coway

Natural Resources Used in Business Activities

Use of Materials(Unit: tons)

Category		2014	2015	2016
Non Renewable Raw Materials	Plastics¹⁾	8,724	9,185	10,017
	Metal	4,056	4,332	5,096
	Theoretical weight applied²⁾	1,983	2,266	2,335
Renewable Raw Maerials		-	-	-
Total		14,763	15,783	17,448

1) Water filtration systems, air purifiers, bidets, water softeners. And food waste treatment appliances
2) Packaging materials: paper boxes, plastics & protective films, and use of EPS in 2016

Water Use(Unit: tons)

According to features of manufacturing facility that operates the produt assembly-oriented and inspection processes, so the company’s environmental impact on water resources through its water use or the discharge of waste water is not significant. Still, Coway is adamant about reducing its water use. One way it has done this is by developing a “waterless” water purifier test system that uses nitrogen and vacuum conditions instead of water. Additionally, Coway was the first Korean company to become a signatory of the UNGC CEO Water Mandate, and has done its best to protect water resources throughout the production process.

Category	2014	2015	2016
Yugu Plant	31,221	30,916	40,083
Incheon Plant	12,151	16,603	16,711
Pocheon Plant	340	235	146
Environmental Technology Institute(R&D Center)	19,995	15,104	19,358
Logistics Center(Yugu)	2,340	3,386	4,071
Total	66,047	66,244	80,369

In 2016, water use increased due to the increase in the production amount of Yugu factory and strengthen test by water purifier.

Energy Use

In order to increase the efficiency of energy use, Coway installed photovoltaic generators at its production facilities and is expanding its use of renewable energy. The company also joined the Win-Win Energy Companion project, and offered energy quantification equipment to reinforce suppliers’ energy competitiveness.

Category	Energy Source	2014	2015	2016
Direct	Butane(GJ)	7	2	0.4
	LPG(GJ)	44	-	-
	Diesel(GJ)	250	268	265
	LNG(GJ)	1,567	1,601	402
	Kerosene(GJ)	209	267	250
	Propane(GJ)	1,135	4,126	5,394
Direct Total(GJ)		3,212	6,264	6,311
Indirect	Electricity(GJ)	103,944	103,640	101,543
Indirect Total(GJ)		103,944	103,640	101,543
Total(GJ)		107,155	109,903	107,854

- Joongang Ilbo Building (Seoul Office), Seoul National University Environmental Technology Research Institute, Cosmetics Research Center, Yugu Logistics Center, Production Plant(Yugu, Incheon, Pocheon)_Excluding water environment division according to company division
- LPG is classified as propane according to the verification of the GHG target management standard.
- 2016 Verification Standard: [Scope1 + 2] x 115,175GJ. At the time of external verification, Data are presented based on the previous year's coefficient of application for comparison with the previous year

Category	Energy Source	2014	2015	2016
Energy Use per Unit (GJ/KRW 100 million)		5.32	5.08	4.54
Total energy use(GJ)/Total sales(KRW 100 million)
Adoption of Renewable Energy	installation costs(KRW 100 million) ¹⁾	2.0	1.7	11.9
Adoption of Renewable Energy	Reduction in power consumption(kw)²⁾	71,528	189,457	900,435

2013 - Pocheon plant → Solar energy generation
2014 - Yugu Factory, 1 Supplier → Solar energy generation
2015 - Incheon Plant, 1 Supplier → Solar energy generation
2016 - Yugu Factory → Installation ESS , Yugu Factory, Logistics Center → Installation LED
- Comparison of LEDs in the logistics center around 1 year [From 2016.03 to 2017.02] = 562,190KWh / year
- Yugu Factory (32-17W) x3,200EAx8hx220 days = 84,480KWh / year
- ESS [including government subsidies], LED [total investment cost of investment company]

1) Amount of reduction of renewable energy facilities in the year
- - Solar energy generation by 2016 : 174,709 (Coway) +79,056 (Supplier) = 253,765KWh / year

Environmental Impact due to Business Activities

GHG Emissions

Coway is the only Korean company which declared its support for the ‘UN Frameworkcoway Convention on Climate Change’ agreed by 195 countries at the COP21 held in Paris in 2015 and has been participating in the corporate voluntary carbon reduction plan scheme. Coway plans to reduce the GHG emission per unit by 50% of the year 2010 by the year 2020 in order to accomplish the mid & long term reduction goal of greenhouse gas established in 2009. Accordingly, Coway has developed the energy saving activity participated in together by staff & employees and partners to minimize the greenhouse gas emission at all manufacturing and sales fields.

Category(Unit : tCO₂e)	2014	2015	2016
Direct Emissions(Scope1)	196	391	401
Indirect Emissions(Scope2)	5,385	5,369	5,261
Indirect Emissions(Scope1+2)	5,581	5,760	5,662
Yugu Plant	1,919	2,015	2,165
Incheon Plant	634	658	677
Pocheon Plant	361	349	387
Environmental Technology Institute(R&D Center)	1,537	1,565	1,588
Cosmetics Research Institute	163	174	183
Seoul Office(JoongAng Dail yBuilding)	399	390	382
Logistics Center(Yugu)	413	464	328
Net Emissions(CO₂e/KRW100)	0.277	0.266	0.257
Domestic Logistics and Transport(Scope 3)	4,025	4,514	4,795
Commuting Vehicles(Scope 3)	49	49	49

Domestic logistics and transport are carried out through subcontracts, which are excluded from the company’s calculation of emissions (data is taken from subcontractors) and external verification.

GHG Emissions from the Use of Refrigerants

In order to minimize the environmental pollution caused by the refrigerant used in the product, it switching to environmentally friendly refrigerants. Refrigerant (R-134a) used in existing products is handled through a company designated by Ministry of Environment.

Category	R-134a¹⁾
Category	2014	2015	2016
Use of Refrigerants in Product Manufacturing(kg)	43,867	50,238	52,340
Use of Refrigerants in Product Disposal(Kg)	13,558	15,562	20,188
GHG Emissions Caused by Refrigerants from Waste Products(tCO₂e)	14,073	16,185	20,996
Use of Eco-friendly Refrigerants in Product Manufacturing(kg)	R-600a, R-436B
	2,440	651	950

1) R-134a is a substance that has lower global warming potential (GWP) than R-12

Status of Mid & Long Term Accomplishment in Reduction Goal of GHG Emissions

Waste Generation Amount

Category		2014	2015	2016
Generation of Waste	Products	12,808	13,263	14,024
	Business Site: General	1,028	1,023	1,619
	Business Site: Designated	26	27	38
	Services	7,024	8,501	9,095
Total (Unit: tons)		20,886	22,814	24,776
Amount of Waste Recycled (Unit: tons)		12,228	12,837	13,559
Waste Recycling Rate (%)		59	56	55

The recycling rate decreased year-on-year due to increased waste from the process and waste product return

Plastics Recycling

Coway has expanded its management scope from the manufacturing and distribution of products to waste that occurs during its service process, as CODYs recollect waste filters after carrying out their services, thus enabling waste separation.

Category	2014	2015	2016
Output(tons) ¹⁾	8,724	9,185	10,017
Amount Recycled(tons) ²⁾	6,198	6,353	6,902
Recycling Rate (%) ³⁾	71.1	69	69

1) filter, water purifier, purifier, bidet, water softener, food processor
2) Recycling rate: (waste product / waste filter) Plastic recycling amount / (product / filter) Plastic delivery amount
3) The recycling rate is stagnant due to the continuous increase in product and maintenance service accounts.

Sales of Refurbished Products

For customers who purchase new products and dispose of existing ones, Coway collects the used products free of charge. The recollected products are handled at the company’s Recycling Center, where plastics are recycled, some of which are later sold as refurbished products. In 2013, Coway signed an MOU with the Ministry of Environment and the Korean Environment Corporation on this very issue and has been working hard to facilitate the sale of refurbished products since then.

Category(Unit: No. of units)	2014	2015	2016
Water Filtration Appliances	12,061	13,492	9,165
Air Purifiers	2,672	4,508	6,584
Water Softeners	366	49	1
Bidets	3,454	3,486	5,362
Food Waste Treatment Appliances	30	-	-
Total	28,123	18,583	21,112

Activities to Reduce Coway’s Environmental Impact

Environmental Investments

In order to reduce the environmental impact of the business activities, Coway is striving to strengthen environment-friendly investments in facilities and systems and to comply with environmental laws and regulations. As a result of these efforts, there have been no cases of environmental regulations violations in 2016.

Category(Unit: KRW million)	2014	2015	2016
Facility Operations	186.5	71.3	322.1
System Operations	66.5	119.9	95.9
Communication	616.0	373.7	181.5
New Environmental Businesses	59.0	149.2	-
Total	928.0	714	599.4

*Environmental investments do not include investments made to improve products and service quality.

Certification Status

Eco-friendly Product

Category (Unit: KRW 100 million)	2014	2015	2016
Sales	6,034	5,972	6,292

Hazardous Substance Process Management

Coway operates a hazardous substance process management system to minimize the amount of hazardous substances contained in its products.Since 2006, The company has responded to environmental regulations such as EU RoHS and WEEE for exports to Europe, and is responding to Korea’s Act on the Resource Circulation of Electrical and Electronic Equipment and Vehicles ever since Coway products fell under the terms of the law in 2014.

Category(Unit: %)	2014	2015	2016
Response Rate to Parts Containing Hazardous Substances	100	100	100

Reducing Suppliers’ Environmental Impact

Green Partnerships

Coway’s Green Partnership (GP) certification system helps Coway to produce eco- friendly products and offers Green Partner certificates for suppliers that meet Coway’s stringent environmental & quality management standards.

Category	2014	2015	2016
Suppliers Certified with Coway’s Green Partnership Certificate	55	55	100

Suppliers’ GHG Emissions

Coway has selected 26 suppliers that deliver major raw materials in large trade amounts and energy use, and now maintains carbon partnerships with them. Every year, the company measures these key suppliers’ GHG emissions and emissions per unit, reinforcing their response capabilities to climate change.

Category	Period	Major Description
Win-Win Energy Partnership	May ~ September 2016	Diagnosis of energy issues at business sites(Encourage investment)

Support for Carbon Partnerships

Coway continuously supports carbon partnership suppliers and reinforces their competitiveness by encouraging them to reduce energy use in relation to sales growth. In doing so, Coway is successfully reducing suppliers’ environmental risks duecoway to climate change.

Category	2014	2015	2016
GHG Emissions(tCO₂e)	44,445	36,181	40,994
Emissions per Unit(tCO₂e/KRW 100 million)	10.56	8.46	8.02