LG Energy Solution publishes 2025 ESG report, highlights battery recycling gains and governance reforms

LG Energy Solution announced Tuesday that it has published its "LG Energy Solution ESG Report 2025," documenting the company's substantive environmental, social and governance achievements over the past year, including improvements in battery material recycling rates and steps to strengthen board independence.

Now in its sixth year, the report highlights three key ESG milestones: the global factory rollout of a new NMP (N-Methyl-2-Pyrrolidone) solvent recycling technology, the appointment of the company's first outside director as board chair, and the establishment of new ESG information management and disclosure regulations.

The report also articulates LG Energy Solution's ambition to lead the future energy industry on the strength of its technology in batteries, energy storage systems and next-generation mobility. The company laid out a vision to integrate its high-performance battery mass production capabilities with data, IT and AI transformation technologies to deliver differentiated solutions and build a battery circular ecosystem.

On the environmental front, the company disclosed that it has expanded a new NMP solvent recycling technology — developed and validated at its Nanjing, China subsidiary — to factories worldwide. NMP is an essential solvent used in cathode manufacturing to bind materials together. The new technology raised the NMP recycling rate from roughly 80 percent to 97 percent. LG Energy Solution has deployed it at its Nanjing factory, its Ochang Energy Plant in South Korea, and its factory in Poland.

On governance, LG Energy Solution appointed outside director Park Jin-gyu as board chair — the first time an outside director has held the position — following a board resolution this year, establishing a more robust oversight mechanism over management. Four of the seven current board members — Park Jin-gyu, Yeo Mi-suk, Han Seung-su and Lee Myung-gyu — are outside directors, a majority that the company said enhances governance transparency.

LG Energy Solution also introduced new "ESG Information Management and Disclosure Regulations" to get ahead of mandatory global ESG disclosure requirements, including the EU's Corporate Sustainability Reporting Directive, set to apply in 2028, and South Korea's Korea Sustainability Standards Board standards. The company said the regulations will strengthen its ESG disclosure governance and data integrity, improving stakeholder confidence in its disclosures over time.

The company also significantly reinforced its compliance framework to proactively manage operational risks that could arise as it expands its global production footprint. It overhauled supplier management processes at construction sites worldwide, including those at overseas joint ventures, and launched a real-time monitoring system to track workforce and compliance risks on an ongoing basis.

In a foreword to the report, CEO Kim Dong-myung said the company has "built the history of the battery industry through challenge and determination over the past 30-plus years." He added that as battery applications expand beyond electric vehicles into energy, robotics, aviation and other industries, the company will "strengthen business competitiveness and sustainability on the foundation of ESG."

Meanwhile, LG Energy Solution is expected to return to profitability in the second quarter, driven by strong performance in its energy storage system segment. According to FnGuide, the consensus operating profit estimate for the second quarter stands at 215.6 billion won ($140 million). In the first quarter, the company posted revenue of 6.55 trillion won and an operating loss of 207.8 billion won.