Our commitment to sustainability
In the Fourth Industrial Revolution era, industry boundaries are disintegrating amid a rise of convergence and change. Mindful of such global megatrends, Hyundai is accelerating its innovation drive powered by an advanced technical prowess. Ever present in Hyundai’s 50-year journey has been the notion of the human race. Without aspirations for humankind, our technological innovations would have been impossible. As an extension of our ever-hopeful journey, in 2019 we adopted a new brand vision “Progress for Humanity” as a way to confirm our determination to create more valuable time for all humanity. Hyundai is now going beyond being an automobile manufacturer to become a mobility solution provider that allows people to easily move and connect with one another, spaces and places, and thus enabling them to make their time more valuable. We will provide mobility services that make every moment of life more valuable than before by more thoroughly understanding people’s daily lives, in our journey toward progress for humanity.
One thing will remain constant and abiding: Hyundai Motor Company’s management philosophy that places humanity above all other considerations.
Based on this immutable belief, we will take the lead in creating a sustainable future in which all mankind can live safely and healthily while enjoying freedom of movement and the unique offerings of our lives.
Jaehoon Chang,
President and CEO, Hyundai Motor Company
2022 Sustainability Report
Road to Sustainability
We are entering an era of stakeholder capitalism, in which corporations pursue sustainable growth from the perspective of all stakeholders, including shareholders, employees, customers, suppliers, and local communities.
To nimbly repond to such shift in paradigm, Hyundai is harnessing all efforts on bolstering its sustainable ESG management.
Meanwhile, Hyundai will lead the way to create a healthier, happier, and more sustainable world for everyone under its corporate vision of "Progress for Humanity".
ESG Management
Hyundai is strengthening management activities to preemptively identify and remove risk factors related to ESG, and explores new business opportunities and strives to secure a new competitive edge by strategically using various ESG factors.
In particular, based on ESG governance that we newly established in 2020, discussions on major pending issues take place on a semi-annual basis at the Sustainability Management Committee under the BOD, which is the highest decision-making body, and the ESG Committee. In addition, we encourage each organization to autonomously carry out ESG improvement activities, such as by establishing a performance goal for each working-level division and reflecting the performance in KPIs, thereby striving to internalize corporate-wide ESG management.
Amid growing importance of responding to climate change and preventing accidents both in Korea and abroad, we created the Carbon Neutrality Execution Team and Serious Accident Prevention Team, and established a more professional and systematic management/response system.
ESG Governance
- BOD(Sustainability Management Committee)
- ESG Committee
- Secretary : Planning & Finance Division
(Sustainability Management Team)- Hyundai Motor Group ESG Council
- ESG Council(Working-level divisions)
- Environmental (E)
- Climate change1)
- Operations environment
- Product environment
- Low-carbon products
- Social (S)
- Human rights/
HR development/
HR management - Supply chain ESG
- Quality management/
Customers - Information protection/
Innovation - Social contributions
- Health & Safety2)
- Human rights/
- Governance (G)
- BOD Operation
- Ethical management
BOD(Sustainability Management Committee)
- Strengthens the ESG management system, such as establishing major ESG policies and discussing improvement plans
- Examines/supervises plans and execution in relation to major issues, including safety, health, and ethics
- Reports and deliberates/decides on major pending issues related to ESG on a semi-annual basis
* Major agenda in 2021: Carbon neutrality strategies, social contribution activity details, examination of employee practice of Code of Ethics, matters related to compliance program implementation and execution plan, compliance support activity details, progress with health & safety plans, product/service trading with affiliates, etc.
ESG Committee
- A small meeting group within the Hyundai Business Strategy Meeting. Top management in each area review/discuss ESG-related matters.
Secretary (ESG-dedicated division)
- Planning & Finance Division
(Sustainability Management Team)
- Planning & Finance Division
(Sustainability Management Team)
- Establish/advance the system
- Establish a reporting system, set up ESG management indexes, and build a data platform, etc.
- Internalize ESG management
- Provide support for employee ESG training and KPI reflection, etc.
- Induce/implement improvement activities
- Handle collaboration/mediation to identify matters that require improvement and implement improvement activities, etc
- Disclose information/communicate
- Sustainability Report publication, ESG evaluation responses, stakeholder communication, etc.
ESG Council
(Working-level divisions)
(Working-level divisions)
- Discuss the improvement direction of each division, implement improvement activities, and share improvement performance
ESG Performance in 2021
Environmental
- Declared and received the approval for the joining of RE100 initiative
- Developed a roadmap to replace electrify used at business sites with renewable energy by 2045
- Declared 2045 net zero
- Set strategies for vehicle electrification, hydrogen business synergy, carbon neutrality at business sites, encouraging auto-part supply chains to achieve carbon neutrality, and social carbon reduction
- Focused on eco-friendly new business based on second life batteries
- Propelled energy storage system (ESS) based on second life batteries and EV batteries remanufacturing businesses for aftersales support, and established a foundation for rare metal recycling system
- Recorded annual eco-friendly vehicle sales of 422,000 units in 2021
- Recorded 150,000 units of annual global sales of EVs and FCEVs in 2021
Social
- Strengthened workplace safety
- Appointed a Chief Safety Officer(CSO)
- Strengthened supply chain ESG management
- Conducted a written assessment of 400 tier-1 and core tier-2 suppliers and an onsite due diligence of 10 high-risk suppliers
- Expanded the scope of employee human rights risk management
- Conducted a human rights impact assessment on employees at overseas business sites in Europe, Americas, India, and China
- Provided ESG-related in-house training
- Provided 7,980 hours of on/offline trainings a year in areas of human rights, safety, environment, and quality
- Provided online education ESG mindset to 22,000 staff in general/research/legal positions
Governance
- Operated the Sustainability Management Committee under the BOD
- Strengthened the ESG system, such as establishing major policies related to ESG and discussing improvements
- Enhanced BOD diversity
- Appointed a director with a foreign nationality (global business field) and a female director (field of guaranteeing stability of intelligent transportation systems)
- Strengthened shareholder communication
- Provided an online real-time broadcasting service for shareholders who couldn’t attend in person
- Held a presentation on areas of interest of shareholders (General shareholder’s meeting in March 2021 – Automobile market outlook)
- Provided compliance training
- Provided compliance training 11 times to employees in Korea (21,567 persons attended) and 9 times to overseas employees (80 persons attended)
ESG Risk Management
Supply Chain ESG Management
In order to establish a sustainable supply chain, Hyundai proactively supports suppliers strengthen their ESG capabilities by presenting “Supplier Code of Conduct,” evaluating and managing ESG risks that may occur, offering support for preemptive risk prevention, and urging to resolve risks and to establish improvement plans.
Supplier Code of Conduct PDFBeginning with first publication of ESG risks assessment result in 2020, Hyundai has conducted written assessment of 100% domestic suppliers and on-site due diligence of 100% high-risk suppliers in 2021. In 2022, the coverage of written assessment has been expanded to overseas suppliers, and 30 domestic suppliers are planned for on-site due diligence. Hyundai plans to continuously advance its ESG management system by conducting on-site due diligence for overseas suppliers.
Diagnosis and Due Diligence for Suppliers’ Risks
Written
assessmentSelf-diagnosis
by tier-1 and core tier-2
suppliersSelection of
high-risk suppliersRisk estimation based on
current status information
and evidenceOn-site due
diligenceOn-site visits and
interviews with high-risk
suppliersRisk
determinationRisk determination through
written assessment and
on-site inspections
Suppliers’ Risk Assessment Status and Plan
Results of Supplier Risk Assessment in 2021
| Classification | No. of companies |
|
|---|---|---|
| Written assessment |
Tier-1 suppliers | 380 |
| Core tier-1 suppliers | 62 | |
| Core tier-2 suppliers | 20 | |
| Selection of high-risk suppliers |
Tier-1 suppliers | 10 |
| Core tier-1 suppliers | 10 | |
| Core tier-2 suppliers | 0 | |
| On-site due diligence |
Suppliers subject to on-site due diligence | 10 |
| Improvement measures by high-risk suppliers |
Suppliers that established improvement plans and completed the implementation | 191) |
suppliers from safety risk inspection other than ESG risk assessment
| Segment | ’21 | ’22 | ’23 | |
|---|---|---|---|---|
| Written assessment |
Domestic | Done | Done | Planned |
| Overseas | N/A | Done | Planned | |
| On-site Due Diligence |
Domestic | Done | On-going | Planned |
| Overseas | N/A | N/A | Planned | |
Composition of Supplier Risk Diagnostic Indicators
Existing
management
indicators
- Quality
- Quality management system,
claim cost reimbursement
ratio, order defect rate, etc.
- Delivery
- Production line stoppage,
A/S parts delivery rate, knockdown
parts delivery rate, etc.
- Technology
- Basic capabilities,
execution capabilities,
future capabilities, etc.
- Win-win
- Payment conditions, contract
fairness, observation of laws,
win-win cooperation, etc.
- Safety
- Safety management manuals,
organization & human rights,
training, accidents, etc.
- Eco-friendly parts
- Prohibition of the use of harmful substances,
providing information about chemical
substances, eco-friendly systems, etc.
- Ethics/human rights
- Prohibition of soliciting or bribery, labor and
human rights, prohibition of discrimination,
adherence to trade agreements, etc.
ESG
risk evaluation
indicators
- Ethics
- Anti-corruption,
conflict of interest,
unfair trade, prevention
of counterfeit parts,
compliance with
export restrictions,
information protection,
responsible purchase
- Environment
- Environmental system,
energy use,
GHG emission,
water resource use,
air pollutants, waste
management,
chemical substance
management
- Labor/human rights
- Non-discrimination,
wage and welfare,
working hours
management,
humane treatment,
freedom of association,
child labor,
forced labor
- Safety/health
- Safety and health
system, machine/
facility safety,
emergency response,
accident management,
safety risk diagnosis,
health management,
etc.
- Management system
- Disclosure of corporate
name, appointment
of a person in charge,
risk checks, education
and communication,
information
management,
grievance system,
business partner
management,
compliance
with standards
ESG Policies
Included in the DJSI World
Earned CDP Climate Change B, Water A- grade
Earned A grade in the 2021 ESG ratings by KCGS
Risk Ratings Score : 30.9 (in 2021)
Maintained the ESG rating of B
‘Hyundai Continue’ represents our commitment to the sustainable future that
Hyundai Motor Company pursues.
It’s an endeavor to allow the planet and humans to coexist in harmony.
It’s an effort to make time more valuable through freedom in mobility.
And it’s a realization of the hope of future generations who dream of tomorrow.
We need to continue, connect, and be connected.
Hyundai Motor Company commences its transformative efforts for a sustainable future with ‘Hyundai Continue’.
Area of focus
Hyundai Motor Company will ‘Continue’ to take care of the planet we live on.
We are connected as one within the ecosystem of the Earth.
Hyundai Motor Company is advancing the coexistence of humankind and the planet by means of technology that will connect them to each other.
In this way, Hyundai Motor Company will continue to work toward the harmonious coexistence of humankind and Earth.
Hyundai Motor Company will ‘Continue’ to innovate for a new mobility.
We will create a sustainable way for anyone to move freely at will.
We will create a new concept of mobility, enabling quality time to be spent in transit, and enabling people to experience complete freedom of mobility.
In this way, Hyundai Motor Company will continue to realize freedom in mobility and connection.
Hyundai Motor Company will ‘Continue’ to create hope for future generations.
We are connected as members of a global society, beyond companies and customers.
We will work together to create a sustainable future so that generations to come can dream and take on new challenges.
In this way, Hyundai Motor Company will continue to create hope for future generations.
