Climate Change Data

Environmental Metrics

ESG Focus Areas

• Climate Change Response
• Business Growth Drivers/Portfolio Diversification
• Workplace Safety and Health
• Ethics and Compliance
• Technical Competence through R&D
• Financial and Non-financial Risk Management
• Eco-friendly Product Development and Recycling
• Corporate Partnership in Growth

Environmental Achievements

• Reduced total greenhouse gas emissions at domestic business sites to 181,938 tCO2eq, a 20% reduction relative to the 2021 allowance.
• Reduced total energy usage at Korea business sites to 3,665 TJ, achieving a 22% reduction compared to the 2021 allowance.
• Received an A- score in Leadership and Carbon Management Honors Club membership at the 2021 CDP Korea Awards.
• Reduced greenhouse gas emissions by a total of 2.712 tCOeq from 2018 to 2021.
• Maintained ISO 14001 certification at 7 sites in Korea and 4 overseas locations.
• Recycled over 90% of all waste generated each year.

Social Achievements

• Achieved a 'Best' rating in the Win-Win Growth Index.
• Conducted in-depth safety inspections at Korea business centers.
• Received the Silver Tower Order of Industrial Service Merit Award.
• Employee turnover dropped 0.9%p versus 2020, reaching 1.1% in 2021.
• Donated 130 service vehicles to people with mobile disabilities (Dream Car project).

Governance Achievements

• Improved BOD diversity (added female board member).
• Received an A rating for two consecutive years in the Korea Corporate Governance Service (KCGS) ESG Review.
• Set BOD review standards.
• Established an Ethics Charter.

Climate Goals & Targets

Environmental Challenges

• Reduced ICE vehicle sales due to increased eco-friendly vehicle sales.
• Increased expenses due to GHG regulations.
• Reduced export competitiveness in case of CBAM taxes.
• Temporary facility shutdown due to natural disasters.
• Production challenges due to raw material shortages.
• Delivery challenges due to logistics issues.

Mitigation Strategies

• Set mid-to-long-term carbon neutrality strategy.
• Transitioned to renewable energy at business sites.
• Participated in Korean clean car (K-EV100) campaign.
• Portfolio adjustments to account for eco-friendly vehicles.
• R&D for eco-friendly vehicle parts.
• Strategic reduction of auto parts sales and portfolio diversification.
• PR activity on climate change response work.
• Carbon reduction work with vendors.
• Global initiative participation (CDP, RE100).
• Developed natural disaster response manual.
• Diversified vendor network.
• Purchased insurance for disasters.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Partner Code of Conduct
• Green procurement
• Fair business agreements

Climate-Related Risks & Opportunities

Physical Risks

• Reduced ICE vehicle sales
• Increased natural disasters

Transition Risks

• Increased expenses due to GHG regulations
• Reduced export competitiveness

Opportunities

• Increased demand for eco-friendly vehicle parts
• Gaining competitiveness via proactive response to climate change

Reporting Standards

Frameworks Used: GRI Standards (Core option), SASB (Transportation Sector-Auto Parts, 2018ver.)

Certifications: ISO 14001, ISO 45001, IATF 16949, ISO 9001, KS Q 9100, KDS 0050-900, ISO/IEC 27001

Third-party Assurance: Korean Foundation for Quality (KFQ), DNV GL (Greenhouse Gas emissions and energy use data)

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Integrated thermal management system
• Electric axles
• Collaborative robots
• Mobile robots

Awards & Recognition

• 3-billion-dollar Export Tower Award
• Management Grand Awards
• GM Supplier Quality Excellence Award
• 4-billion-dollar Export Tower Award
• KOREA’S Most Admired Companies
• FCA ‘2016 Outstanding Supplier Quality Award’
• Commendation for contribution to improving military strength and defense capacity
• 100-billion National Tax Tower
• Commendation for contribution to strengthening fair business practices
• Commendation for contribution to promoting a sharing culture
• Commendation for contribution to the growth of local communities and promoting a healthy family culture
• GM International Organization Good Quality Supplier
• The 5th Software Industry Protection Awards
• The 22nd Environment Day Award
• 2018 Excellent Safety Management Prize by Hyundai Motor Group
• Microdust Reduction Award
• Commendation for contribution to spreading a social contribution culture and improving child welfare
• 2018 HMG Change and Innovation Grand Prize
• 2019 Excellent Safety Management Prize by Hyundai Motor Group
• 2019 World Water Day Award
• 2020 Head of Nakdong River Basin Office Award
• Silver Tower for Corporate Partnership
• 2021 Mayor’s Award (Environmental conservation)
• 2021 Mayor’s Award (Environment management)

Environmental Metrics

ESG Focus Areas

• Climate Change Response
• Eco-friendly product development and recycling
• Workplace safety and health
• Win-win growth with corporate suppliers
• Product safety and quality
• Ethics and compliance

Environmental Achievements

• Reduced GHG emissions from domestic business sites by 11.0% from the target.
• Reduced energy consumption of all domestic sites by 10.9% from the target.
• Achieved the highest grade (A) in CDP assessment
• Acquired carbon footprint certification for one type of CVJ
• Declared “Carbon Neutrality by 2045”
• Joined the global initiative, RE100

Social Achievements

• Improved the accident rate (employees and suppliers)
• Operated a safety reporting center
• Conducted ESG evaluation of suppliers
• Provided financial support to suppliers (win-win growth fund, win-win fund, etc.)
• Provided ESG education and training to suppliers
• Improved the claims rate for three consecutive years

Governance Achievements

• Ensured diversity of BOD (appointed female independent directors)
• Introduced a voluntary transparency reporting system
• Introduced RMS system
• Conducted ethical management and compliance training
• Operated an autonomous fair trade compliance program

Climate Goals & Targets

Environmental Challenges

• Tightened regulation of emissions Trading Scheme and increase in the prices of emission rights
• New or tightened carbon regulations
• Changes in customer (Car Maker) behavior
• Substitution of existing products due to the introduction of low-carbon products/services
• Negative feedback from stakeholders due to poor corporate valuation
• Damage to business sites due to an increase in extreme weather events
• Heat waves and droughts due to rising average annual temperature

Mitigation Strategies

• Established a mid- to long-term carbon neutrality strategy
• Switched to renewable energy
• Managed and reduced energy consumption and GHG emissions through WEMS
• Monitored domestic and international trends and regulations
• Established and implemented strategies to respond to climate change risks
• Expanded R&D for the production of low-carbon products and related technology
• Pursued business diversification
• Disclosed climate change response status and strengthened ESG assessment response
• Participated in global initiatives such as RE100
• Actively communicated with stakeholders
• Established and implemented a major disaster response manual
• Conducted regular inspection/maintenance of facilities
• Carried out activities to reduce water consumption

Supply Chain Management

Supplier Audits: 123 written assessments and 20 on-site assessments in 2022

Responsible Procurement

• Code of Conduct for Suppliers
• Fair trade agreements
• ESG inspections
• Green Procurement Guidelines

Climate-Related Risks & Opportunities

Physical Risks

• Damage to business sites due to extreme weather
• Heat waves and droughts

Transition Risks

• Tightened emission regulations
• Changes in customer behavior
• Technological changes

Opportunities

• Improvement of energy efficiency
• Expanding market for eco-friendly vehicle parts

Reporting Standards

Frameworks Used: GRI Standards, K-IFRS, TCFD

Certifications: ISO 14001, ISO 45001, ISO/IEC 27001

Third-party Assurance: Korea Management Registrar (KMR), DNV

UN Sustainable Development Goals

• Goal 4 (Quality Education)
• Goal 5 (Gender Equality)
• Goal 7 (Affordable and Clean Energy)
• Goal 8 (Decent Work and Economic Growth)
• Goal 10 (Reduced Inequalities)
• Goal 13 (Climate Action)
• Goal 16 (Peace, Justice and Strong Institutions)
• Goal 17 (Partnerships for the Goals)

The report details how various initiatives contribute to these SDGs.

Sustainable Products & Innovation

• Integrated Thermal Management System
• Electrified Torque Vectoring System
• Smart manufacturing and logistics robots

Awards & Recognition

• Leadership A in 2022 CDP Climate Change Response Assessment
• Member of the Carbon Management Honors Club
• Silver Medal in EcoVadis Sustainability Assessment

Environmental Metrics

ESG Focus Areas

• Climate Change Response
• Reduction of GHG emissions
• Ethics and compliance management
• Selection and evaluation of sustainable supply chains
• Workplace health and safety
• Respect for human rights
• Development of eco-friendly automotive parts
• Resource circulation and environmental impact management
• Wastewater and air quality management
• Biodiversity protection

Environmental Achievements

• Reduced greenhouse gas (GHG) emissions by 11% year-on-year in 2023, amounting to 138,476 tCO2eq.
• Achieved a 17.8% reduction in GHG emissions intensity and a 17.2% reduction in energy consumption intensity at domestic business sites.
• Invested in solar power generation at Changwon Plant 1 & Uiwang R&D Center.
• Received an A- rating in the CDP assessment.
• Awarded CDP Korea Climate Change Carbon Management Sector Honors.
• Maintained ISO 14001 certification for 12 domestic and 4 overseas plants.
• Recycled over 90% of waste materials.
• Reduced water usage and air pollutant emissions over 3 years.
• Successfully reused 186.5 tons of distilled water generated from waste oil evaporation.
• Eliminated the use of trichloroethylene (TCE) by replacing it with non-hazardous chemicals.

Social Achievements

• Reduced the accident rate (employees and suppliers).
• Conducted safety and health management of suppliers.
• Performed safety and health checks at domestic and overseas business sites.
• Conducted ESG evaluation of suppliers.
• Provided financial support to suppliers (win-win growth fund, win-win fund, etc.).
• Provided ESG education and training to suppliers.
• Conducted human rights impact assessments.
• Operated human rights risk reporting channels.
• Provided human rights education.
• Achieved a customer satisfaction score of 84.8.
• Acquired health-friendly company certification.
• Strengthened supply chain risk management.
• Operated Mobility School.

Governance Achievements

• Expanded the organization dedicated to ESG management.
• Established a biodiversity policy.
• Provided online environmental courses to all employees.
• Enhanced the risk management system.
• Expanded the scope of ESG review by the Transparent Management Committee.
• Strengthened the compliance system and fair-trade Compliance Program (CP) operations.
• Selected as designated company for voluntary compliance in international trade of strategic goods.
• Received an A+ rating from the Korea Institute of Corporate Governance and Sustainability (KCGS).
• Awarded a Gold rating by EcoVadis.

Climate Goals & Targets

Environmental Challenges

• Climate change risks (transition risks and physical risks)
• Supply chain disruptions
• ESG-related legal and regulatory changes
• Maintaining high recycling rates
• Reducing safety incidents
• Ensuring human rights compliance throughout the supply chain
• Maintaining high customer satisfaction
• Managing potential human rights issues
• Ensuring ethical and compliance management
• Managing financial and non-financial risks

Mitigation Strategies

• Established a carbon neutrality strategy and roadmap to achieve carbon neutrality by 2045 and RE100 by 2045.
• Implemented various energy efficiency improvement activities.
• Developed and adapted a Life Cycle Assessment (LCA) calculation system.
• Increased procurement of renewable energy.
• Established a dedicated environmental management organization.
• Implemented stricter internal environmental standards than legal regulations.
• Operated a risk management secretariat and held risk response meetings.
• Established a risk reporting process for each type of potential risk.
• Established a separate process for major accidents.
• Formulated a tax risk management policy.
• Conducted ESG evaluations of suppliers.
• Provided financial support and training to suppliers.
• Implemented a grievance handling process for suppliers.
• Conducted human rights impact assessments and operated a human rights risk reporting channel.
• Operated a transparent voluntary reporting system.
• Strengthened the compliance system and fair-trade Compliance Program (CP).

Supply Chain Management

Supplier Audits: 214 written evaluations and 40 on-site evaluations of major suppliers (2023)

Responsible Procurement

• Code of Conduct for Suppliers
• ESG evaluations of suppliers
• Financial support for suppliers
• ESG education and training for suppliers
• Green procurement practices
• Regular inspections of suppliers

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events (typhoons, localized heavy rain)
• Heat waves and droughts

Transition Risks

• Tightened emissions trading scheme regulations
• New or stricter carbon regulations
• Changes in customer behavior
• Substitution of existing products

Opportunities

• Improvement of energy efficiency of business sites
• Expanding market and increasing demand for eco-friendly automotive parts

Reporting Standards

Frameworks Used: GRI Standards, SASB, TCFD, AA1000AS(v3), AA1000AP (2018)

Certifications: ISO 14001, ISO 45001, ISO/IEC 27001

Third-party Assurance: Korea Management Certification Institute, DNV, Korean Foundation for Quality (KFQ)

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 8 (Decent work and economic growth)
• Goal 9 (Industry, innovation, and infrastructure)
• Goal 10 (Reduced inequalities)
• Goal 11 (Sustainable cities and communities)
• Goal 12 (Responsible consumption and production)
• Goal 13 (Climate action)
• Goal 17 (Partnerships for the goals)

Various initiatives contributing to these goals as detailed in the report.

Sustainable Products & Innovation

• Integrated Thermal Management System (ITMS)
• Electric Vehicle Torque Vectoring System (eTVTC)
• Smart manufacturing and logistics robots
• Eco-friendly automotive parts

Awards & Recognition

• A+ KCGS ESG rating
• Gold EcoVadis rating
• CDP Korea Climate Change Carbon Management Sector Honors
• Korea ESG Company of the Year Award
• Minister of Environment Award
• Numerous other awards listed in Appendix

Environmental Metrics

ESG Focus Areas

• Environment
• Social
• Governance

Climate Goals & Targets

Environmental Challenges

• Increasing interest from all members of society (consumers, investors, governments) in ESG.
• International regulations requiring ESG management for suppliers (e.g., EU's sustainability investigation mandate).

Mitigation Strategies

• Conducting HYUNDAI WIA Supplier ESG Evaluation to assess suppliers' environmental and social practices, governance, and support capabilities for enhancement.
• Establishing evaluation criteria to check issues from each Environment, Social (labor/human rights, safety/health, ethics), and Governance area.
• Providing training for supplier and procurement personnel to manage supplier ESG risks.

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct based on Hyundai Motor Group’s common code of conduct, complying with domestic and foreign laws and regulations, Responsible Business Alliance (RBA), Global Reporting Initiative (GRI), and EcoVadis evaluation indicators.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI, EcoVadis