Lotte Duty Free Announces First ESG Management in Duty-Free Industry "Creating ESG Value Across All Divisions"

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Lotte Duty Free established the 'ESG Value Pursuit Committee' on the 24th and held a ceremony to announce its commitment to ESG management. Lee Gap, CEO of Lotte Duty Free and chairman of the committee, stated at the ceremony, "Under the ESG management vision of becoming 'the most trusted travel partner,' we will create ESG value across all business sectors."

[Asia Economy Reporter Yuri Kim] Lotte Duty Free announced on the 25th that it has established the industry's first 'ESG (Environmental, Social, and Governance) Value Pursuit Committee' in the domestic duty-free industry and held an ESG management declaration ceremony. The chairman of the committee is Lee Gap, CEO of Lotte Duty Free.

At the declaration ceremony held the previous day, CEO Lee emphasized, "Under the ESG management vision of 'the most trusted travel partner,' we will create ESG value across all business sectors." He added, "To achieve sustainable growth through ESG management, we will move forward with a spirit of coexistence and cooperation, looking toward customers and society."

At the ceremony, Lotte Duty Free established detailed action plans for eco-friendly management (E), corporate social responsibility (S), and enhancing corporate governance transparency (G). For eco-friendly management, they introduced 'Duty 4 Earth.' They selected four business areas where they can practice environmental protection in duty-free operations: the duty-free goods delivery area, logistics center, products, and stores, aiming to lead the industry in eco-friendly management.

In the duty-free goods delivery section, they will take the lead in solving the chronic problem of plastic packaging waste in the domestic duty-free industry. In February last year, Lotte Duty Free was the first in the industry to introduce biodegradable air caps (bubble wrap), and plans to complete 100% introduction of biodegradable and other eco-friendly materials for plastic shopping bags by next year. They will also actively minimize plastic use by expanding eco-friendly paper shopping bags across all domestic and overseas Lotte Duty Free stores.

At the Lotte Duty Free logistics center, efforts will be made to reduce carbon emissions. Lotte Duty Free plans to install solar power facilities within the year at the integrated logistics center located in Yeongjongdo, Incheon, reducing electricity consumption by up to 67%. All 1-ton bonded transport vehicles at the integrated logistics center will be converted to electric vehicles by next year, and electric vehicle charging stations will be installed within the logistics center.

Lotte Duty Free will also create eco-friendly value by discovering 'eco brands.' They plan to open an eco-friendly brand zone within the Seoul World Tower store by the end of the year, housing brands that have obtained ESG-related certifications or produce products using eco-friendly materials. Through memorandums of understanding (MOUs) with brands promoting ESG, they will also engage in exclusive product planning and upcycling package production.

In stores, 'digitalization of printed materials' will be implemented. In August last year, Lotte Duty Free integrated paper exchange vouchers at the delivery area with receipts and replaced them with SMS. They plan to introduce an electronic system for receipts and other printed materials issued in stores, aiming to reduce about 80% of existing printed materials by 2023.

Starting from the ESG management declaration ceremony, Lotte Duty Free will also reorganize its social contribution projects. They unveiled a new social contribution slogan, 'LDF (Lotte Duty Free) Impact,' reflecting their commitment to fulfilling corporate social responsibility and delivering positive social influence. Lotte Duty Free plans to carry out various projects focusing on coexistence with local communities and small business owners.

For local communities, the representative social contribution project 'STARUPS' will continue. Since 2019, STARUPS has been a social contribution project that focuses on nurturing youth enterprises in the region to create local jobs and revitalize tourism. Over the next two years, Lotte Duty Free plans to provide an additional 500 million KRW in support funds to assist 10 youth enterprises in the Busan and Jeju regions. Besides financial support, they will also offer one-on-one accelerating programs, including customized education utilizing Lotte Duty Free’s marketing expertise.

Lotte Duty Free will also newly launch the 'CHEERUPS' project to promote coexistence and cooperation with small business owners. Starting in the second half of this year, they will support 30 restaurants by assisting with meal kit sales and promotion activities, extending a helping hand to small business owners. They will also contribute to solving delivery food waste issues by providing eco-friendly packaging containers and cutlery.

At the corporate culture level, Lotte Duty Free plans to achieve both economic value and social benefits through the internalization of the 'Fair Trade Compliance Program (CP).' They will implement measures such as appointing a compliance officer to the board and regularizing CP messages from the CEO, strengthening employee communication on compliance via an application, conducting tailored fair trade education by department and issue, and enhancing monitoring through improved on-site inspection processes to establish a more systematic legal compliance system.

Meanwhile, in December 2019, Lotte Duty Free was recognized for its efforts in establishing an internal legal compliance system and became the first in the duty-free industry to receive an A grade in the CP rating evaluation conducted by the Korea Fair Trade Commission.

This content was produced with the assistance of AI translation services.