POSCO operates the Group Supply Chain Management Council to ensure a sustainable supply chain. The council is chaired by the Head of POSCO’s Procurement and Investment Division and brings together purchasing executives from POSCO and its group companies to discuss supply chain strategies, emerging issues, and risk management measures. 

POSCO has outlined the fundamental principles that all suppliers conducting business with the company must follow through the Supplier Code of Conduct. The Code comprises 42 provisions across five areas―labor, health and safety, environment, ethics, and management systems―based on the Responsible Business Alliance (RBA) Code of Conduct and POSCO’s internal regulations. We distribute detailed guidelines to promote understanding. In response to the growing need to enhance ESG practices across the external supply chain, we have been collecting suppliers’ signed commitments to the Code of Conduct through our e-procurement portal since 2024.

POSCO promotes sustainability throughout its supply chain by implementing a purchasing policy grounded in ESG principles.

POSCO accepts supplier registration applications at any time from companies seeking to do business with the company. In accordance with our fair trade policy, we ensure full transparency by disclosing all information related to Sourcing Groups (Purchasing Item Groups). The Internal Transaction Review Committee, established to prevent unfair internal transactions, reinforces POSCO’s commitment to ethical procurement.

POSCO collaborates with global suppliers of raw coal and iron ore to develop raw material technologies  to minimize environmental impact. We implement structured supply chain management practices to mitigate potential social risks associated with mineral extraction. In addition to our efforts to establish a responsible mineral sourcing system, manage ESG risks, and enhance communication with both internal and external stakeholders, we create social value through the Go Extra Mile (GEM) Fund―a one-on-one matching program with raw material suppliers―and give priority to companies with strong social responsibility practices.

POSCO recognizes that the sustainable growth of small and medium-sized suppliers is critical to maintaining a stable procurement system. We promote technical collaboration with our suppliers, support their business operations through various programs, and help strengthen their capabilities through training and consulting initiatives.

POSCO enhances its purchasing competitiveness by adopting a Total Cost of Ownership (TCO) approach that optimizes value across environmental, quality, and logistics considerations. We identify high-performing suppliers and offer incentives such as priority negotiation rights to strengthen supply chain resilience. We also apply item-specific sourcing strategies tailored to business impact and procurement complexity.

POSCO operates a comprehensive ESG risk management system throughout the entire supplier lifecycle―from registration and performance evaluation to post-contract oversight―to prevent environmental, human rights, and other ESG-related risks within the supply chain.

POSCO continuously monitors registered suppliers to strengthen supply chain resilience and mitigate potential risks. We may suspend transactions with suppliers found to have ESG-related issues, such as violations of environmental or safety standards. We also deregister suppliers whose credit ratings fall below the minimum threshold for Sourcing Group registration (below grade B), or those with no bid participation in the past year or no business transactions with POSCO for two consecutive years.

In 2023, POSCO established “The Supply Chain ESG Due Diligence Process” by incorporating the ESG rating agencies and conducted the initial round of due diligence. In 2024, we revised and distributed the Supplier Code of Conduct to reflect updated external requirements, including those related to customers and assessment cycles. 

In March 2024, we selected 356 suppliers―with annual transaction volumes exceeding KRW 500 million and a transaction history spanning the past three consecutive years―for ESG due diligence, and completed assessments for 331 of them. In collaboration with a third-party rating agency, we conducted on-site due diligence for companies flagged as high-risk during document-based reviews or those that underperformed in the previous year’s on-site assessments. For suppliers receiving improvement recommendations, we provide tailored support through one-on-one solutions delivered by specialized consulting firms.

POSCO has established a robust policy and operational framework for responsible mineral¹⁾ sourcing, aligned with the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals. We are committed to strengthening our capabilities in responsible purchasing and supply chain oversight. All newly registered suppliers are required to sign a consent form agreeing to POSCO’s Responsible Minerals Policy. If any minerals are identified as originating from Conflict-Affected and High-Risk Areas (CAHRAs²⁾),* we engage exclusively with smelters certified under the Responsible Minerals Assurance Process (RMAP), a globally recognized third-party validation program. To enhance traceability, we collect detailed supply chain data using our own supplier and smelter survey templates, along with the Conflict Minerals Reporting Template (CMRT) and Extended Minerals Reporting Template (EMRT) provided by the Responsible Minerals Initiative (RMI). Suppliers identified as high-risk through internal assessments are subject to enhanced monitoring and management in accordance with POSCO’s established risk response protocols. Since 2021, POSCO has published its Responsible Minerals Report annually, ensuring transparency in disclosing all related management activities.

Since 2020, POSCO has expanded its responsible minerals management beyond tin and tungsten―two of the four key conflict minerals (tin, tungsten, tantalum, and gold, collectively referred to as 3TGs)―to include cobalt, due to its association with serious human rights issues such as child labor in mining operations. As of 2024, we source minerals from conflict-affected and high-risk areas exclusively through smelters certified under the Responsible Minerals Assurance Process (RMAP).

We operate a dedicated grievance and appeals channel via our Responsible Minerals email account to ensure stakeholders can share their concerns with POSCO(Sending grievances or objections via e-mail without a separate form responsibleminerals@posco.com ) 

We are also responding to various inquiries and grievances related to supplier registration and performance evaluation with an open attitude. It operates a dedicated staff to communicate with suppliers’ difficulties in real time and electronic purchasing system.

Through the “Open Purchase Counseling Room” within the “e-Procurement”, we listen to the supplier’s opinions and give feedback I have it. (Purchase Division 054-220-5000, Cooperation Division 054-220-7000)