The purpose of this policy is to contribute to environmental protection through cooperation between HFR Co., Ltd. (hereinafter referred to as the “HFR”), its affiliates, and stakeholders, by establishing a sustainable management and environmental management system that concretely realizes the management philosophy of “building relationships of Pay It Forward and pursuing sustainable development,” and strengthening the role of responding to environmental risks.

This policy applies to all business sites and affiliates of HFR. HFR recommends that partners and contractors doing business with HFR also comply with this policy or a policy at a similar level to this policy. In addition, HFR executives and employees must be encouraged to comply with this environmental management policy when dealing with partners (including contractors, suppliers, and service companies) throughout the entire business process.

1. ESG Committee HFR manages environmental management risks and supervises overall performance improvement activities through the ESG Committee, in which the top decision maker or key decision makers participate. The ESG Committee is an expert committee under the Board of Directors. The main roles of the ESG Committee include approval of mid- to long-term environmental management strategies, review of environmental management risks, inspection of environmental management performance, discussion of environmental management risk response measures, and other matters deemed necessary for the expansion/dissemination of environmental management. 2. Dedicated organization HFR establishes an organization dedicated to implementing environmental management to carry out related tasks. The main roles of the dedicated organization are establishing and operating an environmental management system, protecting and restoring environmental capital, establishing and implementing policies to manage pollutant emissions generated during business operations, identifying and improving environmental risks, and disseminating/disseminating environmental management. Receives and resolves environmental-related grievances, and engages in other external cooperation activities. In addition, the dedicated organization expands eco-friendly products and services by collaborating with organizations such as management support, R&D, purchasing, production, and sales.

• 1. HFR establishes and implements an environmental management system based on ISO 14001 and complies with relevant laws.
• 2. HFR regularly reviews and reports environmental management performance and implementation status through operating the ESG Committee.
• 3. HFR reduces greenhouse gas emissions by increasing energy efficiency, expanding the use of renewable energy, and eco-friendly transportation.
• 4. HFR minimizes the negative environmental impact of business activities by reducing environmental pollutants, hazardous chemicals, and waste.
• 5. HFR realizes a circular economy through the use of environmentally friendly raw materials and resource recycling.
• 6. HFR promotes eco-friendly consumption by producing and distributing eco-friendly products and services.
• 7. HFR strives to preserve the natural environment and biodiversity.
• 8. HFR complies with environmental laws and international environmental agreements at the business location.
• 9. HFR transparently discloses environment-related information to internal and external stakeholders and communicate faithfully

1. Energy ① Promotion of energy saving HFR promotes activities to reduce energy usage, such as replacing old facilities with reduced energy efficiency, introducing high-energy efficiency facilities, developing and applying eco-friendly methods to minimize energy usage, and implementing energy campaigns. ② Introduction of renewable energy HFR mitigates climate change and environmental damage by expanding the use of renewable energy (solar energy, solar thermal power, wind power, hydropower, etc.) and sustainable energy and reducing the use of fossil fuel-based energy. ③ Energy management system operation HFR operates a system for monitoring energy and greenhouse gases, and reviews ways to improve energy management efficiency based on data analysis on the system. 2. Greenhouse gas ① Reduction from business sites HFR achieves carbon neutrality by utilizing renewable energy conversion, energy efficiency, and clean energy. In addition, HFR realizes a carbon-neutral production base through advancement of manufacturing technology and platform innovation, such as eco-friendly smart factories. ② Reduction from supply chain HFR develops supply chain carbon neutral guidelines, encourages carbon neutral practices, and carries out reduction activities considering supply chain characteristics. In particular, HFR is pursuing a project to expand recycling/new materials in collaboration with its raw material partners for reduction at supply chain. ③ Reduction from products and services HFR develops platforms and technologies dedicated to eco-friendly products, expands infrastructure for eco-friendly products, and expands the distribution of eco-friendly products and services. Through this, HFR reduces emissions/greenhouse gases resulting from the use of products and services. 3. Water ① Optimization of water use HFR optimizes water use through process improvement and water management and recycling. ② Environmental impact survey of water catchment area HFR identifies and monitors areas at risk of water shortage, depletion, and contamination due to business activities, and evaluates and mitigates the adequacy of water quality and intake volume and negative impacts on the surrounding environment. 4. Biodiversity ① Research on ecosystem conservation measures HFR recognizes the importance of restoring natural ecosystems and conserving biodiversity, and researches and implements ecosystem conservation measures to minimize negative impacts. ② Biodiversity protection HFR recognizes the potential impact of its business on the environment and biodiversity and work with its partners to protect biodiversity 5. Raw materials ① Improving resource use efficiency HFR prevents resource depletion by optimizing resource use through raw material management and production process improvement. ② Discovery and use of eco-friendly materials HFR reduces environmental damage by encouraging the use of natural raw materials and recycled materials when producing products. 6. Waste ① Waste disposal tracking management HFR complies with the procedures set forth in relevant laws and regulations so that waste discharged from its workplace can be legally processed and tracked. ② Improved waste recycling HFR determines the optimal treatment method depending on the type and amount of waste generated during business operations. Through this, HFR minimizes the ratio of waste to landfill/incineration and improves the recycling rate of waste. ③ Waste recycling HFR creates an upcycling ecosystem that creates value by discovering waste with a high landfill/incineration rate during the product production process and remaking it into new products and services. 7. Waste products ① Collection of waste products HFR cooperates with waste product processing companies to recover waste products and expand recycling, and continues to improve the rate of resource reuse and recycling after waste product recovery. ② Recycling of waste products HFR applies materials recycled from resources recovered from waste products to products. To this end, HFR promotes the localization of recycled materials and the development of component parts, focusing on major production/sales bases. 8. Hazardous substances ① Minimizing hazardous substances HFR evaluates hazardous substances that may occur in products and workplaces to prevent exposure to hazardous substances and accidents in workers and the community. ② Emergency preparedness HFR establishes a scenario for emergency situations, establishes a response system, and establishes a network with related departments and related organizations to prevent environmental accidents. 9. Environmental pollutants ① Air pollutants: HFR minimizes gas and particulate air pollutants generated from business activities and minimizes the impact on the environment by establishing optimal prevention facilities for generated air pollutants.

② Water pollutants: HFR measures and monitors the discharge of water pollutants and manages them below legal standards through wastewater facility management.

③ Soil pollutants: HFR measures and monitors the discharge of soil pollutants and manages them legally, including preventing pollution through appropriate disposal of waste.

④ Noise and Vibration: HFR strives to create a pleasant working environment for executives and employees and a pleasant living environment for local residents by efficiently managing noise and vibration equipment and facilities used in the workplace.

⑤ Odor: HFR strives to create a pleasant working environment for executives and employees and a pleasant living environment for local residents by efficiently managing odorous substances generated during work in the workplace.

1. Setting performance goals HFR sets mid- to long-term performance goals for environmental factors that have a significant environmental impact due to business operations. HFR aims to reduce energy/water usage and waste emissions by 10% within the next 3 years, reduce by 30% within the next 10 years, and expand renewable energy usage and resource recycling by 30%. Mid- to long-term performance goals are set and adjusted by considering not only emissions and usage data forecasts (Business As Usual), but also external economic conditions, government policy direction, and internal business strategies. 2. Check implementation status HFR regularly checks the progress of its mid- to long-term performance improvement goals. HFR comprehensively inspects not only the implementation rate compared to the goal, but also the effectiveness of activities promoted to achieve the goal and any difficulties in the goal implementation process. If necessary, mid- to long-term performance improvement goals are adjusted based on inspection results. 3. Supply chain management HFR shares know-how and experience in promoting environmental management with the supply chain, and continuously consults with the supply chain and monitors the implementation status to create environmental value throughout the value chain.

HFR regularly conducts environmental education for all employees, supports environmental management activities of partner companies, and does its best to raise social awareness of the environment through various activities.

1. Management performance evaluation HFR reflects mid- to long-term environmental performance improvement goals and implementation status in management performance evaluation indicators (KPIs) and reflects them in compensation, etc. When evaluating management performance, HFR comprehensively considers environmental performance improvement, major domestic and international ESG evaluation results, and internal ESG improvement tasks. 2. Supply chain evaluation and selection, etc. ① When selecting external companies (supply, contract, service provision), HFR minimizes environmental impact by reflecting evaluation items such as environmental management level.
② HFR supports its suppliers and partners to establish a high-level environmental management system, and proactively manages environmental risks throughout the supply chain through its own environmental management performance evaluation of suppliers.
③ HFR complies with the green purchasing policy when procuring materials and supplies.

1. When pursuing mergers and acquisitions, HFR conducts due-diligence to identify potential risks that do not meet environmental laws or environmental management system standards and reflects them in company evaluation.
2. Before starting a new project, environmental impacts must be identified and carefully managed, and efforts must be made to minimize any negative impacts that may arise from a new project.
3. HFR complies with international environmental/energy conventions and laws and continuously strives to improve the environment.

1. HFR secures transparency and pursues sustainability by disclosing the results of environmentally friendly management activities internally and externally.
2. Promotion of environmental management is transparently disclosed to stakeholders through various channels such as sustainability reports, environmental information disclosure system, and CDP.