POSCO : ESG Report

POSCO

CORPORATE CITIZENSHIP

REPORT 2021

POSCO MUSEUM

Green Tomorrow,

About this Report

The 2021 POSCO Corporate Citizenship Report details POSCO's "Corporate Citizenship" management philosophy for achieving sustainable management and performance across the areas of Business, Society, and People. This report has enhanced the materiality analysis of key issues facing POSCO, and has significantly expanded the scope of opinions gathered by benchmarking relevant domestic and foreign industries and stakeholders. Furthermore, based on global standards compliance, POSCO has transparently included its response strategies for each issue in this report. To transparently disclose the Environmental, Social, and Governance (ESG) information, this report includes the Factbook, which is focused on quantitative data, and the Policybook, which articulates relevant policies. Moving forward, POSCO will continue to transparently disclose and manage the company's mid- to long-term strategies, goals and management status through the Corporate Citizenship Report.

Cover Story

In line with the vision of "Green Tomorrow, with POSCO," POSCO has expressed its will to build a sustainable future from the perspective of the overall value chain of steel.

Reporting Principles

This report has been prepared in accordance with the Global Reporting Initiative (GRI) Standards. As a member of the UN Global Compact, POSCO will detail all actions taken to achieve the 10 Principles of the Compact in a range of sectors including human rights, labor, environmental protection, anti- corruption and other Sustainable Development Goals (SDGs). Furthermore, this report considers the Sustainability Accounting Standards Board (SASB) industry standards as well as recommendations from the Task Force on Climate-Related Financial Disclosure (TCFD).

Reporting Period

While this report is POSCO's first Corporate Citizenship Report following the split-off on March 1, 2022, it highlights key activities and achievements prior to the split-off, from January 1, 2021 to December 31, 2021. Some of the information, such as the growth vision, strategic system and governance structure, include contents from after the split-off. For quantitative performance included in the ESG Factbook, the four-year trend data from 2018 to 2021 are included.

Reporting Scope

The data provided in this report are based on POSCO's performance across all domestic worksites, including Pohang Steelworks, Gwangyang Steelworks and both the Pohang headquarters and the Seoul office. The management performance includes the financial performance as of December 31, 2021, before the split-off, and the financial information has been prepared based on the POSCO Holdings' business report.

Report Assurance

To assure the credibility of all information contained in this report, POSCO has arranged for third- party certification from Samil PricewaterhouseCoopers, an independent assurance provider, which meets ISAE 3000 requirements.

Global Initiative

POSCO has been a member of the UN Global Compact since 2012, and complies with ISO 26000, a globally renowned standard for social responsibility. Furthermore, POSCO has been consistently included in the S&P Dow Jones Sustainability World Index since 2003, and also participates in the Carbon Disclosure Project (CDP) to assure the continued improvement of our sustainability performance.

Report Distribution and Feedback

This report can be downloaded from the official POSCO website. Please direct any stakeholder views and opinions on this publication to the contacts provided below.

Department : ESG Group, Corporate Citizenship Office

Telephone : [phone]

E-mai l: [e-mail]

Website : www.posco.com

Corporate Citizenship Website : corporatecitizenship.posco.com

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POSCO CHARTER OF CORPORATE CITIZENSHIP

Companies achieve lasting growth and sustainability by pursuing harmony within the society in which they operate. As a member of the social community, companies who have benefited from resources provided by society should look beyond profit, engage in addressing social issues and contribute to the prosperity of mankind and to making the world a better place. We believe that this is the right way to move forward.

POSCO, under its management philosophy of 'Corporate Citizenship: Building a Better Future Together,' will engage and communicate with all stakeholders including customers, employees and shareholders, and continually seek out changes and innovation in pursuit of sustainability by ultimately creating greater value for the company. Accordingly, POSCO embraces Corporate Citizenship by complying with the following principles when conducting business.

One. We nurture a robust business ecosystem with business partners.

• We practice the values of fairness, transparency and ethics across all business activities.
• We pursue collaboration and mutual growth with partners and suppliers based on a culture of consideration and respect.
• We support customer success by providing the finest products and services.

Two. We are at the forefront in addressing social issues and making society better.

• We take a leading role in confronting social challenges at the corporate level, with a sense of empathy.
• We carry out activities for the common good for the development of local communities and environmental protection.
• We actively participate in philanthropy as part of our commitment to sharing with our neighbors and society.

Three. We foster a happy and fulfilling workplace by creating a corporate culture based on trust and creativity.

• We create a safe and pleasant working environment to promote the health and well- being of our employees.
• We pioneer a corporate culture of trust and harmony through fair HR management practices and stable labor relations.
• We create a great workplace where diversity is respected, and a healthy work-life balance can be realized.

July 25, 2019 POSCO

3 POSCO CORPORATE CITIZENSHIP REPORT 2021

Contents

Introduction

Performance

ESG Factbook

1. About This Report
2. POSCO Charter of Corporate Citizenship

1. Company Overview
2. Activities for UN SDGs
3. Steel Production Process and Life Cycle

Overview

1. Message from the POSCO CEO
2. Vision and Strategy of the Steel Business

1. Governance

14 Responsible Management, Integrity Management, Fair Trade

20 Corporate Citizenship Management Philosophy & ESG Framework

1. Materiality Assessment & Stakeholder Interview

1. [Special I] Five Brands for Corporate Citizenship

32 [Special II] Green Reporting and Measurement of Corporate Citizenship Value

34 [Special III] Preparing for the Future

Business

Society

People

Fundamentals

38 Achieving Carbon Neutrality

1. Innovating Eco-Friendly Materials

1. Eco-FriendlySteelworks

51 Protecting the Ecosystem: Environmental Management / Recycling of By-products / Biodiversity

1. Co-Prosperitywith Stakeholders

1. Sustainable Supply Chain

72 Safety and Health

1. Great Work Place (GWP)

1. Diversity and Inclusion

86 Risk Management

1. Stakeholder Communication
2. Commitments & Initiatives
3. Information Security

92 Tax Management

1. Customer Satisfaction Management
2. R&D Performance

1. ESG Data

1. GRI

1. SASB

1. TCFD

1. Assurance report
2. Preparation of the Report

ESG Policies & Positions

1. Overview
2. Environmental

1. Social

1. Governance

About Us

POSCO is an integrated steel manufacturing company that produces steel products such as hot-rolled,cold-rolled, and stainless steel. POSCO was established on March 1, 2022, through the split-off of all steel-related businesses operated by POSCO Holdings Co., Ltd (formerly known as POSCO Co., Ltd.). We have an annual crude steel production capacity of 45 million tons that includes steelworks in Korea and overseas. We have also been ranked Number One in the list of the "World's Most Competitive Steel Companies" by World Steel Dynamics (WSD), a world-class steel analytics agency, for 12 consecutive years as of 2021. Furthermore, POSCO was named the "Sustainability Champion" by the World Steel Association in 2022 in recognition of our ESG management-related efforts and performance.

Vision & Core Values

						Corporate Citizenship:
Management
Philosophy
					Building a Better Future Together
Management
Vision
Areas of		BUSINESS		SOCIETY	PEOPLE
activity
			Biz partners	Social communities and individuals	POSCO Group
		(partners/customers/suppliers)	(local communities and residents)	employees
			• Practice of fairness,
			• Contributing to addressing	• Creating a safe and pleasant
			transparency and ethics		social issues with empathy	working environment
			• Shared growth	• Developing local communities	• Practicing fair HR management
			• Best products and services		and practicing environmental	and stable labor-management

Company Overview

Name of Company Chief Executives

Address of

Headquarters

Date Founded

Business Information

Products

Corporate Website

POSCO

Vice Chairman, Hag-dong, Kim

6261, Donghaean-ro,Nam-gu,Pohang-si,

Gyeongsangbuk-do(Goedong-dong),

Republic of Korea

March 1, 2022

Ironmaking, steelmaking and

production & sales of rolled steel products Hot-rolled steel, steel plate, wire rod, cold-rolled steel, hot-dip galvanized steel, electroplated steel, electrical steel, stainless steel, titanium, etc. www.posco.com

management	relations
• Participating in philanthropy	• Embracing diversity and
	achieving work-life balance

Talent		Talent with the mindset of action, consideration and creativity
POSCO
Code of	Substance		Execution	Practical
conduct
Core	Safety	Win-win	Ethics	Creativity
values

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