Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Sold 141,101 EVs in 2021, a year-on-year increase of more than 40%
• Sold 9,620 units of FCEV, a year-on-year increase of 41.9%
• Renewable energy accounted for 12.8% of total electricity consumption at HMMC in 2021
• Renewable energy accounted for 35.5% of total electricity consumption at HMI in 2021
• Recycled 91.5% of all waste materials generated at business sites in 2021
• Increased water reuse rate at several plants (Asan Plant, HMI, HAOS, HMB, HMMC)

Social Achievements

• Not disclosed

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to climate events
• Regulatory risks related to climate change (e.g., emission trading schemes, vehicle CO2 emission regulations, bans on ICEV sales)
• Transition risks related to changing consumer preferences and technological advancements in the automotive industry
• Physical risks from extreme weather events and changes in average precipitation
• Water scarcity at some business sites
• Management of harmful substances in products and supply chain

Mitigation Strategies

• Developed emergency response manuals and purchased disaster insurance to mitigate extreme weather risks
• Considering building “a zero wastewater discharge system” to address water scarcity risks
• Investing in R&D for eco-friendly vehicles and technologies
• Establishing a mid- to long-term roadmap for the transition from ICEVs to EVs
• Improving fuel efficiency of ICEVs and increasing the proportion of EVs
• Implementing stricter in-house management standards for harmful substances than legal standards
• Applying the International Material Data System (IMDS) and Material Analysis Management System (MAMS) to manage harmful substances
• Developing and using alternatives to harmful substances

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Supplier carbon neutrality guide
• Monitoring suppliers’ carbon emissions
• Support programs for suppliers (smart factory construction, etc.)

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events (typhoons, floods, heat waves)
• Changes in precipitation and sea levels
• Water scarcity

Transition Risks

• Strengthening of vehicle CO2 emission regulations
• Prohibition of ICEV sales
• Changes in consumer preferences
• Increased competition for eco-friendly vehicle technology

Opportunities

• Increased sales of EVs and FCEVs
• Cost savings from energy conversions and reductions in CO2 emissions
• New business opportunities in hydrogen fuel cell technology and green hydrogen production

Reporting Standards

Frameworks Used: GRI, ISO 14001, ISO 14040 & 14044

Certifications: ISO 14001 (multiple sites), ISO 50001 (multiple sites)

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Goal 7 (Affordable and Clean Energy)
• Goal 9 (Industry, Innovation and Infrastructure)
• Goal 11 (Sustainable Cities and Communities)
• Goal 12 (Responsible Consumption and Production)
• Goal 13 (Climate Action)

Not disclosed

Sustainable Products & Innovation

• EVs, FCEVs, HEVs, PHEVs
• Vehicles with solar roofs
• Vehicles using recycled and biomaterials

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Achieved 90.8% waste recycling rate at business sites.
• Reduced air pollutants by 27% through waste heat recycling at HMI.
• Achieved RE100 at HMMC in 2022.
• Reduced carbon emissions in the 7th generation Grandeur by a maximum of 9.2% compared to previous models.
• HMB achieved zero waste-to-landfill.

Social Achievements

• Not disclosed

Governance Achievements

• Established environmental management governance with C-suite participation.
• Implemented ISO 14001 certification at multiple business sites.
• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to raw material price volatility.
• Water shortage at HMI and HAOS.
• Climate change related risks such as extreme weather events (tornadoes, floods) and water scarcity.
• Meeting increasingly stringent CO2 emission standards and fuel economy regulations.
• Managing harmful substances throughout the value chain.

Mitigation Strategies

• Improving raw material use efficiency and expanding the 3Rs (Reduce, Reuse, Recycle).
• Establishing a zero liquid discharge system at HMI and the Asan Plant.
• Implementing measures to minimize damage from tornadoes at HMMA (e.g., employee shelters, strengthened infrastructure).
• Accelerating electrification, improving fuel efficiency of ICEVs, and utilizing accumulated credits to mitigate regulatory risks.
• Implementing the IMDS and MAMS to manage harmful substances, and preemptively developing and applying alternatives.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Carbon Neutral Guide for Suppliers distributed.
• CDP Supply Chain program participation (2023).

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events (tornadoes, floods, heat waves)
• Sea level rise
• Water scarcity

Transition Risks

• Strengthening fuel economy regulations
• CO2 emission standards
• Competition for eco-friendly vehicle technologies

Opportunities

• Increased sales of EVs and FCEVs
• Development of energy-efficient products
• Expansion of hydrogen mobility sales

Reporting Standards

Frameworks Used: GRI, GHG Protocol

Certifications: ISO 14001, ISO 50001

Third-party Assurance: LRQA (Lloyd’s Register Quality Assurance)

UN Sustainable Development Goals

• Goal 7 (Affordable and Clean Energy)
• Goal 9 (Industry, Innovation, and Infrastructure)
• Goal 12 (Responsible Consumption and Production)
• Goal 13 (Climate Action)
• Goal 15 (Life on Land)
• Goal 14 (Life Below Water)

Various initiatives contribute to these goals through renewable energy adoption, sustainable manufacturing practices, waste reduction, water conservation, biodiversity protection, and circular economy initiatives.

Sustainable Products & Innovation

• IONIQ 5 and 6, GV60, Electrified GV70, and Electrified G80 with recycled and eco-friendly materials.
• Nexo FCEV
• XCIENT fuel cell heavy-duty truck
• UNIVERSE hydrogen electric bus

Awards & Recognition

• Responsible Company Seal (HMB)
• Waste Zero Seal (HMB)

Environmental Metrics

ESG Focus Areas

• Climate Change Mitigation
• Consumer Safety
• Human Rights
• Supply Chain Labor Rights
• Labor-Management Relations
• Employee Health and Safety
• Resource Circulation Related to Products

Environmental Achievements

• Sold 695,382 eco-friendly vehicles (including 268,785 EVs, a 28% increase from 2022)
• Achieved RE100 at Hyundai Motor Manufacturing Indonesia in 2023 (following Czech Republic in 2022)
• Increased renewable energy use at global sites by 69% compared to 2022
• Completed LCAs for 25 vehicle models (40.9% of all vehicles sold)
• Increased water reuse by 15.2% compared to 2022 (recycled 2,631,445 tons)

Social Achievements

• Revised Human Rights Charter and expanded human rights due diligence (100% assessment rate in 2023)
• Enhanced BOD diversity (additional female independent director and foreign director)
• Strengthened supply chain sustainability management (risk screening of forced labor for tier-1 suppliers)
• Reduced employee LTIFR from 1.94 to 1.89 and supplier LTIFR from 1.53 to 1.05

Governance Achievements

• Disclosed Board Skill Matrix
• Strengthened ESG governance through enhanced BOD management and oversight
• Updated Fair Trade Compliance Guide

Climate Goals & Targets

Environmental Challenges

• Slowing demand for electric vehicles
• Heightening global competition
• Rising geopolitical risks
• Mandatory disclosure of ESG information
• Proliferation of environmental and human rights regulations
• Water scarcity in some production regions (India)
• EU Carbon Border Adjustment Mechanism (CBAM)
• U.S. Inflation Reduction Act (IRA) requirements

Mitigation Strategies

• Customer-centric quality management
• Strong sense of responsibility and corporate citizenship
• Minimizing human rights risks
• Accelerating commitment to carbon neutrality
• Reinforcing ethical management
• Zero-wastewater discharge system and water recycling at several plants
• Investment in water storage capacity and rainfall utilization
• Progressively reducing imports requiring CBAM certificates
• Construction of a dedicated EV plant in Georgia and joint ventures in North America

Supply Chain Management

Supplier Audits: 1,454 tier-1 suppliers assessed (100% coverage); 192 tier-1 and 19 high-risk suppliers safety inspections

Responsible Procurement

• Supplier Code of Conduct
• ESG risk assessment and due diligence
• Sustainability criteria incorporated into supplier selection and contract renewals
• Zero tolerance of forced labor

Climate-Related Risks & Opportunities

Physical Risks

• Extreme wind speed
• Wildfire
• Flood
• Heat
• Droughts
• Cold waves

Transition Risks

• Tightening of automobile fuel efficiency regulations
• Strengthening emissions trading scheme regulations
• EU Carbon Border Adjustment Mechanism (CBAM)
• U.S. Inflation Reduction Act (IRA)

Opportunities

• Acceleration of electrification
• Energy transition
• ClimateTech (Hydrogen) R&D

Reporting Standards

Frameworks Used: GRI, SASB, TCFD, UNGC

Certifications: ISO 14001, ISO 45001

Third-party Assurance: Independent assurance statement provided in the report

UN Sustainable Development Goals

• Goal 7 (Affordable and Clean Energy)
• Goal 9 (Industry, Innovation, and Infrastructure)
• Goal 12 (Responsible Consumption and Production)
• Goal 13 (Climate Action)
• Goal 8 (Decent Work and Economic Growth)

Initiatives contribute to these goals through various ESG programs and activities

Sustainable Products & Innovation

• IONIQ 5, IONIQ 6, GV60, NEXO, UNIVERSE Fuel Cell Bus, Xcient Fuel Cell Tractor
• Vehicles with recycled and bio-based materials

Awards & Recognition

• 2023 Car of the Year (Grandeur Hybrid)
• 2023 EV of the Year (IONIQ 6)
• 2023 World Car Awards (IONIQ 6)
• German Premium Car of the Year 2023 (Genesis GV60)
• Highest grade of Leadership A in Climate Change from CDP (2023)
• Highest grade of Leadership A- in Water Security from CDP (2023)
• Carbon Management Sector Honors at the 2023 CDP Korea Awards
• Highest rating in the Win-win Growth Index (4 consecutive years)