YoungPoong

Supply Chain Management

Governance
Strategy
Risk Management
Metrics and Targets

Sustainable Supply Chain

We will continue to strive for the healthy growth of all companies in the supply chain and the establishment of a strong supply chain.

Create a green ecosystem

Global Sustainable Supply Chain Leadership Goal

Fair and transparent transactions

Strengthen win-win relationships to make our supply chain more globally competitive

advancing our supply chain management system

Responding to human rights, environmental and safety risks

Responsible Minerals Policy

Minimize the negative impact of conflicts and high-risk areas

Compliance management

Build sustainable supply chains by responding to human rights, resource depletion, and anti-corruption

Sustainable Supply Chain Structure

YOUNG POONG is strengthening the health and sustainability of its supply chain with responsible social governance as a core value, and key ESG issues are shared among relevant departments to support transparent and responsible decision-making. The supply chain management is handled by the Materials & Facilities Team and the Raw Materials Team, while the company-wide management and contracts are overseen by the Raw Materials Team.

Supply Chain Management Strategy

Based on the Partner Management Standards, YOUNG POONG strives to become a trusted company that pursues sustainable growth alongside its partners. These standards are designed to ensure that our partners provide safe working environments, respect workers’ human rights, and fulfill their environmental and ethical responsibilities. We also explicitly prohibit child labor and forced labor in our partner contracts and publicly disclose these policies in English on our website. Additionally, we require our partners to comply with our responsible sourcing policies and strongly discourage the procurement of raw materials from mines located in countries classified as high-risk areas.

Supply Chain ESG Management Policy

Conflict Minerals and Responsible Minerals

As a global company, YOUNG POONG is committed to addressing human rights violations, environmental degradation, and the financing of armed conflicts associated with mineral extraction.

We have established our Conflict Minerals Policy, which clearly sets forth our commitment to avoiding the use of conflict minerals and to practicing responsible mineral sourcing. This policy is based on relevant laws and regulations and other requirements, including the OECD Due Diligence Guidance, the EU CAHRA (Conflict-Affected and High-Risk Areas), the Dodd-Frank Act, and the RMI’s Joint Due Diligence Standards for Copper, Lead, Molybdenum, Nickel, and Zinc.

We have implemented a five-step management process for mineral supply chain management, covering both conflict minerals and responsible minerals. The key frameworks and measures associated with this process are publicly disclosed through our Responsible Minerals Report.

Conflict Minerals (Responsible Minerals) Policy Responsible Minerals Report 2024

Supply Chain Risk Awareness

YOUNG POONG proactively responds to changes in the global supply chain environment by identifying policy, physical, conflict minerals, and partner-related risks in advance, and establishing and implementing tailored management measures for each risk type. Based on this, we strive to systematically manage these risks through sustainable collaboration with our supply chain partners, while creating new opportunities.

리스크 유형, 잠재 및 실제 영향, 관리방안을 나타낸 표
Risk Type	Potential and Actual Impacts	Management Measures
Policy Risk	Strengthening of global supply chain due diligence regulations. Failure to comply may result in reputational damage and negatively impact customer evaluations and transactions.	Promote collaborative business models.
Physical Risk	Supply chain disruptions and delivery delays due to external environmental changes such as abnormal climate events and pandemics.	Promote collaborative business models.
Responsible Minerals Risk	Reputational damage, regulatory sanctions, and risk of losing global customers due to the use of conflict minerals or human rights violations.	Identify and assess responsible minerals risks based on RMI CAHRA standards. Operate the conflict mineral management process and publish the Responsible Minerals Reports. Conduct self-assessments for responsible mineral supply chains. Obtain letters of commitment to responsible mineral sourcing.
Partner Risk	Lack of supply chain transparency may result in ethical, environmental, and social risks throughout the production and distribution processes.	Include ESG-related clauses in supply contracts. Operate shared growth programs. Support partners’ safety and health management systems (ISO 45001).

Responsible Minerals Management

CAHRA(Conflict-Affected and High-Risk Areas)

YOUNG POONG identifies and assesses the risks of its partners based on the CAHRA (Conflict-Affected and High-Risk Areas) standards established by the Responsible Minerals Initiative (RMI) to effectively manage responsible minerals risks. Our risk assessment comprehensively considers various factors, including the partner’s association with CAHRA, response rates to the self-assessment questionnaire (SAQ), the potential submission of intentionally false information, and the partner’s level of awareness regarding responsible minerals. Partners classified as having a high-risk in terms of CAHRA are prioritized under our risk management mechanisms. We request due diligence reports from these partners to verify that the minerals have been sourced in a socially responsible manner. If a high-risk partner repeatedly causes issues without implementing improvements, we recommend or require their participation in third-party due diligence programs. Additionally, partners operating in regions with high CAHRA risk must meet the qualifications required to enter into contracts with YOUNG POONG. We also continuously monitor partners in the regions with low CAHRA risk for potential changes in their risk classification as their countries may shift to high-risk status.

KYC (Know Your Customer) Self-Assessment

YOUNG POONG conducts KYC self-assessments to proactively identify the use of responsible minerals within its supply chain and to evaluate the sustainability of its partners. The assessment includes questions about the supplier’s general information, and its association with conflict minerals as defined by the Dodd Frank Act, as well as its association with key conflict-affected and high-risk areas. The results of the self-assessment are used to determine transaction eligibility and assess the level of risk. At the end of the assessment, we include a commitment letter regarding the establishment of a responsible mineral supply chain to ensure our partners’ participation and to enhance the credibility and integrity of the self-assessment results.

Shared Growth with Partners

Win-Win Cooperation Activities

YOUNG POONG is committed to fostering sustainable, shared growth with its partners through a range of win-win management initiatives. We recognize that some partners may lack the resources or information necessary to invest in occupational safety and health, or may struggle to implement effective accident prevention measures. To address this, we support our partners in improving their safety and health practices through the Large Enterprise-SME Safety and Health Cooperation Plan, providing technical guidance and matching support to help establish autonomous prevention systems. These efforts help bridge the safety and health gap by enhancing our partners’ ability to prevent industrial accidents and manage safety, while promoting a culture of voluntary win-win cooperation. Additionally, we support our partners’ stable cash flow by offering early payments during holidays. During the 2024 Lunar New Year holiday, for example, we made advance payments totaling KRW 16.4 billion for construction costs, as well as for raw and subsidiary materials, all ahead of the scheduled payment dates, easing the financial burden of our partners. Furthermore, we have continued to strengthen our connection with local communities by providing holiday gift sets worth approximately KRW 150 million to residents of Seokpo-myeon, Bonghwa-gun, where the Sukpo smelter is located, as well as to employees of partner companies and construction companies.

ESG Clauses in Purchase Contracts

To proactively manage partner risks from the contracting stage, YOUNG POONG includes ESG-related clauses in supply contracts. These clauses clearly outline obligations to prevent human rights violations, such as modern slavery (including child labor), forced labor, and suppression of freedom of expression, and they require compliance with relevant laws and regulations. We also explicitly state that we will not tolerate any violations of these clauses.