SOUTH KOREA. Lotte Duty Free has established Korean duty free’s first ESG (Environmental, Social and Governance) Value Management Commission and hosted an opening ceremony to celebrate the launch of the initiative.
At the ceremony, Lotte Duty Free laid down an action plan for new eco-friendly initiatives, corporate social responsibility and increased corporate management transparency.
The plan includes the following major elements:
Introducing eco-friendly initiatives in key business areas
Lotte Duty Free has selected four areas of its business to implement environmentally-friendly initiatives.
These include gradually phasing out the use of plastic packaging associated with duty free products through the introduction of biodegradable packaging materials. Plastic bags are to be replaced with eco-friendly paper shopping bags at all Lotte Duty Free branches.
Meanwhile, the Lotte Duty Free logistics centre in Incheon will work towards reducing carbon emissions. This will be achieved, for example, by reducing electricity consumption by a target of -67% through the introduction of photovoltaic power generation facilities. In addition, all one-tonne delivery vehicles will be converted to electric vehicles by the end of this year, and an electric vehicle charging station will be installed at the facility.
Lotte Duty Free will also encourage the listing of “eco brands”, with the opening of an eco-friendly brand zone at its World Tower store in Seoul this year.
In all Lotte stores, further digitisation will be encouraged, for example to replace paper receipts with electronic receipts, sent via SMS on mobile devices. The aim is to reduce the printing volume associated within stores by approximately -80% by 2023.
Helping local communities and small businesses
Lotte Duty Free is reorganising its social contribution business under the name
‘Lotte Duty Free Impact’. In particular, the company is planning to carry out various projects with a focus on a ‘win-win’ with local communities and small businesses.
For the local community, Lotte’s STARUPS project, which has been running since 2019, will continue. It focuses on fostering young businesses in the region to create local jobs and revitalise tourism. As part of this, the travel retailer is planning to support ten fledgling businesses in Busan and Jeju with an additional subsidy of KW500 million (US$441,000) over the next two years. In addition to covering business costs, Lotte Duty Free will also provide training and marketing support.
Lotte Duty Free is also introducing its new CHEERUPS project to help small business owners. It will start in the second half of this year, and will include support for 30 restaurants. Initiatives will include helping these restaurants to reduce waste with the provision of eco-friendly food containers and cutlery.
Strengthening the fair trade compliance system
On the governance side, Lotte Duty Free has pledged to strengthen its fair trade compliance systems. It is doing this in order to ensure transparency in its transactions with product suppliers.
Lotte added that it plans to realise the economic value and social benefits of the company through the internalisation of the Compliance Program at corporate level.
As part of its commitment to an improved legal compliance system, Lotte said it is appointing a Compliance Manager to its Board of Directors and will conduct customised fair trade training for employees.
Lotte noted that in December 2019, it was recognised for its efforts to establish an internal legal compliance system, and was the first in the duty free industry to obtain an A grade in the CP rating evaluation from the Fair Trade Commission.
Lotte Duty Free CEO Lee Kap is chairing the ESG Value Management Commission. He said: “We will create ESG value in all of our business sectors under the ESG management vision of being the ‘most trusted travel partner’. We want to move forward in a state of win-win and cooperation by looking at areas such as customers and society to realise sustainable growth through ESG management.”
