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Hyundai's 2024 Sustainability Strategies Unveiled

General Report January 11, 2025
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TABLE OF CONTENTS

  1. Summary
  2. Governance
  3. Environmental Management
  4. Social Responsibility
  5. Conclusion

1. Summary

  • Hyundai Motor Company has presented a comprehensive overview of its sustainability strategies for 2024, emphasizing governance, environmental responsibility, and social engagement. The report delves into Hyundai’s board-centered governance system, composed of a diverse Board of Directors prioritizing independence and shareholder rights. Key areas of focus include a proactive risk management framework, transparent shareholder engagement, and robust compliance management. Environmentally, Hyundai outlines strategies to achieve carbon neutrality by 2045, with initiatives enhancing resource efficiency and reducing emissions. Socially, the company is committed to human rights, employee welfare, and sustainable supply chain management, aiming for shared value creation. This approach ensures Hyundai's alignment with global sustainability standards while fostering innovation and ethical practices within the automotive industry.

2. Governance

  • 2-1. Board-centered Management System

  • Hyundai Motor Company has established a board-centered management system aimed at creating a robust governance structure that maximizes shareholder rights and interests. The Board of Directors (BOD) operates as the highest decision-making body to ensure the company's sustainable and balanced growth by overseeing management activities faithfully. The BOD incorporates principles of independence and diversity for its independent directors, which is formalized in the Corporate Governance Charter.

  • 2-2. BOD Composition and Diversity

  • As of March 21, 2024, Hyundai's BOD consists of 12 members, with independent directors making up more than half (seven members) to ensure independence as mandated by the Commercial Act. The board includes experts in management, accounting, finance, law, governance, and future technology, thereby promoting diversity without discrimination on gender, race, or religion. The average tenure of directors is 3.6 years, and qualifications are established for both internal and independent directors to contribute to corporate governance.

  • 2-3. Director Appointment and Independence

  • Directors at Hyundai are appointed through resolutions of the General Shareholders Meeting (GSM). Independent directors are recommended by the Recommendation Committee based on their expertise to ensure that they can make substantial contributions to corporate management. Strict independence guidelines are in place for independent directors to maintain their representation of stakeholder interests, barred from holding significant stakes in the company or concurrent positions in multiple companies without board approval.

  • 2-4. BOD Meetings and Decision-Making Process

  • The BOD conducts meetings at least once a quarter, with directors notified in advance. Resolutions are adopted with a majority presence and consent of the directors present. Meeting minutes are maintained, documenting discussions, results, and any dissenting opinions. The average participation rate in 2023 was 95%, with independent directors accounting for a participation rate of 96%.

  • 2-5. Shareholder Engagement

  • Hyundai respects the legitimate demands of shareholders and strives to protect their value and interests. The company provides information transparently and maintains sound decision-making processes to prevent any infringement of shareholder rights. Regular communication is conducted through Investor Relations (IR) activities, ensuring that shareholders have timely access to important information about the company.

  • 2-6. Ethics and Compliance Management

  • Ethical management is a vital aspect of Hyundai's governance framework. The company has established a compliance management system to assess and manage legal risks, appointing a dedicated independent director for oversight. Regular compliance training and inspections are conducted to foster a culture of compliance across the organization.

  • 2-7. Risk Management Governance

  • The BOD is responsible for enhancing risk management capabilities to respond to the rapid changes in the automotive industry. In 2023, the Business Risk Management (BRM) Group was established to promptly address risks arising from production, sales, and supply chain disruptions. Risk management issues are regularly discussed within board meetings to ensure comprehensive coverage.

3. Environmental Management

  • 3-1. Environmental Management System

  • Hyundai Motor Company has established a governance framework for environmental management that involves its highest decision-making bodies. The Board of Directors (BOD) and Sustainability Management Committee oversee environmental management by regularly reviewing achievements and key risk factors. In 2023, the committee approved a set of new carbon neutrality tasks aimed at achieving the 2045 target.

  • 3-2. Climate Change Response

  • Hyundai is proactively addressing climate change by identifying and assessing risks and opportunities at a company-wide level. The company has implemented policies and strategies to mitigate climate-related risks while focusing on environmental technologies that support sustainable practices.

  • 3-3. Circular Economy Initiatives

  • The company is committed to creating a circular economy by enhancing resource efficiency and developing systems for recycling and reusing materials. This includes initiatives for extended producer responsibility and the management of waste and harmful substances.

  • 3-4. Reduction of Environmental Impact

  • Hyundai has set ambitious targets for reducing its environmental footprint. Specific strategies include lowering greenhouse gas emissions, improving energy efficiency at production sites, and enhancing water management practices to minimize impacts on local resources.

  • 3-5. Biodiversity Protection

  • Hyundai is dedicated to biodiversity protection through various conservation efforts that support natural habitats and promote biodiversity. The company implements restoration projects and has established measures to monitor and enhance its biodiversity policies.

  • 3-6. Sustainable Resource Use

  • Hyundai invests in sustainable practices that promote the efficient use of resources throughout the production chain. This includes efforts to minimize waste, enhance recycling initiatives, and ensure efficient use of materials to support sustainable production objectives.

  • 3-7. Environmental Governance and Compliance

  • Environmental governance at Hyundai is strengthened through compliance with international standards, including ISO 14001 certifications for all production plants. Regular audits and assessments are conducted to ensure adherence to environmental management practices, reinforcing the company’s commitment to sustainable operations.

4. Social Responsibility

  • 4-1. Human Rights Management

  • Hyundai Motor Company supports international standards and guidelines pertaining to human rights and labor. The company promotes human rights management across its global operations and supply chain. Collaborating with relevant departments, Hyundai strives for practical improvements and conducts annual human rights due diligence at its business sites and suppliers to identify potential and actual human rights risks, implementing appropriate mitigation measures as needed.

  • 4-2. Employee Health, Safety, and Welfare

  • Hyundai has established a human resources management system that prioritizes the highest standards of value for employees across all stages of their lifecycle. This includes recruiting talented individuals, fostering a culture of voluntary learning, and investing in capacity building. The company emphasizes performance evaluations aligned with mid-to-long term business goals, fair compensation, and customized welfare systems designed to improve the work environment and promote diversity.

  • 4-3. Sustainable Supply Chain Management

  • In managing its supply chain, Hyundai emphasizes sustainable practices and ensures that its suppliers adhere to the same human rights and labor standards as the company. This involves conducting risk assessments and due diligence to identify human rights risks within the supply chain, enabling Hyundai to implement corrective measures and maintain ethical sourcing practices.

  • 4-4. Customer Experience Innovations

  • Hyundai employs innovative practices to enhance customer experiences, integrating feedback mechanisms that recognize and address customer needs. This focus on improving service quality has led to increased customer satisfaction in various segments, including the achievement of awards in customer satisfaction in the automotive industry.

  • 4-5. Creating Shared Value Initiatives

  • Hyundai is dedicated to creating shared value through its initiatives that align business success with community welfare. This encompasses projects such as 'IONIQ Forest', which contribute to environmental sustainability while generating economic value. The company remains committed to ensuring that its growth contributes positively to the wider society.

Conclusion

  • Hyundai Motor Company's ambitious 2024 sustainability agenda sets a benchmark in the automotive sector, showcasing the company’s deep commitment to governance, environmental action, and social responsibility. With a diverse and independent Board of Directors, Hyundai ensures transparency and stakeholder representation in its governance processes, which strengthens decision-making and accountability. Environmentally, the company's strategies are aligned with its long-term goal of carbon neutrality by 2045, emphasizing innovations in resource efficiency and biodiversity protection. Social initiatives are rooted in global human rights standards, advancing employee welfare, and ensuring ethical supply chain practices, which underscore its commitment to shared value creation. However, challenges remain in balancing rapid industry changes and stringent global standards. Hyundai is poised to continuously evolve its strategies, encouraging a culture of compliance and sustainability across its operations. Moving forward, such initiatives have significant potential for practical application, offering a model for other automotive companies aiming to integrate sustainable practices into their business models and drive industry-wide progress towards a more sustainable future.

Glossary

  • Hyundai Motor Company [Company]: Hyundai Motor Company, established in 1967, is a leading global automotive manufacturer. The company is dedicated to sustainable growth through innovative practices in governance, environmental management, and social responsibility. Its initiatives aim to reduce environmental impacts, enhance stakeholder engagement, and uphold high standards of ethics and compliance, making it a key player in the automotive industry's transition towards sustainability.

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