Climate Change Data

Environmental Metrics

ESG Focus Areas

• Customer Satisfaction & Quality Management
• Community Involvement & Development
• Transparency & Business Ethics
• Integrated Environmental Management
• Climate Change & GHG Management
• Employee Value Creation
• Employee Health & Safety Management
• Win-Win Supply Chain Partnership

Environmental Achievements

• Increased waste recycling by 11%
• Increased recycling of treated water by 26%
• Recycled 68% of end-of-life tires
• 52% of products were eco-friendly (based on the number of units)
• Reduced intensity-based GHG emissions by 5% from 2013
• Reduced GHG emissions at domestic plants by 7,488 tCO2-eq/year
• Obtained ISO 14001 certification
• Obtained PROPER Blue grade for two consecutive years (Indonesia Plant)

Social Achievements

• Launched employee health care program
• Scholarship program
• Employee volunteering activities (7,321 employees, 30,876 hours)
• Assisted underprivileged women in obtaining their driver’s license (57 women)
• Donated 40 vehicles through Car Sharing initiative
• Donated 5,528 tires through Tire Sharing initiative
• Tuieum Bus program benefited 16,673 persons
• Opened the 2nd Coffee Zoo for vocational training
• Implemented a whistle-blower reward system
• Improved risk management system (12 areas → 22 areas)

Governance Achievements

• Developed and operated a whistle-blower reward system
• Improved risk management system and process
• Established the Business Continuity Management System (BCMS)
• Offered fair trade training
• Offered sexual harassment prevention training

Climate Goals & Targets

Environmental Challenges

• Global economic downturn and increased competition in the tire industry
• Tightening global environmental regulations
• Increasing stakeholder interest in business risks and CSR
• Need to improve communication with stakeholders
• Need to address customer complaints effectively
• Need to manage suppliers' CSR issues
• Need to reduce GHG emissions and energy consumption

Mitigation Strategies

• Increased investments in R&D and technological prowess
• Established an integrated CSR management system
• Implemented a crisis management system
• Conducted stakeholder interviews and surveys
• Improved customer service through SMART CARE program
• Expanded supplier CSR evaluations and audits
• Set mid-long-term GHG emissions reduction targets
• Implemented energy-saving initiatives

Supply Chain Management

Supplier Audits: 65 critical suppliers

Responsible Procurement

• CSR evaluations of suppliers
• Code of conduct for suppliers
• Support for suppliers' sustainability management
• Green sourcing policy

Climate-Related Risks & Opportunities

Transition Risks

• GHG emission trading schemes and other regulations
• Depletion of energy resources

Opportunities

• Development of energy-efficient products
• Cost savings from improved energy efficiency
• Improved brand value

Reporting Standards

Frameworks Used: GRI G4

Certifications: ISO 14001, OHSAS 18001

Third-party Assurance: Korea Productivity Center

UN Sustainable Development Goals

• Goal 5: Gender equality
• Goal 8: Decent work and economic growth
• Goal 10: Reduced inequalities
• Goal 13: Climate action

Initiatives contributing to gender equality, economic growth, reduced inequalities, and climate action.

Sustainable Products & Innovation

• Eco-friendly tires
• Lightweight tires
• Run-flat tires

Awards & Recognition

• Dow Jones Sustainability Indices
• Korea CSR Film Festival
• Korea’s Most Admired Companies
• Mercury Excellence Awards
• Korean Standard-Quality Excellence Index (KS-QEI)
• Service Quality Certification (SQ)
• Korea Brand Power Index (K-BPI)
• National Brand Competitiveness Index (NBCI)
• Best Korea Brands
• Red Dot Award
• Japanese Good Design Award
• iF Design Award

Environmental Metrics

ESG Focus Areas

• Responsible Corporate Governance
• Integrated Environmental Management
• Climate Change and GHG Management
• Community Involvement and Development
• Transparency and Business Ethics
• Employee Value Creation
• Employee Health and Safety Management
• Win-Win Partnership in the Supply Chain

Environmental Achievements

• Reduced GHG emissions by 11% in 2020 compared to 2018
• Ratio of eco-friendly products (based on quantities): 50.5%
• Waste discharge intensity: 43.8 kg/ton of finished product (2019) and 42.4 kg/ton of finished product (2020)
• Reduced tire rolling resistance by up to 14% compared with existing products

Social Achievements

• Launched Donggeurami Partners, a standard workplace for people with disabilities
• Car donation: 50 vehicles
• Tire donation: 5,130 (globally)
• Tuieum Bus: 45 buses
• Increased the number of employees with disabilities: 141 (2019) to 146 (2020)
• Ratio of female managers at senior manager or higher position increased by 1.1%p (7.0% → 8.1%)

Governance Achievements

• Established the Governance Committee under the ESG Steering Committees in 2021
• Acquired Platinum grade in ESG evaluation by Ecovadis
• Listed on Dow Jones Sustainability Index (DJSI) World for 5 consecutive years

Climate Goals & Targets

Environmental Challenges

• Global economic recession due to COVID-19
• Supply chain disruptions due to COVID-19
• Tightening global regulations on harmful chemical substances
• Climate change and the need for carbon neutrality
• Growing uncertainties in the business environment

Mitigation Strategies

• Secured liquidity preemptively
• Developed Global Chemical Information System (G.CIS) to monitor regulatory environment and develop alternatives
• Established mid-to-long-term greenhouse gas emissions reduction goals
• Reinforced risk management and emergency response activities
• Established Business Continuity Management System (BCMS)

Supply Chain Management

Supplier Audits: 64.6% of critical suppliers received on-site audit at least once for the past 3 years

Responsible Procurement

• ESG assessment for suppliers
• Supplier Idea Awards
• Ethics management education and letter to suppliers
• Ethics management practicing pledge

Climate-Related Risks & Opportunities

Transition Risks

• Carbon border tax
• Increased carbon tax

Opportunities

• Development of energy-efficient products
• Renewable energy, hydrogen energy and secondary cell battery market

Reporting Standards

Frameworks Used: GRI Standards (Comprehensive Options)

Certifications: ISO 14001 (all plants), ISO 22301 (Daejeon/Keumsan/Hungary Plants), ISO 45001 (Daejeon, Geumsan, and Hungary Plants)

Third-party Assurance: DNV

Sustainable Products & Innovation

• Eco-friendly tires with eco-friendly materials
• Tires with 10% less tire rolling resistance

Awards & Recognition

• Listed on DJSI World for 5 consecutive years
• Listed on DJSI Asia Pacific for 8 consecutive years
• Listed on DJSI Korea for 10 consecutive years
• Carbon Management Sector Honors by CDP Korea
• Platinum Grade by EcoVadis
• Various other awards

Environmental Metrics

ESG Focus Areas

• Climate Change

Environmental Achievements

• Reduced Scope 1 and 2 emissions by 4.3% through various initiatives including high-efficiency facilities, energy recycling, and leakage prevention.
• Geumsan plant achieved ISCC PLUS certification for sustainable material use.

Social Achievements

• Increased ESG assessment reflection rate for supplier evaluation from 5% to 10%.

Governance Achievements

• Established ESG Committee in March 2021 to monitor sustainability risks, including climate change.

Climate Goals & Targets

Environmental Challenges

• Compliance with Emission Trading Systems (ETS) in Korea and Hungary.
• Strengthened emissions-reporting obligations.
• EU Directive on Corporate Sustainability Due Diligence.
• Transitioning to lower emissions technology.
• Changing customer behavior reducing demand for products.
• Increased stakeholder concern regarding ESG performance.
• Acute physical risks from extreme weather events.
• Chronic physical risks from changing precipitation patterns.
• Increased cost of raw materials.
• Decreased demand for winter tires due to rising temperatures.

Mitigation Strategies

• Professional consulting to comply with ETS, purchasing emission credits, and independent assurance of Scope 1 and 2 data.
• Various activities to reduce greenhouse gas emissions in worksites (equipment replacement, process optimization, renewable energy).
• Internal legal consulting process for legal risks.
• Business diversification efforts through INB Corporation.
• Investment in R&D for low-carbon products and electric vehicle tires.
• Annual life cycle assessment to monitor environmental impact.
• Dedicated ESG management team.
• Leakage prevention and repairs to prepare for natural disasters.
• Participation in GPSNR for sustainable natural rubber supply chain.
• R&D to utilize dandelion as an alternative to natural rubber.
• Investment in expanding summer tire production.

Supply Chain Management

Supplier Audits: 100% of suppliers by number, 100% total procurement spend

Responsible Procurement

• ESG assessments of suppliers
• ESG assessment reflection rate increased from 5% to 10% in 2021.
• ESG guidance and corrective action plans for suppliers.

Climate-Related Risks & Opportunities

Physical Risks

• Natural disasters (cyclones, hurricanes, typhoons)
• Changing precipitation patterns (heavy rain, snow)

Transition Risks

• Carbon pricing mechanisms (ETS, carbon tax)
• Enhanced emissions-reporting obligations
• EU Directive on Corporate Sustainability Due Diligence
• Transitioning to lower emissions technology
• Changing customer behavior
• Increased stakeholder concern

Opportunities

• Use of recycling (end-of-life tire pyrolysis)
• Participation in carbon market (selling emission credits)
• Use of lower-emission sources of energy (renewable energy)
• Development and/or expansion of low emission goods and services (low-carbon tires, electric vehicle tires)
• Ability to diversify business activities

Reporting Standards

Frameworks Used: Greenhouse Gas Protocol, IEA CO2 Emissions from Fuel Combustion Highlights, IPCC Guidelines for National Greenhouse Gas Inventories (2006)

Certifications: ISCC PLUS

Third-party Assurance: DNV

Sustainable Products & Innovation

• Kinergy Eco 2 tire (A rating in European tire labeling system)
• iON electric vehicle tire brand
• Kinergy 4S2 and Kinergy 4S 2 X all-weather tires using bio-based polymers

Awards & Recognition

• 2021 National Green Factory recognition (Chongqing plant)

Environmental Metrics

ESG Focus Areas

• Eco Value Chain
• Sustainable Product
• Responsible Engagement

Environmental Achievements

• Reduced GHG emissions intensity by 2.74% against 2021 (absolute volume up by 1.88%), aiming for a 46.2% reduction by 2030 from the 2019 baseline.
• Reduced water withdrawal intensity, aiming for a 30% reduction by 2030 from the 2018 baseline.
• Reduced waste discharge intensity, aiming for a 30% reduction by 2030 from the 2018 baseline.
• Developed a tire composed of 55% sustainable raw materials.
• Achieved ISCC PLUS certification at Geumsan Plant.

Social Achievements

• Launched iON, the world’s first EV-only, full line-up tire brand.
• Opened Hankook Technoring, Asia’s largest tire proving ground.
• Continued to invest in R&D and developed innovative technology to pioneer the global EV tire market.
• Total volunteer hours: 9,133 hours; Total Corporate Philanthropic Expenses: KRW 4.4 billion.
• Achieved ‘zero high-consequence injuries’.

Governance Achievements

• Became the first in the Korean tire industry to receive approval from the SBTi for its 2030 near-term greenhouse gas (GHG) reduction goals and 2050 Net Zero target.
• Established the Corporate Governance Charter.
• Listed in the Dow Jones Sustainability Index (DJSI) World for the seventh consecutive year.
• Introduced a compliance system based on transparent and ethical business conduct.

Climate Goals & Targets

Environmental Challenges

• Global inflation, Russo-Ukrainian War, Chinese COVID-19 lockdown policy leading to raw material price surges and logistics expense increases.
• Fluctuations in exchange and interest rates.
• Potential for declining demand for automotive tires due to future mobility shifts (autonomous driving, EVs).
• Climate change risks (extreme weather, supply chain disruptions).
• Increasing ESG assessments and demand to respond to ESG assessments.

Mitigation Strategies

• Monitored financial costs and managed foreign exchange positions.
• Maintained appropriate levels of liquidity and borrowings.
• Established a scalable mobility ecosystem.
• Developed a carbon neutral roadmap and strategies.
• Implemented energy and GHG emissions reduction activities.
• Provided sustainability guidance to suppliers and established a supplier due diligence system.
• Conducted R&D on low-carbon products and raw materials.
• Established a renewable energy use strategy.
• Pursued product LCAs.
• Secured low-carbon raw materials and achieved certification (ISCC PLUS, etc.).
• Engaged in regular worksite maintenance.
• Strengthened safety training for emergency preparedness.
• Identified and implemented improvement tasks based on ESG assessment results.

Supply Chain Management

Supplier Audits: 100% response rate among 413 suppliers in 2022; On-site audits planned for 2023.

Responsible Procurement

• ESG self-assessments for suppliers
• Supplier sustainability guidance
• Conflict mineral policy
• Sustainable natural rubber program
• Participation in blockchain-based sustainable natural rubber project

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events (typhoons, torrential downpour, heavy snowfall, hurricanes)
• Change in climate/ecosystem due to rising average temperatures
• Disruption to raw material supply

Transition Risks

• GHG emissions reduction regulations
• Legislation for climate disclosures
• Legislation for supply chain due diligence
• CBAM (Carbon Border Adjustment Mechanism)
• Transition to low-carbon technology/raw materials
• Market risk (increasing customer demand for carbon emission reductions)
• Fluctuations in fossil fuel prices
• Changing trends in eco-friendly consumption
• Reputational risk

Opportunities

• Participation in carbon markets
• Use of low-carbon energy
• Resource efficiency
• Rising demand for low-carbon products and services
• Resiliency (securing and diversifying alternative resources)

Reporting Standards

Frameworks Used: GRI Standards 2021, TCFD, UN SDGs, SASB

Certifications: ISCC PLUS, ISO 45001, ISO 14001, ISO 37301

Third-party Assurance: Korea Productivity Center

UN Sustainable Development Goals

• Goal 1: No Poverty
• Goal 2: Zero Hunger
• Goal 3: Good Health and Well-being
• Goal 4: Quality Education
• Goal 5: Gender Equality
• Goal 6: Clean Water and Sanitation
• Goal 7: Affordable and Clean Energy
• Goal 8: Decent Work and Economic Growth
• Goal 9: Industry, Innovation and Infrastructure
• Goal 11: Sustainable Cities and Communities
• Goal 12: Responsible Consumption and Production
• Goal 13: Climate Action
• Goal 14: Life Below Water
• Goal 15: Life On Land
• Goal 16: Peace, Justice and Strong Institutions
• Goal 17: Partnerships for the Goals

Various initiatives contributing to these goals are described throughout the report.

Sustainable Products & Innovation

• iON EV tires
• Tires with 55% sustainable raw materials
• Lightweight tires
• Retread tires
• i-Flex non-pneumatic tire
• Upcycled longboard

Awards & Recognition

• Dow Jones Sustainability Index (DJSI) World, Asia Pacific, Korea
• S&P Global Industry awards
• LACP 2022 Spotlight Awards
• Korean Standards-Quality Excellence Index (KS-QEI)
• Korea Brand Power Index (K-BPI)
• National Brand Competitiveness Index (NBCI)
• Korea’s Most Admired Company Awards
• iF Design Award
• Red Dot Design Award
• Red Dot Good Design Korea Award
• IDEA (International Design Excellence Awards)
• 2022 Awards for New Digital Award
• Web Award Korea 2022

Environmental Metrics

ESG Focus Areas

• Climate Change Response
• Resource Conservation and Efficiency Improvement
• Eco-friendly Product Development
• Sustainable Raw Materials and Sourcing
• Human Resources Development and Management
• Respect for Human Rights and Diversity
• Product and Service Quality Safety Management
• Strategic Supplier ESG Management
• Sound Governance
• Support for Community Growth

Environmental Achievements

• Reduced Scope 1 and 2 emissions from the manufacturing phase by 4.45% year-on-year in 2023.
• Achieved a 14.6% share of tires rated A & B in rolling resistance based on revenue.
• Mass production of tires with 45% sustainable raw materials content.
• Development of electric vehicle tires with 70% sustainable materials content.
• Won the 2023 CDP Carbon Management Sector Honors.
• Reduced water withdrawal by nearly 270,000 tons against 2022.
• Reduced waste oil generation by 147.73 tons in 2023.

Social Achievements

• Employees volunteered over 10,000 hours in 2023.
• Increased percentage of female leaders to 8.0% in 2023.
• Achieved 100% ethical practice pledge signing rate in Korea and 99% overseas.
• Provided ethics training to 95% of employees in Korea and 97% overseas.
• Named a great employer for people with disabilities in 2023.

Governance Achievements

• Established governance in accordance with domestic best practices.
• Stipulated the Code of Ethics for Independent Directors.
• Increased the number of independent directors on the ESG Committee from four to six.

Climate Goals & Targets

Environmental Challenges

• Expanding ESG regulations.
• Impact of enhanced vehicle exhaust emission regulations (Euro 7).
• Rapid industrial shift resulting from future mobility innovation.
• Mounting importance of roads and tires amid the mainstreaming of autonomous driving.
• Fire at the Daejeon Plant.

Mitigation Strategies

• Operating a well-structured ESG management system.
• Improving braking and rolling resistance performance of EV tires.
• Developing dedicated compounds and structures for EV tires to reduce tire abrasion.
• Developing a recycling process to make new tires from end-of-life tires.
• Transferring production to other plants to meet customer needs after the fire.
• Investing in facility upgrades and modernization at the Daejeon Plant.
• Implementing a four-year master plan to upgrade firefighting equipment.
• Conducting fire prevention assessments for global plants.

Supply Chain Management

Supplier Audits: On-site audits performed on prioritized suppliers.

Responsible Procurement

• ESG pre-screening in purchase contracts.
• Mandatory submission of pre-screening results.
• Verification of environmental certifications (ISO 14001, ISCC PLUS).
• Supplier sustainability guidance.
• Supplier health and safety council.

Climate-Related Risks & Opportunities

Physical Risks

• Increased frequency of abnormal and extreme weather events.
• Impairments to production/infrastructure facilities.
• Disruption to raw material supply.

Transition Risks

• GHG emissions reduction regulations.
• Climate disclosures legislation.
• Supply chain due diligence laws.
• CBAM.
• Transition to low-carbon technology and raw materials.
• Increased customer demand for carbon emissions reduction.
• Fluctuations in fossil fuel prices.
• Prevalent disapproval for the use of petroleum-based raw materials.
• Changing trends in the automotive market.

Opportunities

• Participation in carbon markets.
• Use of low-carbon energy.
• Efficient use of resources and recycling/reuse.
• Increased demand for low-carbon products and services.
• Creation of eco-friendly businesses.
• Secured and diversified alternative resources.

Reporting Standards

Frameworks Used: GRI Standards 2021, TCFD, UN SDGs, SASB

Certifications: ISCC PLUS, ISO 14001, ISO 45001, ISO 37301

Third-party Assurance: KPMG Samjong Accounting Corp.

UN Sustainable Development Goals

• Goal 1
• Goal 2
• Goal 3
• Goal 4
• Goal 5
• Goal 6
• Goal 7
• Goal 8
• Goal 9
• Goal 11
• Goal 12
• Goal 13
• Goal 14
• Goal 15
• Goal 17

The report details how various initiatives contribute to these goals.

Sustainable Products & Innovation

• iON (EV-exclusive tires)
• Tires with 45% and 70% sustainable materials
• Retread tires
• Upcycled shoes
• Upcycled camping gear
• Upcycled longboard

Awards & Recognition

• 2023 CDP Carbon Management Sector Honors
• 2023 S&P Global LACP Spotlight Awards (Gold Prize)
• 2023 Great Employer of People with Disabilities
• 2023 Presidential Citation (Inclusive Employment Promotion Awards)
• 2023 Grand Prize (Korea Human Resources Development Awards)
• 2023 Minister of Science and ICT Award (3D Printing Best Practice Competition)
• 2023 iF Design Award
• 2023 Red Dot Design Award