Pan Ocean

Sustainability at Pan Ocean

Stakeholder Engagement

Pan Ocean performed a materiality assessment with the aim of promoting not only corporate sustainability but also environmental, social, and human sustainability. The double materiality approach was adopted in line with the GRI guidelines for the company to assess its impacts across environmental, social, human, and economic dimensions, as well as the associated risks and opportunities. In 2025, the issue pool developed in 2024 was updated through working-level workshops, benchmarking of peer companies’ material topics, and a review of the latest regulatory trends of the International Maritime Organization (IMO). The company also reevaluated the risks, opportunities, and impacts of the four material topics reported in the previous sustainability report to align with current business conditions. Following this review, Pan Ocean maintained the four existing material topics while refining their descriptions for clarification. Specifically, “Enhancing Safety and Health Management” was adjusted to “Strengthening Maritime Safety and Health Management” to better address high-risk areas, and “Establishing Ethical and Compliance Management” was revised to “Strengthening Ethical and Compliance Management” to reflect a heightened commitment. The updated materiality assessment was approved at the 2nd ESG Committee in May 2025 and reported to the 3rd Board of Directors meeting.

Material Topic Selection Process

STEP 1. Sustainability/ESG Issue Pool Development: Identified 31 Issues

Pan Ocean identified the most relevant sustainability and ESG issues within the maritime logistics industry through a frequency analysis and established an issue pool consisting of 31 issues.

Sources for Issue Pool Development

International Organizations’ Sustainability/ESG Agreements: IMO, UN, OECD, ILO, etc.

Global Sustainability/ESG Guidelines: GRI, EU ESRS, IFRS ISSB, TCFD, TNFD, etc.

ESG Evaluation Indicators: MSCI, DJSI, KCGS, etc.

Material Topics of Leading Global Shipping Companies: MSC, Maersk, CMA CGM, COSCO Shipping, Star Bulk Carriers Corp., etc.

E Environment 10	Greenhouse Gas and Energy Management Water Resources Management Biodiversity Protection Response to Climate Change Management of Environmental Pollutants Expansion of Eco-friendly Product Use Waste Management and Contribution to Circular Economy Strengthening of Environmental Management Promotion System Compliance with Environmental Laws and Regulations Investment in Eco-friendly Vessels
S Social 11	Establishment of a Human Rights Management System Respect for Diversity and Prohibition of Discrimination Job Creation and Employment Stability Pursuit of Work-life Balance Healthy Labor-management Relations Talent Retention and Development Enhancement of Safety and Health Management Social Value Creation through Social Contribution Collaborative Growth Activities and Supply Chain Sustainability Management Management of Impact on Local Communities Quality Management and Customer Satisfaction
G Governance 8	Board Transparency and Integrity Establishment of Sustainable Management Governance Establishment of Ethics and Compliance Management Strengthening of Anti-Corruption Measures Fair Trade Practices and Regulatory Compliance Information Security and Cybersecurity Enhancement of Company-wide Risk Management Tax Policy
Others 2	Securing New Growth Engines Protection of Shareholder Rights

* Issue pool was updated to reflect the latest IMO regulatory developments in the second half of 2024 and a review of current material topics from other companies in the industry.

STEP 2. Stakeholder Interest Assessment: Survey

Pan Ocean carried out a survey involving 127 internal stakeholders, including employees from both Pan Ocean and POS SM, along with 103 external stakeholders comprising customers, suppliers, local communities and NGOs, government and affiliated agencies, media, ESG rating firms, consulting and advisory organizations, as well as shareholders and investors. Through this survey, the level of interest in 31 issues was assessed, and a total of nine issues were identified as key areas of interest for stakeholders.

E Environment 4	Response to Climate Change Greenhouse Gas and Energy Management Management of Environmental Pollutants Investment in Eco-friendly Vessels
S Social 4	Enhancement of Safety and Health Management Establishment of a Human Rights Management System Respect for Diversity and Prohibition of Discrimination Collaborative Growth Activities and Supply Chain Sustainability Management
G Governance 1	Establishment of Ethics and Compliance Management

* External stakeholders’ opinions in the second half of 2024, such as customer and investor requests, were reflected in the interest level.

STEP 3. Impacts and Opportunities & Risks Analysis

Employees from Pan Ocean and POS SM's operational departments engaged in mapping out the business value chain. Sustainability issues identified through the issue pool and stakeholder interest survey were then integrated into each phase of the value chain. This approach evaluated the actual impacts, risks, opportunities, and materiality of these issues on the management opera-tions of Pan Ocean and POS SM. This analysis identified four issues as the most significant topics for sustainable management.

E	Greenhouse Gas and Energy Management
S	Maritime Safety and Health Management Enhancement Collaborative Growth Activities and Supply Chain Sustainability Management
G	Strengthening Ethics and Compliance Management

STEP 4. Management and Board Review and Approval

The four material topics determined through steps 1, 2, and 3 were reviewed by the management, approved by the ESG Committee, and reported to the Board of Directors.