Sustainbility Management Strategy

Sustainability Purpose

In order to flourish in the future and establish itself as a global leader, CJ CheilJedang aims to build a virtuous cycle of "Nature to
Nature". This entails bringing resources from nature to the table and returning them back to nature, by creating core values of
"Wellness and Safety" and "Sustainable Environment“ throughout raw material procurement, production, consumption, and
disposal.

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.

다우존스지속가능 경영지수 편입 안내표
Core Values	Strategic Tasks	Task Details	Key Achievements in 2022	Goals
Sustainable Environment	Response to Climate Change	Achieve net zero by 2050 and response to climate change risks	Developed measuring guidelines forLife Cycle Assessment Obtained the Zero Waste to Landfill (ZWTL) certification for 5 domestic sites.	Targeting a 25% reduction in GHG emissions¹⁾ by 2030(compared to 2020). Transitioning to 100% renewable energy by 2030 (Americas).
	Sustainable Packaging	Develop recyclable, reusable, and compostable packaging materials and reduce waste	Achieved “Normal” or higher rating in the Ease of Recycling Rating Standards for 95% of products Established a process for measuring packaging sustainability	Phasing out environmentally harmful materials listed in the Negative List.
	Eco-friendly Material Solutions	Develop and commercialize eco-friendly material solutions based on PHA technology	Began the mass production of PHA; launched the PHACT brand. Started the commercialization of the PHA-based packaging solution.	Expanding PHA products and applications
	Sustainable Raw Materials Sourcing	Expand raw material sourcing with greater traceability and transparency	Utilized 100% RSPO²⁾-certified palm oil in domestic sites.	Gradually increasing sustainable raw material sourcing
Health and safety	Human Rights	Proactively manage human rights risk for stakeholders	Conducted human rights due diligence for overseas sites. Mitigated human rights risks in the sea salt supply chain.	Expanding human rights due diligence worldwide
	Respect for DE&I	Create a respectful culture of diversity, equity and inclusion.	Won the Women in Innovation Award for Gender Equality Maintained 25.1% female executives at CJ CheilJedang	Implementing DE&I culture globally
	Enhancement of health and nutrition	Establish CJ nutrition policy and expand health-oriented product portfolio	Expanded health-oriented product portfolio. Reduced negative nutrients	Reducing sodium, saturated fat, sugar based on Nutrition Commitment 2025
	Sustainable supply chain	Proactively manage and eliminate potential environmental and social risks in the supply chain	84% of suppliers are compliant with the Supplier Code of Conduct. Top rated in the Korea Win-Win Growth Index for 7 consecutive years.	Advance the supply chain ESG risk management for 2025 Complete the sustainable supply chain system for 2030

1) Scope 1 & 2
2) RSPO: Roundtable on Sustainable Palm Oil

Sustainability Governance

CJ CheilJedang has established a sustainability governance to proactively manage ESG risks with timely decision-making and to act in a consistent and comprehensive execution. As the highest decision-making body, the Corporate Sustainability Committee under the Board of Directors identifies various environmental, social and economic/governance issues. This process contributes to the development of the company's sustainability management strategy and direction. The committee reviews and approves performance and improvement measures.

The highest decision-making body : Corporate Sustainability Committee, Deliberation & Resolution of Strategy and Agenda, Review and Submission of Agenda. Management-level council : Corporate Sustainability Council(chaired by the CEO), Environment > Foods·Bio R&D Center, Food Business Administration Division, Food Production & Manufacturing Department, Change and Innovation Manager, Bio Engineering Division, White BIO CIC - Performance Review and Improvements. Social > Foods·Bio HR Division, Change and Innovation Manager. Economy·Governance > Foods·Grains·Bio Procurement Division, Food Research Institute, Marketing, Legal Affairs Division - Progress report. Dedicated organization : Sustainability Team - Identification of Agenda and Issue Discussion. Working-level Council : Working-level Council for Corporate Sustainability - Establishment of the Core ESG Agenda Council

Risk Management

Risk
Management System

CJ CheilJedang has established a system to categorize and identify potential risks in business management and to prevent them by continuously reviewing and managing related matters through the Board of Directors and its committees. The Board of Directors and its committees, the CEO and the Compliance Officer have dedicated support organizations that report directly to them. The support organizations are responsible for continuously monitoring and reporting on the status of corporate-wide risk management, and the Board of Directors and its committees are responsible for reviewing these reports.

CEO - CEO MESSAGE, Declaration of the Top Management. Policy : The CJ People’s Promise | Ethical Management Pledge | CP Program Code of Operation | Policy & Guide. Process - Identification → Assessment → Mitigation → RCSA → Monitoring. Governance - Compliance Management System - Board of Directors / Committees, Control Tower, Compliance Officer, Compliance Team, Department in Charge, Lead Department. CMS System, Regulatory Trend, Description, Training, Report, Announcement / FAQ, Process. 10 Major Risk Areas : Fair Trade, Quality Safety, Labor Rights, Environmental Safety(including the climate change), Consumer Protection, Indus trial Safety, Resource Preservation, Anti-Corruption, Property Rights Protection, Privacy Protection

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.

대표이사 - CEO MESSAGE, 경영진의 의지 천명. 정책 : CJ인의 약속, 윤리경영실천 서약서, 컴플라이언스 운영 규정, POLICY & GUIDE. 프로세스 - 식별(Identification) → 평가(Assessment) → 대응(Mitigation) → 자가점검(RCSA) → 모니터링(Monitoring). 거버넌스 - 컴플라이언스 거버넌스 - 이사회 / 위원회, 전사 Control Tower, 준법지원인, 컴플라이언스팀, 관리부서, 실행부서. 컴플라이언스 경영시스템 - 규제 동향, 설명, 교육, 제보, 공지 / FAQ, 프로세스

10 Compliance
Obligations

4대 주요 의무영역 공정거래, 품질안전, 환경안전, 산업안전과 부패방지, 개인정보, 자원보전, 노동인권, 재산권보호, 소비자보호

Key Tasks

Current status of
ISO 37301 (compliance
management system)
Certification

CJ CheilJedang maintains ISO 37301 compliance management certification by undergoing annual follow-up audits to ensure the effectiveness of its compliance management system. The results of the second follow-up audit in 2022 showed that we have satisfactorily met the compliance requirements and that employee awareness has improved. Our compliance management system based on CMS 2.0 was found to be effective in the department/business-specific compliance requirement and risk assessments and control measure reviews, thus maintaining the certification status. CJ CheilJedang also assists other CJ Group companies in obtaining ISO 37301 certification, thereby contributing to group-wide compliance management.

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. — ISO37301 Certificate

Strengthening
Global
Compliance
Management

As we expand our business globally, we are working to strengthen compliance management and response overseas. In 2022, we conducted compliance performance evaluations for global executives and focused on raising compliance awareness to promote an ethical management culture by establishing governance and providing training. In 2023, we plan to further strengthen our global legal affairs team and establish and promote a global compliance management system.

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 Jeiljedang’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 Jeiljedang’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.