POSCO identifies rapidly evolving market conditions and environmental regulations—both domestic and international—as potential risks and opportunities, recognizing their impact on corporate operations. These factors are reflected in our mid- to long-term business strategies and investment decisions. To address policy risks, we continuously monitor relevant regulations and policies, proactively identify potential threats, and actively participate in policy discussions to support rational and effective policy development. 

We also conduct environmental impact assessments to determine key influencing factors and their level of impact, and implement appropriate mitigation measures to minimize environmental harm. In addition, environmental diagnostics are conducted by each plant’s environmental team to prevent risks such as environmental accidents or legal violations, and findings are regularly reported to the CEO through management meetings and executive briefings. Each steelworks also conducts daily environmental patrols to further reduce environmental impact and ensure rapid response to potential risks.

POSCO conducts annual reviews to assess whether its business sites are located in water-stressed or high-risk areas, and categorizes water risks to prioritize management at sites with high water stress or significant water withdrawal volumes. 

In March 2024, POSCO signed a business agreement with the Ministry of Environment(MOE) to enhance joint responses to climate change and the water crisis, aiming to raise mutual awareness of water-related risks.

As of August 2023, Gwangyang was confirmed to be located in a “High Water Stress” area according to the WRI’s 2023 Water Stress analysis. To mitigate risks such as reduced plant utilization due to water shortages, we have established a comprehensive response plan and maintain emergency measures in the event of supply restrictions.

【 Projected Water Supply-to-Capacity Utilization Scenario 】

【 Emergency Response Organization Chart 】

・POSCO has established a water conservation plan to prepare for emergencies such as droughts and is building a cooperative framework with
   relevant government agencies to ensure water security.
   - Water Conservation Measures: In the event of a drought or other emergency, we aim to maximize the operation of seawater desalination
     facilities—from 20,000 to 30,000 tons/day.
   - Public-Private Partnership: Interagency Collaboration: In June 2024, POSCO Gwangyang Works signed a business agreement with the K-Water
     (Yeosu) to secure a stable supply of industrial water. In the same month, we participated in a Water Sector Consultative Group led by the MOE.
     In December 2024, we reached an agreement on the establishment of a regional water supply network for the Gwangyang Bay area, to be
     led by the Yeongsan River Authority.

In February 2021, POSCO established the Pro-Environment Consulting Section to lead comprehensive odor mitigation initiatives at Pohang Works.
This team conducts full-cycle improvement efforts—ranging from identifying odor sources to proposing technical solutions—leveraging POSCO’s expertise in facility operations and environmental enhancement technologies, in collaboration with Pohang City. Since its launch, the team has identified primary odor sources at facilities such as fertilizer manufacturers and steel subcomponent producers, assessed the performance of odor control equipment (e.g., scrubbers), and developed tailored improvement plans. Notably, to address odors at the source, we collaborated with the Research Institute of Industrial Science & Technology (RIST) to develop technologies that replace odor-generating raw materials with low-odor POSCO by-products, and to substitute conventional binders used in fertilizer manufacturing with odorless alternatives. The results of odor diagnoses and tailored improvement plans were shared with relevant companies and the City of Pohang through formal briefings. Based on these findings, each site upgraded its prevention systems—such as installing new scrubbers—and continues to test and adopt alternative low-odor raw materials.
Among the improvement measures proposed by the Pro-Environment Consulting Section, items requiring capital investment are being implemented at each site in conjunction with Pohang City’s SME-scale prevention facility support program. In 2024, POSCO entered into an agreement with Pohang City and local steelworks to encourage voluntary participation in odor reduction initiatives across steelmaking sites.