Lotte Group’s affiliates in the chemical sector will invest a total of 5.2 trillion won over the next 10 years to make extensive efforts to reduce carbon and expand eco-friendly business. Instead of passively accepting social demands to cope with environmental pollution, it is a plan to more actively accept and lead to the creation of new business models. Lotte Chemical CEO Kim Gyo-hyun said, “The chemical affiliates within the group will set this year as the first year of ESG (environmental, social, governance) management to establish sustainable eco-friendly business strategies and carry out key tasks.”
Significant increase in eco-friendly business
Lotte Chemical, Lotte Fine Chemical, Lotte Aluminum, Lotte BP Chemical, and other chemical business unit (BU) affiliates within the Lotte Group announced the introduction of the’Green Promise 2030′ initiative on the 2nd. The slogan was’Every Step for Green’, which means’a sincere step to protect the earth’.
The key is to strengthen eco-friendly business by 2030 more than ten times that of today. Lotte Chemical BU decided to increase its eco-friendly business sales from about 600 billion won at the end of last year to 6 trillion won within the next 10 years. To this end, eco-friendly businesses are discovered for each company.
Lotte Chemical is promoting the development and distribution of materials to replace styrofoam buoys, the main culprit of marine pollution, with eco-friendly buoys. Lotte Aluminum has invested in mass production of materials for electric vehicle batteries. To create more eco-friendly business, Lotte decided to form a consultative body within the chemical BU.
Investments related to the virtuous cycle of resources are also greatly increased. It is planning to work on replacing PET, a plastic material, with rPET (PET made from waste plastic). It is to build a virtuous cycle system by recommending to affiliates to actively use rPET materials in food, clothing, and shoes, and recovering PET from distribution sites such as department stores and marts.
In an effort to reduce carbon emissions, the use of renewable energy such as solar and wind power will be expanded. A Lotte official said, “We will make a power procurement plan in line with RE100 (companies’ promise to use 100% of electricity as renewable energy by 2050).” In addition, the upper limit on carbon emissions is set as the total amount of emissions of Lotte Chemical affiliates in 2019, and it has been decided not to exceed this emission until 2030.
In order to create a green ecosystem, it also included that the waste, air pollutants, and wastewater generated during product production will be reduced to half of the current level. The waste generation management system will be upgraded, and deterioration prevention facilities will be optimized and process improvements will be continued.
Lessons learned from car batteries
Lotte’s efforts to strengthen its eco-friendly business were driven by concerns that if it loses its leadership in eco-friendly business, it could fall far behind. It was evaluated that Lotte lost its opportunity because it could not respond in time to changes in industrial trends. Competitors such as LG Chem, SK Innovation, and other competitors started the electric vehicle battery business to escape from petrochemical-oriented, but Lotte Chemical significantly increased its investment in petrochemical facilities and went against its competitors. As a result, Lotte Chemical has been neglected by the market to the extent that its corporate value (market cap) once dropped to a tenth level compared to LG Chem and SK Innovation. Lotte is expanding its business by jumping into the battery material business late last year.
A business official said, “Lotte chemical affiliates seem to be trying to dominate in eco-friendly businesses such as recycled plastics.”
Reporter Ahn Jae-kwang [email protected]