Sustainability | KRAFTON

KRAFTON develops plans to create a sustainable future focused on the environment, social and governance to grow the value of company and various stakeholders in the short and long term, and realizes them. In addition, Krafton practices sustainability by managing not only financial risks but also non-financial risks.

Environment

Item	Detailed item	Activity
Environmental management system	Environmental information disclosure	• Disclosing green management organization, water and energy use, waste generation, etc. for 2021 on the Environmental Management Information System
Operational environmental impact and eco-efficiency	Energy conservation	• Encourage energy saving culture to employees through resource saving campaigns • Details of automatic power off setting – Large display in front of elevator: 22:00 – Meeting room air conditioner (summer): 1st 20:00, all shut down 23:50 • Lighting – Use LED lights (Pangyo, Yeoksam: Dimming function / Seocho: Only On-Off is allowed) – Meeting room lighting: Apply sensors, etc. to automatically power off when not using
	Resources recycling	• Using recyclable paper shopping bag for employees • Using A4 recycled paper – Use ‘recycled pulp’ that uses waste paper as raw material instead of ‘natural pulp’ when producing paper, – Reduce greenhouse gas emissions from the ‘pre-manufacturing stage’ as ‘wood collection and cutting/processing stage’ have been excluded
	Carbon emissions reduction	• Operating shuttle bus – Shuttle bus use rate: about 120 applicants as of March 2023 (around 10%) • Shuttle bus – By office: Yeoksam, Seocho, Pangyo – Between stations: Gangnam Station, Yeoksam Station • Not operating vehicles for business purpose (corporate cars)
	Resources conservation and environmental protection	• Employee campaign – Upload more than one post per quarter – Upload posts or ads about resource saving and environmental protection • Collecting Nespresso coffee capsules separately – Participate in recycling program run by Nespresso • Promoting using tumbler at in-house cafe – Provide coupon when tumbler is used
Management of climate change risks and climate-related opportunities	Greenhouse gas reduction	• Using game server cloud service – Currently KRAFTON is using about 20,000 cloud (A, M) instances as of April 2023 • Not operating own data centers due to using game server cloud service – A few physical servers for in-house information systems located in third-party’s data center with lease – Not significant greenhouse gas emissions

Social

Item	Detailed Item	Activity
Industrial safety and health	Employee safety and health	• Operating Industrial Safety and Health Committee (employee member, employer member / hold meetings on a quarterly basis) – Measure annual air quality (for all offices) – Conduct bake out when moving into the Seocho office – Company-wide training on AED heart defibrillator – Annual fire drill training (Yeoksam and Pangyo in 2022 / Will also hold at Seocho in 2023) – Detect wiretapping, eavesdropping and illegal filming (closed space, meeting room, rest room, etc.) – Install dimmable equipment by replacing lighting at Pangyo (2022) – Semi-annual risk assessment activities (industrial safety and health committee activities) – Addressing agenda discussed at Industrial Safety and Health Committee meeting such as elevator issues – Adopted ISOS services that provides comprehensive safety management services during overseas business trips starting 2022 (covers both business travelers/dispatch employees, 300 business trips in 2022)
Human resources development	Employee health promotion	• Operating a system to promote employees’ health – Offer health check-up (employee and one family member) – Purchase a group insurance policy – Provide exercise expenses
	Work and life balance	• Operating KRAFTON daycare center (Yeoksam, Pangyo) – Little Fore (max. 180) • Operating an approved leave system – Refresh leave, long service leave, medical check-up, moving, birthday, etc. • Operating a self-approval leave system – 94.3% of annual leave used (as of end-2022)
	Pregnancy support programs	• Providing reserved parking spots for pregnant employees • Operating nursing rooms • Providing maternity leave and leave of absence for parental needs
	Employee family care	• Congratulations and condolences – Providing congratulatory and condolence support for the wedding, death, birth, child’s admission to elementary school, etc. and support for congratulations and operating a congratulation and condolence leave system
	Employee housing support	• Interest-free housing loan • Housing loan interest assistance • Helping new employees settle in – Sharehouse
	Fair employment	• Established the anti-discrimination policy – Stated in Articles 4 and 5 of the Work Rules
	Employee communication	• Active communication with employees – Gathering employees’ feedback and opinions through the Board of Communication (labor-management council) meeting each month (labor-management council)
	Employee satisfaction survey	• Conducting employee satisfaction surveys – Resigned employees (Culture Team): Conducting a survey on workplace satisfaction and experience at the time of resignation – New employees (L&V Team): Conducting a satisfaction survey targeting new employees three months after joining the company – Employee benefits (Focus Team): Conducting a satisfaction survey on employee benefits
	Employee education	• External training support – Offering training expense reimbursements of KRW 2M per person annually ▪ Job training ▪ Foreign language training ▪ Self-improvement training • Operating partnership with external training institutions • Providing mandatory training courses – Prevention of workplace sexual harassment – Personal data protection – Prevention of workplace bullying – Promotion of disability awareness
	Leadership education	• Operating a program to strengthen leadership competencies – Training courses ▪ Training for newly-appointed leaders ▪ Training for employees with two or more years of service ▪ Training for top management
	Employee Stock Ownership Plan	• Mandatory for KOSPI-listed companies
	Employee performance evaluation and reward	• Performance review – Conducting performance reviews twice a year (mid-year, year-end) – Providing multi-faceted feedback to leaders • Operating stock-based compensation programs for all employees – RSU – Stock options – ELI
	Talent nurturing	• Business-education partnership – KAIST Jungle ▪ Recruitment in progress every year through this program from April 2021 • Internship program – AI Fellowship: An internship program for bachelor’s degree students in top domestic/overseas universities (Jun-Aug) – AI Research Internship ▪ An internship program for master’s degree or PhD students in top domestic/overseas universities (Jun-Aug) ▪ Hiring Interns in 2022 and conducting research with the aim of achieving results – Internship on a rolling basis ▪ Job posting and hiring on a rolling basis at the request of the team and will review transition to permanent employment if needed
	Employment creation	• Selected as a leading company for job creation – In 2019, 2020 and 2022
Respect for fundamental rights	Employee harassment report	• Established a system to address employee harassment issues – Culture Team collects reports and provides counseling (workplace harassment, sexual harassment, etc.) ▪ Collects reports via HUB or email. The process is announced on HUB. – Employee harassment issues are addressed based on the company policy (Workplace sexual harassment/bullying prevention and response policy) – A formal investigation is conducted by Compliance Dept. The investigation results and review committee’s feedback is shared with internal directors
Respect for fundamental rights	Employee Mind Care	• Employee Mind Care – Psychological counseling program to help employees address issues such as job and interpersonal stress, mental health, personal concerns, and addiction – Outsourcing Mind Care program via a specialized organization with 280 centers nationwide
Local community engagement and development	Social contribution	• Refer to ‘CSR’ page
Data protection and cyber security	Data protection system	• Providing personal data protection training – As it is legally mandatory, personal data protection training is provided to all employees (incl. contract employees) once a year – Providing personal data protection training to new employees
	Data protection certification	• ISMS-P certification – Annual external audit – Certification renewal every three years
	Creation of an environment for data protection	• Running data protection-related campaigns

Governance

Item	Detailed item	Activity
Corporate governance	Corporate governance	• Corporate governance – Refer to ‘Governance’ page – Refer to ‘Corporate Governance Report’ disclosed on May 31, 2022
Business ethics	Speak Up policy	• Operating Speak Up – Can file reports on HUB or the company’s website – Business Assessment Office to first review the case and request Compliance Team to review it if it is deemed that the case should be handled by Compliance Team ▪ After the review, discuss disciplinary actions and measures to prevent a recurrence if necessary (consultation with HR) ▪ Report the final investigation results to management (Chairman)
	Compliance activities	• Annually conducting a compliance audit in each area • Conducting control activities regarding compliance and ethics in each operation • Reporting the compliance status (compliance report) to management half-yearly based on these findings
	Employee ethics improvement	• Spreading the Code of Conduct • Providing compliance training sessions such as the prevention of insider trading
	Practice and promotion of gaming ethics	• “Chapter 1 A Healthy Game” in the Code of Conduct • Posting a notice about violations of in-game ethics (Service Policy Team) • Reviewing the ethical appropriateness of vendors when pursuing collaborations (Transactions Team) • Running campaigns to prevent gaming violence
	Prevention of bribery and corruption	• Prevention of bribery and corruption – Run related campaigns ▪ Send Chuseok Holiday Gift announcements ▪ Send in-house manners campaign e-mails – Review and answer relevant inquiries from employees – Inquiries related to the Code of Conduct (gifts, entertainment, unfair trade, conflict of interests, etc.) ▪ Inquiries related to the amendment and interpretation of the Code of Conduct ▪ Inquiries related to various Compliance-related systems such as the Pre-notification of Stock Trades by Officers and Employees