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Hyundai's 2024 Sustainability Progress

General Report December 24, 2024
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TABLE OF CONTENTS

  1. Summary
  2. Environmental Management
  3. Governance Structure
  4. Human Rights and Social Responsibility
  5. Business Performance
  6. Conclusion

1. Summary

  • Hyundai Motor Company highlights its ambitious sustainability and governance strategies in its 2024 report. The company focuses on environmental management, climate change response, and human rights efforts. Hyundai's dedication to reducing greenhouse gas emissions and establishing a circular economy underscores its commitment to sustainable practices. The Board of Directors plays a crucial role in overseeing these initiatives, ensuring transparent and ethical governance. Hyundai’s emphasis on employee welfare, safe working conditions, and innovative customer experience solidifies its role as a socially responsible company. Selling over 4.29 million vehicles globally, including significant growth in electric vehicle sales, Hyundai demonstrates that sustainability can drive business benefits and market expansion.

2. Environmental Management

  • 2-1. 2.1 Environmental Management System

  • Hyundai Motor Company has established a robust environmental management governance framework involving its highest decision-making body. The company adheres to environmental management regulations and pursues continuous improvement in its practices across all operational levels. Each production plant is certified under ISO 14001, which ensures adherence to international environmental management standards. Annual assessments are conducted to identify environmental impacts and risks, allowing Hyundai to implement effective measures to mitigate negative consequences. The governance structure includes oversight by the Board of Directors and associated committees, ensuring accountability and proper communication regarding environmental performance.

  • 2-2. 2.2 Response to Climate Change

  • Hyundai recognizes the significant threat posed by climate change and has committed to reducing greenhouse gas emissions as part of its strategy for sustainable growth. In 2023, the company integrated climate change response strategies into its corporate governance, approving specific tasks to achieve carbon neutrality by 2045. These strategies encompass enhancing energy efficiency and transitioning to electric vehicles (EVs), thus reinforcing the company’s commitment to sustainable business practices. Hyundai continuously evaluates risks associated with climate change and identifies opportunities to enhance its operations and stakeholder engagement.

  • 2-3. 2.3 Establishment of a Circular Economy

  • Hyundai has initiated measures aimed at promoting a circular economy, which includes initiatives focused on resource efficiency, waste reduction, and the recycling of materials. This strategy not only ensures compliance with local and international regulations but also emphasizes the importance of sustainability within their production processes. The company has committed to reusing materials wherever possible, collaborating with suppliers to minimize waste, and optimizing production efficiency. These efforts contribute to reducing the environmental impact while driving innovation in processes and products.

  • 2-4. 2.4 Reduction of Environmental Impact

  • Hyundai actively works to reduce its environmental impact through various initiatives aimed at lowering pollutant emissions, enhancing resource management, and improving waste management practices. The company sets strict internal targets that often exceed legal requirements regarding emissions from its production facilities. Regular monitoring and auditing allow for constant evaluation of environmental performance, ensuring adherence to established goals. By advancing cleaner production techniques and promoting resource efficiency, Hyundai aims to diminish its environmental footprint.

  • 2-5. 2.5 Protection of Biodiversity

  • A core aspect of Hyundai's environmental strategy is the protection of biodiversity. The company engages in multiple initiatives aimed at conserving ecosystems and ensuring sustainable use of natural resources. Through environmental impact assessments and corporate social responsibility efforts, Hyundai seeks to minimize adverse effects on biodiversity resulting from its operations. Collaborations with local organizations and participation in broader environmental efforts further highlight Hyundai's commitment to sustaining the planet's ecological integrity.

3. Governance Structure

  • 3-1. 4.1 Board-centered Management System

  • Hyundai Motor Company recognizes that the governance aspect of ESG management is fundamental in creating ESG value. The company has established sound and transparent governance structures to enhance corporate value and respond to various risks, aiming to achieve sustainable growth. The Board of Directors is the highest decision-making body and operates based on the company charter, pursuing continuous and balanced growth while supervising executives.

  • 3-2. 4.2 Shareholder-friendly Management

  • Hyundai Motor Company is committed to respecting shareholders' legitimate demands and protecting their interests. The company ensures that corporate value is fairly recognized by maintaining sound decision-making processes and management practices that consider the interests of all shareholders. Information regarding management matters is provided in a timely and transparent manner to enhance shareholder engagement.

  • 3-3. 4.3 Ethics and Compliance Management

  • The company emphasizes the implementation of ethical and compliant management practices, fostering a corporate culture that prioritizes the interests of diverse stakeholders. Hyundai Motor Company has established a compliance system that includes regular training and awareness-raising activities to enhance the understanding of ethics and compliance among employees, along with internal audit mechanisms to ensure adherence to laws and regulations.

  • 3-4. 4.4 Risk Management

  • Hyundai Motor Company has set up a rigorous risk management system to respond to rapid changes in the automotive industry, including the transition to electric energy and shifts in consumer preferences. The company established the Business Risk Management (BRM) unit, reporting directly to the CEO, to efficiently address internal and external risks that may impact the supply chain, vehicle development, production, and sales processes.

4. Human Rights and Social Responsibility

  • 4-1. 3.1 Human Rights Management

  • Hyundai Motor Company supports international standards and guidelines related to human rights and labor, promoting human rights management across its global supply chain. The company's human rights management system includes governance, training, policy commitments, due diligence, and remedial actions. Annual due diligence is conducted at its business sites and among suppliers to identify potential and actual human rights risks, with appropriate mitigation measures implemented as needed. Hyundai’s management system is designed to protect and respect the human rights of all stakeholders.

  • 4-2. 3.2 Health, Safety, and Welfare of Employees

  • Hyundai prioritizes the health, safety, and welfare of its employees by providing a supportive work environment and implementing customized welfare systems. This includes conducting regular health and safety training, establishing performance evaluation systems, and ensuring fair compensation. In 2023, Hyundai conducted workplace harassment prevention training for approximately 70,000 employees, achieving a participation rate of 98.45%. The company also emphasized diversity and inclusion in the workplace.

  • 4-3. 3.3 Sustainable Supply Chain

  • Hyundai aims to create a sustainable supply chain by establishing a win-win growth ecosystem with its suppliers. This includes implementing sustainability management practices that focus on human rights and environmental standards throughout the supply chain. The company conducts supplier assessments and audits to ensure compliance with its Human Rights Policy, which prohibits forced labor and child labor, while also upholding the rights to freedom of association and collective bargaining.

  • 4-4. 3.4 Customer Experience Innovation

  • Hyundai is committed to enhancing customer experience through innovative approaches that maximize customer satisfaction. This involves product responsibility measures, customer feedback collection, and continuous improvement of service quality. The company's initiatives are aimed at creating sustainable brands that resonate with customers and drive loyalty.

  • 4-5. 3.5 Creating Shared Value

  • Hyundai's Creating Shared Value (CSV) initiatives focus on generating economic value while addressing societal challenges. The company runs various programs aimed at making a positive impact on communities, which aligns with its commitment to sustainability and corporate citizenship. The CSV initiatives include support for local economies, environmental projects, and educational programs.

5. Business Performance

  • 5-1. Sales and Production Metrics

  • As of 2023, Hyundai Motor Company achieved a total global sales of approximately 4.29 million vehicles, marking significant growth in both domestic and international markets. This includes 1.91 million vehicles sold in the domestic market and 2.37 million vehicles in foreign markets. In terms of electric vehicles (EVs), the total sales reached 695,382 units, with 268,785 units classified as electric vehicles (EV), highlighting a 28% increase compared to the previous year. Hyundai has also expanded its production capacities to support these sales, notably with new models like the Santa Fe and Grandeur contributing to the growth in sales.

  • 5-2. Impact of Sustainability Initiatives on Financial Performance

  • Hyundai’s sustainability initiatives have positively influenced its financial performance, showcasing the correlation between environmental responsibility and profitability. The company's focus on electric and hybrid vehicles has garnered attention and demand, resulting in increased revenue and market share. In addition, their commitment to renewable energy through the RE100 initiative has improved energy cost management and operational efficiencies across production facilities, further contributing to their overall financial health. Notably, in 2023, Hyundai's operating profit reached KRW 15.1 trillion, its highest ever.

  • 5-3. Market Trends and Competitive Analysis

  • Hyundai continues to adapt to evolving market trends, particularly the shift towards eco-friendly technology amid rising consumer demand for electric vehicles. The global market landscape is increasingly competitive, with competitors aggressively pushing their EV lineups. However, Hyundai's innovative approaches and strong branding strategies have allowed it to maintain a solid market position. In 2023, the company recorded a market share of 5.6% in the North American market and 14.6% in the Indian market, reflecting its robust growth strategy in high-potential regions.

Conclusion

  • Hyundai Motor Company's 2024 sustainability and governance report reveals substantial strides in ecological and social initiatives. By embracing a strong environmental governance framework, including ISO 14001 certification and proactive climate action, the company positions itself as a leader in sustainable automotive practices. The Board of Directors’ robust oversight and ethical management reflect transparency and accountability, securing stakeholder trust. Although challenges such as market competition and technological shifts remain, Hyundai’s alignment with ESG principles and commitment to innovation indicate promising growth prospects. Future developments could benefit by addressing limitations in expanding EV infrastructure and enhancing supply chain sustainability, potentially driving further market leadership and financial gains.

Glossary

  • Hyundai Motor Company [Company]: Hyundai Motor Company is a leading global automotive manufacturer headquartered in South Korea, dedicated to innovation and sustainable practices. The company focuses on electric vehicle development, environmental management, and social responsibility, ensuring compliance with international standards in governance and human rights.
  • Board of Directors [Governance Body]: The Board of Directors serves as the highest decision-making body within Hyundai Motor Company, ensuring effective governance and oversight of corporate strategy, risk management, and compliance with ethical standards.

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