Sustainbility Management Strategy
Sustainability Purpose
To become a top global company that can ensure its survival in the future, CJ CheilJedang creates the two core values, health and safety and sustainable environment, across the purchase of raw materials, production, consumption, and disposal. To do so, we aim to achieve the virtuous cycle of Nature to Nature in which we obtain resources from nature, provide food to consumers, and return the resources to nature.

Key strategic tasks
The key strategic tasks are linked to our core values, Sustainable environment, Health and Safety. We selected tasks as follows, based on their external priority and impact on business.

Corporate Sustainability Governance
We established sustainability management governance to secure our ability to implement consistent and comprehensive sustainability management and preemptive risk management in order to facilitate timely ESG-related decision-making. To this end, we established the Corporate Sustainability Committee under the BOD, the highest decision-making body, the Corporate Sustainability Council chaired by the CEO, the Sustainability Team, and a council composed based on the core ESG agenda.

Risk Management
Preemptive Risk Management
Establishment of the ‘Compliance Management System (CMS 2.0)’
CJ CheilJedang established its CMS (Compliance Management System) 2.0 to forecast risks and take effective measures against them. To enhance existing compliance management, the new system identifies and categorizes potential risks that may occur in each organization. It establishes control measures for each risk and clarifies the R&R of the department in charge (designing, managing, and supervising essential control activities for each risk) and the lead department (conducting activities according to the design of the department in charge) so that the Compliance Team can act as the company-wide risk control tower to organically manage risk across the lead departments, departments in charge, as well as the BOD and its committees.

10 Compliance Obligations

Key Tasks

Current status of ISO 37301
(compliance management system)
Certification

CJ CheilJedang obtained the standardized ISO 37301 (compliance management system) certification in December 2020 and is maintaining the certification through regular post management assessments. The most recent post assessment was conducted in October 2021.
Expanding the Scope of
Global Compliance Management
With the expansion of its global business, CJ CheilJedang’s compliance issues outside of the country have also increased. In response to the need to strengthen the legal and compliance management and response of overseas subsidiaries, we identified 54 global compliance obligations based on the global ethical management policy. In addition, we plan to continuously advance global compliance management by setting priority global compliance obligations and directions.
- Reinforce capacity of overseas departments and headquarters’ legal organizations and strengthen management
- Conduct monitoring of major overseas corporations
- Prepare global policy
- Strengthen networks with global law firms
- Link to ESG management
Risk Response Division
Situation Supervision Team CJ CheilJedang takes a three-step approach to potential risks in 16 categories, covering the environment (including climate change), industrial safety, quality, and processes, according to severity. We operate a company-wide risk management system to swiftly report and take countermeasures, within 24 hours, through the Risk Response Division whenever a risk is determined to be a major risk. In addition, we utilize an integrated risk management process to prevent any potential confusion or delays that may arise from a risk occurrence, initial recognition of the risk, or response measures.

Management of Potential Risks
CJ CheilJedang is working to identify and preemptively respond to potential risks that can occur in its Food and BIO industries.
Potential risk 1.
Risk in raw material sourcing
Due to unpredictable changes in international affairs, such as regional closures in consequence of the COVID-19 pandemic, and production cuts in the grain belts due to the Russia-Ukrainian War, there are possibilities of disruptions in sourcing of raw materials for food ingredients. Furthermore, in the case of raw materials for food such as soybean, sugar, wheat, there are many cases where there is a high proportion of procurement from a specific country, so if decrease in products from bad weather or logistics risks occur in a specific country or region, it may lead to a global risk in procurement. These raw material sourcing risks can lead to delays in our production and cost burdens, which can make the delivery issues or put a heavy burden on corporate profitability.
CJ CheilJedang’s
response measures
Due to the prolonged COVID-19 pandemic, unstable supply of raw materials around the world, rising grain prices, and other uncertainties are continuously increasing. Accordingly, CJ CheilJedang is checking risks through regular communication with existing procurement channels. In addition, in order to respond to raw material risks caused by intermittent and unpredictable events(war, pandemic, etc.), we are operating a market information system through global network and increasing purchasing predictability. In addition, we are developing a price prediction model using AI technology and actively utilizing it for decision-making. Also, we are securing cost competitiveness and supply and demand stability through purchasing flexibility such as diversification of production areas and supply lines and improvement of purchasing structure.
Potential risk 2.
Risk in regulations related to
Carbon Neutrality
There may be regulatory risks in climate change such as carbon border tax based on the amount of carbon emissions in the Europe and the Americas. As of 2021, CJ CheilJedang’s overseas sales accounts for 61% with the proportion of overseas sales on a continuous rise. Therefore, it is necessary to meticulously respond to the ESG regulations in each region. Failure in responding to climate change may result in significant loss in operating profit, etc., and potentially fatal risks such as bans on business in such areas.
CJ CheilJedang’s
response measures
CJ CheilJedang aims to reduce its GHG emissions by 25% at all business sites by 2030, and ultimately achieve Carbon Neutral & Zero Waste by 2050. To this end, we are pursuing 100% conversion to renewable energy in the Americas and reduction of GHGs in our supply and sales chains. In addition, we are preparing environmental management policies in various areas such as waste and plastics, and are making efforts to reduce environmental impact throughout the company. These represent our preemptive preparations to prevent potential environmental risk factors.