POSCO ESG

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Double Materiality Assessment

POSCO regards the top 5 key issues identified through POSCO HOLDINGS’ double materiality assessment in the steel sector as core improvement areas for the future enhancement of the ESG management system, and focuses on managing them intensively.

POSCO HOLDINGS implements a double materiality assessment to understand the demands and expectations of various stakeholders and incorporate them into the group’s ESG strategy. Through the Group ESG Council, direct communication with internal and external stakeholders, surveys, and round tables, we identify major issues impacting the sustainability of our business model and value chain.

POSCO HOLDINGS Double Materiality Assessment Process

Process	Purpose	Key Considerations
1. Understanding and Selection	To identify significant potential impact on the sustainability of POSCO HOLDINGS’ business model and value chain	SASB industry indicators for each business company/value chain ESG evaluation items from the global top 4 rating agencies (MSCI, Sustainalytics, ISS ESG, KCGS) Inquiries from key stakeholders, such as investors Analysis of materiality assessment results and important ESG issue reports from peer industries for each business company
2. Issue Identification	To identify the social, environmental, and financial impact (Risk & Opportunity) of identified ESG issues	[Social and Environmental Impact] Social and environmental impact of ESG issues identified in 5 business models and value chains Positive/negative, actual/potential impact of POSCO HOLDINGS’ business activities on the external environment [Financial Impact] Financial impact of ESG regulations/laws/policies related to identified issues Opportunities/risks that the external environment poses to POSCO HOLDINGS’ financial value
3. Double Materiality Assessment
	Group ESG Council	Analysis of agendas discussed at the CEO-chaired Group ESG Council (29 in 2023)
	Direct communication with stakeholders (ESG NDR, conference calls, etc.)	online/offline requests and responses from key stakeholders, such as investors (156 in 2023)
	Internal and external stakeholder surveys	Surveys conducted with 36 internal and external experts with high understanding of POSCO HOLDINGS’ business and ESG
	Key stakeholder round tables	Gathering opinions from investors, government, customers/suppliers through the 3rd stakeholder roundtable
4. Selection of Key Issues	Prioritization of key ESG issues	Prioritization of key ESG issues based on quantitative analysis results, report to the Board of Directors, and final confirmation

POSCO HOLDINGS Double Materiality Assessment Results

Based on the selection results of key ESG issues by business sector for internal and external stakeholders, the top 5 issues for the steel sector are as follows. POSCO will actively implement sustainable management in the steel industry by prioritizing these top 5 issues as core areas and managing them intensively.