96,356

2020

2021

1,950
105.2
20.3

98,802

2021

2022

2,172
127.2
20.8

77,8722022

KRW

10,770,144,804

117,804,568,306

210,672,837,530

KRW

37,120,086,061

66,167,763,563

63,953,685,429

KRW270,427,271

39,396,460,066

310,057,934

65,644,370,222

421,309,896

70,336,936,363

Samsung SDI honestly and faithfully files and pays taxes in the countries where we operate. We do not use any tax systemdevoid of commercial substance for the purpose of tax avoidance nor engage in cross-border income transfer or tax
avoidance using tax havens. We sincerely follow country-specific tax policies, and make sure we keep up-to-date withchanging tax policies. To this end, all our employees responsible for tax affairs comply with our legally-appropriate tax
policy in their business conduct.

Corporate Taxes paid (consolidated)
Category

Unit

Pre-tax profit

KRW million

Effective tax rate%

Corporate tax expenses

KRW million

Corporate taxes paid

KRW million

Cash tax rate

%

2020

2021

2022 Note

803,411

1,663,335

2,652,275 On a consolidated basis

21.46

24.83

23.11 On a consolidated basis

172,444

412,934

124,576

217,775

15.51

13.09

Contributions Other Spendings1)

612,914 On a consolidated basis
On a consolidated basis
taxes paid
278,533 (corporate
as specified in the cash
flow statement)
10.50 On a consolidated basis

Category

Unit

Local, regional or national political campaigns/organizations/candidates

KRW million

Lobbying, interest representation or similar

2022

KRW million

Trade associations or tax-exempt groups (e.g., think tanks)00

KRW million

2)1) Samsung SDI does not make political donations accordance with Article 31 of the Political Fund Act.
2) 3 largest contributions in 2022
- Korea Chamber of Commerce and Industry(KRW 211 million)- Korea Battery Industry Association(KRW 600 million)- Korea Display Research Association(KRW 45 million)

Green Sales1)
Category

Green sales

Unit

KRW 100 million

2020

87,2882021

109,469

1,209

2022

175,663

1) Green sales were calculated as revenues from our battery business which falls into the ‘green’ economy category under the EU
Taxonomy. In 2022, our battery business (energy solutions) accounted for 87.3% of total sales, 98.7% of CAPEX, and 89.1% of
OPEX.

SAMSUNG SDI SUSTAINABILITY REPORT 2023

OVERVIEWSUSTAINABILITY MANAGEMENT

Materiality Assessment

92

Financial Performance

Sustainability PerformanceGRI Standards 2021 Index

SUSTAINABILITY MAIN THEMESSASB Index

TCFD Index

UN SDGs

APPENDIXGHG Verification Opinion

Independent Assurance Statement

Sustainability Performance

Infinite Safety – Occupational Health & Safety
Occupational Injury
Category

Injuries

Accident rate2)

Employees- Domestic- Overseas

Illness rate

In-house
partners

Unit

2020

2021

2022

%

0.014

0.021

0.007

%

0.006

0.011

0

cases
%

Fatalities

No. of persons

Accident rate2)%

Injuries

Fatalities

cases

No. of persons

4

0.028
0

6

0.037
0

Employees Loss rate

0

0.019

0.035

0

1
0

Calculation(No. of injuries/No. of annual work hours1)) X1,000,000(No. of lost work days/No. of annual work hours)
X1,000,000

Injury rate
(No. of injured employees/No. of employees) X 100(accidents + illnesses)

In-house
partners

Injury frequency rate
Loss rate(No. of injuries/No. of annual work hours1)) X1,000,000(No. of lost work days/No. of annual work hours)
X1,000,000

Injury rate ((No. of injured employees/No. of employees) X 100
accidents + illnesses)

Injury frequency rate (No. of injuries/No. of annual work hours1)) X1,000,000
Employees(No. of lost work days/No. of annual work hours)+ in-house Loss rate
X1,000,000
partners
Injury rate
(No. of injured employees/No. of employees) X 100(accidents + illnesses)

1) Annual work hours = 8 hours X 300 days X No. of employees

01

Detailed Occupational Injury Data in 2022
Injury frequency rate

0.018

0

1
0

1) Accidents in grade D or higher that involved Samsung SDI employees (2 cases in Korea)
2) (No. of injured employees/No. of employees) X 100

Category

2

1)

Domestic

Overseas

6.061

0

0.073

Total

0

0.016%

2.252
0

0%

0

0.024

0%

0.006%

1.980

Category

Employees to be trained1)

1) Full-time and contract employees are included
2) Two employees did not take the performance test

Employees with industrial engineer and above
qualifications1)
Employees with master engineer and above
qualifications2)

5

2022
4

160

475

242

721)

471)

Unit

2020

2021

2022

No. of persons

1,942

2,002

2,073

99.9

1)

100

326

100

1,9402)

2,002

2,073

Unit

2020

2021

2022

%

23

24

25

Acquisition of National Health & Safety Engineer Qualifications
Category

6cases

No. of persons

0

0

cases

Employees who completed training

0

5.388

1) Due to COVID-19, the audit was scaled down

2021

%

0.007%

0.065

Domestic

Overseas

2020

Completion of safety job qualification training

0%0%

Improvement tasks identified
through EHS audits

Unit

No. of meetings

00.018%

0%

EHS meetings supervised by the CEO

Safety Job Qualification Training

0.027

0

Category000

EHS (Environment, Health & Safety) Reviews and Audit

%

51

60

1) Qualifications recognized within the Safety and Environment Group (industrial safety engineers, industrial hygiene
management engineers, firefighting equipment engineers + masters and technicians)
2) Qualifications recognized within the Safety and Environment Group (masters and technicians)

55SAMSUNG SDI SUSTAINABILITY REPORT 2023

OVERVIEWSUSTAINABILITY MANAGEMENT

Materiality Assessment

93

Financial Performance

Sustainability Performance

SUSTAINABILITY MAIN THEMESGRI Standards 2021 Index

SASB Index

TCFD Index

UN SDGs

APPENDIXGHG Verification Opinion

Independent Assurance Statement

Sustainability Performance
Infinite Safety – Product Safety
Development of Qualify Workforce
Category

Unit

Quality management training hour1)

hours

2020
42

1) In 2020, no training other than legally-mandatory training was provided due to COVID-19

Customer Satisfaction Score
Business
Division

Small-sized
Li-ion Battery
Automotive &ESS Battery

Category

Unit

Point

Customer satisfaction score

Companies surveyed

No. of companies

Customers surveyed

No. of persons
Point

Customer satisfaction score

Companies surveyed

No. of companies

Customers surveyed

No. of persons

2021
117

2022
181

2020

2021

2022

15

22

24

85.1
15

91.9
22

87.7

24

81.2

81.0

81.6

5

4

4

5

4

GHG Emissions
Category

Total emissions (the sum of direct/indirect emissions)
Direct emissions

Direct/indirect
Indirect emissions
emissions
Direct/indirect emissions intensity
By region

Domestic
Overseas

Small-sized battery
By product

Automotive & ESS battery
Electronic materials
R&D and others

4

Purchased goods and services
Capital goods

Fuel- and energy-related activities2)
Upstream transportation anddistribution

Move to Net-Zero – Action for Climate Crisis
Energy Consumption
Category

Unit- Domestic consumption

TJ

Company-wide consumption- Overseas consumption

Company-wide consumption intensity

2020

2021

2022

TJ

23,661

27,46432,799TJ

12,06015,27820,706

TJ/KRW 100 million

11,601
0.21

12,1860.20

12,093
0.16

Other indirectemissions

Waste generated in operations
Business travel

Employee commuting

Upstream leased assets

Downstream transportation anddistribution

Unit

Investments

2021

20221)

tCO2e

1,399,528

1,573,530

1,660,732

tCO2e

1,215,603

1,347,936

1,418,616

tCO2e

561,197

587,846

tCO2e

763,831868,223

tCO2e
tCO2e/KRW 100 million
tCO2e
tCO2e
tCO2e
tCO2e
tCO2e
tCO2e
tCO2e

183,925
12.4

838,331393,962
195,81745,918-225,59411.6

516,853

184,720
65,767

103,527

9,977

33,810

-

-

-

tCO2e
tCO2e

-

65,227223,150

tCO2e
tCO2e

186,114789,059

2,193-

892,538

-

1,673

tCO2e

582,503454,820

tCO2e

-

8.3

1,078,229

568

tCO2e

242,116

985,684tCO2eEnd-of-life treatment of sold products tCO2e
Downstream leased assets

2020

621

-

12,097

118,927
6,726
7,446
104

-

35,234-24-

95,2691,713

1) 2022 emissions were reported as market-based GHG emissions that reflect the consumption of renewable energy. Our locationbased GHG emissions that do not reflect the consumption of renewable energy amounted to 2,953,550tCO2e2) Applied emission factor was changed(When the same emission factor is applied, the emission in 2021 is 102,563tCO2e)

SAMSUNG SDI SUSTAINABILITY REPORT 2023

OVERVIEWSUSTAINABILITY MANAGEMENT

Materiality Assessment

94

Financial Performance

Sustainability Performance

Sustainability PerformanceMove to Net-Zero – Circular Economy and Environmental Impact Management
Waste Generation and Disposal
Category

Unit

20201)

2021

2022

Total generation

ton

159,168

175,143

175,060- Overseas

ton

88,121

100,992

105,799

ton

73,99986,62784,514

%

0.4

0.2

0.2

- DomestictonCompany-wide generation intensity
Hazardous waste generated
Domestic
Overseas
General waste
disposal

Recycling rate

Landfill rate

Recycling rate

Landfill rate

Incineration

Landfill

71,046

ton/KRW 100 million

1.41

%

95.5

Others (neutralization, etc.)
Incineration

Hazardous waste Landfill
disposal
Recycling

96.0

0.87
95.1

71.8

88.5

93.0

ton

9,310

3,114

1,749

ton

73,29080,627

83,211ton

15,699

2,750

3,013

ton

57,837

%

1.5

1,239

ton

1,330

ton

Others (neutralization, etc.)

1.29

69,262%ton

Recycling

74,151327

ton1) Restatements were made by recalculating the waste generated and treated in 2020

Green Purchases1) Made
Category

137

Unit

Use of recycled metals

%

4.4

725

4,050
3,910

79,828

140

2.5

2,386

Category

Environmental Management
Investments

Unit

Plan

KRW million

Rate of Investment Execution%

Achievement

KRW million

GRI Standards 2021 Index

Unit- DomestictonCompany-wide withdrawal- Overseas

Company-wide generation intensity
Withdrawal bysourceIndustrial water

Utility water

Surface water

Underground water

Water Reuse1)
Category

2

2

2021

2022

29,281

17,973106

103

30,916

18,436

1) 6 domestic worksites in Giheung, Suwon, Cheonan, Cheongju, Gumi, and Ulsan and 6 overseas corporations in Tianjin, Xi’an,
Wuxi, Vietnam, Malaysia, and Hungary

ton

4,165,410

4,696,048

5,908,277

kiloton/KRW 100 million

BOD

Water pollutant
discharge intensit

COD

Air pollutant
emissions intensity

SOx

SS

NOx

Dust

0.05

5,299,663

ton

1,735,050

2,127,482

2,007,605

ton
ton

1,751,228
193,502

Unit

1,716,392
203,3012021

2,559,268

ton

ton

Category

0.06

3,643,041

4,667,804- Domestic

Pollutant Generation

0.07

4,018,931

4,380,986

Unit

Company-wide discharge intensity

3,895,356

tonCategory- Overseas

2022

9,551,318%

Effluent Discharge

2021

8,714,979

Water reuse rate

Water consumed

2020

Independent Assurance Statement

8,060,7661)

ton1) Calculated since 2021

2022

GHG Verification Opinion

ton

Water reused

Company-wide discharge
2021

UN SDGs

APPENDIX

1) Restatements were made by recalculating the water withdrawal in 2020

1,602
151

TCFD Index

Category

Company-widewater reuse

79,749SASB Index

Water Withdrawal

3,1991) Green purchases are defined from the perspective of recycling directly associated with Samsung SDI’s business, and refer to raw
materials collected after their use and disposal and recycled

Environmental Management Investments Made1)

SUSTAINABILITY MAIN THEMES

11,274,247
22.7

2020

2021

2,008,895
235,1552022

2,848,852

12,400,170
23.0

2022

ton

3,453,609

3,350,084

3,754,770

ton

1,154,551

1,311,510

1,778,597

kiloton/KRW 100 million

2,299,058
0.03

2,038,574
0.02

1,976,173
0.02

Unit

2020

2021

2022

kg/KRW 100 million

0.88

0.85

0.50

kg/KRW 100 million
kg/KRW 100 million
kg/KRW 100 million
kg/KRW 100 million
kg/KRW 100 million

0.11
0.41
0.62
0.03
0.56

0.20
0.32
0.43
0.01
0.34

0.07
0.24
0.20
0.01
0.22

SAMSUNG SDI SUSTAINABILITY REPORT 2023

OVERVIEW
Materiality Assessment

95

SUSTAINABILITY MANAGEMENT
Financial Performance

Sustainability Performance

Sustainability Performance

Partnership with Value-Chain Partners and Community – Value-Chain Partnership
Purchases Made along the Supply Chain
Category

Unit

2020

2021

2022

Total purchases madeKRW 100 million

73,45590,568134,189- Equipment purchases madeKRW 100 million

9,971

13,065

12,796- Raw/subsidiary material purchases madeKRW 100 million- MRO purchases made1)

Ratio of local purchases made by partners (based on battery business)

60,793

KRW 100 million

2,691

%

1) MRO (Maintenance, Repair & Operation) purchases include the purchase of packaging materials
2) Restatements were made as the proportion of local purchases was re-calculated

Shared Growth Support and Performance
Category

Financial support

Special support (training, etc.)1)

Direct/indirect
management
supportPerformance intechnology support
and protection
Performancein new market
penetration

2022

KRW 100 million

450

650

650

Original trade secret certification system

Technology escrow system
Buyer meetings hosted

Product exhibitions operated for partners

Fair Trade Agreement

158
2

213
5

No. of persons

851

1151

1249

No. of persons

35

48

60

No. of persons

52

73

49

6

7

89

96

5

No. of companies

Innovation guidance1) For first-, second-, and third-tier partners

2

No. of companies

Recruitment support2)

38.0

2021

135

No. of companies

Online training (partners

52.02)

2,649

2020

KRW 100 million

On-the-job training (partners)

2,346

118,744

Unit

Direct support (credit assistance for molding fees, etc.) KRW 100 million

Contributions to the win-win fund1)

35.3

75,15729

3

No. of companies

3

6

cases

52

75

cases

7

6

cases

8

cases

3

0

0

2) Support for creating jobs for youth (aged 15 and older and 30 and under)

103
36

Unit

2020

2021

2022

First-tier partners – second-tier partners

cases

129

136

157

Second-tier partners – third-tier partners

No. of companies
cases

110

40

111

45

Category

Participation in CSR programs

112

54

UN SDGs

GHG Verification Opinion

Unit

Volunteer hours per employee in Korea

1)%

Independent Assurance Statement

hours/no.of persons

2020

2021

2022

8.7

8.5

8.2

99.1

1) For one day each year, 8 hours are set as the target volunteer hour to encourage volunteering

Major CSR Achievements
Category

Unit

Samsung SW Academy for Youth1)

Beneficiaries

no.of persons

Stepping Stone of Hope

Beneficiaries

no.of persons

Samsung Junior SW Academy1)
Blue Elephant1)

Beneficiaries
Beneficiaries

no.of persons
no.of persons

2020
0
0

93.6

2021

1,700

96.8

2022

2,300

0

43,72093,862

259,339

308,941

0

0

6,284

1) This is jointly-conducted program, and the data reflect program results generated after Samsung SDI joined the program

Management expense1)

1

TCFD Index

Employees’ Participation in CSR Programs

0
6

SASB Index

APPENDIX

Partnership with Value-Chain Partners and Community – Togetherness with
Community

CSR Expenditures

Category

Samsung SDI – first-tier partners

GRI Standards 2021 Index

2
2

SUSTAINABILITY MAIN THEMES

Category

Unit

2020

2021

2022

Cash expenses2)

KRW 100 million

51.2

74.2

71.1

KRW 100 million

1) Directly-operated programs2) Donations made (Samsung year-end love your neighbor funds, etc.)

16.5

13.2

18.1

SAMSUNG SDI SUSTAINABILITY REPORT 2023

OVERVIEW
Materiality Assessment

96

SUSTAINABILITY MANAGEMENT
Financial Performance

Sustainability Performance

Sustainability Performance

Accountability in Value-Chain – SCM Risk Management
S-Partner Certification
Category

Unit

Domestic

No. of companies

Total

No. of companies

Overseas

No. of companies

Partners who failed to meet the certification criteria

No. of companies

1) 37 partners were certified with document evaluations

Third-party Audit for Cobalt Smelters & Refiners
Category

Smelters & refiners reported
Smelters & refiners certified
Conformant
Active1)

Other third-party audit2)

Unit

No. of companies
No. of companies
No. of companies
No. of companies
No. of companies

SUSTAINABILITY MAIN THEMESGRI Standards 2021 Index

SASB Index

TCFD Index

UN SDGs

APPENDIXGHG Verification Opinion

Independent Assurance Statement

Accountability in Value-Chain – Labor·Human Rights
2020

2021

2022

26

42

491)

0

0

29
55
0

33
75

23
72

Employee Data
CategoryTotal

By gender

24

21
8

13
0

1) Smelters and refiners participating in active RMI audit programs are included
2) Companies that have conducted independent third-party audits that are equivalent to RMI RMAP

2021
23

22
18
4
0

2022
23
22
21
0
1

FemaleAsia (excluding Korea)
EuropeAmericas

By ageBy employment
type

30~49

50 and older

Full-time
Contract

Dispatched

Korea
China

By nationality

Malaysia
Vietnam
USA

Others

1)

2021

2022

27,98428,91330,716

No. of persons

6,790

6,990

7,639

21,19421,92323,077

No. of persons

10,705

10,85911,412

No. of persons

4,959

5,572

6,691

No. of persons
No. of persons

Under 30

2020

No. of persons
No. of persons

Male

Korea
By region

2020

Unit

12,058262

12,108374

11,988625

No. of persons

12,284

12,134

12,353

No. of persons

1,635

1,836

2,050

No. of persons
No. of persons
No. of persons
No. of persons

14,06524,392
1,454
2,138

14,94325,051
1,316
2,546

16,31325,964
1,453
3,299

No. of persons

10,948

11,142

11,771

No. of persons

2,345

2,142

2,558

No. of persons
No. of persons
No. of persons
No. of persons

6,704
2,545
236

5,206

7,121
2,483
348

5,677

6,875
1,972
572

6,968

1) Domestic dispatched employees mainly assume positions of executive secretaries and interpreters, and overseas dispatchedemployees are responsible for manufacturing and packaging inspection among others.

SAMSUNG SDI SUSTAINABILITY REPORT 2023

OVERVIEW
Materiality Assessment

97

SUSTAINABILITY MANAGEMENT
Financial Performance

Sustainability Performance

Sustainability Performance
Recruitment
Category
Total

Male

By gender

FemaleDomestic

By region

Turnover
Category

Unit

Overseas

1)

1,407

2,230

- Overseas

By gender
By region
By ageFemaleEuropeAmericas

Under 3030~49

50 and older

5,145

494

5,777

%

1.8

2.9

2.9

11.3
17.7
10.8
1.6

15.3
23.4
14.8
2.6

12.9
12.0

22.7

18.2

%

12.9

15.6

15.1

%
%
%
%
%
%

10.8
16.9
21.4
15.0
16.9
7.9

5.3

15.3
13.3
28.7
24.6
25.6
8.8

11.1

12.1
11.4
20.6
21.8
19.8

8.8

10.5

2020

2021

2022

Employees who participated in SCI

%

93.8

89.5

92.5

Change Agents selected

Point
No. of persons

70.9
283

70.0

2922)

73.5
298

1) Restatements were made for 2020 and 2021 data as the data were re-calculated in line with the SCI calculation method
updated in 2022
2) Restatements were made due to the re-calculation of employees selected

No. of persons

241

271

280

EuropeAmericasRank-and-file employees

Managers (senior professionals
and higher positions)Executives (unregisteredexecutive and higher positions)

172
117

178
158

154

48.5

58.3

55.0

%

25.7

37.1

33.5

%
%
%
%
%
%
%

20.1
36.5
25.5
18.0
13.6
34.7
20.7
24.8
26.9
11.2
6.7

20.7
38.9
25.4
14.9
14.1
34.8
19.4
27.8
26.7
12.0
8.6

1) Based on the number of employees reported to Korea Employment Agency for Persons with Disabilities(KEAD)
2) Leader positions include group/team leaders and other leaders assuming such official positions.

Training

181

%

%

Asia (excluding Korea)

23.0
33.0
30.8
19.3
15.9
32.0
25.8
32.0
27.3
13.0
8.5

Category

Unit

2020

2021

2022

Accumulated No. of trainees

No. of persons

50,62855,621

70,339KRW/No. of persons

765,132

876,066

1,005,018

2020

2021

2022

Total training expenditures

Training hours per employee1)

Sales and marketing training expenses

Unit

2022

%

Korea

Training expenses per employee1)

Category

Samsung Culture Index (SCI) assessment scores1)

By
position

2.6

16.9

2021

%

Others

19.4%%

By job
Quality & EHS
category
Sales & marketing

By
region2020%

Manufacturing

Independent Assurance Statement

Unit

No. of persons

Development

Femaleemployees

GHG Verification Opinion

No. of persons

Local
Locally-hired leaders
recruitment
Locally-hired leaders

6,304

APPENDIX

UN SDGs

Leaders at overseas worksites2)

914

2022

1) Turnover data is calculated by dividing the annual number of resignees by the annual average number of employees.
2) Restatements were made for 2021 turnover data due to change in calculation formula

Organizational Culture

4,988

20212)

%

Asia

367

4,864

2020

%
Male

4,144

Unit

%

- Domestic

2022

1,368

- Overseas

Voluntary turnover2021

No. of persons%- Domestic

2020

7,218

Total turnover

TCFD Index

Employees with disabilities1)
6,271

No. of persons

SASB Index

Category

5,512

No. of persons

GRI Standards 2021 Index

Diversity and Social Equality

No. of persons
No. of persons

SUSTAINABILITY MAIN THEMES

1) Based in Korea

Remuneration1)

KRW 100 million
Hours/No. of persons
KRW million

Category

Unit

Retirement benefits

KRW million

Wage1) There is no gender-based disparity in wage

KRW million

75
90
9

1,184,894
84,21387
91

11

1,463,694
102,604122
93
22

1,669,172
96,900SAMSUNG SDI SUSTAINABILITY REPORT 2023

OVERVIEWSUSTAINABILITY MANAGEMENT

Materiality Assessment

98

Financial Performance

Sustainability Performance

Sustainability Performance
Welfare and Benefits
Category

Unit

Welfare and benefits expenditures
Parental leave

Return-to-work ratio

Return-to-work andretention ratio2)

1)

KRW million%

2020

366,873
100.0

100.0

2021

421,096
95.5

99.5

2022

499,22099.5

99.01) Ratio of employees who returned to work in the concerned year after taking parental leave the previous year2) Ratio of employees who worked 12 months and longer among those who returned to work after taking parental leave theprevious year

Employee Grievance Handling (domestic)

Unit

Grievance handling rate%

Grievances submitted

Category

By channel

Unit

OnlineOffline

2020

cases

Grievances Submitted in 2022

1,193

100

2022

cases

1,402

cases

-

%
%

Category100-

GRI Standards 2021 Index

SASB Index

TCFD Index

UN SDGs

APPENDIXGHG Verification Opinion

Independent Assurance Statement

Credibility in Corporate Governance – Advanced BOD%

Category

SUSTAINABILITY MAIN THEMESWorking
conditions
Benefits

By type ofgrievance

HR system
Health andsafetyOthers

2021

1,245
100

2022

1,402
100

Unit

2022

%

47.6

cases
cases
%

cases

668
337
24

216

%

15.4

%

9.3

cases
cases
%

131
50

3.6

Composition of the BOD
Category

Members of the
BOD

Executive Director

Independent Director

Number of female registered executives

Operation of the BOD
Category

No. of persons
No. of persons
No. of persons

4

4

4

1

1

3
1

2022

%

87.9

85.2

100

%

Total

2022

3

2021

Independent Director

Average BOD
tenure

2021

3

2020

%

Executive Director

2020

Unit

Total

Average BOD
Attendance1) As of Jun. 30, 2023

Unit

years

93.5
92.7
1.6

93.7

100
2.3

100
100

2.91)

SAMSUNG SDI SUSTAINABILITY REPORT 2023

OVERVIEWSUSTAINABILITY MANAGEMENT

Materiality Assessment

99

Financial Performance

Sustainability PerformanceGRI Standards 2021 Index

SUSTAINABILITY MAIN THEMESSASB Index

TCFD Index

UN SDGs

APPENDIXGHG Verification Opinion

Independent Assurance Statement

Sustainability Performance

Credibility in Corporate Governance – Ethics & Compliance
Compliance and Ethics Training Provided to Employees in 2022
Category

Compliance

Anticorruption/
ethics1)

Unit
Employees subject to training

No. of persons

Completion rate%

Employees who completed thetraining1)

No. of persons

Employees subject to training

Employees who completed thetraining2)

Category

Total worksites
Worksites identified
as at risk (number)

Total

Domestic
Overseas

Worksites identified as at risk (rate)

98%

194

102

194

102

100%

100%

17,359

%

107%

97%

Unit

No. of worksites
No. of worksites
No. of worksites
No. of worksites%

12,547

Partner

10,825

1) Partners are not subject to anti-corruption/ethics training
2) Based on cumulative numbers

Worksite Corruption Risk Assessment

12,787

Subsidiary(Overseas
Corporation)

No. of persons
No. of persons

Completion rate

Headquarters

11,546

Compliance Audit

16,813-Category

Compliance audits performed

Unit

cases

Corruption Audits and Resulting Disciplinary Measures Taken
Category

Disciplinary measure taken
as a result of corruption
audits1)

Unit

Total

No. of persons

Overseas

No. of persons

Domestic

Business partners whose contract was
terminated in relation to corruption

No. of persons
No. of companies

2020

2021

2022

2020

2021

2022

-

4

22

13
12
1
-

26

1
1

2021

2022

21)

-

3

27

27

31

1

-

1

7

-

10

1

1) Restatements were made for 2020 data as overseas operations were included in the scope of calculation-

2

Information Security Training
Category

Information security training

Data privacy training provided to employees
handling personal data

Unit

No. of persons

No. of persons

2020

7,639
388

4
-

-

4

2021

2022

1) Restatements were made for 2020 and 2021 data as overseas operations were included in the scope of calculation
2020

22

8,786
388

10,502370

SAMSUNG SDI SUSTAINABILITY REPORT 2023

OVERVIEW
Materiality Assessment

100

SUSTAINABILITY MANAGEMENT
Financial Performance

Sustainability PerformanceGRI Standards 2021 Index

SUSTAINABILITY MAIN THEMESSASB Index

TCFD Index

UN SDGs

APPENDIXGHG Verification Opinion

Independent Assurance Statement

GRI Standards 2021 Index
General Disclosures(GRI 2)
Topic

No.

Disclosure

2-2

Entities included in the organization’s sustainability
reporting

2-1

GRI 2:
2-3
The organization andits reporting practices
2-4
2-5
GRI 2:
Activities andworkers

2-6

Reporting period, frequency and contact point
Restatements of information
External assurance

Activities, value chain and other business relationships

2-7

Employees

2-9

Governance structure and composition

2-8
2-10
2-11
2-12
2-13

GRI 2:
Governance

Organizational details

2-14
2-15
2-16
2-17
2-18
2-19
2-20
2-21

Workers who are not employees

Nomination and selection of the highest governance body
Chair of the highest governance body

Pages Note6p

7p of the Annual- Report(in PDF
format)Annotations
were made- when deemednecessary

109p
96p

72p, 74p
72p

Role of the highest governance body in sustainability
reporting

19-20p, 40p

Communication of critical concerns

Collective knowledge of the highest governance body

Evaluation of the performance of the highest governancebody
Remuneration policies

Process to determine remuneration
Annual total compensation ratio

GRI 2: Stakeholder
engagement

73p

19-20p, 24p,
40p, 74p

Conflicts of interest

GRI 2:
Strategy, policies andpractices

6p, 8-11p,
17p, 91p
96p

Disclosure

2-22Statement on sustainable development strategy

2-24

Embedding policy commitments

2-25

Processes to remediate negative impacts

2-27Compliance with laws and regulations

2-26

2-28
2-29
2-30

Policy commitments

Mechanisms for seeking advice and raising concerns

Membership associations

Approach to stakeholder engagement
Collective bargaining agreements

Pages Note
5p18p, 65p, 76p,
78p
54p, 65-66p,
76-78p60-61p, 65-66p,
77-78p77-78p

178p of the84-85p Annual Report
26p(in PDF format)1)

82p

65-66p1) Orders to pay fines were given by the Fair Trade Commission in relation to the two cases of alleged violation of the Fair Trade Act
and the Subcontract Act, and administrative proceedings are pending currently

19-21pMaterial Topics(GRI 3)
Topic

73p
20p

GRI 3:
Material topics

72-73p

74p
74p
74p

No.

2-23

2p

Role of the highest governance body in overseeing themanagement of impacts
Delegation of responsibility for managing impacts

Topic

215p, 218p of the

74p Annual Report(in PDF format)

No.

Disclosure

3-1

Process to determine material topics

3-3Management of material topics

3-2

List of material topics

Pages Note
87p 9088p 9028p, 30-38p,
9040-49p, 60-64p

SAMSUNG SDI SUSTAINABILITY REPORT 2023

OVERVIEW
Materiality Assessment

101

SUSTAINABILITY MANAGEMENT
Financial Performance

Sustainability PerformanceGRI Standards 2021 Index
Economic Performance(GRI 200)
Topic

GRI 201: Economic
PerformanceGRI 202: Market
Presence

GRI 203: Indirect
Economic Impacts
GRI 204:
Procurement
Practices
GRI 205: AntiCorruption
GRI 206: AntiCompetitive
Behavior
GRI 207: Tax

Disclosure

201-2

201-3
202-2
203-1

Financial implications and other risks an opportunities
due to climate change
Defined benefit plan obligations and other retirement
plans

Proportion of senior management hired from the local
community
Infrastructure investments and service supported

Pages Note

40-41p 90

97p 97p

Significant indirect economic impacts

54-55p 90

204-1

Proportion of spending on local suppliers

95p 90205-1

Operations assessed for risks related to corruption

99p 90

205-3

Confirmed incidents of corruption and actions taken

203-2

205-2

206-1

Communication and training about anti-corruption
policies and procedures

Legal actions for anti-competitive behavior, anti-trust, andmonopoly practices

GRI Standards 2021 Index

76-78p 90

Topic

GRI 301: Materials

GRI 302: Energy

91p

207-4

Country-by-country reporting

91p

UN SDGs

GHG Verification Opinion

301-1

Materials used by weight or volume301-3

Reclaimed products and their packaging materials

301-2

302-2

302-3

302-4

302-5

GRI 303: Water andEffluents

303-1

303-2
303-4

303-5
305-1

- No such caseApproach to tax

TCFD Index

Disclosure302-1

99p 90

207-1

SASB Index

APPENDIX

Environmental Performance(GRI 300)

97p 9095p 90SUSTAINABILITY MAIN THEMES

305-2
GRI 305: Emissions

305-3
305-4

305-5
305-7
306-1

GRI 306: Waste

GRI 308:
Supplier
Environmental

306-2
306-3
306-4
306-5
308-1
308-2

Recycled input materials used

Energy consumption within the organization

Energy consumption outside of the organization
Energy intensity

Reduction of energy consumption

Reductions in energy requirements of products and services
Interactions with water as a shared resource

Management of water discharge-related impacts
Water withdrawal
Water discharge

Direct (Scope 1) GHG emissions

Energy indirect (Scope 2) GHG emissions
Other indirect (Scope 3) GHG emissions
GHG emissions intensity

Reduction of GHG emissions

Nitrogen oxides (NOx), sulfur oxides (SOx), and othersignificant air emissions

Waste generation and significant waste-related impacts
Management of significant waste-related impacts

Independent Assurance Statement

Pages Note

- Not applicable

49p, 94p- Not applicable

42-44p, 93p 90- Not applicable

93p 9042-44p, 93p- Not applicable

50p 9050p 9050p, 94p

50p, 94p 90
93p 9093p 9093p 9093p
44p

51p, 94p

50p
50p

Waste generated

50p, 94p

Waste directed to disposal

50p, 94p

Waste diverted from disposal
New suppliers that were screened using environmental
criteria

Negative environmental impacts in the supply chain andactions taken

50p, 94p
61p
61p

SAMSUNG SDI SUSTAINABILITY REPORT 2023

OVERVIEW
Materiality Assessment

102

SUSTAINABILITY MANAGEMENT
Financial Performance

Sustainability Performance

SUSTAINABILITY MAIN THEMESGRI Standards 2021 Index

SASB Index

TCFD Index

UN SDGs

APPENDIXGHG Verification Opinion

Independent Assurance Statement

GRI Standards 2021 Index
Social Performance(GRI 400)
Topic

GRI 401:
Employment

Disclosure

401-1
401-2
401-3
403-1
403-2
403-3

GRI 403:
Occupational
Health and Safety

403-4
403-5
403-6
403-7
403-8
403-9

403-10
GRI 404: Training
and Education
GRI 405: Diversity
and Equal
Opportunity
GRI 406: Nondiscrimination
GRI 408: ChildLabor

GRI 409: Forced orCompulsory Labor

404-1
404-2
405-1
405-2
406-1
408-1
409-1

New employee hires and employee turnover

Benefits provided to full-time employees that are notprovided to temporary or part-time employees

Pages Note
97p
66p

Parental leave

66p, 98p

Hazard identification, risk assessment, and incident
investigation

30-33pOccupational health and safety management system
Occupational health services

Worker participation, consultation, and communication
on occupational health and safety
Worker training on occupational health and safety
Promotion of worker healthPrevention and mitigation of occupational health andsafety impacts directly linked by business relationships
Workers covered by an occupational health and safety
management system
Work-related injuries

31-32p33p32-33p,35-37pRatio of basic salary and remuneration of women to men
Incidents of discrimination and corrective actions taken

Operations and suppliers at significant risk for incidents
of child labor

Operations and suppliers at significant risk for incidents offorced or compulsory labor

GRI 417: Marketingand Labeling

31p
92p

67-68pDiversity of governance bodies and employees

GRI 416: Customer
Health and Safety

31p

Programs for upgrading employee skills and transition
assistance programs

Average hours of training per year per employee

GRI 415: Public
Policy33p

33p, 92p

GRI 418: Customer
Privacy

97p

72-73p, 98p

GRI 413: Local
Communities
GRI 414: SupplierSocial Assessment

30-33pWork-related ill health

Topic

There is no gender-- based disparity inwage- No such case- No such case- No such case

Disclosure

Pages Note

413-1

Operations with local community engagement, impact
assessments, and development programs

56-58p414-2

Negative social impacts in the supply chain and actions
taken

61p

414-1

New suppliers that were screened using social criteria

415-1

Political contributions

416-1

Assessment of the health and safety impacts of productand service categories

416-2
417-2
417-3
418-1

Incidents of non-compliance concerning the health andsafety impacts of products and services
Incidents of non-compliance concerning product andservice information and labeling
Incidents of non-compliance concerning marketing
communications
Substantiated complaints concerning breaches ofcustomer privacy and losses of customer data

61p

No political donations
were made in- accordance with

Article 31 of the
Political Fund Act

34-38p- No such case- No such case- No such case- No such case

SAMSUNG SDI SUSTAINABILITY REPORT 2023

OVERVIEW
Materiality Assessment

103

SUSTAINABILITY MANAGEMENT
Financial Performance

Sustainability PerformanceGRI Standards 2021 Index

SUSTAINABILITY MAIN THEMESSASB Index

TCFD Index

UN SDGs

APPENDIXGHG Verification Opinion

Independent Assurance Statement

SASB Index

SASB Sustainability Disclosure - Hardware Industry & Fuel cells and Industrial Batteries
Accounting Metrics
Topic

Product Security

Employee Diversity & Inclusion
Product Lifecycle Management

Supply Chain Management
Energy Management
Workforce Health & Safety
Product End-of-life Management
Materials Sourcing

Activity Metric

Code

Accounting MetricPages (Reference)

TC-HW-330a.1

Percentage of gender and racial/ethnic group representation for (1) management, (2) technical staff,and (3) all other employees

96-98pTC-HW-230a.1

Description of approach to identifying and addressing data security risks in products

TC-HW-410a.1

Percentage of products by revenue that contain IEC 62474 declarable substances

TC-HW-410a.4

Weight of end-of-life products and e-waste recovered, percentage recycled

TC-HW-430a.2

Tier 1 suppliers’ (1) non-conformance rate with the RBA Validated Audit Process (VAP) or equivalent,and (2) associated corrective action rate for (a) priority non-conformances and (b) other nonconformances

TC-HW-430a.1

RR-FC130a.1

RR-FC-320a.1
RR-FC-320a.2

RR-FC-410b.3

TC-HW-440a.1
RR-FC-440a.1

Percentage of Tier 1 supplier facilities audited in the RBA Validated Audit Process (VAP) or equivalent,by (a) all facilities and (b) high-risk facilities

61p
61p

Description of efforts to assess, monitor, and reduce exposure of workforce to human health hazards

30p, 33p

Description of the management of risks associated with the use of critical materials

62-63pDescription of approach to manage use, reclamation, and disposal of hazardous materials

TC-HW-000.C

Percentage of production from owned facilities

RR-FC-000.B

N/A * Please refer to 48-49p for Samsung SDI's efforts regarding recycling and reuse

42p, 93p(1) Total recordable incident rate (TRIR) and (2) fatality rate

Activity Metric

RR-FC-000.A

Samsung SDI complies with global regulations such as EU RoHS and REACH as well as
national laws. In addition, all raw materials and components that go into our products are
subject to rigorous pre-inspections and follow-up management.

(1) Total energy consumed, (2) percentage grid electricity, (3) percentage renewable

Code

TC-HW-000.A

79p

Number of units produced by product category
Number of units sold1) (Unit: 1,000 cells)

Total storage capacity of batteries sold (Unit: MWh)1) The sum of small-sized batteries, automotive batteries, and ESS batteries based on the number of cells

92p
33p

Pages (Reference)
91p

15-16p of the Annual Report(in PDF format)

2,346,817
60,589SAMSUNG SDI SUSTAINABILITY REPORT 2023

104

OVERVIEW
Materiality Assessment

SUSTAINABILITY MANAGEMENT
Financial Performance

Sustainability PerformanceGRI Standards 2021 Index

SUSTAINABILITY MAIN THEMESSASB Index

TCFD Index

UN SDGs

APPENDIXGHG Verification Opinion

Independent Assurance Statement

TCFD Index
TCFD Index
Category
Governance

Strategy

Risk Management

Metrics and Targets

TCFD Recommendation

Pages (Reference)a) Describe the board's oversight of climate-related risks and opportunities

40pa) Describe the climate-related risks and opportunities the organization has identified over the short, medium, and long term

40-41pb) Describe management's role in assessing and managing climate-related risks and opportunitiesb) Describe the impact of climate-related risks and opportunities on the organization’s businesses, strategy, and financial planningc) Describe the resilience of the organization’s strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenarioa) Describe the organization’s processes for identifying and assessing climate-related risksb) Describe the organization’s processes for managing climate-related risksc) Describe how processes for identifying, assessing, and managing climate-related risks are integrated into the organization’s overall risk managementa) Disclose the metrics used by the organization to assess climate related risks and opportunities in line with its strategy and risk management processb) Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas (GHG) emissions, and the related risksc) Describe the targets used by the organization to manage climate-related risks and opportunities and performance against targets

40p

40-41p
N/A

47p
47p
47p

28p, 42p, 44p, 47p
42p, 45p, 93p
22p, 42p, 47p

SAMSUNG SDI SUSTAINABILITY REPORT 2023

OVERVIEW
Materiality Assessment

105

Financial Performance

SUSTAINABILITY MANAGEMENTSUSTAINABILITY MAIN THEMES

Sustainability Performance

SASB Index

GRI Standards 2021 Index

TCFD Index

UN SDGs

APPENDIXGHG Verification Opinion

Independent Assurance Statement

UN SDGs

Samsung SDI engages in a wide spectrum of activities centered around its sustainability management strategies and material issues to contribute to the attainment of the UN Sustainable Development goals.
UN SDGs

Samsung SDI’s Contribution

Pages (Reference)

Good Health andWell-being• Strengthen the accountability of top management and the Board of Directors for health and safety operations, bolster the dedicated EHS organization, and operate an integrated
company-wide EHS system• Advance the verification of product safety and establish a hazardous substances management system• Conduct workplace risk assessment and partner safety assessment• Support employees’ regular health check-ups, work environment surveys, health training, and illness prevention

30-33p,
35p

Quality Education• Operate bachelor/master/doctoral degree courses to nurture talent for battery business and engage in industry-academia partnerships• Implement education programs with Samsung including Samsung SW Academy for Youth, Samsung Junior SW Academy, Dream Class, and Blue Elephant56-57p,67-68pGender Equality• Focus on the management of diversity metrics including the proportion of female managers• Provide maternal/paternal and parental leave irrespective gender and expand support beyond statutory obligations• Encourage organizational-level discussions on diversity to minimize conflicts among different genders, nationalities and generations

65-66p,
97p

Clean Water andSanitation• Manage our mid/long-term water reuse goal and implement water withdrawal reduction projects by 2050
• Manage the discharge of water pollutants on an on-going basis by applying discharge thresholds more stringent than legal standards• Install monitoring sensors at chemical storage facilities and stormwater outlets to prevent the discharge of water pollutants as well as devices to block and recover pollutants along thestormwater passages

50p

Affordable andClean Energy• Join the RE100 and purchase RECs in line with the goal of transitioning to 100% renewable energy by 2050
• Support global operations with energy technology and roll out best practices to implement energy conservation projects• Strengthen the energy management system at worksites and implement taskforce activities to pursue innovation for our power use structure

42-44pDecent Work andEconomic Growth• Contribute to expanding the eco-friendly industry through our small-sized Li-ion battery, automotive/ESS battery, and electronics material supply• Assist partners in bolstering their management capabilities and competitiveness through win-win cooperation consulting and win-win smart factory initiative• Contribute to job creation by recruiting 7.218 persons at domestic and overseas operations and by helping 49 persons land a job through partner recruitment and talent development
support programs in 2022

8-11p,
54-55pIndustry, Innovation andInfrastructure• Contribute to nurturing outstanding industrial workforce through industry-academia cooperation with third-party institutions and domestic/overseas prestigious universities• Provide financing support through shared growth funds and others to help partners improve their operational stability• Reach 5.4% in R&D investments against 2022 sales• Ensure security in the domestic technology area including automotive battery-related national core technology through information security management system development andpatent management

13-14p,
55p, 79p

SAMSUNG SDI SUSTAINABILITY REPORT 2023

OVERVIEW
Materiality Assessment

106

Financial Performance

SUSTAINABILITY MANAGEMENTSUSTAINABILITY MAIN THEMES

Sustainability Performance

SASB Index

GRI Standards 2021 Index

TCFD Index

UN SDGs

APPENDIXGHG Verification Opinion

Independent Assurance Statement

UN SDGs
UN SDGs

Samsung SDI’s Contribution

Pages (Reference)

Reduced Inequalities• Implement blind recruitment by eliminating all personal information – academic level, gender, nationality, religion, etc. – from applications in the hiring process• Ensure zero gender-based disparities in wage
• Give precedence to socially-underprivileged groups, including men of national merit and people with disabilities

65p, 97p

Sustainable Cities andCommunities• Contribute to reducing waste discharge by developing a system to recycle end-of-life batteries and scraps generated from the manufacturing process• Operate appropriate pollution prevention devices for each of the emitting facilities installed at worksites to manage air pollutants and mitigate impact on the nearby community• Create School Forests to reduce particulate matter levels at elementary schools located in the vicinity of worksites

48-51p, 58p

Responsible
Consumption and
Production• Establish a closed-loop process to reclaim and recycle process scraps and end-of-life batteries• Minimize waste to landfill and reduce water consumption by increasing water reuse• Perform extended Life Cycle Assessments (LCA) from manufacturing to disposal to analyze environmental impact and reduce loads throughout the entire process• Ensure supply chain traceability for all major minerals and use minerals verified through third-party audits or certified by competent bodies

46p, 48-50p,
60-63pClimate Action

Peace, Justice andStrong Institutions• Systematically implement tasks to achieve net zero emissions and transition to 100% renewables by 2050
• Expand products certified under carbon footprint programs and reduce products’ environmental impact• Switch to 100% zero-emission vehicles for corporate fleet vehicles by 2030
• Calculate Scope 3 GHG emissions, and identify partners’ GHG emissions through our CDP Supply Chain membership and collaborate for reduction projects• Disseminate a culture of compliance at all levels through compliance control standards, compliance system operation, and various compliance activities• Make ethics/anti-corruption assessments across the board and facilitate ethics/compliance whistleblowing• Preemptively manage human rights and compliance risk through compliance reviews and blind surveys at domestic/overseas operations• Identify and improve partners’ labor and ethics risks through S-Partner Certification assessments• Join the UNGC to endorse its 10 principles in the areas of human rights, labor, environment, and anti-corruption• Join global initiatives across diverse areas, including renewable energy, sustainable battery value chain, conflict minerals, and ecosystem protection
Partnerships for the Goals• Establish and operate a range of communication channels with major stakeholder groups, including customers, shareholder/investors, employees, partners, communities/civicorganizations, industry associations/universities/research institutes, governments, and media.

40-47p60-61p, 65p,
76-78p

26p, 82p

SAMSUNG SDI SUSTAINABILITY REPORT 2023

107

GHG Verification Opinion

OVERVIEW
Materiality Assessment

SUSTAINABILITY MANAGEMENT
Financial Performance

Sustainability PerformanceGRI Standards 2021 Index

SUSTAINABILITY MAIN THEMESSASB Index

TCFD Index

UN SDGs

APPENDIXGHG Verification Opinion

Independent Assurance Statement

SAMSUNG SDI SUSTAINABILITY REPORT 2023

108

GHG Verification Opinion

OVERVIEW
Materiality Assessment

SUSTAINABILITY MANAGEMENT
Financial Performance

Sustainability PerformanceGRI Standards 2021 Index

SUSTAINABILITY MAIN THEMESSASB Index

TCFD Index

UN SDGs

APPENDIXGHG Verification Opinion

Independent Assurance Statement

SAMSUNG SDI SUSTAINABILITY REPORT 2023

109

OVERVIEW
Materiality Assessment

Independent Assurance Statement
To readers of SAMSUNG SDI Sustainability Report 2023

Introduction
Korea Management Registrar (KMR) was commissioned by SAMSUNG SDI toconduct an independent assurance of its Sustainability Report 2023 (the “Report”).
The data and its presentation in the Report is the sole responsibility of the
management of SAMSUNG SDI. KMR’s responsibility is to perform an assurance
engagement as agreed upon in our agreement with SAMSUNG SDI and issue anassurance statement.
Scope and Standards
SAMSUNG SDI described its sustainability performance and activities in the Report.
Our Assurance Team carried out an assurance engagement in accordance with theAA1000AS v3 and KMR’s assurance standard SRV1000. We are providing a Type 2,
moderate level assurance. We evaluated the adherence to the AA1000AP (2018)
principles of inclusivity, materiality, responsiveness and impact, and the reliability of
the information and data provided using the Global Reporting Initiative (GRI) Index
provided below. The opinion expressed in the Assurance Statement has been formedat the materiality of the professional judgment of our Assurance Team.
Confirmation that the Report was prepared in accordance with GRI standards 2021
was included in the scope of the assurance. We have reviewed the topic-specificdisclosures of standards which were identified in the materiality assessment process.
• GRI Sustainability Reporting Standards 2021
• Universal standards• Topic specific standards- GRI 301 : Materials- GRI 302 : Energy- GRI 305 : Emissions- GRI 308 : Supplier Environmental Assessment- GRI 403 : Occupational Health and Safety- GRI 414 : Supplier Social Assessment- GRI 416 : Customer Health and Safety
As for the reporting boundary, the engagement excludes the data andinformation of SAMSUNG SDI’s partners, suppliers and any third parties.

SUSTAINABILITY MANAGEMENT
Financial Performance

Sustainability PerformanceGRI Standards 2021 Index

SUSTAINABILITY MAIN THEMESSASB Index

KMR's Approach
To perform an assurance engagement within an agreed scope of assessment
using the standards outlined above, our Assurance Team undertook thefollowing activities as part of the engagement:• reviewed the overall Report;• reviewed materiality assessment methodology and the assessment report;• evaluated sustainability strategies, performance data management system,and processes;• interviewed people in charge of preparing the Report;• reviewed the reliability of the Report's performance data and conducted data
sampling;• assessed the reliability of information using independent external sources
such as Financial Supervisory Service’s DART and public databases.
Limitations and Recommendations
KMR’s assurance engagement is based on the assumption that the data andinformation provided by SAMSUNG SDI to us as part of our review are provided
in good faith. Limited depth of evidence gathering including inquiry andanalytical procedures and limited sampling at lower levels in the organization
were applied. To address this, we referred to independent external sources
such as DART and National Greenhouse Gas Management System (NGMS)
and public databases to challenge the quality and reliability of the information
provided.
Conclusion and Opinion
Based on the document reviews and interviews, we had several discussions with
SAMSUNG SDI on the revision of the Report. We reviewed the Report’s final version
in order to make sure that our recommendations for improvement and revision
have been reflected. Based on the work performed, it is our opinion that the Reportapplied the GRI Standards. Nothing comes to our attention to suggest that theReport was not prepared in accordance with the AA1000AP (2018) principles.
Inclusivity
SAMSUNG SDI has developed and maintained different stakeholder communication
channels at all levels to announce and fulfill its responsibilities to the stakeholders.
Nothing comes to our attention to suggest that there is a key stakeholder group left
out in the process. The organization makes efforts to properly reflect opinions andexpectations into its strategies.

TCFD Index

UN SDGs

APPENDIXGHG Verification Opinion

Independent Assurance Statement

Materiality
SAMSUNG SDI has a unique materiality assessment process to decide theimpact of issues identified on its sustainability performance. We have not found
any material topics left out in the process.
Responsiveness
SAMSUNG SDI prioritized material issues to provide a comprehensive, balanced
report of performance, responses, and future plans regarding them. We did not
find anything to suggest that data and information disclosed in the Report do
not give a fair representation of SAMSUNG SDI’s actions.
ImpactSAMSUNG SDI identifies and monitors the direct and indirect impacts ofmaterial topics found through the materiality assessment, and quantifies suchimpacts as much as possible.
Reliability of Specific Sustainability Performance Information
In addition to the adherence to AA1000AP (2018) principles, we have assessed
the reliability of economic, environmental, and social performance data
related to sustainability performance. We interviewed the in-charge persons
and reviewed information on a sampling basis and supporting documents aswell as external sources and public databases to confirm that the disclosed
data is reliable. Any intentional error or misstatement is not noted from thedata and information disclosed in the Report.
Competence and Independence
KMR maintains a comprehensive system of quality control including documented
policies and procedures in accordance with ISO/IEC 17021·2015 - Requirements forbodies providing audit and certification of management systems. This engagement
was carried out by an independent team of sustainability assurance professionals.
KMR has no other contract with SAMSUNG SDI and did not provide any services to
SAMSUNG SDI that could compromise the independence of our work.
June 2023 Seoul, Korea

CEOwww.samsungsdi.co.kr