With mandatory ESG (environmental, social and governance) disclosure set to take effect in 2028, the display industry is stepping up its preparations. Samsung Display, an unlisted company, must respond to the disclosure obligations of its parent Samsung Electronics, while LG Display faces direct obligations as a company listed on the Kospi.
Within the industry, however, the consensus is that global customers are setting a higher bar than the mandatory disclosure requirements themselves. Samsung Display said many major tech companies have set targets to achieve carbon neutrality by 2030, making accelerated decarbonization efforts essential.
While the company has achieved meaningful reductions in its Scope 1 and 2 emissions — those generated directly and indirectly — Scope 3 emissions covering the entire supply chain still need improvement. Because key customers rigorously assess life cycle assessments (LCA) and product carbon footprints (PCF), Samsung Display plans to pursue a joint response with its suppliers.
Kim Dong-hyun, head of Samsung Display's Climate Strategy Group, said the gap between national and corporate timelines is a pressing concern, speaking Monday at the Display Industry ESG Disclosure Mandatory Response Support Seminar at L Tower in Seoul. "The national carbon neutrality target is 2050, but major customers are asking us to achieve it by 2030," he said. "They are particularly demanding carbon neutrality all the way through Scope 3."
Companies are required to disclose greenhouse gas emissions across three scopes: Scope 1 covers direct emissions, Scope 2 covers indirect emissions from purchased energy, and Scope 3 covers emissions across the entire supply chain, including those generated by suppliers.
Apple is the prime example. The tech giant, which sources smartphone and laptop OLED panels from Samsung Display, has set a target to achieve carbon neutrality across its entire carbon footprint by 2030 — a goal that effectively extends to Samsung Display as part of Apple's supply chain.
Samsung Display said it is working to meet these standards. Its Scope 1 and 2 greenhouse gas emissions fell 17 percent from 2022 levels, and the water reuse rate at its Asan facility stands at 82 percent.
The company is also addressing chemical regulations. Efforts are underway to reduce hazardous substances such as per- and polyfluoroalkyl substances (PFAS) used in display production processes.
"Process gas emissions have continued to trend downward year after year," Kim said. "We view investment in expanding process gas treatment facilities — particularly for aging production lines — as a cost of preparing for the future."
But some challenges cannot be resolved by Samsung Display alone. Last year, 1.527 million tons — 40 percent — of the company's total Scope 3 greenhouse gas emissions of 3.801 million tons came from suppliers.
Global customers rigorously calculate and disclose the carbon emissions of their products through LCA. Apple, for instance, publishes LCA data for every product line, including iPhones and iPads. The 1TB model of the iPhone 17 Pro generated 93 kilograms of CO2 equivalent during production and transport.
"Customers are asking how much carbon is emitted per display panel and are having detailed, data-driven discussions about how to reduce that figure going forward," Kim said. "This applies to Scope 1 and 2, and it extends to Scope 3 as well."
The issue is tied not only to customer demands but also to the mandatory ESG disclosure regime beginning in 2028. Scope 3 disclosure carries a three-year grace period and will be required from 2031. Once reporting begins, pressure to cut greenhouse gas emissions across the entire supply chain is expected to intensify.
"Samsung Display has already provided guidelines to its suppliers," Kim said. "We will also share methods for reducing carbon emissions so we can collaborate on practical solutions."
jeongwan@heraldcorp.com
