Road to
Sustainability
2023 Sustainability ReportContents
Introduction

Environmental

SocialGovernance

1.1

CEO Message

03

2.1

Environmental Management

19

3.1

Creative Organizational Culture

45

4.1

1.2

Company Overview

04

2.1.1 Environmental Management System

19

3.1.1

Strategic HR Management45

4.1.1 Composition of the BOD

79

1.3

Global Network

05

2.2

Response to Climate Change

21

3.1.2

Great Workplace Culture

48

4.1.2 Operation of the BOD

80

1.4

Business Performance06

2.2.1 Climate Change Risk Management

21

3.1.3

Human Rights Management50

4.1.3 Functions of the BOD

82

1.5

ESG Direction of Hyundai Motor Group08

2.2.2 Carbon Neutrality

25

3.2

Health, Safety and Welfare of Employees

53

4.1.4 BOD Remuneration

82

1.6

ESG Governance09

2.2.3 Reducing Product Carbon Footprint

28

3.2.1

Strengthening Health and Safety Leadership53

4.1.5 BOD Subcommittees

83

1.7

Key ESG Activities and Achievements

10

2.2.4 Carbon Reduction at Business Sites

32

3.2.2

Customized Welfare Benefits

56

4.2

1.8

Stakeholder Engagement12

2.2.5 Life Cycle Carbon Reduction

33

3.3

Sustainable Supply Chain

57

4.2.1 General Shareholder’s Meeting

85

1.9

Materiality Analysis

14

2.3

35

3.3.1

Establishing a Win-win Growth Ecosystem

57

4.2.2 Communication with Shareholders

86

2.3.1 Extended Producer Responsibility

35

3.3.2

Supply Chain ESG Management60

4.2.3 Shareholder Interest Protection Systems

86

2.3.2 Establishment of a Virtuous Circulation
System for Batteries

37

3.4

Customer Experience Innovation

64

4.2.4 Shareholder Return

86

Establishment of a Circular Economy

What moves us:
The 2023 Hyundai Motor Company ESG Magazine illustrates Hyundai’s “Progress for Humanity”. For
the irreplaceable Earth and for a sustainable future for which generations to come will be grateful, theprogress continues. And what enables our innovation is “humanity.

87

Product Responsibility

64

4.3

3.4.2

Maximizing Customer Satisfaction

68

4.3.1 Spreading Ethical Management87

2.4.1 Sustainable Use of Resources

38

3.4.3

Sustainable Brand

70

882.4.2 Management of Harmful Substances

39

3.5

Creating Shared Value

72

4.3.2 Compliance Management &Compliance Support System

Protection of Biodiversity

41

3.5.1

CSV Initiative72

4.3.3 Compliance Program

88

41

3.5.2

CSV Activities

73

Reduction of Environmental Impact

2.5.1 Preservation, Restoration, Expansion of
Biodiversity

ESG Magazine

Ethics and Compliance Management

85

3.4.1

2.5

This report has been published as an interactive PDF, allowing readers to move quickly and easily to
pages in the report, and including shortcuts to the related web pages.

Shareholder-friendly Management

79

38

2.4

Interactive PDF

Board-centered Management System

4.4

Risk Management89

4.4.1 Global Risk Management System

89

4.4.2 Management of Major Non-financial and
Financial Risks

90

4.4.3 Personal Information Protection

93

4.4.4 Cybersecurity

93

ESG Factbook
5.1

Facts & Figures

95

5.6

SASB Index

111

5.2

ESG Certifications

103

5.7

WEF IBC Stakeholder Capitalism Metrics

112

5.3

GRI Index

104

5.8

Independent Assurance Statement

114

5.4

ESRS Index

107

5.9

GHG Assurance Statement

116

5.5

TCFD Index

110

5.10

About This Report120

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

03

CEO Message

In its pursuit of progress forhumanity, Hyundai Motor Company
will continue embracing
boundless challenges andspearheading innovation.

On behalf of Hyundai Motor Company, I would like to express my heartfelt gratitude to all
our customers, employees and business partners who have contributed so invaluably to the growth andprogress of our enterprise.
In 2022, our company achieved a record 143 trillion won in sales and9.8 trillion won in operating profits — a historic milestone for Hyundai
Motor Company. This proud achievement is a testament to our hardwon efforts to expand sales, particularly of our high-value-added
models, notwithstanding a supply shortage of major components
such as semiconductors and heighted market competition stemmingfrom an economic slowdown.
Our sales in Europe saw a notable 6.5 percent year-on-year increase,reflecting our growing market share in the European Union’s electricvehicle (EV) segment. In the United States, we significantly increased
our market shares across major regions, with our flagship luxury
brand Genesis setting historic sales records for two years running.
Furthermore, Hyundai’s EV brand IONIQ won the prestigious WorldCar of the Year award for the IONIQ 5 (in 2022) and the IONIQ 6 (in2023) due to their world-class quality and safety standards.
In terms of sustainable management, Hyundai Motor Company has
made comprehensive efforts to strengthen its Environmental, Socialand Governance (ESG) initiatives. On the environmental side, we haveworked to steadily expand our sales of EVs, achieving an 8 percent
year-on-year increase in EV sales and selling 200,000 units. Thishas brought our company one step closer to achieving our carbon
neutrality target for 2045. On the social front, we have thoroughly
evaluated diverse ESG-related risks in our supply partners’ operations
and supported them to upgrade their ESG management capabilities,
with a view to creating a more responsible and sustainable valuechain ecosystem. As for governance, we have made serious efforts
to implement frameworks for enhancing our governance structure,including instituting outside evaluations of our board of directors’
operations as well as compliance systems.
On the back of these efforts, Hyundai Motor Company came out on
top in the ESG evaluation (the Dow Jones Sustainability Indices) of theautomotive industry by S&P Global last year. In addition, we have made it
onto the Dow Jones Sustainability World Index for two consecutive years.
In an era of growing demands for and regulation of ESG activity aroundthe globe, establishing an ESG-centered approach to management

has become a vital requirement in the corporate world. Going forward,
this trend is only likely to intensify as sustainable economic growth
gains importance. Not only are major corporations disclosing their
ESG information publicly, but the oversight and management of
ESG initiatives throughout their supply chains are also becoming
regularized. As such, ESG management is the new norm — it has adirect bearing on legal compliance risks as well as reputation andfinancial risks and thus lays the groundwork for sustainable growth.
As a leader in ESG efforts, Hyundai Motor Company has set out tofundamentally transform its system of operations, implementing along-term strategy of sustainable growth, continuous innovation andproactive engagement with various stakeholders. In order to live up
to the rigorous standards expected of us, we will significantly bolster
our company-wide ESG-related capabilities throughout the entire
company as well as our supply chains and make substantive progresswithin our organization.

Dear friends, partners and supporters,
Hyundai Motor Company will usher in the future by ceaselessly taking onchallenges and innovating in response to rising economic uncertainties
and risks. We will fulfill our corporate social responsibilities with a spiritof fairness, integrity and collaboration. And we will build bridges ofsolidarity, mutual trust and unconstrained communication with all our
stakeholders.
Just as small droplets come to form a vast ocean, Hyundai Motor
Company will make good on its promises and fulfill its potential forthe benefit of humanity and Earth itself. I would like to cordially ask
for your continued support and encouragement in this meaningfulendeavor.
Thank you.

Jaehoon Chang
President and CEO, Hyundai Motor Company

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

04

Company Overview
Hyundai Motor Company has been providing customers with the best products and services possible ever since its establishment in 1967. We will continue to strengthen our business capabilities with the goal of growing into a “smart
mobility solution provider” based on sustainability management. Moreover, we build customer trust through “quality” and based on that, we will provide “SMART”, sustainable mobility experiences as our differentiators, and thus realize ourbrand vision of connecting people with quality time.

Overview of Hyundai Motor Company
Company Name

Credit Ratings

Hyundai Motor Company

Date of Establishment

Dec. 29, 1967

CEOs

Euisun Chung, Jaehoon Chang, Dong Seock Lee
Key Business Area

Automobile manufacturing

Date of IPO

DOMESTICOVERSEAS

Korea Ratings

Moody’s

AA+

NICE Investors ServiceAA+

Jun. 28, 1974
12, Heolleung-ro,
Seocho-gu, Seoul, 06797, Korea

Headquarters

Stock Exchange

Korea Investors Service

Baa1

S&P

BBB+

AA+

Korea Exchange (KRX) stock market* As of the end of 2022; Based on K-IFRS consolidated financial statements* As of the end of 2022

Key Financial Figures
SALES REVENUE(Unit: KRW billion)

OPERATING PROFIT(Unit: KRW billion)

NET PROFIT(Unit: KRW billion)

TOTAL ASSETS(Unit: KRW billion)

TOTAL EQUITY(Unit: KRW billion)

2020

103,997.6

2020

2,394.7

2020

1,924.6

2020

209,344.2

2020

76,341.0

2021

117,610.6

2021

6,678.92021

5,693.1

2021

233,946.4

2021

82,615.8

2022

142,527.5

2022

9,819.82022

7,983.6

2022

255,742.5

2022

90,896.5

KRW142,527.5 billion

KRW

9,819.8 billion

KRW

7,983.6 billion

KRW

255,742.5 billion

KRW

Global Best-selling Models

90,896.5 billion(Unit: Vehicles)

TucsonElantra (AVANTE)

Santa Fe

SonataAccent570,058

367,209

218,688

134,752

133,847* As of the end of 2022

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

05

Global Network
Hyundai operates production plants, technology research institutes, and design centers in major overseas markets. We
sell vehicles across the globe, with around 6,200 sales networks in approximately 184 countries.

Asia & PacificMiddle East & Africa

North America, Central & South America

1Hyundai Motor Group (China) Ltd.
2
Beijing Hyundai Motor Company
3	Hyundai Motor Technology And
Engineering Center (China), Ltd.
4
Hyundai Truck & Bus (China)
5
Beijing Zingxian motor Safeguard Service Co
6Hyundai Top Selection Used Car Co., Ltd.
7	Hyundai Motor Global Toolingin China CO., Ltd.
8
Genesis Motor China
9
Hyundai Motor Japan R&D Center
10 Hyundai Motor Japan
11 Hyundai Motor India Headquarters
12 Hyundai Motor India Engineering Center
13	Hyundai Thanh Cong Commercial Vehicle
Joint Stock Company
14 Hyundai Motor ASEAN Headquarters
15 Hyundai Motor Manufacturing Indonesia
16 Hyundai Motor Manufacturing Indonesia
17 HLI Greenpower
18	Hyundai Thanh Cong Manufacturing
Vietnam
19 Hyundai Motor Oceania Headquarters
20	Hyundai Motor Group Innovation Centerin Singapore
21 HTWO Guangzhou
22	Hyundai Thanh Cong Vietnam Joint Stock
Company
23 Advanced & Digital R&D Center China
24 China Commercial Vehicle R&D Center
25 Hyundai Motor Thailand, Inc.
26 Hyundai Motor Philippines, Inc.

27	Hyundai Motor M.East &Africa Headquarters
28 Africa & Middle East Quality Center
29 Genesis Middle East & Africa

51	Hyundai Motor North America Headquarters
52 Hyundai Motor Group Metaplant America
53 yundai Auto Canada Corp.
54	Hyundai·Kia America Technical Center, Inc.
55	Hyundai Motor Manufacturing Alabama
56	Hyundai Motor Central &South America Headquarters
57 Hyundai Motor de Mexico
58 Hyundai de Mexico
59 Hyundai Translead
60 Hyundai Motor America
61	Hyundai Motor Company
40
Washington Office
62 Motional
63 Supernal
64 North America Quality Center
65 Boston Dynamics

Europe30 Hyundai Motor Europe Headquarters
31 Hyundai Motor Manufacturing Czech
32 Hyundai Motor Czech
33 Hyundai Motorsport Gmbh
34 Hyundai Motor Company Italy
35 Hyundai Motor Deutschland Gmbh
36 Hyundai Motor United Kingdom
37 Hyundai Motor France
38 Hyundai Motor Europe Technical Center
39 Hyundai Motor Poland
40 Hyundai Motor Espana
41 Hyundai Motor Netherlands B.V.
42 Hyundai Motor Russia & CIS Headquarters
43	Hyundai Motor Commonwealth Of
Independent States
44 Hyundai Motor Manufacturing Russia
45 Hyundai Truck & Bus Russia
46	Hyundai Assan Otomotiv Sanayi Ve Ticaret A.S.
47 Genesis Motor Europe
48 Hyundai Hydrogen Mobility
49 Europe Quality Center
50 Hyundai Motor Company Brussels Office44
1

42 43 45
36

2

5

53

6
3

50 30 39 33
4

41 37 35 31 32
48 38 47 49
34

64 54

7

24

23

46

61 63
9

10

22 13 21

11 12

60

51
59

18
27 28 29

62 65

8

25

55

52

58
57

26
20
14

15

17 16

56
19

* As of April 2023

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

06

Business Performance
Hyundai sells vehicles through directly-operated branches across Korea as well as dealerships. To increase sales, we implement customer top priority management, marketing aimed at enhancing brand value, and on-site-tailoredsales promotions. We implement innovative activities to respond to consumer needs in the contactless era by making continuous effort to discover new mobility-oriented businesses in line with changes in domestic consumer trends.
In overseas markets, we are implementing distinctive sales strategies that reflect the market environment by base through overseas subsidiaries. Despite the COVID-19 pandemic and semiconductor supply setbacks, we are focusing
on enhancing brand power by digitalizing the sales process based on future retail strategies, strengthening brand image through brand campaigns, expanding the sales network centered on high-quality dealers, and strengthening
online marketing and CSV activities.
Production and Sales(Unit: Vehicles)

PRODUCTION

Sales by Major Market(Unit: 1,000 vehicles)

SALES
250 256
97
TOTAL
TOTAL

4,000,294

3,942,922

689 689

98

RussiaTOTAL

China (BHMC)
BHMC

570 587

North America

555 562

Korea

310
4

EuropeDomestic 1,732,639

Overseas 2,267,655

Domestic 688,884

Wholesale
Retail949 940

India

4

Others(vehicles manufactured in China,
GMC, Truck & Bus (China), HMJ,
HHM, etc.)

Overseas 3,254,038* Based on wholesale

310

Central &South America* As of 2022

Sales of Eco-friendly Cars
TOTAL SALES VOLUME(Unit: Vehicles)

GLOBAL SALES(Unit: Vehicles)

SALES BY MODEL(Unit: Vehicles)

EV, HEV, PHEV, FCEV

Domestic

Overseas

EV

FCEV

HEV, PHEV

506,793

139,432

367,361

210,352

11,217285,224* As of 2022; and wholesale basis

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

07

Business Performance
Business Review in Major Markets
Korean Market

US Market

Asian Market

European Market

Market Condition

Market Condition

Market Condition

Market Condition

In 2020, the Korean market recorded new vehicle sales of 1.89 million units,a 5.7% increase over 2019, on the back of an individual consumption tax
reduction policy and increased launch of new vehicles despite COVID-19
impact. In 2021, however, new vehicle sales decreased 8.4% from 2020 torecord 1.73 million, mainly attributable to supply issues of semiconductors
for vehicles as a result of global supply chain setbacks. Supply chain
instability continued in 2022, resulting in new vehicle sales of 1.69 million, a
year-on-year decrease of 2.3%.

Overall sales decreased in the US market in 2020 as a result of production
and sales setbacks due to COVID-19 and worsened consumer sentiments.
However, the upper middle class used low interest rates to purchasehigh-priced SUVs and pickup trucks, leading to upward alternative
consumption. Sales grew in the first half of 2021 as the market became freeof the COVID-19 pandemic shock, but sales remained low in the second
half of the year due to semiconductor supply shortage. In 2022, inventory
shortage issues continued as a result of global semiconductor shortage
led to a 7.8% decrease from 2021 to record sales of 13.899 million units.

In China, a total of 21.056 million units of cars were sold in 2022. In major
manufacturing regions, including Changchun and Shanghai, manufacturing
was suspended after March to prevent the spread of COVID-19, leading toa significant decrease (-17.5%) in sales from March to May. However, on theback of consumption policies, including a purchase tax reduction in June andexpansion of new energy vehicle license plates, 2022 annual sales recorded
a year-on-year increase of 5.9%. In India, sales rose 22.9% over 2021 to record
3.82 million units owing to base effects from standby demand caused by
COVID-19 and semiconductor supply setbacks. This is a record-high annual
sales performance that exceeds 3.37 million units recorded in 2018.

Total sales in Europe were 11.961 million units in 2020, mainly attributable toproduction and sales setbacks as well as worsened consumer sentiments
due to COVID-19. In 2021, a total of 11.775 million units were sold, a year-onyear decrease of 1.5%. In 2022, supply setbacks triggered by semiconductor
supply shortages and the spread of COVID-19 variants impacted sales,
leading to a year-on-year reduction of 4.1% in sales to record 11.287 million
units. Overall demand declined as a result of semiconductor supply
shortages, but BEV sales rose 28.0% and accounted for 12.1% of overallvehicle demand.

Business Review

Business Review

Business Review

Business Review

In 2022, Hyundai sold 690,000 units, a year-on-year decrease of 5.2%, as aresult of production setbacks caused by global supply chain instability. Our
market share decreased 1.3% year-on-year to record 40.7% but we strived to
improve sales profitability by increasing the proportion of high value-added
model sales, including the Genesis and SUVs, and by increasing sales of the
new Grandeur that was launched at the end of the year. In addition, to respondto customer needs, we became the first in Korea to adopt a Direct to Consumer(D2C) online sales method, while strengthening the Genesis brand lineup tolead the luxury car market in Korea. In 2023, we will successfully launch theplanned new model lineup and focus on increasing our market share.

In 2022, Hyundai sold 781,000 units in the US market, recording a yearon-year decrease of 0.9%, with a market share of 5.6%. Market share rose
0.4%p year-on-year on the back of strong sales of SUV models, including
Tucson and Santa Fe, as well as Genesis models such as the GV70. In 2022,
the G90 was named as Car of the Year by MotorTrend, and Hyundai wasnamed Best SUV Brand by U.S. News & World Report. Hyundai is thus
proving product excellence by winning various awards.

In China, Hyundai sold 250,000 units in 2022, a 28.5% decrease from2021, and recorded a market share of 1.2%. In 2021 and 2020, Hyundai sold
350,000 and 440,000 units, respectively, and recorded a market share of
1.8% and 2.3%. In India, sales of most vehicles, including major SUV models
such as Venue and Creta, rose in 2022, on the back of which Hyundai sold
553,000 units, a year-on-year rise of 9.4%, with a market share of 14.5%. We
are making active efforts to continue balanced growth of sales, services,and brands from a long-term perspective in India.

Hyundai’s sales volume in Europe was 505,000 units in 2021, recording amarket share of 4.3%. In 2022, we sold 538,000 units (based on Western
Europe), a year-on-year increase of 4.0%, on the back of continued strong
sales of the IONIQ 5 and Tucson PHEV. We are reinforcing our positionin the European market based on technological prowess and design
excellence. As a leading example, the Genesis GV60 was named German
Premium Car Of The Year 2023. In addition, the IONIQ 5 was named 2022
German Car Of The Year in the “new energy category” and UK Car of theYear, thus proving Hyundai’s quality competitiveness.

Market share

Market share

Market share

Market share

Total sales

Sales of eco-friendly cars

40.7 %
688,884 units
139,432 units

Total sales

Sales of eco-friendly cars

5.6 %780,675 units

INDIA
Total sales
CHINA

98,443 units* Retail basis

1.2 %14.5 %

CHINA

250,423 units
552,512 units

INDIA* Wholesale basis

Total sales

Sales of eco-friendly cars

4.2 %586,680 units
214,719 units* Retail basis

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine08

ESG Direction of Hyundai Motor Group
Guided by Hyundai Motor Group’s social responsibility message “The Right Move for the Right Future” which includes the Group’s ESG management commitment and mid- to long-term direction, we share a story of a sustainable future forhumanity, the environment, and society. A sustainable future is an obligation we should pursue for the next generation, a basic right that everyone on Earth should be able to enjoy, and a desirable future that everyone dreams of. The Group’ssocial responsibility message incorporates the Group’s commitment to lead the right “move” through the “right” action to this end. For this commitment to lead to actual change, there is a need to clearly set internal and external ESG
requirements and key management indexes per major agenda item. To this end, Hyundai Motor Group clearly presents a direction for change through three major mid- to long-term directions – “Move for Our Planet, People, Community”– and 15 key management areas. Starting in 2023, we have developed and applied the HMG ESG Index, the Group’s common management index, based on 15 key management areas. Going forward, we will continue to build a culture ofsustainability in our organization and improve ESG performance.
Sustainability in Hyundai Motor GroupThe Right Movefor the Right Future

Move forMove forMove for

Our Planet

Our People

Our Community

Internal Stakeholders

External Stakeholders

The Right Way for Our Growth

The Right Change for Our Society

Global Environment

The Right Move for Our Planet
Carbon Neutrality & Energy Transition

Diversity & Inclusion

Social Impact

Circularity

Human Right

Customer Experience Innovation

Clean Tech Products & Services

Corporate Culture Innovation

Product Quality & Safety

Operational Eco-efficiency

Talent Growth Experiences

Sustainable Supply Chain

Natural Capital Conservation

Occupational Health & Safety

Job Creation for the Future

Move

Right

Hyundai Motor Group has been helping people to “move” and creating the world’s “movement” since its
founding. “Move” is therefore a heritage of the Group and it also services as a pivot that connects the past,present, and future into one.

Hyundai Motor Group thinks and acts in a “right” way in the pursuit of progress for sustainable environmentand humanity. “Right” therefore symbolizes the Group’s sustainable philosophy.

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine09

ESG Governance
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. Based on ESG governance, we discuss pending issues at the Sustainability Management Committee under the BOD, the highest decision-making body, and the ESG Committee. In addition, we encourage each organization toautonomously strive for ESG improvement by establishing a performance goal for each working-level division and reflecting the performance in KPIs, thereby building a culture of ESG.

Sustainability-Centered Decision-Making andCommunication

ESG Performance Management

Establishment of ESG GovernanceIn line with the ESG paradigm, where ESG management has become aprerequisite for sustainable growth, Hyundai established ESG governancefor strengthened ESG-centered decision-making and cooperative relations,and operates the Sustainability Management Committee and the ESG
Committee, a small meeting group within the Hyundai Business Strategy
Meeting that is participated in by top management. We also operate the
ESG Council, in which business divisions related to major pending ESG
issues participate to discuss improvement measures and share information
on improvement performance to manage ESG risks and performance.

Sustainability Management Committee
The Sustainability Management Committee consists of a total of eight
directors – seven independent directors, one internal director. It discusses
diverse policies concerning practicing sustainability management andmaintaining insider trading transparency; implementing business ethics
and making ESG performance improvements; and protecting shareholder
rights and interests. It also deliberates and decides on strategy, activity,
performance, and target plans from a professional perspective. In
addition, the Committee discusses major plans concerning safety andhealth, which are steadily gaining importance, and examination of plan
execution. An independent director (Chi-Won Yoon) who is in chargeof protecting shareholder rights and interests in the Sustainability
Management Committee attends investor meetings in Korea and nondeal roadshows (NDRs) for overseas investors to promote communication
between the BOD and shareholders. Investor demands and suggestions
concerning ESG are reflected in the company-wide ESG policy andstrategy-establishing process.

ESG Committee
Hyundai has established the ESG Committee within the Hyundai Business
Strategy Meeting that is participated by the CEO and top management.
Top management in each area discuss implementation directions andaction plans on ESG tasks and issues, and review the implementation
status and major performance. The ESG Committee manages risks by such
ESG area as carbon neutrality, resource circulation, protection of humanrights, spread of ESG across the supply chain, and social contribution,
while also managing and supervising performance improvement activities.

In regards to matters identified as matters that require deliberation/
approval from the top decision-making body after the review ormanagement/supervision by the ESG Committee, we set them as agendaof the Sustainability Management Committee. Those matters include
major pressing risk factors and matters that require improvements
because they are aligned with mid- to long-term business strategies.

ESG Council
Hyundai has formed the ESG Council, consisting of working-level employees
per division concerning environmental (E), social (S), and governance (G),including climate change, quality and safety, talent development, social
contribution, and ethical management. The ESG Council discusses the ESG
implementation direction and plan per division, carries out risk reduction
and performance improvement activities, and shares information on
pending matters and performance. In principle, the ESG Council is held
regularly for the purpose of sharing information on the implementation
status and performance of each division. It is also run frequently for ESG
information disclosure, response to external evaluations, and response topending issues concerning business.

We plan to identify and adopt KPIs that identify ESG risks that may arise
from entering new markets, developing new business, and conducting
projects and that preemptively prevent/manage ESG risks that have a highpossibility of occurrence or high business impact.

Hyundai is adopting an ESG performance management system aimed
building a culture of ESG to generate business effectiveness and positivesocial influence through ESG management. We set KPI per strategic ESG
task and regularly (on a quarterly, semiannually, annually basis) examine
performance. The execution status of strategic ESG tasks and achieved
performance are handled as important factors in the process of evaluating
the performance of top management and employees.

BOD Composition

BOD(Sustainability Management Committee)

ESG Committee(Hyundai Business Strategy Meeting)

Planning & Finance Division(Sustainability Management Team)

Hyundai Motor GroupESG Council

Sustainability Management TeamThe Sustainability Management Team, under the Planning & Finance
Division, handles company-wide planning, management, and cooperation of
ESG management. Its tasks include establishment of an ESG management
system, organizational internalization, establishment of a cooperation
system, and external disclosure and communication. To advance the ESG
management system, the Team is establishing ESG management indexes
and a data platform, and helps each division design ESG KPIs. In addition,
it identifies matters that require performance improvements and handles
collaboration/mediation so that working-level employees can make
improvements. It is also in charge of stakeholder communication, including
sustainability report publication ad external ESG assessment.

ESG Council

Environmental (E)• Climate change• 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 & Safety

Governance (G)• BOD operation• Ethical management

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

10

Key ESG Activities and Achievements
Hyundai identifies and improves ESG issues that are important for Hyundai’s sustainable growth and fulfillment of social responsibilities. We also focus on managing ESG issues that have a high impact on our business operations andstakeholder lives. In 2022, we sold 506,793 eco-friendly vehicles and conducted a life cycle assessment (LCA) on 16 models in line with zero-carbon product goal, and as part of our RE100 implementation, Hyundai Motor Manufacturing Czech(HMMC) achieved 100% transition to renewable energy. We declared our Diversity & Inclusion Policy and confirmed an increase in the percentage of female executives, managers, and technical staff as a result. To manage supply chain ESG
risks, we conducted a document-based assessment on 1,704 suppliers and an onsite due diligence on 38 suppliers. To establish sound, transparent governance, we carried out a third-party evaluation on BOD composition and operation,
appointed additional female and foreign nationality directors, and established an Audit Committee approval process for non-audit service contracts with external auditors.
Journey Towards Sustainability
Overall ESG

Environmental

SocialGovernance•	Announced Hyundai Motor Group’s social responsibility message• Recorded 506,793 units of eco-friendly vehicle sales in 2022

•	Disclosed the Hyundai Diversity & Inclusion Policy and the NonDiscrimination & Anti-Harassment Policy•	Third-party assessment of the BOD- Set 3 major mid- to long-term directions – Move for Our Planet, Movefor our People, Move for our Community – and 15 key managementareas• Developed HMG ESG Index and Conducted a pilot assessment- Established a key performance index to improve the ESG level of theGroup affiliates and for systematic internalization•	Established an ESG platform(in-house ESG information management system)- Established the “integrated ESG platform” by putting together global
disclosure standards and ESG evaluation indexes for systematiccompany-wide ESG data management- Recorded global annual sales of 210,352 EVs and 11,217 FCEVs in 2022

- Established principles aimed at realizing the values of employee
diversity & inclusion and preventing issues/incidents related toworkplace human rights•	Increased the number of models subject to LCA- Conducted the 2022 LCA on a total of 16 models, including all Genesis
models, IONIQ 6, and NEXO

•	HMMC achieved RE100- HMMC completed the transition from electric energy used in the
manufacturing process to 100% renewable energy•	Genesis ranked No. 1 in US Initial Quality Study (IQS)·US Vehicle
Dependability Study (VDS)- Ranked No. 1 in 2022 in IQS and VDS premium brand, thus proving
top-level quality and safety technologies•	Recorded continuous increase in female executives, managers,
engineers- The ratio of female executives, managers, and engineers continued
to increase as a result of efforts to expand employee diversity and tobuild an inclusive organizational culture* Total female executive ratio(5.38% in 2020 → 5.62% in 2021 → 6.37% in 2022)•	Conducted an ESG NDR- Held an ESG-specialized NDR for global investors concerning our ESG
management performance and future plans(for 28 institutional investors for 10 days)•	Water reuse indicated a year-on-year increase of 5%- 2,284,154 tons of water were reused in 2022 with a reuse ratio of 21%(2,179,600 tons in 2021)•	Strengthened supply chain ESG management- Conducted a document-based assessment on a total 1,704 tier-1
suppliers and core tier-2 suppliers and an on-site due diligence of
38 high-risk suppliers- Conducted a third-party assessment for an objective assessment ofadequacy of BOD composition and operational effectiveness•	Assessed the effectiveness of compliance control standards- Conducted an annual effectiveness assessment through an external
expert to examine whether the compliance control system is operated
effectively  •	Enhanced BOD diversity- Appointed an additional female independent director with expertise(labor-management, law) and an additional director with a foreign
nationality (global business)* 2 female directors, 2 directors with a foreign nationality•	Established a process for non-audit services by external auditors- Established a process to receive the Audit Committee’s approval
beforehand to sign a non-audit service contract with an external
auditor to strengthen independence of
external auditors

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

11

Key ESG Activities and Achievements
Hyundai actively responds to ESG ratings of domestic and overseas capital markets, including the S&P(DJSI), MSCI, Sustainalytics ESG Risk Ratings, Korea Institute of Corporate Governance and Sustainability (KCGS), CDP Climate Change& Water Security. We also increasingly disclose information about our ESG performance based on the SASB Standards, TCFD Recommendation, and WEF Stakeholder Capitalism Metrics for external communication of our ESG managementlevel. In addition, through on/offline communication with regulatory agencies, institutional investors, and non-profit organizations in Korea and abroad, we confirm major stakeholders’ ESG management demands or expectations towards
Hyundai. We use the results of collecting stakeholder opinions to better implement ESG management.

ESG Assessment and Initiatives

ESG Communication

DJSI World Index

Korea H2 Business Summit – Corporate Council on Hydrogen

CEO Investor Day

Hyundai x FIFA World Cup 2022TM

Hyundai received recognition for its outstanding ESG management in
Corporate Sustainability Assessment (CSA) by S&P Global and was included
for two consecutive years in the DJSI World Index as of 2022. In particular,
we generated outcomes in such indices as environmental efficiency
improvements, including water consumption, strategic HR management,
and sustainable brand, and received the No. 1 ranking in the industry. Our
inclusion in the DJSI World Index is the result of active ESG performance
generation activities in accordance with our mid- to long-term sustainability
management direction. We will continue to establish measures to improve
our ESG management level and communicate with various stakeholders.

Hyundai is participating in the Korea H2 Business Summit, the largest privatesector hydrogen council in Korea, as a key member. The vision of the Korea
H2 Business Summit is to hasten Korea’s transition to a hydrogen society,with Korea’s leading companies performing central roles, and to lead theglobal hydrogen economy. In particular, it is providing support to facilitatebalanced development of the overall hydrogen economy ecosystem byremoving investment uncertainties, ranging from hydrogen production touse, through close cooperation among companies. In addition, it is striving
to advance the Korean economy’s transition to a hydrogen economy byenabling timely execution of business and investment opportunities that
require considerable capital.

In June 2023, we held the CEO Investor Day and presented our new
strategy, the “Hyundai Motor Way.” The Hyundai Motor Way includes ourfinancial, electrification, and future business strategies to take leadershipin the EV market by achieving innovation based on Hyundai’s unique
heritage. We have set a goal to achieve 2 million units of EV sales and10%+a of EV profitability, as well as mid- to long-term investment plan
totaling KRW 109.4 trillion for ten years (2023-2032), including KRW 35.8
trillion in electrification. We seek to gain top-tier EV leadership by adopting
a modular architecture, implementing an electric vehicle manufacturingmethod that uses existing plants and builds new EV-dedicated plants, andestablishing a value chain and strengthening design capabilities in all areasof battery. We will build a hydrogen ecosystem through a Hyundai affiliatelevel hydrogen toolbox and carry out continued research and investments
in future businesses, including autonomous driving, SDV, robotics, andAAM, to solidify our status as a “smart mobility solution provider.” We
will achieve our brand vision, “Progress for Humanity,” through peoplecentered innovation by developing our technological prowess that hascontinued from the past.

Hyundai’s sustainability vision is to create a sustainable world more
efficiently through solidarity. During FIFA World Cup 2022™, we ran
the Goal of the Century campaign in which soccer fans participate andpractice sustainable actions under the slogan of a “United World for
Sustainability”. In particular, through the Hyundai Goal of the Century
Program, participants made a pledge to practice an eco-friendly activity
if a country in the World Cup Finals that he/she roots for makes a score.
Many soccer fans across the globe took part in the program as a way tocreate a sustainable future. In addition, we provided official vehicles toeach country’s national team players, VIPs, and officials, and more thanhalf of the provided vehicles (some 230 units) were eco-friendly vehicles,
including the IONIQ 5, Tucson HEV, Kona HEV, and ELEC CITY, helping
develop FIFA World Cup 2022™ into a sustainable festival.

CDP Climate Change & Water Security
Hyundai has been implementing 2045 carbon neutrality strategy,
continually expanding the electrified vehicle lineup, switching to renewableenergy at our operations, operating low-carbon/eco-friendly manufacturing
processes, and advancing water treatment facilities at our domestic andoverseas operations. In recognition for such environmental management
practiced from a mid- to long-term perspective, we earned the LeadershipA, the highest rating, in Water Security from Carbon Disclosure Project(CDP) in 2022. We also received the Leadership A- score in Climate
Change. Accordingly, we received the Grand Prize in the water resourcesmanagement and Sector Honors in the carbon management at the 2022
CDP Korea Awards. We will continue to make active efforts to reduce GHG
emissions and protect water resources throughout the entire process that
ranges from acquisition of raw materials to end-of-life treatment.

ESG RATINGSKCGSOverall(Environmental A,
Social B+, Governance B+)
Sustainalytics

Hydrogen Council
The Hydrogen Council is the first global CEO council which was formed toemphasize the role of hydrogen technology in the energy transition acrossthe globe. Launched during the World Economic Forum (Davos Forum),it consists of around 150 global companies, including Hyundai Motor
Company, Toyota, BMW, and Air Liquide, and discusses activities aimed
at successfully implementing the goals of the Paris Agreement that was
adopted at the UN Climate Change Conference in 2015 (COP21). In particular,
Euisun Chung Executive Chairman of Hyundai Motor Group served as theco-chair in 2019 and 2020, taking active part in supporting national andprivate-level cooperation around the world to realize a hydrogen economy.
We are now still playing an active role as a member company.

B+

Risk Ratings

30.9(High Risk)

MSCI

B

ESG Non-Deal Roadshow
In August 2022, we held an ESG roadshow for global investors to explain
about the ESG implementation status and future plans and to listen toopinions, including requirements for Hyundai. In addition to sharing
information on the execution status of our 2045 carbon neutrality strategy,
including RE100, and electrification strategy, including expansion of electricvehicle sales, we explained about our activities to reuse water in regions withhigh water resource risks. In addition, we transparently shared information
on prior inspections and training to strengthen product quality and safety,
measures to manage human rights risks of operations, and supplier ESG risk
diagnosis and due diligence plans. In consideration of the capital market’sinterest in ESG and influence, we will continue to regularly hold events where
our ESG status and performance are shared, including NDRs.

RatingESG Non-Deal Roadshow

Hyundai x FIFA World Cup 2022TM

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

12

Stakeholder Engagement
Hyundai categorizes its stakeholder groups into seven – customers/dealers, employees, suppliers, local communities, government, shareholders/investors – in consideration of automotive industry characteristics and pending issues, andoperates various communication channels by comprehensively considering each stakeholder group’s major matters of interest and anticipations towards Hyundai. We encourage active stakeholder participation and communication, andreflect major stakeholder opinions in our management decision-making process, including business plans, thereby strengthening management transparency and credibility. We will continue to build mutually sound relations, such as byfacilitating stakeholder exchange and transparently providing important information.
Stakeholder Participation and Communication Channel Optimization
Stakeholder Participation Process Hyundai has set in place various channels to facilitate stakeholders’ participation and collect their opinions. Among opinions received through different channels, pending matters concerning our mid- to long-term business strategies and business activities, and issues with high social/environmental
impact are reported to the ESG Committee (Hyundai Business Strategy Meeting) and Sustainability Management Committee (under the BOD). Matters that are determined as being important as a result of an internal review and deliberation are applied to the business operation process or are addressed through improvement activities.
We conduct monitoring on a regular basis to figure out whether the matters are applied to the business operation process and improvement activities are implemented. If deemed necessary to inform stakeholders of the implementation status and progress, we faithfully deliver the information.

Group
Definition

Main
Channels

Major
Issues1)

Establishment of plan

Collection of opinions

Internal report

Improvement activities

Monitoring

Optimize channels and methods
by stakeholder

Explain activities and agenda,
collect stakeholder opinions

Report issues with high business impact
to ESG governance

Apply to the business operation process,derive improvement tasks

Check implementation and execution of
improvement tasks

Customers

Dealers

Employees

Suppliers

Local Communities

Government

Shareholders/Investors•	They purchase and enjoy Hyundai’s products
and services. We optimize customers’purchase/experience channels and provide
top-level products and services.

•	They are contact points that directly facecustomers and deliver Hyundai’s products/
services and brand value/experiences. They
have partnership relations with Hyundai.

•	Employees at Hyundai get involved in
product development, production, sales,and support activities. Their competencies
mean the company’s competencies. They
are internal stakeholders who also fulfill
Hyundai’s social responsibilities toward
external stakeholders.

•	They supply parts or materials to Hyundai,
enabling the company to produce quality
products. Their quality competitiveness
impacts Hyundai’s quality.

•	Local communities refer to residents andcivic groups and local governments in areas
located close to our operations and global
citizens who are influenced by our activities.
Hyundai strives for their sustainable
development.

•	The government enacts laws and regulations
that are related to the automobile industry or
decides on regulation levels on corporations’business operation, so that it can influence
our business activities.

•	They provide finance and capital to thecompany, so that Hyundai can maintainsustainable growth engines while
implementing diverse future businessstrategies or running our business.

•	Offline base (sales/service)•	Car club, influencer•	Customer promotions(Motor show, exhibition, test driving)•	Online (social media)•	Customer satisfaction survey•	Official website, app•	Sports sponsorship•	H-ear(Open customer communication channel)•	Online dealer portal•	Dealer meetings and invitation events•	Regular dealer council•	Regular dealer visits by Hyundai employee
in charge of regional management•	Labor-Management Council•	Organizational culture diagnosis andemployee satisfaction survey•	On/offline grievance receipt channels•	Occupational Safety and Health Committee•	Meetings, events, etc.
•	Musculoskeletal Disorder Prevention
Management Committee•	Education and training related to work andsafety•	Win-win growth portal site1)•	Transparent Purchase Practice Center
website2)•	Win-Win Cooperation Practice Center
website3)•	Global Win-Win Cooperation Center(GPC Portal)4)•	HMG Partner System5)•	Seminars and training•	Social contribution programs(volunteering participated in by residents, etc.)•	Family inviting events(factory visits by employee families, etc.)•	Communication with local communities
nearby the company’s operations(council consisting of local residents)•	Recruitment program(publicize recruitment to local talent)•	Events held for unity, including local cultural,
sports, and art events•	Public hearings•	Policy-making discussions and briefings•	Company briefing and securities firm
conference•	Annual Shareholders Meeting•	Non-Deal Roadshow•	IR meetings•	Sustainability Management Committee•	IR website•	Technology investment and development toimprove product and price competitiveness•	Strengthen product safety/quality
management•	Lead the future mobility, autonomous
driving, and electrification market•	Customer satisfaction•	Brand image•	Expand the vehicle lineup•	Dealer margin and compensation system•	Technology investment and development toimprove product and price competitiveness•	Brand image•	Employee competency building•	Employee human rights and diversity•	Organizational culture and evaluation/compensation•	Labor-management relations•	Health and safety in the workplace•	Supply chain ESG management(assessment and improvement)•	Support for supplier safety and security
management•	Support for supplier implementation ofcarbon neutrality and win-win growth•	Job creation and retention•	Local community-tailored social
contributions•	Enhance operations environmental efficiency•	Assess and protect biodiversity related tobusiness activities•	Support the local community infrastructure,including tourism promotion and facility
installation•	Disseminate eco-friendly vehicles andstrengthen vehicle safety•	Support electrification of small- to mid-sized
suppliers•	Provide support for global supply chain andtrade issues•	Support commercialization of new
businesses, including robot and AAM•	Strengthen roles of ESG governance•	Mid- to long-term future business strategies•	Protect shareholder rights and interests•	Enhance global corporate value and improve
fundamentals•	BOD expertise and efficient operation•	Manage climate change-related financial
impact•	Supply chain ESG management•	Enhance employee diversity•	Health and safety in the workplace in-win growth portal site: Portal site that provides information on our win-win growth activities and support programs (notices for tier-1 suppliers, win-win growth news, notices on training and supplier recruitment information, etc.)
WTransparent Purchase Practice Center website: To practice transparent management and promote mutual development when trading with suppliers, we run a center for making institutional improvement suggestions and reporting matters related to transparent and ethical conductWin-Win Cooperation Practice Center website: This website is dedicated to communication with our tier-2·tier-3 suppliers (Information on major management support and win-win cooperation programs that we provide. We also listen to suggestions and provide feedback.)
4)
Global Win-Win Cooperation Center (GPC Portal): Facilities to support suppliers’ strengthening of future competitiveness (providing training support to Hyundai Motor Group and tier-1·tier-2 suppliers, providing venues for seminars and new technology exhibitions, providing training facilities and lecturers for suppliers’ in-house training, etc.)
5)
HMG Partner System: Supply chain management system aimed at building a collaborative system between Hyundai Motor Group and suppliers (information-sharing, support for collaboration in the areas of production, quality, R&D, purchasing, etc.)2)3)

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

Stakeholder Engagement
BUSINESS CASE

Shareholder/Investor Dialogue and Engagement
Encouraging shareholder/investor engagement andexchanging feedbacks
Investors provide financial capital for the company to pursue diverse futurebusiness strategies or to maintain sustainable growth drivers in doing
business. We therefore communicate with both domestic and overseas
institutional investors to exchange feedbacks from the market perspective.
and based on the trust with investors, we are building a foundation forsustainable future businesses. As a global automobile manufacturer andultimately a smart mobility solution provider, we need to meet investors’
investment standard in diverse categories, including carbon neutrality,
supply chain management, human rights, and governance, and this makes
active communication important.

Role of the BOD and top management
In Hyundai Motor Company’s journey toa smart mobility solution provider
and a global leading electric vehicle brand, active discussions with investors
are important index and source that provide us colors of the capital market.
The board and top management at Hyundai Motor Company, therefore,
communicate with institutional investors on a regular basis to discuss our
performance concerning business and overall ESG management.
Through Sustainability Management Committee under the BOD, directors
regularly discuss ESG-related risks, status, and improvements. An
independent director in charge of protecting shareholder rights participatesin ESG and governance NDRs to directly talk to investors then delivers thevoice of the capital market to the board. Top management is in charge of
conversing the company’s future business strategy and ESG managementtargets with investors.

Facilitating shareholder/investor communication

Meeting expectations of shareholders/investors

Strengthening shareholder/investor trust (Risk Management)

The Hyundai Investor Relations (IR) Team communicates Hyundai’s ESG
management performance and progress through NDRs, corporate briefing
sessions, securities firm conferences, and investor meetings. It also listens
to opinions on the ESG implementation direction that the capital market
demands from Hyundai in line with the global ESG trend.

ESG management at Hyundai Motor Company stands for a sustainable
future. Investors, one of the key stakeholders, have a high level of interest
on ESG enhancement, short/mid/long-term plans, and how these plans
turn into actual progress. Thus, it is our utmost responsibility to present
best performance aligned with the market expectation and standards.

Enhancing shareholder/investor communication“2045 Net Zero” announced in 2021 and “RE100” are the milestones that
Hyundai Motor Company must follow. Based on our progress on thesetargets, investors can make investment decisions through which theinvestors can maintain a trust with their stakeholders. ESG investments,
including those into carbon neutrality, renewable energy, adoption of
eco-friendly technologies, are inevitable for a sustainable future. Throughcontinued engagement relating to the above, we aim to sustain atrustworthy relationship.

As a global company, Hyundai Motor Company has business sites andsales networks in various countries. We must meet environmental
regulations of different countries and also effectively manage the global
supply chain. This regional diversity is an opportunity but also signifies that
we could be exposed to risk factors. To minimize risks, we have establisheda corporate management system for various issues that may arise in the
supply chain and are continuing to advance the system. To satisfy theenvironmental regulations of each country, we are actively monitoring the
progress of fulfilling regulations.

Hyundai Motor Company Investor Relations (IR) Team communicates
Hyundai’s ESG management performance and progress to investor
community through NDRs, conferences, and investor meetings.
Furthermore, IR Team gets feedbacks from investors on global ESG trendthat the market expects us to adhere to.
Global ESG NDR

ESG Meetings

IR Website

In 2022, Hyundai Motor Company held
global ESG NDR first among Korean listedcompanies. ESG NDR targets to discuss any
ESG- related topics, which is different fromquarterly NDRs in which the company covers
financial performance and business results.
Through this global ESG NDR, we discussedwith investors our ESG improvements andmid- to long-term goals.
There is rising interest and demand for our
ESG management and future strategies alongwith the market adding more values to ESG.
In addition to engagement with domestic andoverseas institutional investors, we are actively
expanding scope of IR meetings with various
stakeholders, including ESG rating agencies
and credit rating agencies.
Hyundai Motor Company discloses
information that investors need, such as
quarterly earnings materials and sales
performance on the IR website.

Furthermore, Hyundai Motor Company updates ESG enhancement on aregular basis by engaging with global ESG rating agencies. Through thiseffort, we believe we can further enhance reputational values in addition to
directly engaging with the investors and shareholders.

We can sustain a solid relationship with investors, shareholders, and otherstakeholders through an appropriate risk management. It is therefore
very important to take appropriate and effective measures when a riskarises and to also establish measures to prevent recurrence. When a risk
becomes an issue, we are not hesitant to share the mitigation progress andresults on our IR website or through a shareholder letter in order to assure
confidence and trust to investors. Hyundai Motor Company will continue
to be transparent, and preemptive regarding disclosure so that the trustwith investors is maintained.

Going Forward
Monitoring
Credit Rating
Agencies

Hyundai Motor Company receives credit rating
results from global and Korean credit rating
agencies., These ratings may affect business
investment decisions, including investment decisions
and bond issuance. our credit rating serves as animportant index in business activities. Therefore, it isimportant to consistently monitor and follow up withany risks regarding the ratings.
Credit rating agencies focused mainly on financial
performance in the past but are introducing uniqueevaluation indexes in line with the recent global ESG
trend. This movement signifies that a company’s
ESG credit rating, in addition to its financial credit
rating, is becoming a significant investment index toinvestors and other stakeholders.

Based on the vision, “Progress for Humanity,” Hyundai Motor Company
is leading the progress into a sustainable future through means suchas innovative mobility experience. Through stakeholder engagement
including investors, we aim to share ESG enhancement progress andfuture strategies both regularly and consistently. Ultimately, we will actively
communicate with investors to highlight our genuine endeavor andinvestment into a sustainable future.

13

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

14

Materiality Analysis
Hyundai conducted the 2023 materiality analysis to identify material issues – leading the transition to eco-friendly/electric vehicles, efforts to reduce GHG emissions, enhancement of global corporate value, diffusion of human rights
management, and strategic management of supply chain ESG. They have continuity with the material issues in the last report. “Leading the transition to eco-friendly/electric vehicles” was chosen as the most important issue this year,
reflecting anticipations toward the eco-friendly and electrification transition strategies of Hyundai as the leader of the future mobility industry amid a global trend of switching to EVs. In addition, “diffusion of human rights management”
and “strategic management of supply chain ESG” were chosen as top issues against the backdrop of an increasing need to manage global supply chain human rights risks and expanding normative demand concerning human rights
assessments.
Selecting Material Issues Based on Double Materiality
STEP 01.

STEP 02.

STEP 03.

STEP 04.

Forming a pool of ESG issues

Assessing the materiality of ESG issues

Measuring the impact of ESG issues

Selecting material issues

To identify material issues that are material in business/financial aspects and also have a high level of influence on
stakeholders, we analyzed global economic, social, andenvironmental topics as well as international standards. As
a result, we derived a sustainability issue pool of 45 issues.

We used various assessment methodologies to determine
priority from the double materiality perspective for the poolof 45 issues, and quantified each result of analysis.

Financial Materiality

Impact Materiality

To identify issues with financial materiality and issues thathave potential/actual/negative/positive impact on external
stakeholders, we conducted a stakeholder survey thatreflected the double materiality concept. In particular, todetermine impact materiality, we expanded the external
stakeholder survey target and advanced survey questions
from the previous year. We quantified the likelihood, scale,and scope indexes of issues based on global guidelines,
including GRI 2021 and draft ESRS, and reflected them inissues’ impact scores.

Benchmarking

Analyze material issues ofsustainability reports by companies
in the same industry

International
standard index

Analyze domestic and overseas
standards, including GRI and SASB

Agenda reported
to C-level

Analyze agenda items reported toHyundai’s top management

Internal/External
expert survey

Analyze issue influence froma third-party perspective

Five-year material
issuesAnalyze material issues ofsustainability reports disclosed in
the last five years

Media research

Analyze 35,776 major media articles
that were published in 2022

EmployeesurveyAnalyze issues with financial
materiality to Hyundai

External
stakeholder survey

Analyze issues with impact
materiality

PeriodMarch 29 – April 14, 2023
(around 2 weeks)

MethodOnline survey

TargetExternal stakeholders andHyundai employees

Details

Assess ESG issues that have a highlevel of importance and influence onHyundai and stakeholders

Review by the top decision-making body

Internal employees

2023 materiality analysis results will be reported toresponsible governance (C-level executives). Regarding
the management plan, key performance, and mid- tolong-term plan for sustainability (ESG) issues, we will go
through a process of making a report to the Sustainability
Management Committee and receiving approval.

External ESG evaluation index• Conduct research on domestic andoverseas ESG risk and performance
evaluation agency’s requirements
and evaluation criteria- DJSI, MSCI, Sustainalytics, etc.

Financial & Impact Materiality
ESG disclosure index•C onduct research on principles,standards, and guidelines aimed
at facilitating ESG information
disclosure in domestic andoverseas- GRI, SASB, TCFD, etc.

75 persons

Outside stakeholders

107 persons

Internal/external experts

22 persons

Total

204 persons

1)

ESG Issue Research

STEP 05.

Composition of stakeholder survey respondents

1)

Approach to Apply Double Materiality

We determined each issue’s priority through a materiality
analysis. For material issues derived through the process,we disclosed each issue’s management direction, key
performance, and mid- to long-term plan through oursustainability report.

Overview of stakeholder survey

 ollected opinions from domestic and overseas investment
Cinstitutions, local communities/NGOs, government-related
agencies and evaluation organizations, suppliers and Hyundai
affiliates, customers, and general consumers

Impact Measure

Financial materiality•	Issues that must be managed byHyundai with importance to generate
financial performance

Impact materiality•	Issues that must be managed byHyundai with importance to manage
external impact− Hyundai’s material issues in the last five years− Benchmarking of information disclosure in thesame industry− ESG agenda reported to C-level− Employee survey− Domestic/overseas evaluation anddisclosure index− Status of media exposure, including the press− Internal/external expert interviews− External stakeholder survey

Impact on Hyundai• Consider the possibility of
impact on Hyundai’s financial
and business performance• Identify business areas that cause
social and environmental impact

Double Materiality Analysis Results
Impact on stakeholders• Measure the likelihood of impact that material issues
have on external stakeholders (likelihood)• Measure the size of impact that material issues haveon external stakeholders (scale)• Identify key external stakeholders who will highly
likely be impacted by material issues

Top 5 material issues

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

15

Materiality Analysis
Materiality Analysis Results

Results of selecting 2023 material issues

2

Efforts to reduce
GHG emissions
1

5 Strategic managementof supply chain ESG
Impact materiality

29

36
35 33

44 39
43

41
42

38

34

14 20
22

21

27

26

25

6

17

11

28

15

24

30

32

12

16
19

23
31

10

7

8

Leading the transition
to eco-friendly/electricvehicles

3 Enhancement of global corporate value
4 Diffusion of human rights
management

9
13

18

IssuesNo.

1

Leading the transition to eco-friendly/electricvehicles

16

2
3
4

Diffusion of human rights management

5

Strategic management of supply chain ESG

6Sound labor-management relations

7

Risk management system

8

Establishing an environmental management
system9Strengthening production and product quality

10

Strengthening ESG governance11

Establishing a climate change response system

12

Industrial health and safety

13

Fair BOD composition

14

Organizational culture and compensation

15

37

40

No.

45

IssuesStrengthening shared growth and win-win
cooperation

No.
31

Climate change risk management(physical/transition)

Efforts to reduce GHG emissions

17

Strategic workforce plan

Protection of shareholder rights

18

Collecting and recycling end-of-life vehicles/
second life EV batteries

32

Enhancement of global corporate value

33

Efficient BOD operation
Biodiversity assessment and protection

19

Customer experience innovation

34

20

After-sales service management

35

Personal information protection system

21

Strategic social contributions

36

Participating in global ESG initiatives

22

Employee competency building

37

Expanding eco-friendly material input

23

Enhancement of employee diversity

24

Brand ESG strategies

38

Water management

25

IT/cyber security systems

39

Response to global fuel economy regulations

26

Product Life Cycle Assessment (LCA)

40

Air/water pollutant management

41

Financial impact of climate change

42

Environmental management system certification

27

Strengthening ethics and compliancemanagement

Issues

Improving resource efficiency at business
operations
Responsible minerals (conflict minerals)monitoring

43

Reduction of hazardous chemicals

29

Open innovation

44

BOD and management compensation

30

Efforts for eco-friendly purchase45

Establishing committees within the BOD

28

Results of selecting 2022

No.

No.

Issuesmaterial issues

1

Carbon neutrality & Expansion ofrenewable energy

4Strengthening product safety and quality
management2

Supply chain ESG risk management

5

Expanding the EV lineup

3

Technological innovation

Financial materiality

IssuesAligning material issues with management compensation
Target• Expand eco-friendly product sales• Promote eco-friendly product-related activities

Leading the transition to
eco-friendly/electric vehicles

Efforts to reduce
GHG emissions

Enhancement of
global corporate value

KPIs

C-Level executives responsible
for related divisions, including CEO
and CFO

Relevant Goals• Eco-friendly product sales ratio of 17%* or more by 2023*

Based on managerial accounting• Increase the number of models subject to LCA• Increase EV sales volume and sales ratio• Sell 2 million units of electric vehicles by 2030

• Establish a system for carbon neutrality implementation and increase renewable energy use• Realize carbon neutrality in the overall value chain by 2045
• Achieve 100% renewable energy transition for electricity consumed at all global business sites by 2045

• Financial profit and loss, profit margin, market share, and brand power achievement level• Strengthen profitability and enhance brand value• Strengthen the hydrogen energy business’ value chain growth foundation• Reorganize global factories to optimize EV production• Achieve 34% of global EV production in 2030 through global factory reorganization• Establish Hyundai Motor Group’s mid- to long-term hydrogen business strategies and phased roadmap

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

16

Materiality Analysis
Management of Material Issues
Material
issuesLeading thetransition to
eco-friendly/
electric
vehicles1)

External stakeholders /Impact areas evaluated

Cause of the impact
Background of issue selection

Major activity and impact metric• Accelerating transition to eco-friendly,
electrified vehicles, attributable to majorcountry’s strengthening of fleet’s average
CO2 emission standards for automotive
companies or fuel economy regulations aswell as policies that prohibit ICEV sales• Electrified vehicles’ CO2 and air pollutant
reduction effects compared to ICEVs: 58.1%
reduction (KRW 19.8 billion reduction effect)* Based on internal research conducted in 2018

Business
site●

Supplychain●

Product & Environservice
ment

●

●

Local
commu- Consumer Supplier
nity

●

●

●

• Increased consumer expectation towards
reduction of CO2 emissions during thevehicle operation

Efforts to
reduce GHG
emissions1)• Adoption of strong trade regulations,
including Europe’s Carbon Border
Adjustment Mechanism (CBAM)• Increased demand for companies to fulfill
social responsibilities concerning reducing
GHG emissions to minimize natural disasters
caused by climate change• Needs for corporate value enhancement bygaining global brand competitiveness andincreasing global sales

Enhancementof global
corporate value1)• Needs for R&D investment aimed at
expanding business areas to future mobility• Costs of responding to the emissions
trading scheme regulations: approximately
KRW 1.15 billion* Financial loss due to exceeding the GHG emissions
allowance (around 1.46 million tons) in 2022

Mid- to long-term goal and plan

Page•	Hyundai established a mid- to long-term roadmap to transition from theprevious internal combustion engine-centered portfolio to an electrification
portfolio, and is expediting development of technologies and launch ofvehicles. In case of commercial vehicles, such as buses and large trucks withhigh carbon emissions, we will build an electrification lineup for all models
by 2028. Beginning with the transition to 100% EVs in Europe by 2035, we will
expand the region, while also strengthening FCEV lineup after 2023.

•	100% Electrification in main markets
by 2040•	100% Electrification in European market
by 2035•	100% Electrification of Genesis by 2030
•	Sell 2 million EVs in 2030

P. 28-31•	Achieve carbon neutrality across theentire value chain by 2045
−F
 ocusing on electrification, RE100 at
business sites, and encouraging supply
chain achieve carbon neutrality•	Transition of all electricity consumed at
all business sites around the world torenewable energy by 2045
−A
 iming to achieve RE90 at all businesssites by 2040

P. 25-27•	Plan to invest KRW 12 trillion by 2030 insoftware, including connected car andautonomous driving (KRW 4.3 trillion
for new business-related technology
development, KRW 2.9 trillion forestablishment of a big data center,
KRW 4.8 trillion for open innovation, etc.)

P. 6-7− Sold 506,793 electrified vehicles in 2022
− Sold 210,352 EVs (98,583 units of IONIQ 5) in 2022
− Sold 11,217 FCEVs in 2022

Reducing social costswith eco-friendly vehicles• Increased importance of reducing GHG
emissions in line with the global carbon
neutrality trend

Issue management and performance

●

●

●

●

●

•	In September 2021, we announced our plan to achieve carbon neutrality by
2045, primarily through electrification and establishment of the hydrogensociety, smart cities and circular economy ecosystems. Hyundai’s carbon
neutrality plan includes not only the reduction of GHG emissions across ourentire value chain, including the purchase and procurement of raw materials
and subsidiary materials, design, production, and sales of vehicles, but also
activity plans to reduce or offset GHG emissions from the incidental activities
necessary for business operations outside its value chain.
− Joined the RE100 initiative and set the roadmap−E stablished Hyundai’s carbon neutrality roadmap and supplier carbon
neutrality guidelines− Achieved transition to 100% renewable energy at HMMC in 2022 and HMMI
in 2023• Support for R&D efforts for technologicalimprovement to enhance corporate value•	In 2022, Hyundai ranked third in global sales by strengthening its brand andimproving quality. Among the global top 6 companies, we were the only
company to record growth in sales volume. In addition, we increased theratio of sales of high value-added models, including the Genesis and SUVs,
improving profitability. The G90 was chosen as MotorTrend’s 2022 Car of theYear, receiving global market recognition for competitiveness.

• R&D investment in mobility software• Investments to improve product quality for
consumer safety●

According to the external stakeholder survey, 70% and more of the respondents said that the issues have “positive” or “very positive” impacts.

●

●

●

●

− IONIQ 5 ranked first in a comparative evaluation of electric vehicles by theGerman automobile magazine Auto Motor und Sport (AMS)−3
 models were chosen for the 2023 IIHS safety evaluation TSP and TSP+−R
 &D investment in 2022: approximately KRW 3,340.5 billion− Investment in startups through open innovation from 2017 to the first quarterof 2023: approximately KRW 1,328.5 billion− ICT investment in 2022: approximately KRW 240 billion

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

17

Materiality Analysis
Material Topic Management
Material
issuesDiffusion ofhuman rights
management

Background of issue selection• Increased importance of preventing humanrights violations and mitigating human rights
risks at business sites and supply chain• Increased stakeholder demand forcompanies to fulfill social responsibilities bypracticing human rights management•S trengthened need to manage ESG risks
that may occur in the value chain throughpreemptive supply chain ESG management
Strategic
managementof supply
chain ESG

External stakeholders /Impact areas evaluated

Cause of the impact• Increased duties to manage supply
chain ESG due to international laws andregulations, including the EU Sustainability
Due-Diligence

Major activity and impact metric• Establishment of a human rights risk
management system to measure humanrights risks that can arise during business
operations• Establishment of human rights risk
evaluation index based on Human
Rights Policy to conduct written/on-site
assessment

Business
site

Supplychain

Product & Environservice
ment•	Hyundai established the Human Rights Policy to prevent human rights violations
and mitigate human rights risks, and demand employees, domestic and overseas
manufacturing plants and sales companies, subsidiaries and sub-subsidiaries, and joint
ventures to comply with the Human Rights Policy.

●

●

●

●

− Ran 23 human rights training programs for employees in 2022
− Ratio of evaluation of a human rights risk among business sites was 90.4% in 2022
* Number of employees at business sites where human rights risk assessment was
conducted / Total number of employees• Establishment of a supply chain ESG
diagnosis and due diligence system tomeasure ESG risks that may occur at
suppliers, including environmental pollution
and serious accidents• Document-based/on-site diagnosis using
supply chain ESG evaluation indexes that are
based on the Supplier Code of Conduct andother initiatives

Issue management and performance

Local
commu- Consumer Suppliernity•	Hyundai stipulates a code of conduct in the areas of ethics, environment, labor and human

●

●

●

●

rights, health & safety, and management systems that must be observed by all suppliers
that signed a contract with Hyundai. In addition, we provided training programs aimed at
improving ESG awareness and relevant competencies to suppliers to prevent ESG risks
in the overall supply chain and enhance the ESG management level of suppliers. We alsoestablished and operate a supply chain ESG diagnosis and due diligence system, thereby
strategically managing supply chain ESG risks.

− Conducted a document-based diagnosis on ESG risks for 1,680 tier-1 suppliers− Provided ESG consulting to 30 suppliers for which risks were identified in 2022
− P rovided on/offline training to around 360 tier-1 suppliers in Korea to enhance theircarbon neutrality response capabilities

Main Opinions of External Stakeholders
Suppliers/Group Affiliates

Customers

Overseas Institutional Investors

We hope to see the consulting aimed at helping suppliers improve their ESG
management continue. In addition, we would like for Hyundai to disclose, indetail, its vision, goals, and strategies to achieve sustainable growth together
with suppliers as well as supplier support measures.

We hope that Hyundai will further strengthen its chemicals management
system for parts and safety evaluation for customer safety. We also would
like the manufacturing of many eco-friendly vehicles that can adequately
respond to global environmental and carbon neutrality issues.

We are impressed by Hyundai’s efforts to reflect the opinions of external
stakeholders in the process of creating the sustainability report. We
anticipate confirming the results of global supply chain management that
includes all major ESG issues, such as the environment, human rights, andlabor, in the form of quantitative data.

We believe supply chain management is extremely important for Hyundai
to achieve net zero by 2045. It is important to achieve the goal as soon as
possible, but we hope to see Hyundai allocate sufficient time in accordancewith the level that suppliers are currently at to establish an environment thatenables smooth participation by all parties.

Government Agencies
We hope to see Hyundai present customers and suppliers with balancedsocial rules by taking the lead in responding to environmental issues, suchas global warming, and establishing sound labor-management relations. We
also ask Hyundai to become a corporate role model that pursues futuristic
technologies and values.

External Experts
There is a need to continually discover and review new risks, other thanissues that have already become legal risks, such as human rights andsupply chain ESG.

Mid- to long-term goal and plan

Page•	Advance diagnosis and due diligence
P. 50-52
index to respond to human rights risks•	Hold a prior briefing session on the humanrights risk diagnosis and due diligenceprocess and index•	Provide training on diagnosis and due
diligence and response capacity building•	Complete a document-based diagnosis
P. 60-62
for all tier-1 suppliers in 2024 and expand
on-site due diligence•	Support the establishment of safety
devices in 2024 to prevent supplier safety
accidents

1. Introduction

Environmental

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

18

The Earth is not only the home of mankind but
also our responsibility to future generations.
Hyundai has a clear understanding of its roleand responsibility in reducing GHG emissions,
thereby taking active parts in contributing to
the global trend of achieving carbon neutrality.
In particular, we are doing our best to protect
the blue light of Earth with distinctive
approach to climate change based on our own
eco-friendly technology.
2.1

Environmental Management

2.2

Response to Climate Change

2.3

Establishment of a Circular Economy

2.4

Reduction of Environmental Impact

2.5

Protection of Biodiversity

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

19

Environmental Management
Hyundai has established environmental management
governance in which its highest decision-making
body(C-suite) participates. We also have anenvironmental management system in place forsustainable business operations, including management
and supervision of environmental management at
the company level based on the environmental ruleand policy. Environmental management enables us torespect nature capital and fulfill our corporate social
responsibilities, thereby achieving sustainable growththrough continued communication with stakeholders.
Each business site operates an environmental
management system based on international standards,
and strives to manage it systematically and effectively
by receiving outside certification and conducting
internal audits. In particular, we establish a mid- to longterm environmental management plan to respond toclimate change, expand resource circulation, and reduce
pollutants. A performance evaluation system basedon environmental management goals is also set inplace with an aim to raise environmental managementawareness and internalize it at the company level.

Composition of Environmental Management Policy
1. Overview

2. Basic principles

3. Execution system

A.	Purpose of
establishment

A.	Raw and subsidiarymaterials

A. Governance

B. Application scope

B. Energy

C.	Implementation
measureC. WaterD. Greenhouse gas
E. WasteF. Waste productB.	Training anddissemination
C.	Stakeholders
communication
D.	Performance
management

G.	Pollutants andhazardous materials
H. Local community
Hyundai Motor Company Environmental Management Policy

Environmental Management System
ENVIRONMENTAL MANAGEMENT GOVERNANCE
Roles of the BOD The BOD and its subcommittee (Sustainability Management
Committee) receive reports on environmental management performance aswell as major risk factors and improvement activities on a permanent basis,and provide supervision. They also review and approve agenda items that are
essential for business strategy execution and management activities, such as
establishing mid- to long-term environmental management strategies that
include carbon neutrality and making environmental investments.
Roles of the Management The Hyundai Business Strategy Meeting (orESG Committee), in which the C-level executives participate, examine major
company-wide environmental management plans and implementation
status, including strategies for electric vehicle (EV) expansion and carbon
neutrality, review improvement performance, discuss countermeasures for
major risks, and manage other matters required to spread and disseminate
environmental management. Environment-related issues that are expected
to have a major impact on execution of business strategies, from among
matters that are reported to the management, including the Hyundai
Business Strategy Meeting, are reported to the BOD and subcommittee(Sustainability Management Committee).
Roles of the Dedicated Environmental Organization Hyundai has
a company-wide supervising organization under the CEO and CSO’s
responsibility and an operating organization by business site in order toimplement environmental management, and have two-way discussion on aregular basis for more efficient environmental management.
Company-Wide Supervising Organization The supervising organization at
the head office is in charge of company-wide environmental management
governance to implement sustainable environmental management
in Korea and abroad. It performs diverse tasks, such as establishinga system to respond to environmental accident risks; planning andoperating environmental management KPIs; responding to environmental
regulation improvements; and planning and managing the supervision ofenvironmental investment/culture/technology/training, through which it
plays a central role in establishing an environmental management system,
thereby achieving our environmental vision and goals.
Business Site Management Organization The environmental management
organization at each business site is in charge of such roles as establishingand operating an environmental management system; enhancing businesssite environmental efficiency; and operating facilities to manage and reduce
pollutants that occurs in the business operation process. It also implements
environmental policy; identifies and addresses environmental risks; spreads
and disseminates environmental management; and receives and handles
environment-related grievance reports.

R&D Organization With our R&D Center performs a central role, the R&D
organization is in charge of conducting R&D on environmental technology,
developing eco-friendly products such as EVs, and carrying out otherenvironmental improvement activities. Theses include reducing vehicles’
carbon and tailpipe emissions by developing EVs; developing eco-friendly
design which takes recycling into account; conducting life cycle assessment(LCA); developing eco-friendly materials; replacing harmful substances, anddeveloping decarbonization technologies such as carbon capture, utilizationand storage (CCUS) technology.

IMPLEMENTATION OF ENVIRONMENTAL MANAGEMENT
Environmental Management Principles We established the environmental
management rule to actively practice environmental management based onrecognition of the environment as a key corporate element. We periodicallyamend it by reflecting environmental regulations and the latest issues in
Korea and abroad (recent amendment in 2022). Consisting of seven items,
it includes items that we must focus on managing while implementing ecofriendly management. Key management items include responding to climatechange, reducing pollutants, protecting biodiversity, preserving natural capital,and supporting environmental management of suppliers. Through this rule,
Hyundai declares active efforts toward corresponding activities.
Environmental Management Policy Hyundai and all its subsidiaries andbusiness units continually improve environmental performance according
to the environmental policy and strive to minimize negative environmental
impact of business activities and the overall value chain. In addition, we
encourage our supply chain, including all suppliers and contract partners, toimplement environmental management by recommending them to comply
with our environmental management policy and providing necessary
support. We place priority on compliance with environment-related laws andregulations in each country where we do business over our environmental
management policy. We implement environmental management according
to this policy in cases where the respective country’s laws and regulations
do not cover matters or do not have special clauses. We are periodically
improving our environmental management policy by reflecting theestablishment and amendment of laws and regulations and changes in theexternal market environment and corporate circumstances.
Environmental Management Execution Our environmental management
is implemented based on the plan-do-check-action process that includes
1) Comply with laws and regulations; 2) Declare the environmental
management policy; 3) Establish an environmental management system andadopt internal management standards; 4) Monitor and analyze environmental
performance and data; 5) Identify risks and implement improvement activities;
and 6) Continually improve environmental performance.

Establishment of an Environmental Management System Hyundai’s all
business sites in Korea and overseas plants had established an environmental
management system (EMS) that meets international standards, including
ISO 14001 and are obtaining certification from a third-party organization
to secure the environmental management system’s credibility and publicconfidence. Business sites that obtained ISO 14001 certification regularly
receive an audit from a certification agency every year and implement
improvement measures based on the audit. They also receive a renewal
audit every three years. In addition, internal auditors inspect whether theenvironmental management system is working properly. In addition, an audit
and verification are received on the environmental management systemfrom external environmental experts, such as TÜV NORD. The supervisingorganization at the head office implements internal audit and performanceassessment on domestic and overseas sites’ environmental management.
System for Responding to Business Site Environmental Accidents andRegulations Hyundai has set in place an emergency response system to take
immediate measures in the event of an environmental accident, such as air/water/waste and chemical substance leakage, based on international safety,
health & environment (SH&E) standards. The head office and each business site
have an emergency response organization and emergency contact system, andalso have an emergency response manual that includes the status of disasterprevention facilities and equipment aimed at responding to environmental
accidents and have all employees familiarize themselves with the manual.
In addition, we create an alternative scenario for environmental accidents
and continually conduct an emergency response drill at each department. In
particular, we estimate environmental accident cases that may occur at businesssites, based on which departments disseminate and provide training on actuallyapplicable response measures. With regards to responding to regulations,a Hyundai/Kia environmental council is held every quarter through which
employees in charge at each business site systematically discuss environmental
regulations and response measures and respond to the regulations as part ofbusiness site environmental management.
Status of ISO 14001 Certification
Site

Domestic sites
Hyundai Motor Manufacturing Alabama (HMMA)
Beijing Hyundai Motor Company (BHMC)
Hyundai Motor India (HMI)
Hyundai Motor Manufacturing Russia (HMMR)
Hyundai Motor Brasil (HMB)
Hyundai Motor Manufacturing Czech (HMMC)
Hyundai Assan Otomotive Sanayi (HAOS)
Hyundai Motor Manufacturing Indonesia (HMMI)
Hyundai Truck & Bus China (HTBC)

Term of validity

2020-2023
2021-2024
2021-2024
2020-2023
2022-2025
2021-2024
2021-2024
2021-2024
2022-2025
2020-2023

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

20

Environmental Management
MANAGEMENT OF ENVIRONMENTAL PERFORMANCEManagement of Environmental Goals
Through our environmental
management implementation system, we set mid- to long-term performancegoals for environmental factors that have a considerable environmental
impact due to business operations, such as carbon emissions. Mid- to longterm performance goals are set in consideration of business as usual (BAU) as
well as external economic circumstances, government policy direction, andinternal business strategies.
To respond to climate change, we set the goal to achieve carbon neutrality
by 2045 throughout the entire life cycle that ranges from raw material
collection to parts procurement, production, and operation. To achieve thegoal, we are implementing such strategic tasks as a strategy to transition
to EVs, achieving RE100 at business sites, and reduction of supply chain
carbon emissions. For quantitative improvements to environmental
indexes, excluding carbon, we set improvement goals for water and wastes
based on the direction of suppressing increases in water consumption
and waste generation that are on the rise in connection with productionthat is increasing after COVID-19. In addition, we strive to reduce pollutant
emissions (air: dust, NOx, SOx, THC / water quality: TOC, TP, BOD, SS) at ourbusiness sites by setting higher pollutant emissions standards than thoserequired by law.

Evaluation of Environmental Management Performance To improvebusiness site environmental performance, we are reflecting and managing
operational efficiency improvements, energy reduction activities, adoptionof renewable energy, other GHG reduction performance, and internal goals
on environmental pollutants in business site KPIs. In case of business site
environmental pollutants, we examine monthly emission indicators. For
business sites in excess, we analyze the cause and implement improvement
measures. In the area of products, we set and manage our fleet average fueleconomy or CO2 emissions, electric vehicle sales goal achievement rate, andothers as KPIs.
Environmental Investment Plan and Execution Hyundai established aplan to invest a total of KRW 109.4 trillion (KRW 47.4 trillion in R&D, KRW 47.1
trillion in facility investment, KRW 14.9 trillion in strategic investment) by
2032 to achieve its mid-to long-term electrification strategy. In addition, weestablished a mid- to long-term investment plan that additionally invests
KRW 24 trillion by 2030 to strengthen the upstream and downstream EV
industry ecosystem, such as building EV-dedicated production facilities
in Korea and expanding EV charging infrastructure, at the Group level.
Hyundai’s environmental investment budget in 2022 was KRW 667.6
billion, of which KRW 506.1 billion was executed. A total of KRW 21.5 billion
was executed in 2022 as environmental facility investments to reduce theemission of environmental pollutants at domestic sites.

Environmental Management Goals and Implementation Status
Classification

Transition toelectric vehicles

In addition to our employees, we provide environment-related training
programs to suppliers. Through an online platform’s ESG training course, weare communicating the need for environmental management and suppliers’
roles. In addition, a group course and seminars are provided to offer in-depth
environmental training.

Performance in 2022

Stakeholder group

Government Agencies• Sold a total of 506,793 units of electrified vehicles• Sold a total of 210,352 units of EVs• Sold 15,594 units of Genesis EV models

Shareholders and Investors

Expand hydrogen mobility sales• Sold 11,217 units of FCEVs

Supply Chain

Produce and supply green hydrogen•	Collaborated with H2Pro to develop high-efficiency hydrogen production technology•	Collaborated with NextHydrogen to develop a green hydrogen water electrolysis system

Achieve RE100 by 2045

•	Renewable energy accounted for 7.7% of total electricity consumption in 2022
(HMMC 100%, HAOS 51.7%, HMI 42.1%)

Encourage to achieve carbon neutrality
by 2045•	Conducted investigation of GHG emissions by tier-1 suppliers, and reviewed major
companies’ reduction plans•	Distributed carbon neutrality guidelines to tier-1 suppliers•	Provided training to around 360 tier-1 suppliers to strengthen their carbon neutrality
capabilities

Achieve 100% electrification of Genesis by 2030
Sell only EVs in Europe by 2035
Sell only EVs in main markets by 2040

Hydrogenbusiness synergy
Carbon neutrality
in our factories

Carbon neutrality
in our supply chain

Stakeholder Engagement and Consultation
Hyundai conducts astakeholder survey every year to identify sustainability issues, including
environmental issues. By regularly holding an ESG Non-Deal Roadshow(NDR) for domestic and overseas investors, we are strengthening investor
communication on ESG issues, including environmental issues. Furthermore,on the basis of consultation and communication with industry associations(Korea Automobile Manufacturers Association, European Automobile
Manufacturers Association, etc.), environmental groups and governmentorganizations (Healthy Seas, Korea Forest Service, etc.), we present opinions
and conduct eco-friendly activities in areas related to our business.
Grievance Handling Channel
We operate a channel for receiving
environment-related grievance from various stakeholders, including
employees. Once received, the grievance reports are handled and notified
according to set procedures and standards. In particular, the ESG Committee
discusses countermeasures for grievances that have a high possibilityof violating laws and regulations and may cause a considerable setbackin business operations or expect to have a negative impact on the local
environment. Environment-related grievances can be reported to anorganization exclusively in charge of the environment at each business site
and key grievance-handling channel (ESG@hyundai.com).

Stakeholder Engagement and Consultation

Mid- to long-term goal

Plan to sell 940,000 EVs by 2026,
2 million EVs by 2030

ENVIRONMENTAL MANAGEMENT COMMUNICATION
Training to Raise Environmental Management Awareness
Hyundai
operates an environmental management training course that addresses
requirements specified in environment-related laws and regulations,company-wide environmental management goals and plans, outstandingcases of environmental management activities, matters required to performmajor duties, and results of benchmarking relevant companies. Various
opportunities are provided to employees in charge of the environmentso as to enable global ESG responses, including participation in overseas
forums and seminars. In addition, environmental expert ISO auditor training
is provided to improve practical environment-related job competencies andto systematically manage statutory environmental training. In 2022, a totalof 48,837 employees completed environmental training, and total operation
hours of the programs stood at 95,372.

Engagement•	Hyundai shares its environmental management performance with government agencies and proactively responds tochanges in the direction of their policies. Overseas, the company systematically monitors and complies with each country’s
environmental laws and regulations.
•	Hyundai will achieve environmental performance that meets the requirements of its shareholders and investors, therebybuilding long-lasting, trusting relationship and expanding investment aimed at improving its corporate value.
•	Hyundai shares its know-how and experience in environmental management across entire supply chain, while operating
communication channels to enable continuous consultation with its suppliers aimed at creating environmental values
throughout value chain.

Customers•	Hyundai provides environmental information on its products and services while reflecting opinions gathered throughcustomer contact channels in the process of developing eco-friendly products and services.

Local Communities•	To mitigate the environmental impacts of its business operations, Hyundai collects opinions from local organizations andpublic-private consultative bodies, while also striving to identify and resolve grievances raised by local communities.

Employees•	Hyundai shares its environmental management principles and policies with its employees and raises their awareness ofenvironmental management through environmental education. The company also reflects its employees’ proposals toimprove environmental performance.

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

21

Response to Climate Change
Hyundai responds to climate change at a company
level by identifying, evaluating, and managing relatedrisks and opportunities on a constant basis. We also
have set major climate strategies through our climatechange governance to analyze the potential impact
of climate change on our business and respond to
macroscopic changes in the business environment
due to changes in laws and regulations. We identify
various climate risk and opportunity factors, andpreemptively respond to changing market demands
through the development of eco-friendly mobility andvarious mobility solution technologies.

Climate Change Risk Management
CLIMATE CHANGE GOVERNANCE
Roles of BOD and Management Hyundai preemptively identifies its risks
related to ESG and strengthens its management activities, while strategicallyutilizing various ESG factors to explore new business opportunities anddevelop competitive advantages. Major ESG issues, including climatechange, are discussed semiannually by the Sustainability Management
Committee and the ESG Committee under the Board of Directors. The ESG
Committee, a subcommittee within the Hyundai Business Strategy Meeting,shares and discusses information on the company’s ESG status and issues
among its executive members. Important agenda items selected by the ESG
Committee are presented to the Sustainability Management Committee,
which reports directly to the BOD and makes decisions on important ESG
issues reported to management.

CLIMATE RISK AND OPPORTUNITY MANAGEMENTClimate Risk and Opportunity Management Process Hyundai identifies,
assesses, and manages risk and opportunity factors to respond to climatechange issues at the company level. The climate change issues identified
by each region/organization are submitted to the head office’s Planning& Finance Division, which then figures out risk and opportunity factors foreach issue, assesses the strategic and financial impacts of each factor on thecompany, and determines companywide response strategies.

Greenhouse Gas Council In order to respond to climate change and achieve
its mid- to long-term goals of carbon neutrality, Hyundai has formed companywide GHG response organizations and does its best to improve energy
efficiency, expand the use of renewable energy, and improve the working
environment at its business sites.

Assessment and Reporting Stage The Planning and Finance Division at thehead office figures out the strategic and financial impact that factors and issues
identified in the identification stage may have on the company, and dependingon their materiality, reports them to the CEO or the BOD through the ESG
Committee for decision-making.

ROLES OF DEDICATED TEAMS
Company-wide Planning Team In 2021, Hyundai established the Carbon
Neutrality Execution Team, a dedicated organization within the Planning &Finance Division at the head office respond to climate change more actively.
The team works with relevant organizations to establish implementation
strategies in various areas such as product, business site, and supply chain.

Management Stage The decided climate change issues are proactively
reflected in the KPIs of each working-level division of the relevant region ororganization. The Carbon Neutrality Execution Team and related organizations
join forces to systematically manage climate change factors in various areas.

R&D Organization Hyundai also makes efforts at the R&D organization level
to respond to climate change and achieve its goal of carbon neutrality. As partof these efforts, in March 2022, Hyundai entered into a joint research agreementwith Aramco and KAUST on ultra-lean combustion engines and eco-friendly
synthetic fuels and embarked on joint development to reduce GHG.

Climate Change Governance

BOD (Sustainability Management Committee)
CEO

Identification Stage In the identification stage, we figure out issues by region
and team regarding risks and opportunities that may affect the company
due to climate change at the Product Committee and the Hyundai Business
Strategy Meeting.

Incentives for Climate Change Management Hyundai includes climatechange-related items in the KPIs of the CEO, plant managers (heads ofmanufacturing subsidiaries), and employees (related teams), with the resultsof the performance evaluation aligned with the incentive and annual salarysystem. The CEO performance evaluation items includes the implementation
rate against carbon neutrality target and the level of establishment of carbon
neutrality implementation system, while the performance evaluation items
for plant managers include GHG emissions, emissions per vehicle, andRE100 target achievement rate. In addition, we have set goals related to GHG
emissions reduction for employees at related teams and use them for theirperformance evaluation.
TargetIncentiveCEO

Plant managers(Heads ofmanufacturingsubsidiaries)
Employees(Related
teams)

Financial
rewards(Included inbonus)KPIs

KPI Details

Carbonneutrality& Energytransition

1) Accomplishment rate to carbon
neutrality goal
2) Level of carbon neutrality
implementation system

GHG
emissions
reduction

Identification ofcompany-wide issues
related to climate change(Planning &Finance Division)

Identification ofrisk/opportunity
factors andassessment of
impacts

Identification of issues
related to climate change
by region/organization

Climate change
scenarios(Transition/Physical)

Priority check andestablishment ofresponse strategies* Agenda selection forreports to top management

Development ofaction plans

Implementation byregion/organization

Planning & Finance Division (Carbon Neutrality Execution Team)

Procurement
DivisionR&D Division

Product
DivisionSet goals related to GHG
emissions reduction for staff at
related teams and use them for
performance evaluation

Identification, Assessment, and Management Process of Climate Risk/Opportunity

Hyundai Business Strategy Meeting (ESG Committee, division heads or equivalents)

Responsibleorganizations
by region/
business site1) Total emissions2) Emissions per vehicle3) RE100 target achievement rate

Agenda review for the Hyundai
Business Strategy Meeting(ESG Committee)* Agenda selection for the BOD report

Review of agenda by the BOD(Sustainability Management
Committee)

Monitoring anddiagnostics

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

22

Response to Climate Change
RISK ANALYSIS OF CLIMATE CHANGE SCENARIO
Scenario Analysis Methods Hyundai systematically addresses potential
climate risks and opportunities through transition and physical scenario
analysis. We carefully set various timeframes – short-term (1-3 years), midterm (3-10 years), long-term (10-25 years) – which allows us to identify
potential impacts on value chain stages, including domestic and overseas
business sites, as well as upstream and downstream operations. We conduct
annual analyses of these scenarios, utilizing the findings to develop proactive
response plans.

In regard to the transition scenario, we have established our own “2045
Carbon Neutrality Plan” with the goal of electrification, hydrogen society,smart city, and circular economy ecosystem in line with the level required by
IEA NZE 2050. For the physical scenario, we have evaluated the impact on ourbusiness by using RCP 8.5 (non-reduction scenario), the most conservativeof the RCP (Representative Concentration Pathway) scenarios based on theconcentration of CO2 in the atmosphere. Based on the evaluation results, we
set response priorities for each major issue and manage them preemptively.

Methodology for Deriving Climate Risk/Opportunity Factors

Climate scenarios in use
Transition

Physical

Scenario analysis
Quantitative

Qualitative

Application timelines
Short term
(0-3 years)

Medium term
(3-10 years)

Long term (10-25 years)• 	 Transition
IEA B2DS, IEA STEPS, NZE 2050, NDC• Physical	RCP 8.5 (baseline scenario),
RCP 2.6 (below 2℃ scenario),
RCP 1.9 (1.5℃ scenario)

Application scopeBusiness sites
Upstream

Downstream• 	 Business sites	All global operations(including new ones, expected facility
life-cycle considered)• 	 Upstream activities
	Purchased goods and services,
employee commuting, business travel, etc.
• 	 Downstream activities	Transportation, use (customers),
end-of-life treatment and recycling, etc.

Overview of Transition Risk Scenario Analysis As the damage caused
by abnormal climate has increased rapidly, a number of major countries
including Korea have declared their commitment to carbon neutrality.
In order for them to achieve the goal of carbon neutrality, however, it isessential to reduce GHG emissions in the transportation sector. In its efforts
to take active part in the eco-friendly industry, Hyundai has conducted ananalysis that takes into account the requirements for carbon neutrality by
2050 and an annual average reduction rate of more than 4.2% on the basisof the IEA NZE 2050 scenario.
To meet the level required by IEA NZE 2050, we analyzed our energy
consumption status and trends, based on which we derived businessas usual (BAU) scenario using growth rate and regression analysis. We
then calculated the amount of our GHG reduction compared to BAU andreviewed various measures to achieve the goal. First, we sought ways todirectly reduce GHG emissions and estimated the reduction potential basedon applicable reduction technologies. We established the RE100 roadmap,
which aims to use 100% renewable energy in our global production plants
by 2045. We plan to promote carbon neutrality at our business sites byimproving energy efficiency for major manufacturing processes andswitching to hydrogen and other eco-friendly fuels. Lastly, for areas where
direct reduction is difficult, we have sought ways to offset GHG emissions
and achieve the net zero goal through carbon capture utilization & storage(CCUS), a technology that captures and treats CO2 in the atmosphere; theHyundai Green Zone Project, a global ecological restoration project; and themarine ecosystem restoration and upcycling project.
Estimating the Damage Caused by Transition Risk Under the Paris
Agreement, governments around the world are setting targets to reduce GHG
emissions by 2030. Europe announced “Fit-for-55,” which aims to reducecarbon emissions by 55% compared to 1990 by 2030. To comply with vehicle
CO2 emission standards, Hyundai will adopt the internationally recognizedWorldwide Harmonized Light Vehicle Test Procedure (WLTP) as the standard
for light vehicles. Failure to meet this standard poses the risk of lawsuits andpenalties for non-compliance. CO2 emission standards vary by type of vehicle,
but if the standard is not satisfied, a penalty of “number of cars sold x amountof CO2 exceeding the standard (1g/km)” will be incurred, which may causesignificant financial damage to the company.

Overview of Physical Risk Scenario Analysis Electricity accounts foraround 70% of Hyundai’s Scope 1 & 2 GHG emissions. Electricity has
therefore a significant impact on Hyundai’s operating costs, and sinceelectricity consumption has a direct impact on global temperature rise,
physical scenarios were analyzed based on RCP 8.5, which predicted a
3-4ºC increase in global temperature in the future. First, based on the World
Resources Institute (WRI) scenario and the physical scenario analyzed by the
Korea Meteorological Administration, we have analyzed risks posed by RCP
scenarios for all our business sites in Korea, the U.S., China, India, Turkey, theCzech Republic, Russia, and Brazil.
RCP 8.5 scenario analysis shows that the failure to actively respond tophysical scenarios will directly lead to an increase in operating costs, which
will have a significant impact on consumer burden and our product sales
due to higher production costs. Hyundai therefore recognized climatechange as a critical issue and has set Net Zero and RE100 targets by 2045.
We plan to actively participate in setting and implementing these goals tocontribute to lowering the global GHG concentrations and minimize the riskof operating cost risks.
Estimating the Damage Caused by Physical Risks Analysis of the effects
of climate change disclosed by the WRI and the Korea Meteorological
Administration confirms that the global temperature is continuously rising,which means that the impact on Hyundai varies depending on the extent
of the temperature rise. In the case of RCP 8.5, we have compared theoperating costs in 2100 to the present, assuming a 3℃ increase by 2100
compared to 2021 and a 1.5-fold increase in electricity consumption forevery 0.5℃ increase in global temperature. The result shows that if we donot take active part in responding to climate change, we will incur about 8.4
times more electricity costs than present.
Moreover, as climate and environmental charges have been reflectedin the unit price of electricity in Korea since 2021, the rise in global
temperature will act as a factor in increasing the electricity unit price,which will also increase operating costs. Assuming that the unit price ofelectricity increases KRW 0.3/kWh when the earth’s temperature rises
by 1℃, Hyundai will be affected very seriously for electricity takes large
portion of its energy consumption.

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

Response to Climate Change
MAJOR CLIMATE RISKS AND COUNTERMEASURES

Regulatory Risk
Hyundai responds to climate change by designating and managing the laws and regulations ofvarious countries and regions where it operates as regulatory risk. We faithfully comply with laws andregulations, preemptively respond to expected regulations according to climate change scenarios, andminimize the impact and damage.

Transition Risk
Hyundai is making various efforts to analyze the trends in the rapidly changing vehicle market andsatisfy consumer preferences. Hyundai has taken the lead in expanding hybrid/plug-in hybrid EVs(HEVs/PHEVs), EVs, and fuel cell EVs (FCEVs) markets, as well as bolstering its related technology
development capabilities.

Physical Risks
Due to climate change, the frequency and intensity of extreme weather events are increasing.
Hyundai is equipped with a system to identify business sites that are exposed to short-term physicalrisks (typhoons, floods, heat waves, etc.) and long-term physical risks (changes in precipitation, sealevels rise, etc.) to take preemptive countermeasures to physical risks.

GHG Emissions Trading System

Accelerating the Electrification

Damage to Facilities Due to Abnormal Climate Events

RISK FACTORSCOUNTERMEASURESRISK FACTORSCOUNTERMEASURESRISK FACTORSCOUNTERMEASURES

Subject to the allocation of emission rights inaccordance with the Act on the Allocation andTrading of Greenhouse Gas Emission Permits,
Hyundai participates in the Korea Emissions
Trading Scheme (K-ETS). Accordingly, if we emit
more GHGs than allocated by the law, we must
purchase rights for the shortfall or, in the eventof failure to do so, pay a fine equivalent to threetimes the average price of allowance units. Webought allowance units in 2022 because we
produced more emissions than our allowance forthe year, which was about 1.46 million tCO2-eq.

In order to avoid financial losses due to excesscarbon emissions, Hyundai has set a more
stringent reduction target than allowed by thegovernment while continuing to invest in GHG
emissions reduction and energy conservation
programs. Furthermore, when purchasing
emission permits, we strive to minimize thepurchase cost by selecting the most optimized
option based on an analysis of transaction
prices and volumes.

The EU countries gave final approval to alandmark law to end sales of new CO2-emittingcars by 2035. The EU law will require all newcars sold to have zero CO2 emissions from 2035,
and 55% lower CO2 emissions from 2030 versus
2021 levels. The targets are designed to drive
the rapid decarbonization of new car fleetsin Europe. Among the EU member countries,
France will ban the sale of ICEVs from 2030
while nations around the world are tightening
regulations on electrification.

Hyundai has established a mid- to long-term
roadmap for the transition from ICEVs to EVs andhas been accelerating the relevant technology
development and EV launching. Starting with
Europe by 2035, we will complete the transition to100% electrification in other regions as well, while
continuing to expand our FCEV lineup. On the backof such efforts, we will achieve the goal of 100%
electrification of all vehicles sold in the European
market by 2035 and other major markets by 2040.

Hyundai operates a facility in Alabama, locatedin the southeastern region of the U.S., which issusceptible to tornadoes. There is a projected
substantial increase of GHG emissions by
2030 compared to 2010, which can contributeto heightened occurrences of severe climate
events like hurricanes and tornadoes. These
events pose a potential impact on the company's
operations in the U.S.

Hyundai Motor Manufacturing Alabama (HMMA)
strives to minimize tornadoes damage by
expanding shelter for employees, strengthening
bridge superstructures, developing emergency
response manual, purchasing disaster insurance, and making other various efforts.

Fleet-wide CO2 Emission Standards and Taxation

Promoting Eco-friendly Consumption

Water Shortage due to Reduced Precipitation

RISK FACTORSCOUNTERMEASURESRISK FACTORSCOUNTERMEASURESRISK FACTORSCOUNTERMEASURESAs part of each government’s efforts to reduce
GHG emissions in the transport sector inaccordance with the Paris Agreement, regulations
on CO2 emission standards for vehicles soldare being strengthened along with those on
corporate average fuel economy. The European
Union adopted a target to reduce CO2 emissions
to 0g/km by 2035, which means that from 2035
the sale of new vehicles with internal combustion
engines (ICEVs) will be banned in the EU market.
If Hyundai fails to meet its CO2 emissions target,
it may incur significant additional costs inproportion to its sales volume, which will lead tohigher manufacturing costs and product prices.

Hyundai is focusing on improving the fuelefficiency of ICEVs of its Genesis brand and midto-large SUVs in response to the tightening of CO2
emission standards and the corporate average
fuel economy regulations in major markets,
including EU, as well as changes in market
demand due to the spread of CO2 emissionbased automobile taxation. Furthermore, toreduce the carbon emissions of all products
produced by Hyundai, we are striving to improve
the fuel efficiency of existing internal combustion
engines in the short term while developing anddistributing eco-friendly vehicles in the long term.

According to the International Energy Agency(IEA), global sales of eco-friendly vehicles, such asEVs, exceeded 10 million units for the first time in2022 while the trend of eco-friendly consumption
by automobile consumers is strengthening as
well. Demand for EV batteries are growing andis expected to rise to a maximum of 4,028 GWh
by 2030.

As part of our efforts to secure the highest
quality batteries, we have signed an investment
agreement with LG Energy Solutions to build
battery cell plants together. We are also
developing technology for the solid-statebattery, a next-generation battery, to improvestability, mileage, and charging time of our EVs.

In the long term, climate change may cause adecrease in average precipitation, which canhave a significant impact on water supply
shortages and rising water costs, posing risks tobusiness operations.

Hyundai has conducted a water depletion risk
assessment for its major business sites in Korea
and overseas, and five business sites are rated
as high-risk. Accordingly, we are striving toestablish a zero-wastewater discharge system
in stages for the relevant business sites. The
Asan Plant has taken measures such as securing
sufficient water usage, reducing wastewater
generation through wastewater reuse facilities,
and resupplying all its reprocessed wastewater
as industrial water.

23

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

24

Response to Climate Change
Climate Risks and Opportunities
Type

Issues•	Acceleration in competition for technology
development for eco-friendly vehicles

Technologies

Risks•	Strengthening fuel economy regulations worldwide•	Declining market share upon failure to lead technological change

Opportunities•	Proving the EV technological prowess by winning global automotive
awards, aimed at increasing market share

Response Directions

Financial Impact•	Expanding R&D investment in FCEVs, etc.
•	Establishing a goal of 100% electrification for vehicles sold in major
markets by 2040

High•	Launching brands based on E-GMP, an EV-dedicated platform•	Increased sales of EVs and FCEVs in line withthe expansion of EV markets
Markets•	Increase in demand from investors and otherstakeholders to respond to climate change
Reputations•	Increase in procurement costs of raw materials (lithium, cobalt,
nickel) due to limited supply following rising demand for
EV batteries•	Achieving large potential EV/the second life EV battery customers,
including car rental/car sharing/ESS1) companies•	Diversifying supplier diversification•	New industrial fuel cell (ship/AAM2)) business expansion•	Decrease in sales if not achieving sufficient FCEV profitability•	Recycling waste battery and developing the solid-state batteries•	Increased sales of EV/FCEV models•	Scaling up FCEV/fuel cells•	Failure to disclose climate change information and lack of response
to climate change leading to a decline in brand image, withdrawal ofinvestment and customer attrition•	Raising brand image and securing investment throughactive climate change information disclosure and response•	Disclosing climate data transparently•	Conducting real-time monitoring of raw material prices

High•	Participating in international initiatives such as CDP•	Joining RE100 and promoting carbon neutrality goal by 2045

Mid-high•	Encouraging the Group affiliates and suppliers to participate inclimate change response•	Tightening fuel economy regulations for
ICEVs
Legal

•	Increased response costs due to fines imposed on non-compliancewith regulations•	Reduced regulatory response costs through fuel economy
innovations•	Degradation of brand image, withdrawal of investment andcustomer attrition due to fuel economy-related lawsuits•	Emissions Trading Scheme•	Penalties due to emission in excess of emission allowances•	Conducting research on fuel efficiency improvement and joint
development of new energy parts with suppliers•	Generating revenue through the sale of spare credits•	Increasing use of renewable energy•	Establishing a management system for the entire process including
emission forecast and reduction•	Strengthening of CBAM3) of EU•	Rise in costs and shifts to customers due to tax increases

EmergingHigh•	Promoting fuel efficiency improvement by vehicle unit

Current
Regulation•	Monitoring peer litigation cases•	Securing price competitiveness by increasing the portion of
local purchase overseas

Mid•	Conducting life cycle assessment (LCA) by vehicle model•	Conducting continuous monitoring of the inclusion of automotive items

High•	Implementing practical ways to reduce carbon emissions

Acute•	Increasing abnormal weather phenomena(typhoons, floods, heavy snowfall, etc.)•	Damage to facilities, production facility shutdown and delays, etc.
•	Increasing damage to business sites located on the coast•	Increased market share due to stable product supply whencompared to competitors•	Monitoring weather change•	Establishing emergency response manuals

High•	Strengthening stability in the workplace
Physical•	Increasing rate of sea level rise
Chronic

1)
2)
3)

Energy storage system
Advanced air mobility
Carbon border adjustment mechanism•	Increased risk of flooding in most domestic workplaces locatednear the coast•	Attracting potential customers by supporting local communities
and helping them adapt to climate change•	Conducting continuous monitoring of sea level rise•	Reviewing plans to relocate business sites in the mid- to long-term•	Establishing drainage measures to prevent flooding at business sites
located on the coastHigh

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

25

Response to Climate Change
Carbon Neutrality
CARBON NEUTRALITY STRATEGY
Carbon Neutrality Direction Hyundai is committed to its vision of “Progressfor Humanity”, valuing mobility for human being while ensuring minimal burden
on the environment. Hyundai has instituted the Integrated Solutions to Climate
Change to achieve carbon neutrality by 2045 at IAA Mobility in September
2021 as part of its efforts to pass on a sustainable global environment to future
generations and do the right thing for humanity. With Clean Mobility, NextGeneration Platform, and Green Energy at its core, we will establish a sustainable
operating system for future generations by expanding our electrification
capabilities and transitioning to renewable energy. Additionally, we will continue
to strive to build a circular economy ecosystem with the goal of achievingcarbon neutrality across the entire mobility value chain.
Based on its own hydrogen energy production technology and integrated
solutions that encompass the entire city, Hyundai will realize a sustainable
future that includes not only electrification but also a hydrogen society andsmart cities. For the electrification business, we are considering ways toreduce GHG emissions even after vehicle sales, such as recycling batteries.
In the hydrogen business, we plan not only to build a lineup of passenger andcommercial FCEVs, but also to promote storage, transportation, charging,and production of hydrogen energy. Moreover, we are also accelerating thedevelopment of new mobility based on eco-friendly power, such as advanced
air mobility (AAM) and purpose-based mobility (PBV), for a clean and mobilityfree urban lifestyle of the future.

Carbon Neutrality Targets Hyundai’s carbon neutrality target goes far
beyond simply reducing GHG emissions at its business sites and aims
to completely eliminate and offset the GHG emissions generated by ourcustomer’s use of sold vehicles (Tank to Wheel) through electrification.
Regarding vehicle emissions, Hyundai aims to achieve 100% electrificationin the European market by 2035 and 100% electrification in other major
markets by 2040. In the emerging markets, we plan to accelerate
electrification by considering consumer needs, market conditions andinfrastructure construction status. To reduce GHG emissions in the processof vehicle production, we will establish a cooperative system between
subsidiaries and directly produce renewable energy through solar panels,
etc. Additionally, we will implement RE100 (100% Renewable Energy)
by 2045 through renewable energy procurements (PPAs, RECs) and thepurchase of green premium electricity, among others. For supply chainssuch as parts and raw materials, we will encourage them to achieve carbon
neutrality by 2045 by collaborating for energy transition and reducing carbon
emissions of critical raw materials supply chain.

2045 Carbon Neutrality Roadmap■ Vehicle emissions1)(Unit: tCO2-eq)■ Supply chain emissions2)■ Business site emissions (Plants/Buildings)3)

CO2 emissions•	100% Electrificationof Genesis•	Expanding the use ofrenewable energy

2,705,383•	100% Electrificationin European market•	Electrification of allcommercial vehicles
in Korea•	100% Electrification in
main market•	Expanding theapplication of hydrogentechnologies
CARBONNEUTRALITY

97,941,942

To deal with residual carbon emissions, Hyundai will invest in CCUS andwill continue to pursue offsetting activities such as recycling second life
batteries for ESS and restoring marine ecosystems. In addition, we plan
to maximize the synergy between the hydrogen business and carbon
neutrality through hydrogen power generation and processes by using theelectrification process based on the hydrogen fuel cell system.

Social reduction offset(offset/absorption)
Carbon Neutrality of Hyundai

20,024,630
2019

2030

2035

2040

2045

2019 (base year)

2030

2035

2040

2045

Businesssites

Business site emissions3)(2,705,383 tCO2-eq)

Reduction of 1,217,422 tCO2-eq(45% down compared to 2019)
RE 60% transition-

RE90% transition

RE100% achieved

Supply chain

Supply chain emisions2)(20,024,630 tCO2-eq)

Cooperation with major suppliers
for raising awareness on carbon
neutrality and energy transition

Encouraging carbon reduction
in core raw material supply chain

Vehicles

Vehicle emissions1)(97,941,942 tCO2-eq)

Classification*

Encouraging supply chain
to achieve carbon neutrality

30% electrification-

80% electrification

100% electrification

100% electrification ofGenesis vehicles

100% electrification ofEuropean market sales

100% electrification ofmajor market sales

Accelerating electrificationin emerging markets

GHG reduction targets were established based on the “Science-based Target”, and the reduction targets were calculated for 100% of the base year's emissions.
Vehicle emissions: Emissions from the customer’s vehicle operation process (tank-to-wheel: TTW)
2)
Supply chain emissions: Emissions from raw material and parts suppliers we aim to reduce and achieve encourage carbon neutrality
3)
Business sites emissions (plants/buildings): Sum of Scope 1 + Scope 2 emissions
1)

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

Response to Climate Change
FIVE MAIN AREAS TO ACHIEVE CARBON NEUTRALITY
Electronification To achieve carbon zero beyond carbon reduction, Hyundai
has declared 100% electrification of the Genesis by 2030 and 100% electrificationin the European market by 2035 while aiming for 100% electrification for all
its vehicles sold in major markets by 2040. For commercial vehicles such aslarge trucks and buses, we plan to completely convert all lineups to electrified
vehicles by 2028. We are also continuing R&D and investment in commercial
FCEVs. In 2023, we launched the UNIVERSE hydrogen electric bus in Korea andintroduced the XCIENT fuel cell tractor in North America.
Reducing Our Carbon Emissions at Work Hyundai is an active supporterfor the Paris Agreement and recognizes its corporate role and responsibility
to reduce global GHG emissions. In this regard, we strive to achieve carbon
neutrality at our business sites by 2045 by switching to renewable energy,
improving the energy efficiency of production processes through theintroduction of high-efficiency motors and inverters, and utilizing hydrogenenergy. In the short term, in conjunction with the RE100 roadmap, we plan
to promote the transition from electric energy used in the manufacturing
process to renewable energy first. In the long term, our goal is to achieve carbon
neutrality by 2045 by expanding the application of green hydrogen and the useof renewable energy in conjunction with the realization of a hydrogen society.
Social Activities for Reducing Carbon Emissions (treatment of residual
emissions) In addition to reducing carbon emissions, Hyundai is strengthening
its activities such as carbon absorption and removal and resource recycling.
We developed CCUS technology in 2012 and has since applied it in Korea while
continuously pursuing designs that can recycle waste batteries and maximize
recycling at the scrap vehicle stage. We apply recycled plastic materials to wheel
guards, under covers, and battery trays while actively utilizing eco-friendly
materials in the production of the IONIQ 6.

BUSINESS CASE
Hydrogen Business Synergy Effects Hyundai announced its hydrogenbusiness vision of “2040, The Completion of Hydrogen Energy Shift” in 2021,
based on which we are striving to increase the popularity of the hydrogenbusiness by focusing on three primary areas (scalability, economic feasibility,and eco-friendliness) so that hydrogen energy could be used widely in allareas of human life and industry, beyond the means of mobility, by 2040. To
achieve this vision, we will continue to grow and develop both our hydrogenenergy system-related business and technology use endeavors. We will
supply hydrogen energy systems at competitive prices and contribute tocarbon neutrality and environmental improvement through the transition tohydrogen energy.
Support for Net Zero in the Supply Chain In line with global trends suchas climate change, carbon neutrality, and ESG management, Hyundai
not only improves the quality and technology of its suppliers, but also
encourages and supports their carbon neutrality. To achieve this objective,
our initial step involves assessing the carbon emission status of our primary
suppliers. We will then identify key suppliers for enhanced management andprovide them with guidelines to align their practices with our sustainability
goals. Additionally, we plan to carry out reduction activities for eachsupplier grouped according to their characteristics, and prepare supply
chain collaboration programs, including carbon neutrality education andawareness raising. In particular, we will join forces with the suppliers of raw
materials with a high proportion of carbon emissions to promote a joint
response in conjunction with automotive design technologies, such as
recycling materials and expanding the use of new materials.

Blue Carbon ProjectAs part of implementing a unique carbon offsetting
strategies to respond to climate change, Hyundai has
been reviewing marine ecosystem restoration projects,
and has discussed cooperation plans with relatedorganizations for the creation of sea forests. Based onthese discussions, on May 10 of 2023, Hyundai signed
an MOU with the Ministry of Oceans and Fisheries andthe Korea Fisheries Resources Agency for cooperationin the development of seaweed blue carbon.
The term “sea forest” describes a coastal area
characterized by abundant growth of seaweed, forming
a forest-like ecosystem that serves as a habitat fordiverse marine species. It is known to be able to absorb
carbon dioxide, in addition to its excellent ecologicalvalue. Blue carbon refers to the carbon absorbed bymarine ecosystems such as seaweed and tidal flats.
Under this agreement, Hyundai will support research on
carbon reduction effects and development of related
methodologies so that seaweed blue carbon can beofficially recognized by the international community
as a carbon sink.
Furthermore, Hyundai plans to participate in the Sea
Forest Blue Carbon Council, which consists of the
Ministry of Oceans and Fisheries, the Korea Fisheries
Resources Agency, academia, and NGOs, according
to the agreement while striving to create synergies
by leveraging our global network. The Sea Forest Blue
Carbon Council is scheduled to be launched in thesecond half of 2023 after discussing its composition.
With the goal of seaweed being registered as an
official sink of blue carbon with the Intergovernmental
Panel on Climate Change (IPCC), an organization
devoted to assessing the impact of climate change,
we will share research data and develop results.
As a member of the council, Hyundai will consider
methodology registration and R&D support whileserving as a potential source of blue carbon credits toachieve carbon neutrality.

To restore sea forests, we plan to create sea forests
through seaweed planting activities in the coastal
areas of Korea whose ecosystem is severely damaged
due to ongoing sea desertification. Restoration ofsea forests will bring various positive effects, such as
reducing GHG emissions, improving species diversity
in marine ecosystems, and purifying marine water
quality by removing heavy metals such as nitrogenand phosphorus. Through these efforts, we intend tocontribute to the preservation of the environment andthe response to climate change.
The project will include the planting of seaweed
in areas where ecosystems have been severely
damaged by marine desertification caused by risingwater temperatures and reckless development incoastal areas. Sea forest restoration not only reduces
greenhouse gas emissions, but also has various
positive effects, such as promoting the diversificationof species in the marine ecosystem, purifying
marine water by removing nitrogen, phosphorus
and heavy metals, and contributing to communal
fishing. Hyundai will also contribute to environmental
preservation and respond to climate change througha blue carbon seaweed related project that is currently
under the spotlight around the world.
* Source: Korea Fisheries Resources Agency

26

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

27

Response to Climate Change
Monitoring GHG Emissions Hyundai uses LNG as its main fuel to produce
the heat necessary for vehicle production and to heat its business sites, with
GHG emissions from LNG combustion accounting for a significant portion of
Scope 1 emissions. Our Scope 2 emissions from the use of electricity at ourbusiness sites account for approximately 70% of all our Scope 1 and Scope 2
emissions. Scope 3 emissions refer to other indirect GHGs emitted outside
the company to produce goods and provide services for the company or toconsume products and services offered by the company. Emissions from theuse (driving) of vehicles sold by the company account for the largest share(approximately 80%) in Scope 3.

Hyundai manages Scope 1 and Scope 2 GHG emissions from activities at thebusiness sites owned, operated, and managed by the company, while further
strengthening management of Scope 3 emissions from upstream suppliersand downstream distribution networks. Based on Scope 1, Scope 2, and Scope
3 emission data, we will promote effective GHG reduction activities andinvestment through scientific estimation, analysis, and verification processes.

Scope 1 and Scope 2 Emissions(Unit: tCO2-eq)
Classification

20211)

2020

Scope 120222)

716,237

724,013704,726

Scope 2 (location-based)

1,680,079

1,660,058(1,853,813)

Scope 2 (market-based)3)--

1,684,121

2,396,316

2,384,071

2,388,847

0.642

0.616

0.597

Scope 1 + Scope 24)
Emission intensity (GHGs emissions per vehicle produced)
Scope 3 Emissions5)(Unit: tCO2-eq)
Classification

2020

Supply chain (purchase of raw materials and parts)
6)

Capital goods (purchase of furnishings and equipment)
Upstream
emissions6)7)

Other energy-related activities (excluding Scope 1 and 2)
6)

Waste generated in operation
Employee business trip6)

6)

Employee commuting (commuting buses)

6)

Transportation and distribution (by sea and land)8)

Use of sold vehicles (Tank to Wheel)
Downstream
emissionsEnd-of-life treatment of sold vehicles (recovery, disassembly, disposal)9)6)

Leased assets (headquarters and leased office buildings)
10)

Investments
Scope 3

2021

Participation in the GHG Emissions Trading Scheme The Greenhouse
Gas Emission Trading Scheme is a GHG reduction system that allows thegovernment to allocate emission rights on an annual basis to businesses that
emit GHGs in accordance with Article 17 of the Kyoto Protocol, so that they canemit GHGs within the allocation range. Then their actual GHG emissions areevaluated, and their remaining/insufficient emission rights can be traded withother business sites. Hyundai strives not to exceed the government-allocatedemission allowance by setting strict GHG reduction targets and reducing
emissions through efficiency improvements and facility improvements at its
business sites. Additionally, we seek to minimize the financial losses caused by
the purchase of emission credits when we need to do so.
Data Disclosure through the Environmental Information Disclosure System
The environmental information disclosure system aims to enhance thevoluntary will of companies to promote environmental management inaccordance with the Environmental Technology and Industry Support Act.
It not only lays the foundation for environmental management throughout
society but also contributes to green loans and green investments for
eco-friendly companies by providing financial institutions with verified
environmental information. As a company subject to environmental
information disclosure, Hyundai discloses key information on environmental
management promotion system, resource and energy conservation, andenvironmental pollutant emission reduction goals and achievements.
Hyundai energizes environmental management through the disclosure ofenvironmental information and increases achievements through continuous
environmental information management.

Third-party Verification of GHG Emissions Hyundai undergoes thirdparty verification of its GHG emissions. In 2022, we received independent
verification from LRQA (Lloyd’s Register Quality Assurance) for our GHG
inventory and energy consumption. In particular, we were evaluated forcompliance with the GHG protocol as well as the accuracy and reliability of
the information on direct GHG emissions (Scope 1), indirect GHG emissions(Scope 2) from our domestic and overseas operations, and other indirect
GHG emissions (Scope 3).
Establishment of Supply Chain GHG Data Management System
In thesecond half of 2023, we plan to monitor the carbon emissions of domestic
suppliers through the establishment of a carbon emission history
management system for our suppliers. Through the system, we intend toprovide a basis for our suppliers to calculate and manage their own GHG
data. By assisting suppliers in enhancing their capacity to measure andmanage GHG emissions, Hyundai is poised to play a leading role in carbon
reduction initiatives.

2022

17,014,155

18,359,619

19,852,763

22

139

326

93,518

149,556

145,177

1,760

1,911

1,978

5,222

7,069

21,37014,314

5,911

6,617

655,831

838,575

964,206

81,598,073

80,887,513

81,959,096

780,338

810,794

2,133,743

3,325

804

539

369,926

728,902704,970

100,536,484

101,790,793

105,790,785

1)

According to the results of the conformity assessment of the domestic emissions trading scheme, the 2021 emissions have been slightly adjusted.
	In 2022, additional sites were added (Indonesia, Vietnam, and Mexico). The sum of Scope 1 and 2 emissions produced in 2022 excluding the added sites is 2,242,879tCO2-eq.
3)	Scope 2 emissions: Addition of market-based emissions in 2022
4)
	Began to calculate the sum of Scope 1 and 2 emissions (market-based) in 2022
5)	Some Scope 3 emissions increased because of reopening after COVID-19 recovery (increase in product sales, increase in employee business trips, normalization of supply chain, etc.)6)	Based on the country where the Headquarters is located7)	Upstream emissions of fuel consumed at business sites (excluding electricity and steam)8)
	Excluding emissions before vehicles are fueled/charged (Well-to-Tank)
9)	Emissions produced at the end-of-life treatment stage was increased due to the addition of emissions in 2022 produced during the recycling process
10)	Scope 1 and Scope 2 GHG emissions from six of the listed investee companies in which Hyundai owns more than 20% of the shares.
2)

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

28

Response to Climate Change
Reducing Product Carbon Footprint
CONVERSION TO ELECTRIFICATION
Transition Direction of Electrification Hyundai does its utmost to achievecarbon neutrality by 2045 by promoting carbon reduction and zero-emissionin our vehicle sales. To accomplish this, we are transitioning our businessstructure from internal combustion engine vehicles to an electrification-focused
approach. Hyundai is continuously developing and producing not only hybrid
and PHEVs but also EVs and FCEVs that have zero carbon emissions during
operation. Hyundai is prioritizing the development of EV-focused technologies,
such as the E-GMP (Electronic-Global Modular Platform), and enhancing theperformance of hydrogen fuel cell systems that can be applied to a variety
of types of vehicles, including passenger cars and commercial vehicles.
Additionally, we are actively driving the expansion of electric and hydrogen
infrastructure to ensure convenient and accessible charging and refuelingfacilities anytime and anywhere. As a Mobility Solution Provider, we are not only
focused on improving the hardware performance of mobility devices but also
on strengthening our software capabilities to consistently provide optimized
services, generate revenue, and promote sustainable development.

2030 Mid-to Long-term Electrification Strategy In its efforts to achieve
the 2030 electrification strategy goals, Hyundai is pursuing a comprehensive
electrification strategy that includes expanding production within regions where
there is high demand for EVs, developing next-generation battery technologies,
implementing battery modularization, and enhancing the marketability ofEVs through the integration of hardware and software. In particular, we areaccelerating the transition toward carbon neutrality by pursuing the following
electrification initiatives of achieving 100% electrification for Genesis vehicles
by 2030, 100% electrification in the European market by 2035, and 100%
electrification in major markets by 2040.
We plan to increase our share of global EV production from 8% in 2023 to
34% by 2030, while gradually expanding our regional production volume byemploying a two-track approach to line conversion and the establishment of
new plants, rather than focusing solely on production in Korea.

Transition to EV Production
Increase the portion of EV production
efficiently through transition to EV lines
and addition of new dedicated EV plants
by region

Global EV production portion
Europe
54%

U.S.

1)

34%

75%

Korea

30%

36%
24%

7%
37%

2023

2026

14%

2030

Others
2023

2026

2023

2026

2030

2030

16%

8%

1)

2023

0.7%

18%

2026

2030

2%

6%

2023

2026

2030

Vehicle Electrification Roadmap by 2030
2030

2035
• 100% electrification for
the European market

2040• 100% electrification forthe major markets

Development of Dedicated EV Platforms Hyundai's E-GMP is a vehicle
chassis that encompasses the battery, motor, and power electronics system.
It is a modularized and standardized integrated platform that allows forthe configuration of a variety of types of vehicles, thanks to its expandable
wheelbase. Additionally, Hyundai plans to introduce two dedicated EV
platforms – the “eM” platform for passenger vehicles and the “eS” platform
for PBVs. The eM platform features an expanded common range compared to
E-GMP, and will be developed in a form that can be applied to all segments. eS
will be developed with a flexible structure and will play a key role in responding
to B2B demand such as delivery and car hailing. We are developing ournext-generation EV-dedicated platforms with the goal of increasing battery
capacity by 40% and motor output by 28%, while raising competitiveness byincreasing the charging time following increased battery capacity. In addition,
we are seeking to reduce the slow charging time by 50% compared to thecurrent level. In terms of safety, we plan to introduce a new structure that will
not be exposed to flames in the event of a battery fire, while maintaining theexisting highest crash safety performance in all regions.
Standardization and Modularization of Core EV Components Hyundai aims
to standardize a total of nine types of battery systems, allowing for easy
response to battery demand based on vehicle class. Furthermore, we plan
to transition from the current “cell-to-module” structure to a “cell-to-pack”
approach by 2025, removing the module stage. This transition is intended toenhance energy density and improve overall battery performance.

Major markets (Korea, U.S., Europe) 48%• 100% electrification ofGenesis models

Gaining EV Technology Competitiveness To expand EV sales, Hyundai
is implementing a comprehensive battery strategy that combines three
key strategies – stable battery supply, next-generation battery technology
development, and modularization. To procure the required large-scalebatteries for the sale of 2 million EVs by 2030, Hyundai is strengthening
collaboration with global top-tier battery suppliers. In addition, we are
pursuing local battery sourcing in key production regions and establishing abattery cell joint venture factory in Indonesia. We are focusing on maximizing
the performance of existing lithium-ion batteries to achieve EV performance
improvements and cost reductions. Simultaneously, we are also investing in
the development of next-generation battery technologies such as all-solidstate batteries. Furthermore, Hyundai is working toward the standardizationand modularization of key EV components like batteries and motors throughthe development of an integrated modular architecture (IMA) system, whichis expected to be completed by 2025.

2045• Accelerate electrification for
the emerging markets(carbon neutrality achieved)

Expanding EV Charging Infrastructure Hyundai is expanding the charging
infrastructure for EVs and FCEVs to enhance the convenience of using ecofriendly vehicles and accelerate their adoption. In Korea, we have been
expanding our service operations for the high-speed EV charging service known
as “E-pit” ever since its launch in 2021. In Europe, we are expanding high-speed
charging infrastructure through strategic investment in IONITY, an EV charging
network company. In the U.S., we have entered into a business agreement with
global energy company Shell to explore and review options for expanding EV
charging infrastructure and enhancing charging convenience.
E-pit – Ultra-fast EV Charging Station E-pit provides the fastest charging speedin South Korea, allowing EVs to be charged in less than 18 minutes (based on
the IONIQ 6, from 10% to 80% battery charge with a 350-kW ultra fast charger.)
Furthermore, E-pit offers several services to its customers, including Digital
Queue which provides estimated charging time and queue information to users;
Plug & Charge Technology which enables users to automatically authenticate,charge, and make payments; Digital Wallet which allows users to authenticate
and make charging payments even at other charging networks; and Route
Recommendation which guides users to the nearest available charging station
with the optimal route.
H Moving Station – Mobile Hydrogen Charging Station H Moving Station
is a mobile charging station (truck) that can be easily moved to areas wherehydrogen charging stations are not provided or are out of order. Hyundai’s
mobile hydrogen charging station, H Moving Station, can store 80 kg ofhydrogen per unit and charge up to 25 FCEVs per day with a charging pressure of
350 bar. In particular, these charging pressure figures are in accordance with theinternational standard charging protocol (SAE J2601), and durability and safety
for mobile facilities are also procured. Going forward, we will expand operations
to enable the charging of a variety of mobilities such as heavy equipment anddrones that use hydrogen fuel.

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

29

Response to Climate Change
EXPANSION OF ELECTRIFICATIONEV Starting with the development of the dedicated eco-friendly model
IONIQ in 2016, Hyundai unveiled the Kona EV, a compact SUV, in 2018, which
was followed by the 2020 launch of IONIQ, a dedicated EV brand based on
E-GMP. As of 2022, we have six EV models (3 models from Hyundai and 3
models from Genesis), including the IONIQ 6. Hyundai’s global EV sales in
2022 stood at 210,352 units, up 49.1% from the previous year.

FCEV The NEXO, launched by Hyundai in 2018, is a leading FCEV with amaximum driving range of 611 km (US certification) and a charging time ofabout 5 minutes (6.33 kg per charge). We are expanding our FCEV lineup by
expanding our FCEV leadership and mass-producing the Elec-City fuel cellbus, and the XCIENT fuel cell heavy-duty truck. Hyundai’s global FCEV sales
in 2022 stood at 11,217 units, up 22.5% from the previous year.

HEV and PHEV Hybrid models are available for all models except for large
SUVs and small sedans such as IONIQ, Elantra (AVANTE), Kona, Sonata,
Tucson, Santa Fe, and Grandeur. We are also offering a plug-in hybrid lineup
in our IONIQ, Sonata, Tucson, and Santa Fe models. In 2022, Hyundai’s global
HEV sales volume stood at 239,181 units and PHEV sales were 46,043 units,
up 2.6% and 20.3%, respectively, from the previous year. Going forward, we
will increase the sales portion of HEVs and PHEVs to 15.6% of the entire sales
volume with sales of 910,200 units (HEV:873,900, PHEV:36,300) by 2030.

Other Eco-friendly Vehicles Hyundai has also launched regional ecofriendly models that run on bioethanol, liquid petroleum gas (LPG) andcompressed natural gas (CNG). In South America, we launched the HB20, a bifuel vehicle, to meet the demand for bioethanol, while in India we introduced
the Aura CNG model to respond to the country’s growing demand for CNG.
Going forward, we are aiming to expand the sales portion of flex-fuel vehicles
and liquid petroleum gas vehicles to 5.2% and 1.5% by 2030.

Global Sales of Electrified Vehicles

Sales of Other Eco-friendly Vehicles

■ HEV

507

■ PHEV ■ FCEV

11
46

422
9
38

239

259

234

7
18

192
5
13

(Unit: 10,000 units)(Unit: Vehicles)
2019

2020

2021

Flex-feul vehicles(Bio-ethanol/Bi-fuel)2022

201,874

152,977

179,193

195,485

Compressed Natural
gas vehicles

3,005

1,352

1,489

1,581

Liquid petroleumgas vehicles

59,63449,53440,35035,797

Total

264,513203,863

221,032

232,863

Korea

10

15

24

Europe

10

30

51

U.S.

7

23

66

Others

6

26

59

136
210

110
141

98

64
2019

EV Sales Goal As global EV demand grows faster than market forecasts,
we have raised the 2030 sales target that we announced at the 2022 CEOInvestor Day from 1.87 million to 2 million units. We have also raised our sales
targets for each of our major regions, and are prepared to flexibly adjust
those sales targets according to regional market demand.

2020

2021

2022

Expansion of Models Based on EV-dedicated Platform Hyundai plans tolaunch the IONIQ 7 in 2024 following the release of the IONIQ 5 and theGV60 in 2021, based on the first EV-dedicated platform E-GMP, and theIONIQ 6 in 2022. Based on the next-generation EV-dedicated platform,
which will inherit the original features of, and further develop, the E-GMP, weplan to expand our EV lineup significantly by launching nine new models (fourHyundai and five Genesis models) from 2025 to 2030.

EV Sales Goal for 2030

(Unit: 1,000 units)■ EV

EV Sales Performance and Expansion Plan
EV Sales Performance In 2022, Hyundai’s EV sales volume is 210,352 units,
accounting for approximately 5.3% of total vehicle sales. This figure grew by about
49.1% compared to 2021 EV sales of 141,101 units. In particular, IONIQ 5, IONIQ 6,
and GV60 based on the EV-dedicated platform E-GMP led EV sales growth.

33

94

200

(8% of total sales)(18% of total sales)(34% of total sales)

2023

2026

2030

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

30

Response to Climate Change
Development of EV Battery Efficiency Improvement Technology Hyundai
continues to research and develop “thermal management technology” tominimize the waste heat in EVs and increase battery efficiency. To minimize
the energy supplied from the battery for heating, Hyundai has developed“radiant heat warmer” technology, which raises the temperature of theheating element based on radiant heat. We have also developed the “heatedglass defrost system” technology, which uses heated glass to remove
snow and ice from the front windshield, rather than using hot air. Hyundai's
dedicated EV batteries are designed to provide a maximum driving rangeof 250,000 to 300,000 kilometers when reaching 70-80% of battery
performance. This translates to a cumulative usage of 12 to 15 years whenassuming an annual driving distance of 20,000 kilometers. Furthermore, tomaintain optimal charging speed and efficiency under a variety of weather
conditions, Hyundai is developing an “external thermal management
station”. This system injects cooling water of the required temperature fromthe outside during charging to optimize the battery temperature.

Battery Management Based on Digital Twin Hyundai is implementing
digital twin technology to manage the performance of a key component of
EVs – batteries. The battery life prediction technology, utilizing digital twin,
analyzes a variety of factors based on the actual vehicle's driving history tocontinuously re-evaluate the battery life, enabling more accurate battery life
predictions. By creating a virtual EV in the digital world based on a varietyof driving data collected from real-world driving of EVs (such as the IONIQ
5), Hyundai predicts the battery life for each vehicle. The integration of AI,
machine learning, and physics models is utilized in a sophisticated data
analysis model to comprehensively analyze vehicle-specific information,
including charging/discharging, driving habits, parking, and driving
conditions, which can impact EV battery performance. This approach aims
to increase the accuracy of battery life predictions.

Certified Energy Efficiency by EV Model
Korea (Combined)1)

Model

Europe (WLTP)2)

U.S. (EPA)2)

Electrified G80

4.3 km/kWh

19.1 kWh/100km

97 MPGe

Electrified GV70

4.6 km/kWh

19.2 kWh/100km

91 MPGe

GV60

5.1 km/kWh

17.0 kWh/100km

112 MPGe

Kona Electric

5.5 km/kWh

14.7 kWh/100km

120 MPGeIONIQ 55.2 km/kWh

17.0 kWh/100km

114 MPGeIONIQ 6

6.0 km/kWh

14.3 kWh/100km

140 MPGeIONIQ Electric

6.3km/kWh13.8 kWh/100km

133 MPGe

1)	Electrified G80 (19-inch, 2,265 kg), Electrified GV70 (19-inch, 2,230 kg), GV60 (standard 2WD), Kona Electric (long range, 1,720kg), IONIQ 5 (long-range 2WD exclusive,
without built-in cam), IONIQ 6 (long-range 2WD, 18-inch)2)
Europe and the USA make distinctions based on the representative TRIM standards for each model

FCEV Battery Performance
VehicleNexo

Fuel tank capacity

Fuel economy (combined)

Driving distance per charge

Warranty period for separately
guaranteed parts

6.33 kg / 156.6 Liter

96.2 km/kg

609 km10 years, 160,000 kilometers

Based on Modern I 17-inch tire

IMPROVING FUEL ECONOMY
Improvement of Vehicle Fuel Economy Hyundai is aiming for a longterm transition to EVs while also making efforts to minimize greenhouse gas
emissions from ICEVs which take large portion of our total sales volume asof current. Through continuous research and development of powertrain
efficiency improvement, we are adapting to country-specific fuel economy andemission regulations while achieving greenhouse gas reduction during vehicle
operation. Furthermore, we are focusing on R&D aimed at making vehicles
more lightweight, enhancing aerodynamics, and other measures to improve fueleconomy, thus enhancing both environmental and economic benefits.
Technologies to Enhance Vehicle Fuel Economy The 7th generation
Grandeur, launched in 2022, was able to reduce its carbon emissions despite
increased vehicle specifications and improved convenience features, thanks
to aerodynamic enhancements and a variety of fuel economy technologies.
Compared to the previous models, the 7th generation Grandeur achieved amaximum 9.2% reduction in carbon emissions, decreasing from 178 g/km
to 163 g/km. The hybrid model, in particular, achieved an additional 10.2%
reduction, lowering carbon emissions from 97 g/km to 88 g/km. This wasachieved by setting development goals for aerodynamic improvements indesign and engineering across a variety of areas, such as optimizing bumper
curvature, trunk end kick-up, and full undercovers, as well as applying
technologies like air guards (ICEV) and active air flap (HEV) to reduce cooling
resistance. In addition, the optimal injection method suitable for driving
conditions was achieved by applying the 3rd generation powertrain involving
the advantages of both MPI and GDI, resulting in a 4.9% improvementin fuel economy. The integration of a flow control valve also allowed for
optimizing cooling water temperature control based on driving conditions,further enhancing fuel economy. Furthermore, the addition of fuel economy
technologies such as Continuously Variable Valve Duration (CVVD) in theintake system and Low-Pressure Exhaust Gas Recirculation (LP-EGR) in the
HEV powertrain contributed to the reduction of carbon emissions.
Making Vehicles Lightweight Hyundai uses not only carbon-fiber-reinforced
plastics but also lightweight materials such as aluminum, clay nano, and clad
metal. The Genesis G70, for example, incorporates aluminum in its hood (-9.1kg), front suspension (-6.7 kg), and rear suspension (-5.2 kg), resulting in aweight reduction of 29.7 kg.

Enhancing the Public Confidence in Fuel Economy Testing Hyundai
complies with the fuel economy regulations of key markets such as Korea,
North America, Europe, China, and India. To obtain fuel economy certification,
we conduct tests according to the standards of each country. To enhance
the reliability of fuel economy and emission measurements conducted incontrolled conditions (on-cycle), Hyundai undergoes inspections of fueleconomy measuring equipment by external specialized organizations
such as the Korea Laboratory Accreditation Scheme (KOLAS) and the
Korea Automotive Technology Institute (KATECH). Furthermore, Hyundai
collaborates with a variety of government research institutes and conducts
fuel economy tests jointly to ensure public confidence in the accuracy of thefuel economy measurement results. The results of on-cycle and off-cycle testcomparative analysis are reported to the executive in charge of powertrain
research and development at least once a year.
Real-Road (Off-Cycle) Fuel Economy Test The vehicle fuel economy isinfluenced by a variety of factors, including internal factors such as gear shifting,vehicle weight, and air conditioning, as well as external factors like road conditions
and traffic congestion. In light of this, Hyundai conducts fuel economy tests not
only in controlled conditions (on-cycle) considering a variety of factors but also
performs off-cycle tests that simulate real-world driving profiles.
Collaboration with Third-Party Agencies Hyundai conducts correlation
analysis between the fuel economy test results obtained from real-world (offcycle) tests and those of other organizations. In the US market, we compare
our fuel economy data with those published by third-party organizations
such as the EPA, J.D. Power, and Consumer Reports. In the European market,
comparisons are made with data from third-party organizations such asGreen NCAP, Auto Bild, and Spritmonitor. By comparing the fuel economy
measurement results with those of third-party organizations in each country,
we enhance the credibility of our own fuel economy test results.

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

Response to Climate Change

EU
The EU has finalized its goals through a resolution by the European
Parliament, which includes reducing the current fleet average CO2 standards
for passenger cars (119 g/km based on WLTP), with an aim to achieve a 15%
reduction by 2025 and a 55% by 2030 compared to the levels in 2021. In
addition, the EU has set a goal to achieve a 100% reduction in emissions
from passenger cars by 2035. As a result of these regulations, starting from2035, the sale of new ICEVs in the EU market will be practically impossible.
Furthermore, countries like Norway, the Netherlands, and Germany areeven pursuing individual national policies to prohibit the sale of new internal
combustion engine vehicles earlier than 2035.

U.S.
The US government has increased their average fuel economy target from40 miles (64.4 km) per gallon to 55 miles (88.5 km) per gallon by 2026. They
have also set a goal to reduce greenhouse gas emissions from 224 grams
per mile to 161 grams per mile by 2026. Furthermore, both the federal andstate governments are expanding incentives for the transition to eco-friendly
vehicles through increased purchase subsidies. The federal government has
set a goal to transition 50% of all vehicles, including electric vehicles (EVs), tozero-emission vehicles by 2030. Additionally, the California state government
is pursuing a policy to ban the sale of internal combustion engine vehicles
starting in 2035.

China
The Chinese government is also continuously strengthening fuel efficiency
regulations and enhancing the mandatory sales requirements for newenergy vehicles (NEVs), including EVs. In particular, they aim to progressively
increase the mandatory sales share of NEVs, reaching 20% by 2025, 40%
by 2030, and 50% by 2035. Additionally, they have set a target for EVs toaccount for over 95% of NEV sales by 2035.

Average CO2 Emissions in the EU

Average Fuel Economy in the US

Average Fuel Economy in China(Unit: g/km)(Unit: mpg)
Light truck

Passenger vehicle(Unit: L/100km)

45.1

Combined

38.5
38.1

38.0

36.1

6.28

6.15

5.61

38.5

40.8
39.3

6.00

38.9

6.28

40.0

106.0

94.7

107.1

42.8

123.5

Hyundai is expanding the sales of electrified vehicles in response to thestrengthening of CO2 regulations in major regions until 2030, aiming to
reduce the average carbon emissions of our fleet in each region. We havea long-term goal of achieving zero fleet carbon emissions, and to minimize
regulatory risks, we at Hyundai are calculating and incorporating theregulatory compliance volume, including the volume of EVs, into our annual
sales volume plan. We also monitor and evaluate regulatory compliancebased on monthly sales performance. To prepare for the possibility of not
meeting regulations, we adjust our sales volume and utilizes a variety ofmeasures such as the use of accumulated credits to mitigate regulatory risks
in advance.

Korea
Korea has strengthened its GHG regulations related to automotive emissions, demanding a reduction in vehicle emissions from 97 g/km in 2020 to 89 g/km by 2025 and 70 g/km by 2030. In case the emission limits are exceeded, a fine of
KRW 50,000 per gram is imposed. Furthermore, a basic plan has been presented to promote eco-friendly vehicles, aiming to supply 2.83 million units by 2025 and 7.85 million units by 2030, leading to a 24% of exhaust gas emission reduction.

124.3

Responding to Fleet average CO2 standards (Fuel Economy) in Major
Markets The fleet average CO2 standards or corporate average fueleconomy regulations, implemented in major countries, are continuously
being strengthened to achieve their carbon reduction goals. In the EU,
regulatory targets have been adopted to reduce passenger car CO 2
emissions by 55% by 2030 compared to 2021 and achieve complete
decarbonization of vehicle CO2 emissions by 2035. The US government
has announced regulations starting in 2023 to progressively increase fueleconomy standards by 5-10% annually, aiming to reach 55 miles per gallon
by 2026. They have also set a target to replace 50% of new vehicle sales
with electrified vehicles (including EVs, PHEVs, and FCEVs) by 2030. The
government of California in the U.S. plans to replace 35% of new vehicle
sales with zero-emission vehicles (including EVs) starting from 2026,
increasing to 68% by 2030, and has set plans to prohibit the sale of new
internal combustion engine vehicles starting from 2035.

30.9
29.4

2018

2019
NEDC

*

2020

2022

2021

27.2

27.1

2018

2019

2020

2021

2022

2018

WLTP

	2021/2022 performance is not able to be compared with the performance of prioryears for the EU Commission (EC) changed the CO2 emission standard from NEDC
to WLTP; and the regulatory value was also from 95 g/km (2020) based on NEDC
to 112.5 g/km (2021) based on WLTP according to the change of methodology.
**
	The figure for 2021 has been revised from our internal estimate (109.7 g) to theofficially announced figure by the European Commission (107.1 g).
***
	The input figure for 2022 is based on our sales performance and is our own estimate.
Going forward the final confirmation of the figures by the EC will be necessary.

2019
NEDC

*

	The average fuel economy in the U.S. and China is determined annually based on
the average fuel economy performance of individual car brands as disclosed by
the respective government agencies (NHTSA) in the U.S. and the Ministry of State
Security in China).

*

2020

2022

2021
WLTP

	2021 performance is not able to be compared with the performance of prior years
for the Chinese government changed the fuel economy certification standard from
NEDC to WLTP.

31

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

32

Response to Climate Change
Carbon Reduction at Business Sites
DIRECTION OF CARBON REDUCTION AT BUSINESS SITES
Energy Efficiency Hyundai acknowledges and supports the direction
and goals set by the 2015 Paris Agreement, and we recognize our role andresponsibility in global greenhouse gas reduction and have been actively
developing and implementing a variety of energy-saving initiatives. Leading
example includes the adoption of energy-efficient facilities to reduce energy
consumption in our operations, and we strive to transition to renewableenergy sources as part of our commitment to sustainability.
Carbon Capture Utilization and Storage To achieve carbon neutrality, it isnecessary to cease the use of fossil fuels in the automotive manufacturing
process. However, reaching the target point for energy transition requires asignificant amount of time. During this transitional period, Carbon capture
utilization and storage (CCUS) technology, which involves capturing andprocessing CO2 emitted from fossil fuel combustion, is being recognized asa practical solution and a high-potential means for carbon neutrality.

Hyundai has been developing CCUS technology to capture carbon emitted
by LNG in manufacturing processes, given that a large amount of the fuel isused despite its relatively low carbon emissions among fossil fuels. In addition,
Hyundai’s research institute is conducting CCUS pilot studies to commercialize
the technology, aiming to extend its application beyond the automotive industry
to other business sectors. Continuous market monitoring is also being carriedout to stay updated on the latest developments in CCUS technology.
Improvement of Production Process Hyundai is committed to improving
energy efficiency in our production processes through a variety of efforts.
We plan to incorporate high-efficiency motors and inverters and transition to
renewable energy sources. By using hydrogen energy, we aim to achieve carbon
neutrality at our business sites by 2045, and we will be replacing fossil fuels andelectric energy used in the manufacturing process with renewable energy. Alsoplanned is to enhance the efficiency of the paint process, which primarily uses
LNG fuel, through the introduction of high-efficiency equipment, waste heatrecovery, and process improvements.

Sites with the Energy Management System (ISO 50001) Certification
Site

Beijing Hyundai Motor Company(BHMC)

Certificate validation dateJan. 26, 2025 (Renhe/Yangzhen Plants)
Dec. 12, 2024 (Changzhou Plant)

Site

Certificate validation date

Hyundai Motor India (HMI)

Oct. 04, 2024

Hyundai Assan Otomotiv Sanayi(HAOS, Turkey)

Jul. 16, 2024

Energy Consumption1)(Unit: MWh, MWh/vehicle)
Classification

LNG
Non-renewable energy
consumption

Total of energy consumption2)
Energy intensity
*
1)
2)

2021

2022

3,534,350

3,562,760

3,442,276

Diesel, kerosene, gasoline

184,158

154,015

131,268

Steam, heat

98,77790,51094,027

Other fuel123,433

143,460

172,986

3,344,292

3,338,657

3,377,133

70,376

120,171

280,498

7,355,386

7,409,573

7,498,188

1.97

1.91

1.87

Electricity (non-renewable)
Renewable energy consumption

2020

Electricity (renewable)

Intensity: A value representing the environmental resources used or the environmental impact emitted when producing one car
Due to changes in energy consumption calculation criteria and an expansion of the calculation scope, the data for previous years has been revised.
In 2022, additional sites were added (Indonesia, Vietnam, and Mexico). The total of energy consumption in 2022 excluding the added sites is 7,217,893 MWh.

TRANSITION TO RENEWABLE ENERGY
RE100 Implementation Plan Hyundai, along with other major Groupaffiliates of Kia, Hyundai MOBIS, and Hyundai WIA, declared our commitment
to the global initiative RE100 in July 2021, aiming for 100% renewable energy
usage. In April 2022, this commitment was approved. Hyundai now aims toachieve 100% renewable energy transition by 2045, ahead of the RE100’s
target year, 2050. To achieve this goal, we take into account the renewableenergy supply environment, government policies and regulations, and plantspecific conditions in each country. We plan to install solar panels on theroofs of key production plants, purchase renewable energy certificates, andestablish power purchase agreements (PPAs) with external renewable energy
generators. The aim is to gradually expand the use of renewable energy until
2045 by applying optimal solutions. Hyundai’s manufacturing subsidiaries in
the United States, India, and Turkey, specifically, have set a target to achieve
RE100 by 2025.

Hyundai Motor Manufacturing Indonesia (HMMI) HMMI achieved RE100
in its vehicle production in 2023 by signing a forward purchase agreementfor RECs issued by a geothermal power plant located in Bandung in the WestJava province.
Hyundai Motor Manufacturing Czech (HMMC) HMMC has transitioned
to 100% renewable energy for the electricity used in its plant through theguarantee of origin (GO) system in 2022. It has also implemented the Eco
Smart vapour emission control (VEC) system, based on the gas monitoring
system in the paint shop, to improve energy efficiency. In addition, HMMC
is implementing measures such as compressed air supply control and LED
lighting replacement to reduce energy consumption.
Hyundai Assan Otomotiv Sanayi (HAOS) HAOS in Turkey set the goal ofachieving RE100 by 2025, so did HMI and HMMC. HAOS procures 51.7% of
its total electricity from renewable sources, and it has also implemented avariety of process improvements and introduced state-of-the-art equipment,such as reducing compressed air usage and installing high-efficiency
inverters, to minimize unnecessary power consumption.

ADOPTION OF RENEWABLE ENERGY AND ENERGY SAVING AT MAJOR
BUSINESS SITES
R&D Sites To reduce GHG emissions, Hyundai utilizes recycled waste heatand steam from facilities and equipment in its research facilities. We also
harness waste heat generated during waste disposal. In addition to theexisting 562 kW-scale photovoltaic power generation facility, we plan toinstall an additional 3 MW-scale facility.
Hyundai Motor India (HMI) HMI sources approximately 33.3% of its total
electricity consumption through the purchase of eco-friendly energy (PPAs) topower its factories, and 8.5% of its electricity is purchased through renewableenergy certificates (RECs). Furthermore, HMI has its own photovoltaic power
generation facility, with a capacity of 0.3% (0.69 MW). It procures 42.1% of its
total electricity from renewable sources and aims to meet 100 percent of its
electricity consumption with renewable energy by 2025.

RE100 Roadmap

Jul. 2021

Apr. 2022

2030

2040

2045

• Declared the joining of
RE100• Received the approval
to join RE100• Aim to achieve 60%
electricity transition to
renewable energy• Aim to achieve 90%
electricity transition to
renewable energy• Aim to achieve 100%
electricity transition to
renewable energy

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

33

Response to Climate ChangeLife Cycle Carbon Reduction
CARBON REDUCTION IN THE SUPPLY CHAIN
Supplier Carbon Neutrality Hyundai is committed to encouraging its
tier-1 part suppliers and raw material suppliers to achieve supply chain
carbon neutrality. GHG emissions generated by our raw material supply
chain are 20 million tons, which is about 18% of total GHG emissions
generated throughout the life cycle of Hyundai’s products. To support
the carbon neutrality of suppliers, we plan to establish a monitoring andmanagement system for suppliers' carbon emissions. In the long term,
we plan to promote carbon reduction in the supply chain through ecodesign and the use of low-carbon materials. In addition, we developed anddistributed the Carbon Neutral Guide for Suppliers and plan to introduce
the CDP Supply Chain program starting from 2023 to engage suppliersin environmental initiatives and support them. As such, we are making
multifaceted efforts to reduce GHG emissions throughout the entire
automotive manufacturing process in addition to helping our suppliers
reduce their carbon emissions.

Support for Suppliers’ Carbon Reduction Efforts Hyundai conducts surveys
on suppliers' carbon emissions and reduction plans, and based on the
results, we establish and implement initiatives to support suppliers’ carbon
reduction. We offer training courses to raise awareness of carbon neutrality
among suppliers' employees and provide them with guidelines for
implementing carbon neutrality. In March and July 2022, we operated theSupplier Carbon Neutrality Council to gather opinions on Hyundai's carbon
neutrality strategy and exchange views on key issues. Furthermore, we set
greenhouse gas emission standards and targets for top-emitting suppliers
and promote their establishment of internal carbon neutrality response
systems through support activities.

Roadmap for Supply Chain Carbon Neutrality

Participation in CDP Supply Chain Hyundai and Kia have jointly joined
CDP Supply Chain in 2023. CDP Supply Chain is one of the environmental
disclosure projects operated by CDP, which enables the assessment of
suppliers' carbon-related information such as climate change issues,
strategies, carbon emissions, and more. To facilitate smooth participationof suppliers in CDP Supply Chain, Hyundai provides on/offline training
on a variety of topics including carbon neutrality overview, emissions
calculation, and questionnaire guidance to some 360 tier-1 suppliersin Korea. Continuous support is also offered through the production of
instructional videos and the operation of a Help Desk.

Supply Chain Carbon Information Disclosure & Services for Logistics/Transportation Energy Efficiency

Encourage energy transition ofmajor suppliers

Encourage carbon reduction in
the supply chain of key raw materials

Establish supplier carbon
neutrality management system

Encourage carbon neutrality ofsupply chain

Apply low-carbon
raw materials

Disclosure ofcarboninformation of
the supply chain

Carbon neutrality
2019 (Base Year)

Creation of an Ecosystem for Low Carbon Logistics and Transportation
Hyundai strives to reduce carbon emissions from the “first mile” stage,
where freight moves from production plants to logistics warehouses, tothe “middle mile” and “last mile” stages, where it moves from warehouses
to a variety of hubs. In the first mile stage, hydrogen-powered electric
trailers suitable for long-distance driving are being deployed. In the middle
mile and last mile stages, electric trucks and other innovative technologies
such as EVs, FCEVs, urban air mobility, and robotics are being utilized tolead the reduction of carbon emissions in the logistics and transportation
service ecosystem. Furthermore, Hyundai has signed a multi-stakeholder
agreement with Hyundai Glovis, the Ministry of Land, Infrastructure
and Transport, the Ministry of Trade, Industry and Energy, and theMinistry of Environment to expand the electrification of the logistics andtransportation sector by 2030. Hyundai is striving to distribute 10,000
hydrogen-powered trucks in the logistics field by 2030.

2030

2040

2045 (Target Year)

Goal•	Establishing a plan to specify and support our supply chain carbon reduction strategy bydisclosing information on carbon emissions of suppliers

Efforts for educationand support•	Conducting on/offline education related to CDP Supply Chain (carbon neutrality overview andemission calculation, guidance on questionnaire items, etc.)•	Continuing support for suppliers by offering educational videos, verifying carbon emissions,and operating a help desk

•	Planning to upgrade the calculation of carbon emissions (Scope 3, Category 1) at suppliers’
Future utilization measures

Activities for Supporting Suppliers’ Carbon Reduction Efforts
Activity

Description of activities

Training for andraising awarenessof suppliers•	CEOs: Hosting the Partnership Day for suppliers and introduce
Hyundai’s carbon neutrality strategies•	Employees: Offering training on the enhancement of suppliers’
capabilities of carbon neutrality (Global Partnership Center)

Operation of the
Supplier Carbon
Neutrality Council•	Convening the Supplier Carbon Neutrality Council(March and July 2022)•	Gathering opinions on Hyundai’s carbon neutrality strategies
and exchange opinions on major issues•	Presenting suppliers with an implementation guide toProvidingpromote carbon neutrality
suppliers with the•	Establishing an in-house management system, reducing
carbon neutral
GHG emissions at business sites/supply chain/logistics,
guide for suppliers
disclosing emission information, etc.

Activity

Description of activities

Survey ofsuppliers’ GHG
emissionsand energy
consumption•	Investigating GHG emissions and energy consumption ofparts suppliers, etc.
•	Promoting the establishment of a supplier carbon emission
management system (second half of 2023)

Review of
suppliers’
reduction targets
and developmentof support
programs•	Specifying suppliers’ GHG emission reduction plans(criteria and targets)•	Promoting projects such as support for carbon reduction
facilities for suppliers and consultation on GHG emission
diagnosis

Services forenhancing theefficiency inlogistics andtransportation

1)

Achievement of
packaging efficiency

workplaces using the CDP supply chain•	Planning a review to reflect CDP supply chain results in purchase policy•	Reducing the amount of energy used for collecting packing materials through thedevelopment of foldable plastic boxes1)•	Pursuing packaging efficiency through cooperation with suppliers and expand logistics energy

efficiency
Transitioning to eco-friendly
transportation means•	Enhancing energy efficiency and reduce GHG emissions through coastal shipping

Eco-driving ofcargo vehicles•	Enhancing the integrated transportation management system within the logistics business andimprove the fuel efficiency of cargo vehicles•	Monitoring fuel efficiency improvement activities by installing a digital tachograph (DTG)	When used as a packaging material for automobile parts, foldable plastic boxes can be recovered and folded up to a fifth of their size, greatly increasing the amount of boxes thatcan fit into a collection container.

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

34

Response to Climate Change
LIFE CYCLE ASSESSMENTLCA Methodology Hyundai conducts life cycle assessments (LCA) basedon ISO 14040 and 14044 international standards to assess the environmental
impacts throughout the entire process of vehicle production, including raw
material extraction, component manufacturing, component transportation,
vehicle manufacturing, vehicle distribution, vehicle operation, and end-oflife treatment. As of 2022, the proportion of vehicle models that underwent
LCA was 25.03%. The LCA was conducted using the full-LCA methodology
for all vehicle models.
LCA was conducted using the CML (Centrum voor Milieukunde Leiden)
methodology, considering a variety of impact categories such as global
warming (GW), abiotic depletion potential (ADP), acidification potential(AP), eutrophication potential (EP), ozone depletion potential (ODP), andphotochemical ozone creation potential (POCP), as well as human andecosystem impact categories. To assess the impacts arising from suppliers’
manufacturing processes, reliable commercial databases were utilized. For
factors such as vehicle transportation, distribution, and energy use, as wellas pollutant emissions, actual data measured at the facilities were applied.
In 2022, the accuracy of the LCA was improved by differentiating primarymaterials, such as aluminum, into virgin and recycled sources at the raw
material extraction stage. Additionally, the operational stage of EVs involved
predicting the impact on future electricity production based on the basic
plan for power supply.

LCA Expansion Based on the LCA process established until 2021, LCA
was conducted for four powertrains (ICEV, HEV, EV, FCEV), a total of 14
passenger vehicle models and 2 commercial vehicle models in 2022. In
addition, the Genesis brand has completed LCA for all of its vehicle models.
Use of LCA Hyundai comprehensively analyzes the environmental
impacts at each stage of the entire process based on the results of LCA.
Using this information, we identify and promote activities to improve theenvironmental friendliness of our vehicles. In the raw material extraction
stage, we are expanding the use of eco-friendly steel and aluminummaterials. In the part-manufacturing and vehicle-production stages, weare committed to carbon neutrality through initiatives like RE100 andresource circulation. When developing new models, we aim to minimize
environmental impacts by considering LCA.

Manufacturing ofcomponents

Transport ofcomponents

Manufacturing ofvehiclesDistribution ofvehiclesOperation ofvehicles

EV

157.4

Grandeur (IG)

ICEV

220.2

Grandeur (IG)

HEV

169.1

Grandeur (GN7)

ICEV

215.4

Grandeur (GN7)

HEV

156.8

GV60

EV

146.9

G70

ICEV

236.8

Vehicle Chain

GV70

ICEV

265.2

End-of-life
treatment

GV70E

EV

214.7

G802)

ICEV

311.6

G80E

EV

234.1

GV802)

ICEV

325.6

G90

ICEV

311.0

Cumulative Vehicle Models and Ratio of Sales by Model in 3-year Full-LCA

Ecological consequences

Resource use

Acidification(AP)

Ecotoxicity(ETP)

Eutrophication(EP)

Abiotic depletion(fossil fuels,
minerals)Global Warming
(GW)

Ozone
Depletion(ODP)

Photochemical
Ozone Formation Water Depletion(POCP)

Human health

Human Toxicity(HTP)

GHG emissions

IONIQ 6

Well-to-Tank

Impacts Covered by LCAClassification

224.8

Life Cycle

Extraction of
raw materials

Model

FCEV

Life Cycle Stages Covered by LCA

Tank-to-Wheel■ Pre-manufacturing ■ Transportation ■ Manufacturing ■ Distribution ■ Use ■ End-of-life treatment, Recycling

NEXO1)LCA Results As of 2022, we have completed LCA for a total of 20 vehicle
models. The LCA results of 14 passenger vehicle models that underwent
LCA are shown on the right. The results for the remaining factors, such asparts manufacturing and vehicle maintenance stages, which are currently
not included, will be addressed and improved through advanced LCA
methodologies.

Vehicle Chain

LCA Results by Model2020

1 vehicle model (2.62%)2021

4 vehicle models (14.14%)2022

20 vehicle models (25.03%)
1)
2)

Percentage of GHG emissions generated by life cycle stage

Based on the case using hydrogen produced via steam methane reforming (SMR) process
Based on gasoline 3.5 AWD(Unit: gCO2-eq/km)

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

35

Establishment of a Circular Economy
Hyundai complies with the end-of-life vehicle (ELV)
recovery and disposal regulations in countries where
it sells its vehicles, while also implementing extended
producer responsibility (EPR) to increase the recovery,
disposal, and recycling of ELVs. [Re-think] We continue
look for materials that minimize negative impact on
the environment and human health starting from thevehicle design phase. [Reduce] While reducing theuse of one-time raw materials, such as plastics, asmuch as possible, we are increasing the applicationof eco-friendly materials. [Recycle] In addition, we areshifting our business operation method from a linear
structure to be circular so that recyclable materials
can be recycled. To increase the recovery, disposal,
and recycling of ELVs, we are intensifying the processinternally while also strengthening cooperation withoutsourced companies.

Extended Producer Responsibility
DESIGN FOR RECYCLING AND RECYCLED MATERIALS
Designs for Recycling Starting from a new vehicle’s design and development
phase, we take the recovery, disposal, and recycling of wastes that are
generated from ELVs. In addition to increasing the application of recyclable
materials, we are replacing non-metals, such as plastic and glass, with recycledmaterials, biomaterials, and other eco-friendly materials to enhance vehicles’
eco-friendliness. Hyundai vehicles are 85% recyclable if vehicles’ thermalenergy is not recovered, and the recyclability rate rises to 95% if the recovery ofthermal energy from waste disposal is included. In particular, metals, such as
ferrous and non-ferrous materials, account for approximately 70% of vehicle
materials, and we are reusing or recycling most of them.
Eco-friendly Material Technologies Hyundai values recycling as a way topreserve a sustainable future environment. We are therefore expediting theestablishment of a closed loop for recycling plastic waste, while also building
an open loop system for waste from other industries than automobile industry
as well as domestic waste as part of our efforts for eco-friendly activities thatconsider the recycling ecosystem.

Based on the circular plastic system, we make continued efforts to expand
the use of recycled plastics to exterior parts of lamps and closure parts,
in addition to applying recycled plastics to interior parts of wheel guards,
undercover parts, battery trays, and fan-shrouds. We have established a midto long-term plan on continually discovering new wastes and developing
recycling element technologies, and are giving concrete shape to strategies
on applying and expanding recycled plastics based on these internal
resources. Moreover, we will build a system that can monitor the status ofrecycled plastic application to our vehicles to efficiently manage the entire
recycled plastic application process.
In addition to recycled plastics, we produce bioplastics made of raw
materials extracted from sugar cane and wood, and use them for finishingmaterials of dashboards and others, and also use eco-friendly paint thatuses coconut seed extracts. Vegetable oil that is produced from flaxseeds
is applied for seat processing, and we have developed eco-friendly
anthropogenic leather that applies bio-polyol derived from cornstarch,
thereby reducing around 47% in carbon generation compared to previous
anthropogenic leather. As part of an environmental project that makes
marine environment pollutants into resources and applies them toautomotive parts, we developed a technology that recycles waste tunafishing nets and applied them to floor mats and plastic parts. To expand
application, we are establishing collaborative relations with outside parties,
such as agreements with the fishing industry. We are continually securing
recycled material technologies, such as developing parts that apply biocomposite materials using coffee grounds and developing interior parts thatreuse waste wood, including whiskey/oak barrels.

Eco-friendly materials applied to IONIQ 5

Increased Application of Eco-friendly Materials to New Vehicles Hyundai
is applying eco-friendly materials, including recycled materials, to its
new EV models first. Yarn extracted from sugar cane and processed yarn
from recycled PET bottles were applied to the IONIQ 5’s door trims andseats, followed by expanded application to the head linings, pillar trims,
sun visors, and package trays of the IONIQ 6, GV60, Electrified GV70, andElectrified G80 models. In addition, materials made of recycled waste
fishing nets that were discarded in the ocean were applied to the floor
mats of the IONIQ 5 and IONIQ 6. Natural fabric that contains 30% wool
was applied to the front of the headrest and side of seats for the Electrified
GV70. Also, the Electrified G80 applied forged wood decoration that is
made of leftover pieces of wood.
Application of Eco-friendly Materials to EV Models
IONIQ 5

Bio paint extracted from rape blossoms and corn, oil
extracted from flaxseed, yarn extracted from sugar cane,processed yarn from recycled PET bottles, etc.

IONIQ 6

Paint from recycled waste tire, plant raw material-based
paint, yarn extracted from sugar cane, processed yarn
from recycled PET bottles, etc.

GV60

Bio-polyol derived from corn and sugar cane, processed
yarn from recycled PET bottles, etc.

Electrified GV70

Natural fabric containing 30% wool, processed yarn fromrecycled PET bottles, etc.

Electrified G80

Natural dye, processed yarn from recycled PET bottles,
forged wood made of recycled leftover pieces of wood, etc.

Eco-friendly materials applied to Electrified G80

Yarn extracted fromsugar cane

Bio paint extracted fromrape blossoms

Used for head linings,
floor mats, etc.

Used for horn cover,switch, steering wheel,
etc.

Processed yarn fromrecycled waste PET bottles

Used for head linings,
pillar trims, sun visors,
package trays, etc.
Forged wood madeof recycled leftover pieces
of wood

Yarn fromrecycled PET bottles

Used for door trims,
seats, etc.

Used for console, doors,crash pad, andrear armrest

Eco-friendly plastic HDPE
Oil extracted from flaxseed

Used for seat leather
processing

Used for door garnish,etc.

Natural dye

Used for seats, console,rear armrest1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

36

Establishment of a Circular Economy
ESTABLISHING THE ELV RESOURCE CIRCULATION SYSTEM
Eco-friendly ELV Service In line with customers’ requirement for ecofriendly ways of scrapping vehicles, we provide a one-stop service that assists
our customers through the vehicle recovery, dismantling, and recycling
processes. Customers can apply for the service at Hyundai’s website. We
pick up the scrapping vehicle at the time and place desired by the customer,
after which the vehicle is sent to an eco-friendly junkyard for eco-friendly
dismantling and recycling based on the principle of indoor storage ofrecovered materials and recycling of all recovered parts and materials.
Recovering and Recycling ELVs
Hyundai signed an agreement with
the Korean Ministry of Environment in 2011 to implement a pilot project toadvance the recycling system for ELVs by justifying the adoption of EPR
in the automobile sector after introducing it to packaging materials andelectronic products. We are strengthening collaborative relations withscrap car companies, such as providing vehicle dismantling manuals andnecessary training to scrap car companies, supporting the eco-friendly
disposal of waste refrigerants contributing to climate and ecosystem change,and subsidizing the recycling of materials that are difficult to recycle. In 2022,
we recovered about 199,443 tons of resources at the end-of-life stage, withthe recycling rate of end-of-life cars reaching 82.4% without including heatrecovery and 91% when included. In the meanwhile, Hyundai does not havea financial benefit from the end-of-life vehicles’ take back programs.

Eco-friendly ELV Principles

Prevention of soil andwater pollution

Resource circulation, preventionof global warming•	Carry out the dismantlingprocess indoor•	Store recovered parts andmaterials indoor•	Recover liquid waste andA/C refrigerant by type•	Recycle all recovered parts andmaterials

Resources Recovered from ELVs

(Unit: Tons)

2019261,971

2020

209,7542021

195,3702022

199,443

UPCYCLING PROJECTSHyundai goes beyond the reuse and recycling of wastes and continues with upcycling projects that create new value based on wastes, such as fashion accessories, new materials, and renewable energy. We will make continued efforts to
conduct various upcycling projects, thereby creating new value of waste resources in the automotive industry as well as other industries.

Re:Style

Producing clean hydrogenusing biogas based onorganic waste resources

Appling renewed materials
based on marine waste

Hyundai unveiled “Re:Style”, an eco-friendly
upcycled fashion platform, in 2019 in collaboration
with designer Maria Cornejo to combine leftoverleather and fabric from car seats that are discardedin the automobile manufacturing process with
Maria Cornejo’s signature pieces to be reborn as
15 innovative pieces of clothing. For the second
project of Re:Style, we took a step further fromthe 2019 project to use various waste materials,
such as vehicles’ glass, carpet, and airbag thatare discarded in the automobile manufacturing
process, and create a collection that reflects thephilosophies of six eco-friendly designers.

Hyundai is moving forward with a business that
produces and supplies clean hydrogen by using
biogas (methane) generated at public sewage
treatment plants in collaboration with the Ministry ofEnvironment, Cheongju City in North Chungcheong
Province, and Institute for Advanced Engineering,
through which we seek to contribute to reducing
carbon and vitalizing the hydrogen ecosystem.
We plan to complete construction of a hydrogenproduction facility in a public sewage treatment
plant in 2024 after commencing construction in
2023 in partnership with Cheongju City, with an aim
to begin operations in 2025. Once the hydrogenproduction facility goes into operation, 500 kg ofhydrogen is planned to be produced a day. The
facility will later be extended to increase dailyhydrogen production to 1,000 kg in 2027. Hydrogenproduced at the facility will also be supplied tohydrogen charging stations in the local community
to supply local residents with clean hydrogen at
reasonable prices compared to byproduct hydrogen.
Its areas of use will be expanded to include mobility
for public services, such as hydrogen buses andhydrogen cleaning trucks.

In partnership with Healthy Seas, a marine
conservation organization in Europe, Hyundai
is carrying out marine ecosystem restoration
activities while providing marine pollution-related
education and striving to prevent marine pollution.
In 2022, we undertook large-scale cleanup andeducation project in Ithaca, Greece and collected18.5 tons of abandoned fishing nets and 5 tons ofother marine wastes. The collected fishing nets
and marine wastes are processed into ECONYL®
(nylon material recovered from upcycled nets
and cloths) to be used in diverse areas, including
fashion products, clothing, and floor mats of the
IONIQ 5 and IONIQ 6. In addition, in collaboration
with Enaleia, an NGO in Greece, we provided
incentives to fishermen who stopped fishing in thebreeding season, when fish should be protected,
and instead collected marine plastic wastes. We
plan to widen the scope of marine ecosystem
restoration activities to include northern Africa andKorea, in addition to Europe. Going forward, we
will expand the application of marine waste-based
renewed materials to new car models and ourbrand accessories.

In early 2023, we joined hands with the worldrenowned fashion designer Jeremy Scott andunveiled a collection that used bio plastic skin (fabriccontaining a bio-material extracted from sugarcane), an eco-friendly material that was applied to
the IONIQ 6, as well as wipers, tail lights, and seatbelts used for EVs. In addition, the “parametric pixel”,
which gives a geometric form to pixel, the smallest
unit to constitute an image, was used to produce
various accessories for sale, including micro minibags, notes, and keyrings.

Overseas, we are running a business of producing
electricity by converting livestock excretions into
biogas in Lampung, located on the island of Sumatra,Indonesia, through which we are contributing to
reduction of GHG emissions and job creation forthe local community.

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

Establishment of a Circular Economy
Establishment of a Virtuous
Circulation System for Batteries
ECO-FRIENDLY BUSINESS BASED ON SECOND-LIFE BATTERIES
Establishment of Cooperative System for Battery Circulation
Basedon the battery life cycle, Hyundai is establishing an eco-friendly battery
circulation system that aims for sustainability through the recycling andreuse of second-life batteries generated from end-of-life EVs. The battery
life cycle consists of an eco-friendly loop encompassing manufacturingof battery cells using raw materials to production of battery systems forelectric vehicles, reuse of batteries after use, extraction of materials fromfinally discarded batteries, and application of the extracted materials tobattery manufacturing. We formed a taskforce team in 2022 to establish
a group-wide cooperative system throughout the battery life cycle, while
exploring green business models and developing relevant competencies.
In building a cooperative system for battery circulation among Hyundai
Motor Group affiliates, Hyundai Motor Company will be in charge ofcreating a system that enables us to obtain large amounts of secondlife batteries through our global sales and service network. We will alsoestablish a virtuous circulation system for batteries through which we
extract such key battery materials as cobalt, lithium, and nickel, fromsecond-life batteries that cannot be recycled or remanufactured, and thenuse them for battery-manufacturing process.

Hyundai GLOVIS plans to use its global logistics network to conduct abusiness that recovers second-life batteries through ground/marinetransportation and reuses the collected second-life batteries for energy
storage system (ESS). Hyundai MOBIS is planning a remanufacturingbusiness that prolongs the life of batteries by means of new packaging,such as sorting out collected batteries and restoring performance, andinputs them for use. Remanufactured batteries will be used for old electricvehicles and repair (after-sales service).
Recovery of Second-Life Batteries In partnership with Hyundai GLOVIS,
we are building up a global network and transportation control system tocollect and transport second-life batteries discharged from various places
including junkyards and dealers around the world. Hyundai GLOVIS hasdeveloped and acquired a patent for a dedicated platform container that
can transport hard-to-handle used batteries safely and effectively, andis equipped with logistics systems that meet the complex and diverse
regulations of various countries. We will use Hyundai GLOVIS’ logistics
know-how and network to establish a second-life battery recovery systemthroughout the battery life cycle and complete the link between thedownstream and upstream segments.

Reuse of Second-Life Batteries Hyundai has been conducting pilot
projects to reuse second-life EV batteries for ESS. In December 2020, we
became the first company in Korea to obtain approval to give a special
regulatory sandbox demonstration of an energy storage device for reusing
second-life batteries. Having built a 2 MWh ESS and a 300 kWh ESS,
respectively, at our Ulsan plant and the Gongju plant of OCI Specialty,
our demonstration partner, we began commercial operations using
photovoltaic power in January 2021. In April 2022, in cooperation with
the Korea Water Resources Corporation, we built a new 400 kWh ESS in
Busan Eco Delta Smart City, which will be used in the P2P-based powertransaction pilot project. Starting in 2023, Hyundai’s various ESS pilot
projects based on second-life batteries will be led by Hyundai GLOVIS,
which is planning to convert into a full-fledged second-life battery reusebusiness equipped with a unified pipeline ranging from a recovery system
to a reuse business.
Remanufacturing of Second-Life Batteries Among second-life batteries
generated from our battery life cycle, top-quality second-life batteries withhigh residual value will be linked to remanufacturing business according toour own classification criteria. We will work together with Hyundai MOBIS
to establish a collection system and a remanufacturing base by using thedomestic and global after-sales parts supply chains of Hyundai MOBIS.
We then remanufacture purchased/collected second-life batteries into
batteries for old vehicles and after-sales service, thereby prolonging theservice life of batteries.

Virtuous Battery Circulation System

Battery recovery(car replacement,
scrapping)

New vehicle
application

Reuse
Life cycle extension and reuse

Battery diagnosis

Remanufacturing
Repair to recover performance

Battery
manufacturing

Commercialization,
including ESS

RecycleExtract raw materials

Use as replacement
and after-sales
service battery

Recycling of Raw Materials from Second-life Batteries Second-lifebatteries that cannot be remanufactured or recycled via Hyundai’s battery
circulation system are broken into pieces and sent to a recycling businessthat extracts from them valuable metals such as lithium, cobalt, and nickel.
Hyundai is concentrating on securing technology that can recycle a large
amount of second-life batteries in an eco-friendly, safe way. By linking
the raw materials that are secured as a result with battery manufacturing
processes, we will complete the virtuous circulation system of batteries.
We plan to build a stable electric vehicle ecosystem by strengthening ourbattery raw material supply capabilities in the region through the virtuous
battery circulation system.

Strengthening the
Global Battery Supply Chain
Hyundai Motor Group is expanding battery cell plants in areas locatednear EV production sites in order to procure required batteries stably andlocally for the global expansion of EV production and sales. To this end, it
is increasing investments and strategic alliances with battery companies,
including LG Energy Solution and SK on. Through local procurement ofbattery cells that are optimized in line with electric vehicles’ performanceand detailed specifications, we seek timely production and sales of highefficiency, high-performance safe EVs with a high level of competitivenessin accordance with market circumstances. In addition to establishing EVdedicated production plants in Korea and the US, we are changing previous
internal combustion engine vehicle (ICEV) production sites to a system
optimized for EV production. In particular, the manufacturing innovation
platform that Hyundai Motor Group Innovation Center in Singapore(HMGICS) demonstrated and developed will be applied to new electricvehicle production sites to enable demand-centered intelligent control, useof eco-friendly, low-carbon construction methods, and safe, efficient work.

Establishment of a Battery Cell Production
Joint Venture in North America
In partnership with SK on, Hyundai Motor Group is constructing a plantwith an annual battery cell production capacity of 35 GWh in Georgia, US
to stabilize battery procurement in North America. Hyundai MOBIS willassemble battery packs using cells from the plant, then supply them for the
production of Hyundai, Kia, and Genesis EV models manufactured in the
US. In addition, the plant is located close to Hyundai Motor Manufacturing
Alabama (HMMA) and Hyundai Motor Group Metaplant America (HMGMA),
EV production subsidiary that will be launched in 2025, which is expected
to enable us to have a stable local procurement system based on which
we will strive for increasing EV sales in North America.

Construction of a Battery Cell Plant in Indonesia
Hyundai Motor Company, Kia, Hyundai MOBIS, and LG Energy Solution are
establishing a joint battery cell plant with an area spanning 330,000 m2 inIndonesia to strengthen the battery cell supply chain that is optimized for
EV-dedicated models. The plant will have the capacity to produce a totalof 10-GWh worth of lithium-ion battery cells every year and is scheduled
to begin mass production in the first half of 2024. In particular, Hyundai
Motor Group will perform the role of strengthening battery cell production
capability through integrated quality control regarding overall battery
systems and application to finished vehicles. The battery cells produced at
the joint plant in Indonesia will be used in various electric vehicles that will
be produced in 2024 and onwards.

37

2. Environmental

1. Introduction

3. Social

4. Governance5. ESG Factbook

38

ESG Magazine

Reduction of Environmental Impact
Companies have the responsibility to meets the needsof the present without compromising the ability of
future generations to meet their own needs. Hyundai
is making utmost efforts to perform this role. There are
rapid changes in the internal and external environmentthat surrounds companies, while water shortage
grows in severity due to climate change and reckless
corporate activities, and such environmental issues
as air and water pollution cause great harm to Earthand all life on Earth. In addition, there is increasing raw
material risk, which was triggered by war and inflation.
Amid stricter regulations of environmental authorities,
sustainable use of natural resources has become an
important issue more than ever. Hyundai therefore
strives to restrain increases of resource use and waste
generation that are connected to the rise in production,
which has been increasing after COVID-19.

Sustainable Use of Resources
RESOURCES INFLOWS
Increased Efficiency of Raw Material Input Volatility of raw material
prices is rising, mainly attributable to global inflation, supply chain
circumstances, and the Russia-Ukraine War. Raw material price volatility
is a factor that directly affects finances. Hyundai is therefore striving tominimize internal and external risks that can be triggered by raw materials,
including a rise in costs, instability in supply and demand, and depletion ofnatural capital, by improving efficiency in raw material use and expanding
the three Rs (Reduce, Reuse and Recycle). Main raw and subsidiarymaterials that are used at Hyundai’s production plants are steel sheets(steel), aluminum, paint, thinner, foundry sand, and plastics. In case of
scraps that are generated by the press process, where steel sheets (steel)and aluminum are mainly used, we sell them to outside parties and enable
reuse of the entire amount. In 2022, Hyundai Motor Manufacturing Russia(HMMR) not only recycled 4,351 tons of scrap iron, but also 1,877 tons ofcartons and 172.55 tons of plastics as part of efforts to improve its raw
material efficiency. Hyundai Motor Brasil (HMB) adjusted fender thickness
and reduced steel input by around 8%. Hyundai Motor India (HMI) reduced
steel use by 161 tons by reducing blank pitch.

Strengthening Water 3Rs (Reduce/Reuse/Recycle) As the global
water shortage caused by climate change intensifies, a number of risks
associated with water resources have already emerged. In response,
Hyundai evaluates water risks by business site based on the WRI Aqueduct
Water Risk Atlas Tool. As a result, we have identified HMI and HAOS as
business sites with extremely high water stress and are increasing water
3Rs (Reduce, Reuse and Recycle) mainly at high-water-risk businesssites. HMI and the Asan Plant in Korea have established a zero liquid
discharge system to reuse and recycle 100% of the water they use. HMI,
located in Chennai, India where water shortage is severe, reduced dailywater consumption by 130 tons by taking diverse measures, such as
strengthening rainwater harvesting facilities and expanding reservoirs.
HMB reuses washing water in some production process steps. In 2022,
water reuse amounted to 2,284,154 tons, a year-on-year increase of 5%,
and the reuse rate remained similar to the previous year’s at around 21%.
The water usage target for 2022 was set as 10,868,795 tons, which is a 5%
reduction from the estimated amount of use that was determined basedon the 2022 production plan. Actual water usage was 10,790,093 tons.

RESOURCES OUTFLOWS
Expanding Waste 3Rs (Reduce/Reuse/Recycle) Various kinds of wastematerials are generated in the automobile production process. Of thesewaste materials, metals are 100% recycled. We strive to recycle otherwaste materials as much as possible, such as waste paint, waste thinner,
packaging materials, and sludge. In 2022, we recycled 90.8% of all wastematerials generated at our business sites, while treating difficult-to-recycle
waste in an environmentally-friendly way. The Asan Plant changed thefilter media of the pressure filter at its industrial water purification plant
to a recycling treatment method. Our service centers in Korea are holding
campaigns on preventing loss of major resources, including aluminum
wheels and batteries. The waste reduction target for 2022 was set as
59,875 tons, a 10% reduction from the estimated waste volume that wasdetermined based on the 2022 production plan. Actual waste volume was50,453 tons. Beijing Hyundai Motor Company (BHMC) changed the waste
paint drying method from natural drying to electric heating and reduced
final waste volume by 36.75 tons. Hyundai Motor Manufacturing Czech(HMMC) makes continuous efforts to reduce sludge in its wastewater
treatment process through sludge dryers and compressors.

Raw Material Use

Water Use

Waste Discharge(Unit: Tons, Tons/Vehicle)
Classification

2020

Steel/aluminum use

1,031,113

Use per vehicle
Steel/aluminum scrap

2021

1,138,929(Unit: Tons, Tons/Vehicle)

2022

Classification

1,177,082

0.27

0.29

0.29

382,965

400,419

408,662

Ratio of scrap amount in 2022

1)

Total use

2020

2021

10,967,709

9,941,274

Reuse and Recycling
Use per vehicle

2022

Classification

455,211492,787

498,162

Total waste volume

43,10545,98650,453

Waste volume per vehicle

0.01150.01190.0126

2.94

2.57

2.70

1)

	Value resulting from excluding the discharge amount from the sum of urban water
and water supply facility, surface current, and underground water intake amount1)

Ratio of water reuse and recycling in 2022

Ratio of waste recycling in 2022

1,177,082

10,790,093
tons

2022

1)

2,284,154

Total use

2021

Total reuse/recycling

2,179,600

Total use

2020

10,790,093

-

34.7%
(408,622 tons)

tons(Unit: Tons, Tons/Vehicle)

21.2%(2,284,154 tons)	Sum of landfilled, incinerated, biodegraded waste that does not include the reused/recycled amount

90.8%(498,162 tons)
Total discharge

548,615
tons

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

39

Reduction of Environmental Impact
Management of Harmful Substances
Reducing Pollutant Emissions
Hyundai has set stricter in-housemanagement standards than the legal standards of the countries in which
its business sites are located as a way to preemptively respond to air andwater pollution. The Ulsan, Asan, and Jeonju plants have each established
an integrated monitoring system for IoT environmental facilities to comply
with the environmental laws and prevent serious environmental accidents.
They have reduced risks caused by environmental pollutants and establishedan efficient workplace environment management system by introducing
advanced new technologies such as water level alarm systems for watertanks, remote disaster prevention facilities, and flow management ofenvironmental facilities, as well as air quality monitoring. HMMC manages
its air pollutant emissions considerably lower than the legal standards by
reducing air pollutant emissions from each process. It has been planting
trees on unused land within the factory, and checks for mercury (Hg) andcadmium (Cd) discharge every day and manages it to be less than 15% of
the legal standards. HTBC does not use transport vehicles and utility centerboilers any more, and thus reduced boiler load during cold weather to lessthan 5 t/h, leading to reduced pollutant emissions. The Asan Plant raised
wastewater treatment efficiency by installing an additional vacuum dryer,
resulting in stable production and supply of industrial water. In addition,
facility improvements were made to result in increased wastewater treatment
efficiency. HMI reduced pollutants by using chemical and biologicaltreatment methods at its wastewater treatment plant.
Pollutant Emissions(Unit: Tons, kg/Vehicle)
ClassificationAir
pollutants
Waterpollutants
VOCs

2020

2021

935

1,211

1,411

0.250

0.313

0.353

605

643

723

Emissions intensity (kg/vehicle)

0.172

0.166

0.181

Total emissions (tons)

11,047

10,756

7,796

Emissions intensity (kg/vehicle)

1.062

0.915

0.547

Total emissions (tons)
Emissions intensity (kg/vehicle)
Total emissions (tons)

HARMFUL SUBSTANCE MANAGEMENT SYSTEM
Harmful Substance Management Standard Hyundai classifies andmanages harmful substances in three stages – prohibition of use, limiteduse, strengthened management – according to international standards andinitiatives. Substances classified as “prohibition of use” are banned from use
as high-risk regulated substances for which substitutes must be found, whilesubstances falling into the category of “limited use” can only be used for
purposes specified in the exception article, and those falling into the categoryof “strengthened management” can only be used under constant monitoringand systematic management.
Although we strive to minimize harmful substances under internal standards,
it is difficult to completely block harmful substances from products because
automobiles consist of many thousands of parts. We therefore apply thesame management standards for harmful substances to our supply chain inorder to ensure that the products that are delivered to us do not contain any
regulated substances.

Inspection and Analysis of Harmful Substances Hyundai has adopted
the International Material Data System (IMDS), jointly operated by global
automobile manufacturers, to systematically manage information on
harmful substances. We also apply the Material Analysis Management
System (MAMS), developed in-house, to conduct risk assessments basedon substance information on parts collected from the development/design
stage of a new vehicle, thereby blocking the use of high-risk substancesfrom the outset. Moreover, we investigate the inclusion of regulated
substances during the new car development stage in order to preemptively
respond to newly regulated substances. Hyundai also checks information on
substances that are liable to change during the mass production processes
through parts and material analysis and inspections during regular suppliersite inspections.
Management of Harmful Substance Information Hyundai does its utmost
to prevent accidents by preemptively reviewing new high-risk substancesand replacing them with alternative substances. Upon handling hazardous
chemicals, we are striving to maintain a safer working environment by
utilizing the integrated monitoring system of environmental facilities tocheck for leakages of hazardous chemicals in real time. Since 2003, we havebeen sharing information on domestic and international harmful substanceregulations and response requirements with our suppliers, as well as strictly
managing harmful substances in the supply chain by helping suppliers
set up their own systems of response to harmful substance regulations,whenever necessary, in addition to running annual IMDS user trainings to
improve the consistency of IMDS data.

2022

Preemptive Response to Regulation and Initiatives Hyundai supports
international regulations, standards, and initiatives concerning harmful
substances. We strive to preemptively develop and apply alternatives even
before finalization of regulations that prohibit/restrict the use of harmful
substances in Korea and abroad. In response to amendment and/or
strengthening of legislation on end-of-life vehicles (ELV) and REACH of EU,a leader of governing harmful substances, we work on replacing high-risk
substances. Persistent organic pollutants (POPs) that have recently become
known to be resistant to environmental degradation accumulate in the bodyof animals and plants through the food chain, causing damage to the central
nervous system and disturbances in the immune system, thereby adversely
affecting the ecosystem and human health. As global discussions are in fullswing on regulations that prohibit use of POPs, Hyundai has preemptively
established countermeasures. Discussions on regulations concerning
perfluorinated compounds (PFAS) have been taking place in Europe. Aiming
to prohibit PFAS use before 2027, which is when regulations are expected
to be adopted, we are identifying alternatives and the status of regulated
substance use and reviewing when to apply alternatives.
Focused Management of Four Major Heavy Metals Hyundai prohibits
use of the four major heavy metals – lead, cadmium, hexavalent chromium,mercury – that are prohibited from use in the EU market based on the July
2003 EU ELV regulation and that can accumulate in the human body andcause heavy metal poisoning. In addition, we strictly prohibit the use of highrisk substances such as brominated flame retardants. We manage such
harmful substances in accordance with the harmful substance management
standards established in December 2002.

Pyramid-type chemicals
management system

Ulsan Plant’s commitment tozero hazardous chemicals

Hyundai has set in place a pyramid-type chemicals management systemthat covers the head office–business sites–unit plants. We also operate thedepartment responsible management system and social media communication
channels for real-time sharing of chemicals injection information (planned timeof injection, injection amount, etc.), thereby taking preemptive measures toprevent chemicals accidents.

Hyundai’s Ulsan Plant is striving to reduce hazardous chemicals
themselves with a goal of reducing chemical accidents. It has been making
continuous plant facility improvements since 2014, while developing
alternatives together with suppliers. As a result, it achieved a 90% reductionin hazardous chemicals and plans to become a zero hazardous chemicals
business site by 2030.

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

Reduction of Environmental Impact
BUSINESS CASE

ECO-FRIENDLY ACTIVITIES BY PLANTS
Hyundai is improving quantitative environmental indicators for each business site in Korea and overseas. Our business sites also have been taking active part in eco-friendly activities and initiatives. These qualitative activities are included in business sites’ performance indicators, along with quantitative indicators, andreflected in their environmental performance evaluations. Based on this performance system, we are strengthening the eco-friendly activities of each business site and leveling up the company’s environmental management based on the horizontal development of excellent environmental activities.

Business Sites in Korea
Ulsan Plant
As the company’s largest single manufacturing plantcomplex, the Ulsan Plant engages in a range of eco-friendly initiatives
individually tailored to each of its manufacturing plants. Plant 3 plans tobuild a wastewater reuse system including water transfer piping so that
effluent from the wastewater treatment plant can be reused as circulatingwater for the scrubber in the painting booth, enabling the plant to reuse
52,000 tons of water per year. The engine transmission plant has installeda real-time leakage detection system to prevent environmental accidents
caused by leakage of cutting oil used for cooling, rust prevention, andlubrication. The flow of leaked cutting oil is identified in real time, and an
alarm system is activated immediately if necessary, enabling the plant totake action before any leaked oil enters the drainage ditch.
The materials plant became the first in Korea to apply an automaticmanagement system for washing water of wet scrubbers to eliminate
odor and reduce hydrogen chloride discharge concentration. If thepollution level – set based on this system – exceeds, washing water is
automatically replaced, which has enabled us to manage air pollution
prevention facilities in a more stable and efficient way. We also strive toimplement ESG management through a wide range of cultural events
that promote environmental management, such as ZUPZUP campaign of
the Plant 1 and labor-management environmental workshop of the Plant 2.
Asan Plant The Asan Plant’s waste recycling ratio is 95%, which is higher
than the average waste recycling ratio (91%) of all our plants across theglobe, and its waste-to-landfill is close to zero at 0.04%. Based on a highrecycling ratio and very low landfill, the Asan Plant is working on receiving
external Zero Waste To Landfill (ZWTL) certification which assigns a
grade according to the actual recycling rate after confirming a businesssite’s waste recycling level. According to the preliminary inspectionsof the certificate agency, the Asan Plant is anticipated to achieve Goldlevel validation. This will be the first ZWTL validation among automotive
manufacturing plants, contributing to enabling Hyundai to strengthen its
ESG competitiveness.

Overseas Business Sites
Jeonju Plant The Jeonju Plant is strengthening management step by step
across the entire scope of air measurement, ranging from selection of an air
measurement company to management of measurement result data, to prevent
regulation risks from stricter laws concerning self-measurement of air pollutants
and incorrect measurements. In particular, it has dual measurement companies
to enable mutual comparison and analysis of results. In addition, it strengthened
field surveys and continually discovers and reflects new pollutants. It is also
strengthening follow-up improvement activities based on measurement and fieldsurvey results, such as scrubber improvements.

Asan Plant’s Waste Treatment Status

2 34

1

1

Recycling

95.43%

2

3

Heat recovery Neutralization
incineration

4.03%

0.07%

4

Landfill

0.04%

Hyundai Motor Manufacturing Alabama (HMMA) Located in Montgomery,
Alabama in the U.S., HMMA is carrying out multi-faceted improvement activities
to reduce wastewater pollutants to protect Montgomery’s water supply. In
January 2023, HMMA established a regular conference body with an external
professional company to inspect the water quality of wastewater, in addition
to significantly strengthening water treatment standards of the wastewater
treatment facility. It has also established a real-time wastewater quality
monitoring system and strengthened water quality inspection equipment.

Hyundai Motor India (HMI) Air pollution caused by rapid industrialization is
emerging as a social issue in India. In response, HMI is continually strengthening
improvement activities aimed at reducing air pollutants, including Particulate
Matter (PM) and nitrogen oxide (NOx). It recently built a system that recovers
waste heat from regenerative thermal oxidizers (RTOs) and uses the waste heatas a substitute for boilers, resulting in a 27% reduction in air pollutants generated
during boiler use. In addition, it has reduced fuel consumption by 91% throughwaste heat recycling, contributing to energy saving and cost reduction.

Hyundai Motor Brasil (HMB)
HMB was the first Hyundai business site toachieve zero waste-to-landfill. Based on this performance, it became the first
automotive company in Brazil to obtain the Responsible Company Seal in relation
to waste management and the Waste Zero Seal for two consecutive years in 2023.
In addition, HMB is conducting a regular impact assessment (monitoring) on theoverall environment – including air, water quality, biodiversity, soil, undergroundwater – to minimize its environmental footprint, while also making improvement
based on assessment results.

Hyundai Assan Otomotiv Sanayi (HAOS) HAOS has achieved a reduction of
about 23% in the amount of contaminated wastes per vehicle in the last three
years, but found it difficult to measure it by department since it was taking
total measurements for HAOS. It therefore adopted a waste barcode system
to address difficulties in detailing activities by department. By attaching abarcode sticker to each shop contaminated waste bag and measuring theweight in the waste warehouse, it can conduct real-time monitoring of theamount of contaminated waste by department. HAOS plans to implement
additional reduction activities by department based on monitoring results.

Hyundai Motor Manufacturing Czech (HMMC) HMMC is strengthening its
efforts to reduce sludge waste from the sewage treatment plant to protect
nearby water supply. In order to improve its sludge compression process, HMMC
changed the sludge coagulant to one with stronger alkalinity, thereby reducing
sludge waste by 37%. It will adopt an additional sludge compressor to reduce
sludge waste by at least 60%.
Hyundai Motor Manufacturing Russia (HMMR) Soil loss and erosion trigger
floods and soil erosion, not to mention damage to biodiversity. To minimize
negative impact from soil loss and erosion, HMMR is improving the business site
environment by restoring old pipes in the business site that have a possibility ofsoil loss and erosion and inserting filter cartridges in areas where there was soil
loss, thus preventing additional loss.

Beijing Hyundai Motor Company (BHMC) The BHMC Yangzhen Plant
in China reused and adopted a waste cutting oil treatment facility of the
Changzhou Plant, which stopped operation according to a mid- to long-term
plant operation plan, to strengthen treatment of waste cutting oil, which isan environmental pollutant. This has enabled the Yangzhen Plant to prevent
environmental pollution that is caused by waste cutting oil by being equippedwith a dual (separation/microbial) waste cutting oil treatment system that
includes microbial treatment.
Hyundai Motor Manufacturing Indonesia (HMMI) HMMI began its plant
operations in 2022 and provided employee training to raise environmental
awareness in consideration of its low environmental implementation scorecompared to neighboring countries, including Singapore and Thailand.
HMMI created an emergency manual and set up emergency equipment to
respond to emergency situations, such as pollutant leakage and other suchenvironmental accidents. It is also strengthening relevant employee training
so that they can become familiar with relevant matters.

40

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

41

Protection of Biodiversity
Biodiversity is an essential element for life on Earth tomaintain balance with the natural environment. Hyundai
recognizes that biodiversity has a significant impact
on humanity’s food security, health, air, water, and soil
quality. To minimize biodiversity loss due to business
operations, we are assessing species composition anddiversity as well as improving environmental factorsthat influence biodiversity. Moreover, we will undertake
various projects that take characteristics of the natural
ecosystem into account with a goal of enhancing
biodiversity. To this end, we will continue with projects
aimed at preserving/restoring species and populationnear business sites or local communities, and restoring
habitats and establishing alternative habitats.

Preservation, Restoration,
Expansion of Biodiversity
BIODIVERSITY PROTECTION SYSTEM
Establishment of Biodiversity Protection Policy In 2022, Hyundai
established the Biodiversity Protection Policy based on the Convention on
Biological Diversity (CBD), Convention on International Trade in Endangered
Species of Wild Fauna and Flora, and Guidelines for Applying Protected
Area Management Categories. We are complying with laws and regulations
on diversity promotion, wild fauna and flora management, natural habitat
conservation, and use of forest/soil/water resources of countries where
our business sites are located. Also implemented based on the biodiversity
policy includes the assessment of environmental impact throughout ourbusiness operations and conservation/restoration activities. Implementationof our pledge on mid- to long-term biodiversity restoration and promotion,
biodiversity policy declaration and establishment/amendment, assessment of
biodiversity and setting of impact reduction activities, and forest destruction
prevention and reforestation project is endorsed by BOD or management.
Biodiversity Assessment and Protection by Business Site Hyundai conducts
an environmental impact assessment of its large business sites based on
relevant laws and regulations in the respective country to forecast andanalyze the impact on resident life and natural environment by environmental
factors that arise in the process of newly building/extending business sites
or operating business sites. The air environment, water environment, land
environment, fauna and flora, and other factors are subject to environmental
impact assessment. Based on assessment results, we identify major risk
factors and establish mitigation measures. Some production subsidiaries
additionally conduct a biodiversity risk assessment that identifies numbersof fauna and flora and ecosystem status, through which they forecast impact
and risk factors on specific species and population and establish mitigation
measures. In addition, each business site carries out biodiversity andhabitat protection activities and collaborates with government and relevantorganizations, non-profit groups, and professional organizations to raise theeffectiveness of protection activities.

Biodiversity Assessment – Numbers of Fauna/Flora and Analysis of Impact① Select species and individuals	We select species and individuals that are subject to an assessment in a
way that allows identification of fauna and flora as well as the ecosystemstatus in consideration of a business site’s operation method, operation
size, and nearby local environment characteristics. In particular, we include
endangered animals, protected wild animals, natural monuments, andspecies that are designated for preservation/protection by international
agreements in assessment targets.
② Set the assessment area (range)	The area that has the business site’s major axis length as the radius isused as the basis, but we set impacted neighboring areas from businesssite boundaries as the assessment range. If needed, we expand theassessment range in consideration of fauna and flora’s movement route,area of activity, and vegetation distribution. Also, in consideration ofseasonal characteristics, we conduct an assessment at a different time.
③ Define the assessment method (means)	We carry out a basic survey of ecosystem geography and ecology,
including an inquiry, documentary survey, and questionnaire. We identify
the status of numbers of species through unaided eye observation, fieldinquiry, picture-taking, sound detection, spot survey, and trap installation,in consideration of fauna and flora’s area of activity, time, frequency,
and other factors. Assessment results are managed as characteristics
information, including method of confirming species per assessment
spot, legally protected species, indigenous species, and observed andconfirmed population.

④ Forecast and analyze impact
	We forecast and analyze the impact and risk factors of natural environment changes caused by business operations, air/water/soil pollution,and noise and vibration generation on changes in species andpopulation. When forecasting impact, we refer to similar assessment
cases, such as establishment of new business site, capacity expansion,and business operation. Based on assessment results, expectedchanges to species and population are described in quantitative or
qualitative form. We forecast impact in detail for major species andindividuals that are expected to be substantially impacted from business
operations. Priority is placed on considering species that are sensitive toanthropogenic interference.
⑤ Establish mitigation measures	Based on the results of forecasting and analyzing negative impact on
species and population, we establish measures on mitigating negative
impact on fauna and flora species and population. We change businesssite locations, adjust business operation schedules, and establish
alternatives to avoid significant impact, and adopt environmental
facilities to remove and minimize environmental pollution. In case ofunavoidable damage to a major habitat, we establish alternative habitats
and vegetation belts, and artificial space, including wildlife passage.

Hyundai Motor Company Biodiversity Protection Policy

Methods for assessing the species and individual inhabitation status (picture-taking, spot survey, field inquiry)

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

42

Protection of Biodiversity
BIODIVERSITY PROTECTION APPROACH AND MITIGATION MEASURES
Hyundai’s Approach

Avoid•	Restrict or put off the establishment and extension of business sites in areas that havea high impact on biodiversity

Hyundai’s Mitigation Measures•	Before establishing/changing/expanding a large business site, we pre-assess how the activity will impact the nature assets, including biodiversity (flora and fauna) and natural environment (air, water, soil), of the planned
project site and surrounding area. According to assessment results, we decide on carrying out the project or restricting/putting off the project.

•	If negative impact is confirmed, conduct restricted operations until the impact is offset

Reduce•	Make facility investments to remove and minimize the discharge of air, water, and soil
pollutants•	Develop technologies that reduce environmental pollutants that arise in the processof manufacturing and using vehicles

Transform•	Make structural improvements to the topography of business sites or surrounding
areas so that there is no impact on biodiversity•	Participate in policy-making and engage in cooperation in the industrial sector to
reduce negative environmental impact

Restore•	Promote species and population that reduced or became extinct in a business site’ssurrounding or nearby area•	Establish (alternative) habitats to maintain-restore species and population

Regenerate•	Contribute to enhancing natural/biological capital and improving productivity
other than business site surroundings•	Induce increases in species and population by improving the forest, ocean, and soil
environment•	We adopt environmental facilities that can minimize discharge of air/water/soil pollutants of our business sites, such as use of the regenerative thermal oxidizer (RTO), dust collector, zero liquid discharge system, andwaterborne-based paint.
•	We conduct life cycle assessments (LCAs) in the areas of global warming, acidification, eutrophication, and photochemical oxidant generation to assess our vehicles’ potential impact on the environment- LCA results indicated that EVs can reduce the carbon footprint as much as 67% compared to ICEVs, when using new and renewable energy-based electricity. Hyundai is therefore striving for 100% electrification by 2045.
•	We apply exhaust gas-reducing technologies, such as the gasoline particulate filter (GPF) and diesel particulate filter (DPF), to reduce vehicle exhaust gas such as NOx and PM.
•	We are establishing eco-friendly ecological parks based on private-government cooperation and developing/spreading new technologies that restore the ecosystem.
- We established the Yeouido Saetgang Ecological Park based on a three-party agreement among Hyundai Motor Company, Seoul Metropolitan City, and social cooperative Hangang, adopted non-point pollutant source
reduction facilities, and conducted a planting project in the area.
- In partnership with The Nature Conservancy (TNC) in Brazil and Sao Paulo State University’s Department of Forest Science, we established a research forest to develop new technologies for forest restoration (Green Field,etc.) and are spreading new technologies.
•	We restore endangered high-risk species and endangered species threatened by climate change.
- Animal restoration: Preserving and restoring species, such as by setting protection zones for the endangered long-billed ringed plover and eagle, which is a natural monument, living in the Taehwa River in collaboration with
Ulsan Metropolitan City and East Asian-Australasian Flyway Partnership- Plant restoration: Following a project in the Hongcheon area to restore Korean fir and tulip tree, endangered species threatened by climate change, we collaborated with the Korea National Park Service and conducted a
project on restoring plants on Mt. Deokyu that are categorized as endangered species threatened by climate change, including the Korean fir, spruce, and yew.
•	We undertake a land/marine/pond ecosystem regeneration project.
- Land ecosystem: Through “IONIQ Forest” project, we will regenerate forests by planting 1 million trees by 2025 across the globe, to provide sustainable habitants for both flora and fauna (Trees support over 80% of the world’s
terrestrial biodiversity).
- Marine ecosystem: In collaboration with Healthy Seas, we will collect a total of 230 tons of ocean waste (waste fishing nets, etc.) in 10 European countries and Korea by 2025 to increases in marine life population, including
return of marine fish species.
- Pond ecosystem: Together with the Gurugram city government of India, we are regenerating the ecosystem of three ponds. By regenerating ponds, which serve as habitats of various forms of life, we are inducing therestoration of species that mainly live in ponds.
Classification

RegionMetrics

TargetProgress

Terrestrial
ecosystem

Korea, U.S., Brazil, Europe(the Czech Republic)•	Area of regeneration•	No. of trees planted tobuild forests•	Area of regeneration: Regenerate a total of 650 haof terrestrial ecosystem (forest, grassland) by 2025
•	Planting trees: Plant 1 million trees by 2025

•	Area of regeneration: Completed regeneration of a total of 270 ha of the terrestrial ecosystem,
including forests and grasslands, from 2016 to 2022 (achieved 41% of the target)•	Planting trees: Completed planting a total of 225,923 trees from 2016 to 2022
(achieved 23% of the target)

Marineecosystem

10 countries in Europe,
including Greece,
Korea (Gangwon Province)•	Collected marine
wastes, including waste
fishing nets

•	Collect 230 tons of marine wastes by 2025

•	Completed collecting a cumulative 100 tons of marine wastes across around 20 occasions in 8
European countries and Korea from 2021 to 2022 (achieved 43% of the target)

Pond
ecosystem

India (Hariahera, Palasoli,
Tajnagar)•	Number and area ofregenerated ponds•	Regenerate three ponds with an area of a total of
2.3 ha by 2023

•	Completed regenerating 3 ponds with a total area of 2.3 ha from 2022 to the first half of2023. Together with the regeneration of the pond ecosystem, 132,623 cum of water storage
potential was secured (achieved 100% of the target)

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

43

ESG Magazine

Protection of Biodiversity
BUSINESS CASE

BIODIVERSITY IMPACT ASSESSMENT – HYUNDAI MOTOR BRASIL (HMB)

Overview ofBiodiversity Assessment

Description of
the Assessment Area

Methodology

Species and Individual
Inhabitation Status

Forecasting andEasing Biodiversity Impact

Hyundai Motor Brasil (HMB) has been carryingout the seasonal biodiversity impact assessment
annually since 2010 to track changes in biodiversity
change near its business site, attributable to the useof natural capital required for its business operations
and to the impact of the business operations. It also
conducts biodiversity assessments to identify the
impact that its internal restoration project of riparian
forests (Corrego Capim Fino) has on surrounding
biodiversity.

The areas chosen for the biodiversity assessment are
identified as Area T1, Area T2, Area T3, and Area T4,
near Piracicaba City in the Brazilian state of Sao Paulo
where HMB is located. In principle, a biodiversity
assessment area should be within a 1-km radiusfrom the business district, but the assessment area
range can be expanded in consideration of thecharacteristics of amphibians, reptiles, mammals,
and birds, which are the fauna mainly subject to theassessment. Area T-1 corresponds to the region of themouth of Ribeirão Capim Fino, and has a secondary
forest area where eucalyptus monoculture, a major
plant species that grew naturally, was re-established.
Area T-2 corresponds to the region of the permanent
preservation areas (APPs), and this site has wellpreserved secondary forest. It is in the center of
two residential condominium areas. Area T-3 is awater resource protection area, and this region has
anthropic pressure on the borders due to intensesugar cane cultivation. The T-4 area has the APPof a water resource that flows directly into the Rio
Piracicaba. This region has anthropic pressure on theedges due to the intense cultivation of sugar cane andthe highway that runs along one side of the fragment.

With participation by an ecology expert, HMB
conducted sample and field surveys on amphibians,
reptiles, mammals, and birds. Based on literaturematerials on the status of biodiversity distributionof the assessment area, HMB pre-identified thespecies and population and then confirmed themby means of an unaided eye observation, fieldinquiry, picture-taking, sound detection, and spot
survey. When the biodiversity assessment was
conducted, optical image equipment, trap cameras,
and GPS and sound-recording devices were used inconsideration of the geographical characteristics ofthe assessment area and weather environment at
the time of the assessment. HMB directly confirmed
and estimated species’ abundance, frequency, andarea occupancy through the Seasonal Biodiversity
Assessment, and also conducted a sensitivity
analysis that estimates changes in species as aresult of anthropogenic influence, including reduced
habitats, depleted water resources, water pollution,
fire, and traffic operation.

The assessment results indicate that there are no
indigenous species and introduced species thatlive only in the area and that there are no high-risk
species, such as endangered species. Most species
are generalist species that adapt to changes inthe surrounding environment and anthropogenic
influence. Some mammals and birds were confirmed
as specialist species that are sensitive to changes
in the surrounding environment. These specialist
species are highly dependent on forests andsensitive to changes in the surrounding environment.
They have been analyzed as species that inevitably
move to a new habitat if there is a change in theenvironment. From among assessment areas, most
species live near the river and areas that houseindigenous vegetation. An imbalance in species oroverpopulation was not found.

It was assessed that cumulative anthropogenic
impact as a result of the development of farmlands
and residential areas surrounding the businesssite and daily life activities of local residents
and crop cultivation is significant on changes
in species in the biodiversity assessment area,rather than environmental factors that arise during
HMB operation having an impact on biodiversity.
In addition, an imbalance in the number of
species, such as a dominating specific species, oroverpopulation of a specific species was not foundin the assessment area and neighboring regions.

HMB is identifying the status of species andnumbers in areas surrounding the business site andalso assessing the level of biodiversity impact ofenvironmental factors that arise from the businesssite through the seasonal biodiversity assessment.
If negative impact on biodiversity is expected, HMB
carries out mitigation activities (maintain-restorepromote) to decrease impact and monitors whether
the activities are effective for maintaining-restoringpromoting biodiversity. In addition, it conducts the
Seasonal Biodiversity Assessment on a regular basis to
track and manage changes (increases and decreases)in the number of species.

SpeciesNo. of species Cumulative no. of
identified in species identified
2022
since 2010

Amphibians/
reptiles81)

33

Mammals

6

25

Birds

87

197

Total

101

255

1)

Based on the biodiversity assessment results, HMB
is conducting a qualitative habitat improvement
project for net positive impact on species. Startingin 2012, it has been planting indigenous plants throughthe project on restoration of riparian forests near thebusiness site. HMB completed planting 50 thousandtrees near the business site. Starting in 2023, it will
collaborate with The Nature Conservancy (TNC)
to further improve the habitats of land species byplanting a total 100 thousand indigenous trees in a
40-ha area of Sao Paulo, where a Hyundai plant islocated, and State of Minas Gerais nearby Sao Paulo.

1

2

3

Including 2 newly identified species

1. Sample areas of the Seasonal Biodiversity Assessment(T-1, T-2, T-3, T-4)
2. Methodology – Night survey
3. Cururu toad – Amphibians identified through thespecies and individual inhabitation status survey

1. Introduction

Social“for Tomorrow” initiative powered by Hyundai and UN Development Programme (UNDP)

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

44

The primary purpose of every business is togenerate profit. However, those which fail tofulfill their obligations as responsible membersof society in the process of creating economic
value are no longer sustainable.
Having committed itself to the pursuit ofsustainable growth, Hyundai considers
the right direction for achieving growth andthe right changes for society as a member ofthe global community, spreading social value
so that more people can benefit fromthe greater value created by Hyundai.
3.1

Creative Organizational Culture

3.2

Health, Safety and Welfare of Employees

3.3

Sustainable Supply Chain

3.4

Customer Experience Innovation

3.5

Creating Shared Value1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

45

Creative Organizational Culture
Hyundai is building a human resources andorganizational management system that can deliver
the highest level of value throughout the entire life
cycle of employees, including talent acquisition,
development, evaluation, compensation, benefits,
and retirement. This system ensures the timely securingof outstanding talents through continuous recruitment
and employee referral programs while investing ininfrastructure to foster a self-driven learning culture.
Furthermore, at Hyundai, we have implemented
a performance evaluation and fair compensation
system based on mid- to long-term business objectives;
run tailored welfare programs that employees canperceive in their daily lives; and build
an autonomous work environment to improve
employee engagement. We also promote activities thatenhance diversity, enabling employees with a varietyof cultural backgrounds to work together, aimed atcreating an organizational culture that values creativity
and achievement. In our efforts to continue improving
organizational culture, 5% of KPIs for executives reflect
the internal culture survey scores.

Strategic HR Management
TALENT RECRUITMENT AND MANAGEMENT
Talent Recruitment Process and System Hyundai has moved away from theannual recruitment system and introduced a year-round recruitment system
to flexibly respond to changes in the business environment and labor market.
A procedure is now being operated that allows the field to take the lead in
selecting job-oriented talents in a timely manner. Departments that want tohire talent define the expertise such as competence, qualifications, and skills
required of applicants, as well as establishing selection criteria and making
decisions. In the process of selecting applicants, job competencies are verified
in a variety of ways, such as assignment presentations and group interviews,
to hire talents who meet the criteria. In order to support the expansion of field
departments' participation in the recruitment process by introducing a yearround recruitment system for excellent talent, a “Recruit Support Center” is inoperation for each large-scale business site to provide support throughout therecruitment process. Additionally, decision-makers involved in recruitment,such as the HR department responsible for hiring and the businessdepartments carrying out practical work, actively participate in the selection
process to fairly assess the applicants’ professionalism and job suitability.
After the recruitment process, regular internal audits are conducted to ensuretransparency throughout the entire process. If any issues related to fairness
and reliability are identified, corrective measures are taken to address them.
Hyundai has further enhanced transparency throughout the recruitment
process by operating a checklist that allows self-assessment of the fairness ofcandidate selection, and we have also reorganized our recruitment website
to provide applicants with an intuitive and convenient platform to access andapply for job openings. The internal recruitment management system has
been upgraded as well to enhance fairness and reliability in the recruitment
process by enabling data-driven analysis of a variety of applicant information.
Target Sourcing System Hyundai has established the Target Sourcing
System in the second half of 2022 to proactively secure talents in new
business and emerging technology fields, required for enhancing futurecompetitiveness. Building upon this system, we are promoting preemptive
proposals for recruitment positions and reinforcing our in-house recruiting
through talent acquisition and talent networks. In order to effectively secure
top talent, we have established a dedicated Talent Sourcing Center and arebuilding a proactive talent pool aligned with our new business strategies.
This involves sourcing talents from a variety of channels and establishingconnections with external talents through hosting and participating in avariety of tech conferences. We are also expanding our network with externaltalents by organizing and participating in a variety of tech conferences, whichallows us to establish connections with exceptional talents from outside ourorganization while promoting industry-academia collaboration to build atalent pipeline. These efforts contribute to enhancing our recruitment brandimage as a future mobility tech company.

Recruitment Promotion
Hyundai is communicating with applicants
through a variety of means of online recruitment promotion, providing themwith information about the company and job positions. We have introduced
a metaverse job fair which has gained attention as a means of consultationand communication, particularly for candidates who are more accustomed tocontactless interactions.
With the adoption of contactless recruitment processes due to the spread of
COVID-19, this approach has been received as a new recruitment solution.
We have therefore established a dedicated metaverse space to communicate
with applicants on a regular basis. We are also making continuous efforts topromote the company through such online platforms as YouTube, providing a
positive corporate image and offering in-depth information that may not beeasily accessible from external sources. Moreover, we are planning additional
promotional activities to sustain interest and awareness in the company,
taking into account the unique characteristics of each business site. This
ensures that Hyundai continues to attract ongoing attention and engagementfrom potential candidates.

Strategic Workforce Planning Hyundai is formulating strategic workforce
plans from a mid-to long-term perspective to secure the necessary talent
for executing and achieving our long-term business strategies, including
strengthening EV portfolio and developing future strategic technologies. In
addition, we proactively attract key talents who will lead our future business,and support their growth by helping them to design their career paths andarranging for them to meet personally with our corporate leaders, while
striving to spread their proactive and innovative way of working throughout
the organization.
Strategic Workforce Planning Process
Planning•	Introduce various methods of talent analysis to secure
excellent human resources and analyze their relativecompetitiveness

Use•	Use the results of the talent analysis in the corecompetency analysis of the company’s manpower,
recruitment process, portfolio of HR planning,
recruitment strategy, etc.
•	Increase collaboration between departments throughorganizational network analysis

OutcomeMetaverse job fair•	Conduct organizational culture assessment and make
improvements to analyze potential reasons for leaving
the organization and establish countermeasures, etc.

Talent Analysis
Employee
Competency
AnalysisInternal
Organization
Analysis

External
Environment
Analysis

Performance
Measure•	Review job performance and competency development of each employee based on key performance indicators (KPIs) on a constant basis•	Select outstanding talents, including employees who have consistently achieved exceptional results compared to their peers in the samejob position and level, or exceeded performance targets

Skill Gaps
Identifying•	Define competency requirements for each job position and level, and measure and manage individual employees’ competency levels•	Identify outstanding employees based on quantitative measurements of competencies for each element

Network
Analysis•	Identify inter-departmental relationships by analyzing frequency and time spent on inter-departmental collaborations as well as
the efficiency and productivity of collaboration processes•	Select and manage departments that may feel excluded or isolated during the collaboration process

Employee
Retention•	Conduct organizational culture assessments among employees to identify individual grievances, expectations, and potential turnover risks•	Improve personnel policies and welfare programs, and promote proactive communication to retain top talentCompetitive
Intelligence•	Conduct regular monitoring of market conditions, including industry competition, emergence of potential competitors, and supply chain
uncertainties•	Implement a continuous recruitment system to secure talents with required capabilities and skills

Recruiting &Hiring•	Generate interest from outstanding talents through online promotion and virtual job fairs in the metaverse•	Organize separate recruitment sessions for international master’s and doctoral candidates to attract global top talents

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

46

Creative Organizational Culture
TALENT DEVELOPMENT AND PROFESSIONAL COMPETENCIESNew Growth System Hyundai is creating a workplace culture thatencourages self-driven learning to develop the capabilities necessary for thetransition towards electrification, software competitiveness, and future growth
drivers such as autonomous driving, PBV, AAM, and robotics. In particular,
we are formulating career development and competency enhancement
plans based on employee growth guides and competency assessment data,
followed by the development of programs which enable employees to engage
in continuous learning and facilitate knowledge-sharing.
The accumulated data (experience points) through continuous learning andknowledge-sharing is used for the development of growth platforms andnew educational programs. The data is also incorporated into HR processes
such as evaluation, promotion, and career development. Based on the dataand insights obtained through the operation of the new growth system,
Hyundai plans to develop and enhance platforms that allow experiences
and knowledge to spread beyond individuals and across the organization,
providing support for employee learning and development.
Global Career Development Hyundai runs a Global Career Development
program, where highly talented individuals with a global mindset andrecognized expertise in their respective fields are regularly dispatched toover 50 overseas locations worldwide. This program allows employees
to lead global field organizations in areas such as research, production,and sales, providing them with valuable opportunities to drive futurebusiness plans and generate results, serving as a significant opportunity for
employees to grow into global talents.

Learning Lounge Hyundai operates the “Learning Lounge”, a new
growth support system designed to respond swiftly to rapid market andenvironmental changes. Through the Learning Lounge, employees canestablish future growth plans and receive recommendations for learning
solutions tailored to their individual growth plans, enabling them to engage
in autonomous continuous learning. The Learning Lounge provides
approximately 12,000 learning solutions, empowering employees toproactively drive market changes and transform into game-changers.
Learning Lab The “Learning Lab” is a study group formed voluntarily by
employees to independently acquire knowledge on common topics. It is
designed to enhance employees’ competency and promote a culture of
growth by allowing them to autonomously select the learning content, time,location, and participants. In addition to their assigned tasks, employees
can participate in groups focused on deeper learning and engage insharing and discussing creative ideas. The Learning Lab facilitates activities
such as exploring and experimenting with advanced location positioning
technologies, researching, and analyzing data related to e-mobility trends,
and understanding and implementing monitoring systems for autonomous
driving vehicles.

New Growth System

Setting a growth plan

Continuous learning andknowledge sharing

Using growth results“What’s the career path to become
an expert?”“What learning solution will be
the best for me?”“Growth activities are accumulated
as data.”“What are the competencies requiredfor growth?”“How to share my work skills?”“The growth results are reflected in
the HR process.”

Growth guide → Career planning
Capacity assessment →Capacity improvement plan

Learning curation

Knowledge sharing

Growth data

• Internal/external
program• Learning maps

• In-house instructors• Creating andsharing contents• Learning
experiences• Knowledge-sharing
experiences

Constant feedback from/to team leadersInternal Recruitment and Job Transfer Hyundai has established the“Internal Recruitment and Job Transfer” system which enables the company
to have right talent in a timely manner within its talent pool and provides
opportunities for employees to gain new job experiences. When there is aneed for personnel in a particular department, employees can apply for thedesired department and position based on their career and competency.
Through the evaluation process, including document review and interviews,
candidates for internal transfer are selected. Hyundai actively utilizes thissystem to reduce costs associated with new recruitment, shorten theorganizational adjustment period, and provide opportunities for existing
employees to develop their abilities as managers.
Performance Evaluation System Hyundai implements an objective andfair performance evaluation system, with a focus on employee performance.
This includes KPI evaluations based on management by objectives (MBO),
360° multi-faceted evaluations, and peer-to-peer evaluations. The MBObased KPI evaluation is applied to general and research employees, while
all other employees set individual goals based on their job responsibilities or
specific targets aligned with the objectives of their respective departments.
Feedback is provided to employees based on their performance against
these goals. As a result, all employees at Hyundai are subject to the MBObased performance evaluation system. Furthermore, through team unit
evaluation and KPI settings by each division, Hyundai attempts to evaluate
performance in various level.
360° Multi-Faceted Evaluation Hyundai has implemented a multi-faceted
evaluation system that includes “Leadership Surround View” and “Peer
Surround View” evaluations. In 2022, this evaluation system was conducted
for 95.8% of executives, general employees, and research staff. Moreover,Hyundai imposes restrictions on the highest rating, enabling the comparison
and analysis of performance among employees at the same rank. This
indicates that the evaluation system incorporates relative elements under
the framework of an absolute evaluation system.

View-T System

Remuneration System Hyundai provides variable pay (performance-based
bonuses) that is linked to performance evaluations. Base salary is increased
annually to ensure the well-being of employees, and the magnitude of theincrease is adjusted considering internal and external economic conditions,market conditions, and business performance. The company does notdiscriminate among employees when it comes to setting base salaries ordetermining salary increases. Wages calculated accurately according to theirworking hours (above the minimum wage under the local law) are paid tothem on a regular basis on fixed dates.
Performance-based Compensation At Hyundai, employees’ variable pay
is determined fairly based on their job performance. In addition to variable
pay based on performance evaluations, we also motivate our employees
by distributing surplus profits to all employees annually based on thecompany’s business performance.
Employee Stock Ownership Plan Hyundai has implemented an employee
stock ownership plan (ESOP) to enhance employee motivation, job
engagement, and alignment of business objectives with personal values.
As part of this plan, a portion of the variable pay is provided to employees
in the form of company stock. In 2022, Hyundai offered 1,020,552 shares to
employees. By 2022 we had granted a total of 2,857,635 shares, equivalent
to 1.3% of total shares, to our employees through the ESOP. All our full-time
employees, who account for about 90% of the company’s total workforce, areeligible for both the ESOP and the employee stock repurchase plan.

[Team Member]
Register work plans, progress updates,
support requests, constraints, etc.

Reflecting in
HR process• Evaluation,
promotion, careerdevelopment, etc.

24/7 Feedback (View-T) Hyundai operates a 24/7 feedback system called“View-T” which allows leaders and team members to share and exchange
feedback on job performance, career development, skill enhancement,
and performance management. When team members register their work
plans, progress, support requests, constraints, and other related information,
leaders evaluate and provide feedback based on not only the outcomesbut also the team members' efforts and the process of task execution.
The feedback and shared performance information between leaders andteam members through the continuous feedback system are utilized in theperformance evaluation process.

Team
Member

Set business plans andperformance goals[Leader]
Provide comprehensive evaluation andfeedback on team members’ performance,
work processes, etc.

LeaderHR
Department

Assess and provide feedback on job
performance, efforts, etc.

Use leader feedback for
performance evaluations

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

Creative Organizational Culture
Project-based Joint Research Programs In collaboration with renowned
research institutions at home and abroad, Hyundai is running a “projectbased joint research” program. Through this program, we are strengthening
R&D capabilities in future core technologies and address persistent issues inour products. The outcomes of these joint research efforts are then applied to
our finished vehicles and advanced technologies. In addition, we have beenorganizing a variety of research dissemination seminars based on these researchfindings to foster technology internalization and enhancing their research anddevelopment capabilities.
Customer-oriented Car Master Training Program Hyundai focuses oncustomer-centricity through our “Car Master Training Program” to cultivate
talents in sales, customer service, and service sectors from a customer
experience perspective. We have established a service convergence education
system to strengthen product knowledge (electric vehicles, luxury cars) andenhance consultation skills (CSR, CS) through training. This enables us to enhancecustomer touchpoint services. As a result, the Korean Customer Satisfaction
Index (KCSI) has shown improved customer satisfaction in all passenger vehicle/
RV sectors compared to the previous year. We have achieved consecutive wins in
the passenger vehicle sector for 29 years and in the RV sector for 19 years.

Leadership and Job Competency Training The solid leadership of the top
management is of paramount importance in realizing Hyundai's management
philosophy of realizing the dream of mankind by creating a new future throughcreative thinking and taking on endless challenges. Hyundai is conducting avariety of leadership training programs such as a customer-oriented mindset
for top leaders, a collaboration system that can create synergy effects with thehighest level of expertise, and the establishment of an organizational culturethat can generate innovative minds among members. Furthermore, in orderto enhance competitiveness in future mobility beyond automobiles, we areoperating job competency reinforcement training courses to learn about majorcore technologies such as vehicle electrification and autonomous driving.
Training to Internalize Sustainability Hyundai is conducting sustainability
awareness improvement training to integrate sustainability into the job
responsibilities of our employees. In particular, we operate ESG education programsin the areas of human rights, safety, environment, and quality to enhance themanagement of our suppliers. Furthermore, we strive to internalize the concept ofsustainability among our employees by providing specialized ESG training tailoredto specific job roles. Through this approach, our aim is to build a sustainability
mindset and strengthen the capabilities of sustainability management.

Results of Project-based Joint Research in 2022

On/Offline Training for Leadership and Competency

Developmentof new
technologies

Leadership

Creation ofPatents
solutions toandon-site problems research paper

4325

Dissemination
Participationof researchrate
results

52

42

65%

*	The participation rate is calculated as the number of participants among the R&D development
personnel who are subject to training in the “Project-based Joint Research Programs.”

Results of Car Master Training Program in 2022
Based on Korea

Own operations

Number of courses held

AgencyJob

No. of coursers (on/offline)

Percentage of learning hours

995

1.4%

15,63884.2%

Organizational
culture230

0.6%

Onboarding

144

7.8%

Others

140

6.0%

Total

17,141

100%

Total

33

20

53

No. of participants

11,61012,252

23,862

Participation rate

100%

100%

100%

Education Offered through Learning Lounge in 2022
(Unit: No. of courses)
Education, lectures, and Learning Lab

Management/strategy (329), Product/automobile
technology (956), Development process (28),Organizational and corporate culture (464)*	The Participation rate is calculated as the number of employees who participated among own
operations and agency workers who are subject to education of “Customer-oriented Car Master
Training Program”.

Company-related

Sustainability Education Programs in 2022

Leadership-related Continuous learning (1,007), Formal education (557)

HumanrightsNo. of courses

23

Safety948

Environment772* Keyword search results in the Learning Lounge platform

Quality

671

Total

2,414

Job-related

Quality/production-related (1,720), R&D (2,076),
Strategic technology/ICT (524), Business-related (1,538)

Compulsory
education

Compliance/security (126), Fire/safety, etc. (463)External training

Offline lecture (462),
Online learning such as e-learning (264)

HMG Developers
Conference

Discovery and Nurturing ofExternal Startups

The importance of software development capabilities in future
mobility has been on the rise. In particular, efforts are being madeto develop core software technologies such as artificial intelligence,autonomous driving, and data science to implement software
defined vehicles (SDV), which are vehicles centered around software.

Hyundai has been active in the discovery and nurturing of external
startups through its open innovation platform, ZER01NE. Throughthe ZER01NE ACCELERATOR program, we are promoting morethan 100 collaborative projects with internal field teams, providing
support for equity investments, product development, exhibitions,and investment attraction. Furthermore, we have been supporting
the technological development of 31 technology startups byparticipating as an operating company in the TIPS (Tech Incubator
Program for Startup) program1), organized by the Ministry of SMEs
and Startups, since 2015 until the present year of 2023. Hyundai
aims to foster mutual growth and collaboration with startups byfacilitating coordination with internal field teams, providing equity
investments, and offering a variety of nurturing programs.

Hyundai is making multifaceted efforts to enhance and internalize
our software technology capabilities, with a particular focus
on strengthening developer competencies. We hold the “HMG
Developers Conference” to facilitate the exchange of mobility
development experiences and expertise between Hyundai Groupdevelopers and external experts. In 2022, over 60 executives anddevelopers leading research and development presented on some
50 topics related to key technologies for the transition to the SDV era,
including autonomous driving, infotainment, data science, artificial
intelligence, car cloud, electronics, and body. These presentations
provided opportunities for interaction and collaboration withexternal participants.

H-Mobility ClassIn response to the rapid change in the mobility industry ecosystem, theimportance of nurturing mobility talents has increased significantly. Inline with this, the HMC R&D Division operates the “H-Mobility Class”
for undergraduate and graduate students who are interested in the
future automotive industry. The H-Mobility Class is designed as a“match-up” program, where Hyundai employees in the field design
job-oriented educational curricula and receive support from the
Ministry of Education. The entire program is provided free of charge,
and the educational courses are conducted online. So far, we haveprovided educational programs on vehicle electrification, autonomous
driving, and robotics to approximately 5,000 engineering students andgraduate students. Upon completion of the education, participants
are granted eligibility to take certification assessments for thecorresponding technical positions, and outstanding learners receive
benefits such as exemption from certain R&D Division documentation
requirements. Hyundai will make continuous efforts to establish avariety of educational programs to support the development of future
talents and connect them to employment opportunities.

Support for In-house Startups
Hyundai operates an in-house start-up system to support employeeswith creative ideas, discover promising new businesses andcommercialize them. In 2000, we started operating “Venture Plaza”,
an in-house startup fostering program, and since then, we have
expanded the support field to include promising new businesses
beyond automobiles. Through the in-house start-up system, weare achieving the effect of establishing a stable supply chain andcreating jobs through the localization and mass production of futuretechnologies. So far, 76 in-house startup teams have been selected
and nurtured, and 30 companies have spun off. Among the spinoff companies is “Auton”, a KOSDAQ-listed company, and Hyundai
supports the stable growth of the startups through open innovationeven after the spin-off.

1)

 rogram aimed at supporting the incubation of technology startups through thePprivate-led-investment and government’s matching support for R&D.

47

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

48

Creative Organizational Culture
Great Workplace Culture
IMPROVING WORKPLACE CULTURE
Diagnosis of Organizational Culture Hyundai recognizes that highemployee engagement is a significant factor that influences the company’s
performance and individual talent development. We therefore conduct adiagnostic assessment to gauge the level of organizational culture among
our employees. The assessment consists of 67 questions in five areas of Biz,
People, Work, Leadership, and Organizational Effectiveness, as well as twoareas related to company-wide systems and infrastructure. In 2022, 72.6% of
all employees, including general, research, and legal positions, participatedin the organizational culture diagnostic assessment. Based on the results, wewill make continuous efforts to enhance employee engagement.
Accelerating Change and Innovation by Division Hyundai promotes
innovation of the organizational culture at each division in two directions –a top-down method initiated by leaders and a bottom-up method driven
by team members. Through executive-level workshops, we engage indiscussions regarding the direction of organizational culture. Each division’s
leader, in partnership with the designated person to take charge of changes
in the organizational culture and innovation for each organization, works
together to lead a cultural shift within their respective divisions. They
continuously monitor organizational culture issues and strive to implement
solutions based on the voice of employees (VoE), enabling tangible
transformational activities to take place.
Idea Contest for Organizational Culture Innovation Hyundai operates acontinuous idea sharing platform called the “Hyundai Idea Contest” where
all employees can freely participate at any time. Once a year, outstanding
ideas are selected and rewarded, and the chosen ideas undergo a thoroughreview by field departments to develop concrete implementation plans andbring them to life.

In 2022, a total of 5,713 ideas were proposed, and we are currently
conducting execution reviews and implementations for the 47 selected
outstanding ideas. Additionally, we organized a New Year’s event in theform of “Town Hall Meeting” where management and employees can freely
communicate. We also operate channels for anonymous communication,such as “Hyundai Bamboo Forest” to encourage our members to leadchanges actively and horizontally.
Hybrid Work System We have implemented a hybrid work system to foster
an organizational culture that respects the diverse lifestyles of our members
and allows them to immerse themselves in their work autonomously,
regardless of location. We have formed a consensus on the introductionof this policy based on the opinions of our employees. In order to facilitate
efficient work even in remote situations, we have established a VPN
environment that enables mobile PC access from outside the office andhave utilized online video conferencing IT tools. We have conducted a varietyof transformative activities to create an environment conducive to effective
remote work.
Way of Working, “CoC (Code of Conduct)” Hyundai conducted a survey
called “Kill the Company” among all employees to identify employee
perspectives on working in a way that can save the company. Based on
the survey results, we developed Hyundai's way of working, “CoC (Codeof Conduct)”. From the CEO to new hires, all employees participate insharing their own thoughts and commitments regarding a positive mindset,
responsibility, tenacity, and embracing new challenges and initiatives.
As such, we plan to develop a corporate culture program to immerse
employees in their work based on voluntary participation and continuous
communication.

The Hub Office “H-Work Station” Hyundai operates eight sites of the hub
office “H-Work Station” in Seoul and Gyeonggi-do. In order to enhance work
efficiency, a variety of spaces such as café-style seating, stand-alone seating,and conference rooms have been created. The H-Work Station is operated
on a pre-reservation basis to provide employees with a pleasant working
environment. Through the H-Work Station, employees have the flexibility tochoose their working location beyond the traditional office setting, which is
expected to improve work efficiency and job satisfaction.
Labor Union Communication in Korea Hyundai guarantees the rights thatare fundamentally respected based on the Constitution, such as the rightto organize, the right to collective bargaining, and the right to collective
action for our workers. We have established and operates a collective
bargaining consultation body and a labor-management council. In addition,
we have formed the Future Change Response TFT and the Job Stability
Committee to promote pre-discussions and consensus-building between
labor and management regarding future changes. Hyundai is committed toenhancing trust between labor and management, establishing mature labormanagement relationships, and fostering organizational culture innovation.
Based on these efforts, Hyundai has successfully concluded four years ofpeaceful collective bargaining since 2019.

Labor Union Communication Overseas Among Hyundai’s overseas
subsidiaries, unions have been established in Hyundai Motor Manufacturing
Czech (HMMC), Hyundai Motor Brasil (HMB), and Hyundai Motor India (HMI).
Overseas subsidiaries in China have established the Chinese Trade Unions,a worker representative organization. Corporations with established labor
unions engage in collective bargaining with labor unions in accordance withlocal labor-related laws and regulations. We hold regular or ad hoc meetings
to find out the working conditions and welfare system that employees want,and based on this, we are trying to find an agreement from a viewpointthat is mutually reasonable and can satisfy both labor and management.
Although there are no labor unions established in subsidiaries in the US,
Russia, Turkey, and Indonesia, we listen to the voices of our employees
through active and direct communication with them.
In addition, at the head office level, surveys and interviews are conductedamong executives and employees of overseas subsidiaries on a biennial
basis, and based on the results, improvement activities are conducted toenhance employees’ satisfaction, trust, and pride in the company. Eachoverseas subsidiary is making efforts to preemptively resolve employees'
grievances and requests by individually holding regular meetings between
employees and management, operating grievance counseling centers, andtouring the field sites.

In 2022, Hyundai established the 4th Advisory Council for the Job Stability
Committee, consisting of a total of six experts. With the acceleration ofchanges in the automotive industry, such as electrification and future
mobility, and increasing internal and external uncertainties, the 4th Advisory
Council sought solutions for employment issues and crisis management.
The 4th Advisory Council also played a role as mediators in resolving any
differences of opinion between labor and management.

Results of Culture Survey(Unit: Points)

2019

63.2

2020

66.3

2021

68.5

2022

72.9

Hyundai Motor Group Town Hall Meeting (New Year’s event)

CoC – Hyundai’s way of working

H-Work Station

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

49

Creative Organizational Culture
PROMOTING EMPLOYEE DIVERSITY
Establishing Diversity Policy Hyundai strives to create an organizational
culture that respects diversity and to contribute to the transition to an inclusive
society. To this end, we formulated and released the “Hyundai Motor Company
D&I Policy”, which stipulates our diversity and inclusion management factors, inJune 2022.

Hyundai Motor Company D&I Policy

Basic Principle of Diversity
Hyundai shall prohibit discrimination against employee’s gender, race,
ethnicity, nationality, cultural background, age, individual gender identity,differences in political and religious beliefs, weakness in social status, etc.,
without due reasons, and provide equal opportunities in employment,
promotion, education, wages, and welfare.

Campaign Commemorating
the International Women’s Day
Every year on March 8th, the world celebrates International
Women’s Day, honoring the social, economic, cultural, and politicalachievements of women worldwide. In commemoration ofInternational Women’s Day, Hyundai created and distributed a playlist
titled “Who drives the world?” to bring happiness to women travelingon the roads. The playlist features songs by diverse women musiciansfrom around the world, including Lizzo, Miley Cyrus, Victoria Monét,
and others. Through this engaging and meaningful campaign,
Hyundai aimed to celebrate International Women’s Day.

Title

Article 3. Age
The employees of Hyundai shall respect and communicate with eachother in an open manner, regardless of age.
Article 4. Disability
Hyundai shall not discriminate against employees based on disability
or disease without reasonable grounds.
“Who drives the World?” Playlist

TargetOutlineOnboarding course forheads of overseas subsidiaries

This course covers discussions on the role of corporate leadership in building a "healthy communication and working culture" within an organization
where members with diverse cultural backgrounds work together.

Expatriate Staff
Assignment Course

This course includes conducting the GlobeSmart assessment to enhance understanding of the cultural diversity in which one will be assuming the post.
Based on the assessment results, educational sessions are offerred to enhance awareness and understanding of cultural diversity.

Cross Cultural Seminar

This seminar focuses on providing cross-cultural understanding and communication training for foreign executives.

Learning Lab(All employees) Under this platform, members of the organization with similar interests and job roles come together for voluntary learning, experiencesharing, and other activities aimed at enhancing organizational synergy.

Remembrance Day(R&D Division) This program provides education to newly appointed department heads, team leaders, and members with a focus on building a positive
organizational culture based on mutual understanding.

Connect-fit(Korea Business Division) This program facilitates experience sharing and career mentoring through connecting junior employees, who are scheduled
for their initial rotation, with experienced senior employees.

Key activities

Women @ Hyundai

Female•	Create an inclusive environment that grants independence to female employees, customers,
and employees of partner companies•	Implement mentoring programs and females-supporting activities aimed at careerdevelopment from the perspective of female employees

Hyundai @SoulBlack and African American•	Discuss how to enhance the Hyundai brand image within the black and African American
community•	Provide a variety of support to improve cultural competency of Hyundai management

HANA (Hyundai Asian
Network Alliance)

Asian•	Discuss methods to enhance the Hyundai brand image within the Black and African American
community•	Provide a variety of support for cultural competency improvement within Hyundai's executive
leadership

Amigos Unidos

Hispanic and Latin American•	Present innovative management ideas using the cultural intelligence of the Latino community•	Present ideas for Hyundai’s future direction from the perspective of Latino employees

Young Leaders

Millennials•	Think about a variety of ideas, solutions, and improvements using the strengths of themillennial generation•	Conduct a mentoring program for individual employee development and self-development

Equality

LGBTQ+•	Provide training, career development, networking, and workplace collaboration opportunities
for LGBTQ employees•	Share ideas to raise awareness of Hyundai's brand within the LGBTQ community

Hyundai CARESDisabled•	Improve the work life of the disabled and raise positive awareness of disability•	Support employees with congenital or acquired disabilities, middle-aged employees withdisabilities due to aging, etc.

Stars & Stripes

Veteran•	Implement a forum where Hyundai employees, their spouses, their families, and supportersof U.S. Army veterans gather•	Provide a safe and inclusive space where one can feel a sense of belonging

Key Diversity Programs
Classification

Employee Resource Groups (ERG) Hyundai believes that sharing common
interests and promoting cultural exchange among employees with diverse
backgrounds is one of the effective ways to foster a leading organizational
culture. Therefore, we at Hyundai support Employee Resource Groups (ERGs)
where employees with shared interests, including gender, culture, age, andhometown, can communicate and connect. Through the ERG program, we
provide career development opportunities at the individual and team levels,
cultural-based mentoring, and engagement in external activities such ascommunity involvement. Hyundai hopes that these initiatives will not only
have a positive impact within the company but also extend to the local
community, spreading positive influence.

Hyundai ERG Activities

Article 1. Gender
Hyundai shall treat all employees and stakeholders equally, regardlessof gender, gender identity, sexual orientation, etc.

Article 5. Veterans
Hyundai honors veterans and their families, such as those of national
merit and independence, during the recruitment process.

Diversity Programs Hyundai provides opportunities for enhanced
communication and teamwork among diverse groups through workshops,
training, and other activities. These programs have significantly improved
the awareness of cultural diversity within the organization and have made asignificant contribution to fostering a greater acceptance of diversity.

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

Creative Organizational Culture
Human Rights Management
BUILDING A FOUNDATION FOR HUMAN RIGHTS MANAGEMENT
Human Rights Management Governance We report on the revision anddissemination of the Human Rights Policy, the planning, execution, andoutcomes of human rights risk assessments, risk mitigation and reduction
measures, and the effectiveness of such measures to the ESG Committee andSustainability Management Committee under the Board of Directors, in which
the management participates. Our ESG, HR, Compliance and Procurement
departments share responsibility of implementing the human rights
management, and organically collaborate on managing human rights risk.
Human Rights Policy Hyundai implements human rights management
while also striving to prevent human rights violations and mitigate relatedrisks in our business operations by establishing and revising the Human
Rights Policy. The Policy includes key elements for internalization anddissemination of human rights management, such as the commitment
to prohibiting forced labor/child labor, freedom of association, collective
bargaining rights, and the prevention and respect of non-discrimination.
Hyundai’s Human Rights Policy applies to all employees (executives, staff,
and non-regular workers), domestic and international production and sales
corporations, subsidiaries, and grandchild subsidiaries, as well as joint
venture employees. Hyundai employees are expected to adhere to the Policy
when dealing with suppliers, sales, and service organizations. Furthermore,
we encourage all stakeholders in business relationships to respect anduphold the Human Rights Policy.
Human Rights Policy of Hyundai Motor Company

ESG Mindset Education
Non-Discrimination & Anti-Harassment Policy Hyundai accounted a
Non-Discrimination & Anti-Harassment Policy, aiming to prevent incidents
and issues related to workplace discrimination, harassment, and sexual
harassment while respecting the right of employees to be treated equally
and without discrimination. In accordance with the Non-Discrimination &Anti-Harassment Policy, the following behaviors are strictly prohibited –exclusion or rejection of individuals or groups based on their differences;inflicting physical or mental suffering by leveraging one’s position or
relationship within the workplace; and engaging in actions that cause sexual
humiliation or feelings of disgust.
Hyundai Motor Company
Non-Discrimination & Anti-Harassment Policy

Handling of Human Rights Grievance Hyundai has set in place a procedure
for receiving, addressing, and taking action on issues related not only todiscrimination, harassment, and sexual harassment but also to improving
organizational culture and working conditions. The grievance handlingchannels are operated in a variety of forms, both online and offline, such as
postal services, hotlines, and cyber audit office, to enhance accessibility forcomplainants. The anonymity and confidentiality of complainants are ensured,and any form of retaliation, identity exposure, or adverse employment
actions related to reporting complaints is strictly prohibited. Upon receiving
a complaint, the process involves promptly assessing the situation according
to the established procedures. If necessary, efforts are made to address theroot causes of the complaint, improve internal systems or work methods, andprevent recurrence. Furthermore, for employees who have had a negative
impact on human rights through actions such as discrimination or harassment,
we review the criteria and procedures specified in employment rules anddisciplinary regulations to consider appropriate personnel measures.

Hyundai refers to “Principle 31” of the UN Guiding Principles on Business andHuman Rights to verify the effective and efficient operation of the grievancehandling procedure, encompassing channels, receipt, processing, actions,and prevention of recurrence.
Human Rights Education Hyundai has developed and implemented
human rights education programs to promote compliance with the Human
Rights Policy and enhance awareness of human rights. The human rights
training programs offered by Hyundai encompass a total of 23 courses.
These include not only compulsory education on such topics as sexual
harassment prevention and improving awareness of disabilities but alsobroader education on the concept of human rights management, cases ofhuman rights violations, legislation related to human rights, and industry
trends in human rights management.
In addition, Hyundai organized briefings on “Supply Chain ESG Risk Assessment
and Auditing” and “Conflict Minerals Management Process” specifically forour suppliers. These briefings aimed to explain the importance of humanrights management and provide guidance on managing human rights risks.
Furthermore, we provided online training courses on the Supplier Codeof Conduct, which outlines the fundamental principles of human rights
management that suppliers are expected to comply with. These principles
include non-discrimination, humanitarian treatment, and management ofworking hours. The ESG briefings for suppliers saw the participation of 303
representatives, covering 100% of Hyundai's domestic suppliers. The online
training courses had a participation of 1,123 supplier representatives in total.

• Purpose: To improve employees’ basic understanding andawareness of ESG•	Target: About 73,000 people in general, research, legal, technical,
maintenance, and sales positions•	Content: Education on the concept and importance of each ESG
area, best practices, etc.
Education Roadmap
Watching ESG Mindset Videos• Composed of a total of 5 videos(ESG overview, ethics, human rights, safety, environment)
Sending Newsletter•S ummary of video training content•S ummary of ESG content specific to Hyundai
Continuous learning•P roviding continuous learning content through our internallearning platform “Learning Lounge”
Ethical Management Education•	Purpose: To foster a shared understanding of ethical management
and enhance the role of team leaders in promoting ethicalsensitivity and improvement in the workplace.
• Target: All team leaders in Korea
Content
STEP 1.

Human Rights Management GovernanceGrievance Handling Procedure

BOD (Sustainability Management Committee)
BOD/
Management

ESG Committee
Top Management (C-Level)
HQ

WorkinglevelOverseasHR

ComplianceHR

Compliance

ESG

Procurement

ESG

Procurement

Receiving
complaints

Improve reporter
accessibility byoperating a varietyof on/offline
channels such as
mail, hotline, andcyber audit officeCounselingIf necessary, theperson in chargeof each region thathas received thegrievance provides
counseling to thecomplainant, victim,
witness, etc.

Expanding principles and convictions to the individual →leader → organizational level

Human Rights Education in 2022
Investigation
andjudgment
Investigate
complaints received
without delay inaccordance withprocedures

Approximately
73,000 people

Training participation
rate

Approximately 90.1%

Supplier ESG Briefing

Ratio of participating
suppliers

Domestic - 100%

Online Training
for Suppliers

No. of participating
suppliers

410 companies(6,882 persons)

ESG Mindset Education(Korea)1)

Personnel
measures

Implement
corrective andpersonnel actions
based on the zerotolerance principle,
and, if necessary,
improve systems
and practices toprevent similarcases

Number of employees
subject to training

1)

STEP 2.

Experiences in ethical decision-making situations andmethods for upholding principles and convictions
STEP 3.

 onsisting of 5 areas – human rights, ethics, safety, environment, and general ESG.
C
Education on the concept and importance of each area of human rights, bestpractices, etc.

Establishing a plan to be reborn as a leader who protects andspreads principles and convictions* Plan to develop an ethical management training course specialized for
expatriate staff and heads of overseas subsidiaries (targeted for the second
half of 2023)

50

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

51

ESG Magazine

Creative Organizational Culture
HUMAN RIGHTS RISK MANAGEMENT PROCESS
Scope of Human Rights Risk Assessment Hyundai prioritizes conducting
human rights risk assessments for domestic business sites, including theheadquarters, research institutes, Ulsan plant, Asan plant, Jeonju plant, as well
as regional headquarters and subsidiaries in Europe, North America, Central andSouth America, India, China, and other overseas locations, covering businesssites with more than 300 employees. This initiative already encompasses over
90% of Hyundai’s workforce. Moving forward, we aim to refine and enhance theindicators and standards for human rights risk assessment. In addition, the scopeof assessments will be expanded to include distribution centers and subsidiaries,
with the goal of achieving 100% coverage in conducting these assessments.
Human Rights Risk Assessment Targets Taking into account factors suchas employee composition, business operations and locations, products
and services offered, environmental and community impact, as well as thesourcing of products and services from the supply chain, Hyundai has identified
employees, women, children, migrant workers, workers in partner companies,
and local residents as key subjects for assessing human rights risks.
Design of Human Rights Risk Assessment Indicators Hyundai strives
to accurately identify potential human rights risks within the scope of ourhuman rights risk assessment. To this end, we develop and implement ourown indicators for human rights risk assessment and due diligence based onvariety of resources, from our own Human Rights Policy to all of the followings:

domestic and international human rights management standards, industry
initiatives manuals, and best practices in similar industries, past grievancesthat have been reported and handled, input from employees, and a review
process by third-party expert organizations.
Prediction of Human Rights Risk Prior to conducting document-based
assessment and on-site inspections of human rights risks, Hyundai conducts
research on the following: the legal and regulatory landscape regarding
human rights in each country; investigative materials from domestic andinternational institutions and media related to human rights; documentationfrom industry initiatives on human rights; interviews and consultations withbusiness site personnel to gather their insights and opinions. By investigating
the internal and external environments, Hyundai aims to proactively
anticipate potential human rights risks that could arise from a variety ofgroups, including employees, women, children, migrant workers, supplieremployees, and local residents.

Document-based Human Rights Risk Assessment Hyundai identifies
potential human rights risks among a variety of worker groups throughdocument-based assessments conducted in the form of surveys, based on
our differentiated indicators and criteria for human risk assessment and due
diligence. To facilitate the document-based assessments at each business site,
we provide specific assessment criteria and requirements, ensuring an effective
assessment process. The potential human rights risks identified throughdocument-based assessments are further verified and validated through onsite inspections. In 2022, we conducted document-based assessments basedon a total of 63 indicators. Going forward, we plan to maintain, expand, andstreamline our indicators to proactively identify and address potential humanrights risks within our business sites based on the implications derived from theresults of human rights risk assessments.

Preliminary Diagnostics of Human Rights Risk and Major Risks Identified
Based on the preliminary assessment of human rights risks, Hyundai
applies assessment and due diligence indicators differentiated by businesssite and stakeholder group. These indicators are continuously refined andstrengthened to ensure a more accurate identification of risks. The preemptive identification of human rights risks has highlighted potential risks
related to the working environment, working conditions, occupational healthand safety, local communities, and the risk of conflict minerals within our
supply chains. Specifically, there is an anticipated possibility of human rights
risks related to child labor and female workers in the sourcing and supply
chains of conflict minerals.

Targets of Human Rights Risk Assessments
Human Rights Issues

Work environments (including emotional labor,
discrimination, freedom of association, etc.)

Work conditions (including hours, pay, and child andforced labor, etc.)

Health and safety (including workplace safety
facilities, wearing safety equipment, etc.)

Human Rights Risk Assessment Process

Business impacts (environmental and social
impacts on places near businesses)

Conflict minerals (concerns about raw materials
when procuring raw materials)

Indicator
designIntegrate and analyze the
Human Rights Policy ofHyundai Motor Company,
Korean and international
standards, and industry
initiatives to design
distinguished indicators

Document-based
assessment
Identify potential humanrights risks or negative
impact factors based on
Hyundai’s unique indicatorsand standards

On-site Human Rights Risk Assessment To ensure the reliability of the
document-based assessment results, Hyundai selects business sites for onsite inspections taking into consideration of various factors such as the locationof the site, operational characteristics, worker composition, and impact on thelocal community. Particular attention is given to business sites where potential
human rights risks are identified or where negative impacts are anticipated,prioritizing them for on-site inspections. On-site inspections are conducted byinternal experts responsible for HR, safety, and organizational culture. Consulting
by external experts in labor and law may be involved if necessary. To assess
working conditions, a variety of documents are reviewed, and interviews are
conducted with key personnel. Site visits are also conducted to verify the safetymeasures and working environment. Hyundai continuously improves the onsite inspection process to incorporate diverse perspectives and enhance thereliability of human rights risk assessments.

On-siteinspection
Visit business sites based on
the results of document-based
assessment in order to clarify
detailed causVisit business sites
based on the results of documentbased assessment in orderto clarify detailed causes anddiscover further potential risk
(Note: some of the visits in 2022 were
replaced by untact interviews due to
COVID)

Analysis ofresults
Combine the results of
document-based assessmentand on-site inspection to
draw implications suchas risk definition and risk
characteristics by businesssite or location

Improvement
measures
Each business site
establishes an optimal
improvement plan foreach risk type and checks
the implementation
status to ensure practicalrisk improvement.

Employees

WomenChildren

Immigrant andcontract workers

Suppliers

Local
communities

Low Risks

Low Risks

Low Risks

Low Risks

Potential Risks

Low Risks

Low Risks

Low Risks

Low Risks

Low Risks

Potential Risks

Low Risks

Low Risks

Low Risks

Low Risks

Low Risks

Potential Risks

Low Risks

Low Risks

Low Risks

Low Risks

Low Risks

Potential Risks

Low Risks

Low Risks

Potential Risks

Potential Risks

Low Risks

Potential Risks

Low Risks

Results of Human Rights Risk Assessment (Document-based & On-site)
Classification

Hyundai business sites

Suppliers

Results

Ratio of business sites where human rights risks assessment was conducted1)

90.4

Ratio of business sites where risks were identified

8.3

Ratio of improvement measures and activities taken

50

Ratio of suppliers where human rights risks assessment was conducted100

Ratio of suppliers where risks were identified
Ratio of improvement measures taken

1)(Unit: %)Percentage of number of employees of business sites where the human rights risk assessment was conducted to total number of employees

21001. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

Creative Organizational Culture
Results of Document-based Assessment and On-site Inspection The resultsof document-based assessment and on-site inspections showed that thecompliance rate for indicators at domestic and international business sites all
exceeded 85%. Specifically, Korea showed a compliance rate of 96.3%, Europe
98.8%, North America 98%, Latin America 100%, China 93.1%, and India 93.7%.
The European region has demonstrated leadership in minority protection
and non-discrimination, with ongoing improvements in working conditionsaligned with social safety nets. Manuals have been created and disseminatedto guide workers in reporting and addressing human rights issues. In India
and China, it has been observed that human rights management is still in theearly stages due to national laws and regulations, social customs, and cultural
backgrounds. In terms of specific areas of assessment and due diligence, risks
have been identified in policy and systems, non-discrimination, humanitariantreatment, forced labor, and human rights of customers.
Analysis of Document-based Assessment and On-site Inspection Resultsby Area Based on the document-based assessment and on-site inspection
results, potential risks have been identified in certain domestic and overseas
business sites, including in the policy and system category. The evaluationof policy and system focuses on the internalization of Hyundai's Human
Rights Policy through employee guidance and human rights-related
education, rather than assessing actual risks. In addition, potential risks havebeen identified in the categories of non-discrimination and humanitariantreatment. To manage the identified risks, we have implemented companywide distribution and education of the Human Rights Policy and are taking
mitigating measures concerning the identified risk factors.

Results of Human Rights Risk Assessment by Region Hyundai has
diagnosed human rights risks at its domestic business sites, as well as
joint venture company (Beijing Hyundai Motor Company), and 16 overseas
business sites in North America, Central and South America, Europe, India,
and China. This has enabled us to identify current status of human rights
management at each region, and thus to develop improvement measuresand implementation plans.
Measures to Address Human Rights Risks Through document-based
assessments and on-site inspections, improvement tasks are identified,and each business site establishes implementation plans for thesetasks and takes relevant measures. For identified risks, the business site
representatives discuss and establish improvement tasks, considering
the timing, approach, and potential issues related to the implementation.
The progress of implementing improvement tasks according to eachbusiness site is monitored, tasks that require a significant amount of time ornecessitate regulatory or systemic improvements or large-scale investments
and structural changes are set as company-wide tasks, and long-term
implementation plans are being developed from a strategic perspective.

Plan to Advance Human Rights Risk Assessment Hyundai is committed
to establishing a system to manage potential human rights risks that may
arise at business sites and minimizing the negative impact of human rights
risks on business operations. To identify and address actual issues withhigh operational impact and potential risks at business sites, we plan toenhance assessment and due diligence indicators. Through assessment
and due diligence, identified human rights risks will be actively mitigatedto prevent further dissemination and transmission. Since 2022, we havebeen incorporating the rates of human rights assessment and due diligenceand the handling of grievances into KPIs of, CEO and relevant departments
responsible for human rights. Furthermore, we plan to enhance the efficiencyof document-based assessments and on-site inspections. Prior to theseprocedures, pre-explanatory sessions on the procedures and indicators forassessment and due diligence will be conducted for site-specific personnel.
We will also be providing training to strengthen the capacity for assessment
and due diligence and response.

Statement of salaryin English•	Distribute the Human Rights Policy aimed atstrengthening awareness of respect for human rights
and spreading human rights management•	Establish and distribute the Non-Discrimination &Anti-Harassment Policy to prevent discriminationand harassment in the workplace and raiseawareness•	Provide pay slips in English, including wages,
allowances, deductions, etc. for foreign workers

Measures to Address Risks by Region

EuropeNorth America

Central & South America

India

China

Subsidiaries in Europe strictly
prohibit discrimination basedon gender, ethnicity, age, race,and other factors through our
Code of Conduct. The company
provides clear guidelines on
how employees should act inthe event of human rights risks,specifying the appropriate
actions to be taken.

Both federal laws and state
regulations provide detailed
provisions for human rights
protection. The country
ensures national-level humanrights protection for minorities,
including gender, ethnicity,
race, and sexual orientation.

Subsidiaries in Central & SouthAmerica have independently
implemented human rights
protection policies, including
the establishment of policies,
dissemination them among
employees, and conducting
education on preventing sexual
harassment and workplacebullying. In this region, a varietyof policies and regulations arebeing enacted to address laborrelated issues and promote
their resolution.

Although the formal caste
system has been abolished, theinfluence of social stratification
persists. Societal awarenessregarding workplace harassment
is relatively low, yet, severe
consequence is imposed in caseof human rights violation occurs
within the company. In order toprotect maternity, subsidiaries
in India operate various support
policies such as guaranteeing
maternity and postpartum leaveand operating an in-house
daycare center.

At the national level, there is asystem in place for collecting andmanaging ethnic information ofworkers, and there is a lack ofobligation for collective bargaining.
The legislation regarding workplaceharassment and sexual harassment
is still in its early stages, and there
is a lack of social awareness onthese issues. Multiple subsidiaries
in China have started implementing
employee assistance programs(EAP) for individual counseling andorganizational diagnostics, aiming
to address the psychological wellbeing of employees.

Hyundai held ESG non-deal roadshow (NDR) targeting global investors inAugust 2022 in Boston and San Francisco in the US, London and Edinburgh
in the United Kingdom, Singapore, and Tokyo, Japan. Through these events,
we shared our key activities related to supply chain ESG risk management,
strengthening industrial safety and health, and assessing human rights
risks. We received inquiries from global investors regarding human rights
risk assessment, mitigation and improvement plans, and our strategy inresponding to the implementation of the EU Corporate Due Diligence
Directive, and we shared our current activities, achievements, and futureplans. The demands and opinions of global investors will be consideredin the development and planning process of human rights management
activities, aiming to enhance sustainability. Going forward, we will expand
communication with investors through a variety of channels based on theoutcomes of the ESG NDR.

Measures to Address Risks by Type
Distribution of
Human Rights Policy
and Non-Discrimination& Anti-Harassment
PolicyResults of Human Rights Risk by Region

Communication with Global Investors•	Operate company-wide complaint reception
channels (HR, Audit Department) related toworkplace bullying. Upon receipt, complaints are
subjected to immediate investigation followed bydisciplinary action, where appropriate.
India•	Operate in-house daycare facilities and guaranteematernity/parental leave to improve social
awareness•	Build legal and institutional safeguards is underway
to improve women’s human rights (late-night
commuting bus for females, external investigators,
participation in investigation of sexual harassment
cases, etc.)

China•	Operate an offline grievance handling center toreport and handle cases of workplace bullying andsexual harassment•	Consider implementation and introduction of
EAP for individual psychological counseling andorganizational diagnosis

Measures and Activities to Address and
Mitigate Child Labor in Suppliers
Hyundai conducted a comprehensive investigation and assessment of its
overall supply chain in North America after confirming the employment ofunderage workers at two companies, SL Alabama and SMART Alabama,
which have a cooperative relationship with Hyundai Motor Manufacturing
Alabama (HMMA) in 2022. We identified that a third-party employment
agency had misrepresented applicant information, and thus we immediately
discontinued our business dealings with the respective employment agency.
In addition, SL Alabama agreed to establish a special audit committee tooversee compliance with relevant labor laws. Furthermore, HMMA is in theprocess of divesting our ownership stake in SMART Alabama.
HMMA conducted investigations on 29 tier-1 suppliers in North America
through interviews, on-site inspections, and other methods. HMMA has also
been actively collaborating with the US Department of Labor to implement
employment-related regulatory compliance training since March. The
training covers Hyundai’s zero-tolerance policy regarding unfair employment
practices, methods for verifying applicants’ identities during the hiring
process, and compliance with the code of conduct for suppliers. In addition,
we have instructed our suppliers to establish an anonymous grievance
hotline for workers and provided education on prohibiting employment
through third-party employment agencies. Our Board of Directors receives
regular reports on the facts and follow-up actions regarding these issues
through the Sustainability Management Committee. The Board has directed
the company’s management to enhance the ESG management system,
including the management of unfair employment issues, across all aspectsof our business.

52

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

53

Health, Safety and Welfare of Employees
Hyundai places the highest value on the life and safetyof all its employees and other stakeholders, thereby
promoting activities aimed at enhancing health andsafety based on firm principles and standards of healthand safety. We have established a company-wide
health and safety system in order to comply with therelevant laws and regulations, while identifying andimproving hazards and risk factors so as to promote
our employees’ health and enhance their working
environments. We are also making active investment
in human and material resources to implement
mid-to long-term roadmap, thereby achieving key
performance objectives. Moreover, we will contributeto spreading a culture of health and safety built upon
participation and communication by sharing ourprogress and implementation status with all of our
stakeholders including employees.

Strengthening Health and Safety Leadership
HEALTH AND SAFETY SYSTEM
Establishment of Health and Safety Governance Hyundai’s Board of
Directors and management inspect and supervise the operation of the healthand safety system, the status of its implementation against the set goals,
action plans, and major achievements at least once per quarter. A Chief Safety
Officer (concurrently serving as the CEO) has been appointed to operate theoverall health and safety governance, and the company-wide health andsafety organization is operated under the direct control of the CEO.
Under the overall supervision of the Chief Safety Officer (CSO), the health andsafety managers at each business site prioritize health and safety management,
establish implementation plans, and conduct regular meetings in which
managers and employees from across the organization and specific workplaces
participate in order to share and discuss health and safety issues and risks.
Furthermore, external experts in industrial health and safety inspect the healthand safety conditions at workplaces and identify potential injuries, illnesses, andaccidents, while also participating in post-incident investigations. Management,
responsible personnel at each business site, and process managers with healthand safety responsibilities set health and safety KPIs and evaluate performancebased on the status of their implementation compared to the targets.
Introduction of the Health and Safety Management System All domestic andinternational workplaces have implemented a health and safety management
system that includes the establishment of implementation plans, identificationand improvement of hazardous and risky factors, evaluation of health andsafety performance, and the development of improvement measures basedon an activity analysis. Each workplace obtains a third-party certification for
its health and safety management system, taking into consideration the laws,
regulations, market conditions, and business characteristics. Additionally,
efforts are made to encourage and support subcontractors in establishing theirown health and safety management systems, thereby enabling them to secure
their own health and safety capabilities.

Health and Safety
Management System(ISO 45001)-certified
Workplace100%of all manufacturingsubsidiaries at home
and abroad

Results of the 2022 Safety Leader Seminar
Date

Seminar Overview

No. ofParticipantsLabor-Management Joint Declaration to Create a Safe Workplace In April
2022, representatives of labor and management, including CSO, gathered
to prioritize respect for employees’ lives and announced a joint declarationof labor-management for the prevention of industrial accidents and thecreation of a safe workplace. The joint declaration includes the establishmentof a culture of voluntary safety management, joint efforts to prioritize safety,
safety inspections for high-risk processes, identification and improvement ofrisk factors, expansion of continuous investment in safety, establishment ofa systematic health and safety management system, promotion of activities
to enhance safety awareness and improve risk factors, and support forsubcontractors' health and safety. Furthermore, both labor and management
have agreed to actively cooperate on preventing major accidents and formeda joint labor-management task force team to that end.
Safety Leader Seminar Hyundai conducted safety leader seminars (one in
the first half and one in the second half of the year) to keep abreast of external
trends related to the enforcement of the Serious Accidents Punishment
Act and to strengthen its safety leadership and safety awareness. The CSO
participated in these seminars to disseminate safety policies and foster ashared understanding among domestic and international safety professionals
regarding the establishment of a safety culture and improvement of thecompany’s health and safety management systems. Hyundai is taking the leadin creating a safe workplace through such efforts as enhancing on-site safety
awareness and strengthening two-way communication.

Safety Vision Strategy Roadmap In December 2022, Hyundai conducted
an in-depth diagnosis of the safety management system at its business sites,with the participation of safety experts engaged in research and consultation,and carried out a survey of global best practices. Based on the results, wedeveloped a safety vision and strategy roadmap comprising a development
plan for the safety management system. The safety vision and strategy
roadmap also includes our long-term vision as well as phased and annual
strategies for realizing its core safety values. It is also focused on strengthening
the alignment between corporate core values and safety culture, enhancing
safety education, improving safety communication and leadership, andpromoting collaborative activities between labor and management.
In accordance with the safety vision strategy roadmap prepared based on thecomprehensive in-depth diagnosis, we plan to carefully establish mid- to longterm implementation plans for each stage. We also plan to conduct in-depth
diagnosis by industrial safety sector in order to come up with specific solutions
for improving site safety. Furthermore, we will strengthen the management
system for the five key safety elements (organization/manpower, budget,training, labor-management relations, and safety culture) with the aim of
becoming a global top-notch safety company.

Directions of Safety Vision Strategy
Establishment ofa safety culture•	Establish Hyundai’s unique safety culture by realizing safety-first core values and developing it into a “Just Safety
Culture” as an advanced company

Advancement ofsafety training•	Advance the specialized training programs to raise the safety awareness of employees and strengthen their risk
awareness capabilities in order to strengthen safety education beyond the level required by laws and regulations

Leap towards
the Global Best•	Establish future strategic tasks centered on the headquarters to expand global safety governance, and actively
promote a pilot introduction of advanced cases, such as the safety management system (Safety Career)

Field-basedrisk assessment•	Establish self-regulation by conducting risk assessment activities in which all employees participate, develop andadvance employee capacity building programs for this purpose, and establish a system for identifying and improving
harmful risk factors

First half

• Issues related to the Serious Accidents
Punishment Act and safety trends• Sharing of excellent improvement cases
and advanced safety technologies

48

Strengthening
labor-management
cooperation•	Introduce various systems (Safety Merit System) to strengthen the capability to comply with labor-management
health and safety standards and enhance labor-management cooperation.

Secondhalf• Dissemination of the safety policy of
the CSO• Safety leadership for me and my colleagues

63

Win-wincooperation•	Reinforce various support measures (excellent partner discovery system, etc.) in order to raise the safety management
capabilities of our partners to the same level as Hyundai

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

54

Health, Safety and Welfare of Employees
SPREADING THE CULTURE OF HEALTH AND SAFETYManagement of Leading Indicators for Industrial Accidents (H-LWC) Hyundai
has introduced the leading indicator, “H-LWC (Hyundai-Lost Workday Case)”,as a shift from the traditional lagging indicator-based management of accident
rates. This has enabled us to analyze accident types in advance and focuseson activities designed to reduce industrial accidents. Leading indicators areused to measure the processes and behaviors related to preventing industrial
accidents. These indicators include safety consciousness and cultural level,
equipment integrity, exceeding the scope of safe operations, improvementof health and safety management systems, and the effectiveness of activities
to prevent industrial accidents from recurring. Through the management ofleading indicators, the accident rate has been reduced by approximately 9%
compared to 2021. In particular, the total number of safety accidents has been
reduced by approximately 21% by focusing on reduction activities targeting
specific types of workplace accidents.
Assessment of the Health and Safety Management Level (H-SAT) Hyundai
has set in place the “H-SAT (Hyundai-Safety Assessment Tool)”, a tool
developed inhouse in order to quantitatively evaluate and analyze the healthand safety level of its business sites, address vulnerable areas, and raise
the overall level of health and safety. The results of the evaluation are being
linked to the KPIs of the management and business site managers, withthe aim of enhancing health and safety leadership and promoting activities
to prevent workplace accident. The evaluation is composed of safety,
health, fire, and environment sectors. It utilizes specific indicators such as
the achievement of accident reduction targets, the management of work
stoppage accidents, and assessments of the health and safety roles andresponsibilities of leaders.

Composition of H-SAT
AreasManagement System
Assessments

On-Site Workplace
Inspections

SafetySafety meetings bymanagement, etc.

Robot protection
devices, etc.

HealthManagement ofmusculoskeletal
diseases, etc.

Ventilation facilities,
etc.

Emergency response
systems, etc.

Fire-prone areas, etc.

Environmental facilities
licensing, etc.

Air pollution prevention
facilities, etc.

Firefighting

Environment

Application of Safety Design Criteria Hyundai is establishing andexpanding safety design criteria that include warnings for hazardous
areas and facilities, instructions or guidance for emergency situations,and safe behaviors to be followed during work processes. Safety Design
encompasses the development and application of measures based on theconditions and state of the workplace, such as restricted access, warnings
for fire hazards and falling objects, the use of personal protective equipment,
emergency evacuation procedures, and guidelines for safe behavior prior
to commencing work. In addition, safety designs are attached to places
or facilities that workers can easily recognize, and training is conducted onmatters necessary for workers to understand the related contents. Safety
design can be applied to various areas such as new construction andimprovement projects in the workplace, logistics handling areas, automatedtransport systems, and lifts for material handling, among others. It is
expected to show a high degree of effectiveness in reducing accidents.
Health and Safety Training Hyundai ensures that all its employees areable to access health and safety training easily and conveniently via an
online education platform. The online education videos, titled “Future Safety
Education Content”, consist of six episodes, including six in-depth videos
and 30 micro-learning videos. They cover various topics related to safety
regulations, accident prevention, and major disaster prevention, providing
diverse contents for employees. In particular, starting in October 2022, we
further increased employee accessibility to education by enabling them toreceive regular health and safety education via mobile devices. In addition,
Hyundai operates VR experience-based safety education contents andfacilities where employees can wear VR devices to experience simulated
hazards in virtual reality, enhancing their awareness of safety. Hyundai
also provides health and safety education to not only its employees but toall its subcontractors and SMEs in the same industry through the Global

Partnership Center and the Foundation for Industrial Safety Partnerships.
Furthermore, Hyundai requires all partner companies entering the workplace
for work or construction purposes to complete pre-entry safety education.
Application of Wearable Devices Hyundai is developing and adopting
wearable devices with improved functionality and convenience to prevent
musculoskeletal disorders among its workers. The first industrial wearable
device, “CEX”, is a knee-joint-assist robot designed to help workers maintaina seated posture. Despite its lightweight design of 1.6 kg, it can support aweight of up to 150 kg. In addition, it can be adjusted to suit the user’s heightand posture, thereby reducing approximately 40% in the activation of thewaist and lower body muscles, significantly improving work efficiency.
Meanwhile, “VEX” is a vest-type wearable robot that assists workers who
engage in overhead tasks for long periods. Weighing only 2.5 kg, it does notburden the worker, and its joint structure and springs are combined withbody movements, enabling it to exert a force of up to 5.5 kgf.
Launching of Hyundai Motor Group’s Foundation for Industrial Safety
Partnerships In September 2022, Hyundai, in partnership with six Groupaffiliates, established the Foundation for Industrial Safety Partnerships toenhance the safety management capabilities of SMEs in industries such as
automotive parts manufacturing, steel, and construction. The Foundation’s
mission is to support SMEs in establishing independent safety management
systems and acquiring advanced safety management capabilities, with theaim of preventing safety accidents and major disasters, and eliminating
the root causes of risks. The Foundation carries out projects to improve
the overall safety level of industries, including small subcontractors, and topromote a culture of mutual safety, while fostering a strong commitment
to safety as a top priority across the entire group of companies, as well as
among subcontractors and SMEs.

Creation of a
Sustainable Safety
Ecosystem

1.	Safety management system inspection
and technical support projects aimed atpreventing industrial accidents
2.	Education and training support projects
designed to foster professional humanresources and improve quality among
others3.	Safety information and data support
projects, such as safety-related bestpractice seminars
4.	AI-based utilization support projects, suchas smart safety management technology
5.	Awards for outstanding SMEs and forcontributors to improving industrial
management
6.	Win-win cooperation fund support projects
to vitalize business safety and safety
management
7.	Scholarship support for bereaved families ofworkers who have died in serious accidents
8.	Other projects related to improving theoverall safety level of the industry

Health and Safety Training Programs in 2022
Classification

TargetTraining Hours

New hire training

New hires (5,516 persons)

8 hours and more per year

Special training

Those subject to special training (39 types)

16 hours and more per year

Regular training for all employees

On-site staff (33,045 persons)

6 hours and more per quarter

Regular training for managers andsupervisors

On-site supervisors (1,531 persons)

16 hours and more per year

Training on operational changes

Workers who change work

2 hours and more

Competency/
specialized training

Competency-based training

Safety managers, safety promoters, etc. (253 persons)

Up to 2 nights and 3 days

Psychologicalsafety counseling

Psychological counseling andtraining

Employees, employee families, subcontractors, etc.
(1,449 persons)

About 1 hour each

Mandatory
safety training

Business Plan of the Foundation
for Industrial Safety Partnerships

VEX – vest-type wearable robot; and CEX– chair-type industrial exoskeleton robotic system

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

55

Health, Safety and Welfare of Employees
PROMOTION OF HEALTH AND SAFETY ACTIVITIESHealth and Safety Management Activities Hyundai conducts risk
assessments and health and safety diagnoses, measures noise and hazardous
chemicals in the work environment, and provides emergency response training
for workplace health and safety management. Based on these efforts, Hyundai is
promoting safety measures, preventing health hazards, and enhancing its healthand safety activities regarding the work environment, machinery, instruments,and facilities. In 2022, we strengthened construction safety supervision on
holidays at domestic business sites, safely carrying out 3,646 cases of facility
construction work. Furthermore, we conducted fire safety inspections at our
production plants, research laboratories, service centers, and facilities related toeco-friendly vehicles. A total of 101 improvement measures were identified, andaction plans have been developed for their implementation.
Furthermore, we conduct investigations and assessments of hazardous factors
to prevent the kinds of occupational diseases that may affect our employees.
We also carry out post-measures such as individual health check-ups andtreatment. We have developed measures and programs for the prevention of
musculoskeletal disorders and continue to implement activities designed to
improve employees' lifestyle habits and prevent job-related stress.

In particular, at our workplaces, we plan and promote health management
campaigns, including smoking cessation clinics and smoking cessation camps,
and we are also promoting smoke-free facilities.
Preventing Serious Accidents at Workplaces Along with compliancewith the relevant laws and regulatory requirements, such as the Serious
Accidents Punishment Act, we plan and operate company-wide programsfor the prevention of serious accidents based on domestic and international
trends in major accident response. To prevent major accidents, we regularly
conduct safety inspections to identify on-site hazards, store and manage thedata obtained through these inspections in a database, and establish andimplement major accidents prevention measures based on analysis of thedatabase. Furthermore, we establish and manage post-incident response
measures and measures for preventing recurrence in the event of industrial
accidents, including major accidents. We also distribute accident case studies
and examples of excellent industrial safety management to ensure that accident
prevention activities are continuously carried out on-site.

Health and Safety Management Activities

Risk
Assessment

Tags ofHealth and
Safety Signs

Safety Measures
for Working
Environments

Safety Measures for
Machinery, Equipment
and Facilities

Preventive and Health
Measures against Health
Hazards

Provision of
Personal Protective
Equipment

We identify hazards andrisks related to the work
environment, machinery,equipment, raw materials,
gases, vapors, and work
procedures; and based on
the findings, we implement
preventive measures tomitigate risks and hazards.

We put the safety sign
tags in identifiablelocations to warn
employees and visitors ofhazardous or risky areas,
facilities, or substances;and provide guidanceon how to behave inemergency situations.

We set management
criteria for areas where
there is a risk of falls,
collapses, drops, orother potential hazards;
and perform regular
maintenance andinspections.

We take protective
measures that take into
account the functions
and characteristics ofmachinery, equipment,
and facilities, and perform
regular maintenance andinspections to eliminate
potential hazards.

To prevent health hazards
caused by raw materials,
gases, vapors, hightemperatures, noise, etc.,
we implement necessary
preventive and healthmeasures.

We provide appropriate
personal protective
equipment (PPE) for thework environment andensure the availability andmanagement of spare
PPE. Wearing protective
equipment is mandatory.

Health and Safety
Diagnosis

Response to
Emergencies

Management ofHazardous Substances

Activities for
Health Promotion

Support for Health and
Safety at Subcontractor

We conduct health andsafety diagnoses of
workplaces that havea high risk of safety
accidents, such as falls,
collapses, fires, explosions,and leaks of hazardous
materials.

We conduct training
based on emergency
scenarios such as falls,
collapses, fires, andleaks of hazardous
materials. We also inspect
the functionality of
firefighting equipment ona regular basis.

We compile and provide
a list of material healthand safety information forthe handling of hazardous
substances. We also
regularly measure andaddress physical andchemical hazardous
factors, and implement
improvement measures.

We conduct regular
health check-ups andimplement programsfor the prevention ofwork-related diseases
such as respiratory
and musculoskeletal
disorders, as well as
managing job-related
stress.

We have established a health We conduct investigations
and safety managementof the causes of any
system for subcontractors
accidents that may occur
to substantialize risk
and develop measures toassessments, and have
prevent their recurrence.
strengthened accident
We also perform statisticalprevention through close
analysis of industrial
management including
accidents and incorporate
diagnosis, education, andthem into our performance
consultation.
improvement goals.

Investigation of
Accidents

Preventing Serious Accidents at Subcontractors To improve the safety
management level of its subcontractors, Hyundai provides safety education andoperates a reward system for excellent safety management partners. We also
have developed a subcontractor safety management system that enables us toassess potential accident prevention capabilities in advance and select qualified
subcontractors in the first place. To establish a safety management system forour subcontractors, we have carried out safety management activities such as
registering subcontractors’ information, evaluating our subcontractors’ safety
management competency (1,515 cases), operating a safety council (160 times),and conducting joint inspections (48 times). In addition, we strived to help our
subcontractors prevent serious accidents by conducting special construction
safety training (3 sessions) for the CEOs of 120 construction companies andsafety supervisor training for internal subcontractors (4 sessions).
Comprehensive Emergency Response Drills Hyundai has set in placea robust emergency response system to respond actively to emergency
situations, including disasters such as fires, explosions, and leakages, as well
as non-natural emergencies like cyber-attacks and information breaches.
We conduct comprehensive emergency response drills twice a year, during
the first and second halves of the year, with the participation of all employees
at each workplace. This training is aimed at maintaining and improving
employees’ ability to respond to emergency situations. It includes developinga schedule, creating scenarios for different situations, implementing response
protocols for each emergency scenario, and organizing the participants into
groups and assigning specific tasks to each group.

Main Activities to Prevent Serious Accidents at Workplaces

The training coordinator evaluates whether the training is being conducted inaccordance with the established standards and procedures. The evaluation
criteria for the comprehensive emergency response drills are continuously
revised to enhance the level and intensity of the training. The emergency
response scenarios and response systems are also being updated by analyzing
deficiencies and implications identified during the training.
Efforts to Prevent Industrial Accidents Involving Subcontractors Hyundai
has strengthened external collaboration for on-site and process safety
management at each business site by considering the nature of thebusiness operations, the types of subcontractors, and potential risks
comprehensively. In 2021, the Asan Plant entered into a business agreementwith its key subcontractors (30 in total) to create an industrial accidentfree automobile parts manufacturing industry. Efforts are being madeto support subcontractors through safety diagnosis consulting and toestablish a foundation for collaborative safety inspections between theautomakers and subcontractors. In 2023, the Jeonju Plant entered into abusiness agreement for the prevention of major accidents and overall safetywith all its subcontractors. Joint on-site inspections between labor andmanagement were conducted, focusing on three major types of accident(falls, entanglements, and collisions) and eight major risk factors. Basedon the results of the on-site inspections, guidance was provided for the
improvement and implementation of safety measures in those areas where
deficiencies were identified.

Investigation Procedures And Step-by-step Actions inCase of a Safety Accident

Description of Activities

Step

Regular mobile
safety inspections•	Continuous risk management by conducting
mobile-based safety checks on a regular basis
to ensure the safety of work processes andoperating facilities

Secure a statement

Securing the statement of the first eyewitness

Process confirmation

Check the process and listen to the cause of
the accident

Installation of smart
motion sensors inblind spots•	Installation of smart motion sensors in safety
management blind spots to identify risk factors
and prevent accidents in advance

Photo shoot

Entire process and accident reenactment
photography•	Installation of human body detection sensors,
etc. to reduce the risk of accidents caused
by workers’ negligence when operatingtransportation machinery such as forklifts

Cause analysis

Root cause analysis of accidents

Installation ofhuman bodydetection sensors

Take measures

Apply the most appropriate countermeasure after
establishing several countermeasures

Development ofsafety management
regulations•	Development of step-by-step regulations for
managing non-routine construction work
conducted during non-working hours, fromdesign to construction

Classification

Action*	Behavioral instructions for an accident investigation: In the event of an accident, follow
the steps above and do not omit a step or rush through the steps**	Prevent missing information by conducting an accident investigation that is basedon the “5 Ws and 1 H”, and start from large causes and then move onto small causes(top down approach)1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

56

Health, Safety and Welfare of Employees
Customized Welfare Benefits
EMPLOYEE WELFARE SYSTEM
Flexible Work Hours Hyundai implements a flexible working-hours
system that allows employees to choose their own most efficient working
hours, taking into consideration the nature of their work. This flexible systemapplies to certain job positions, allowing employees to select their own startand end times for work within the available time slots, excluding mandatory
working hours. By enabling employees to determine their own efficient
work hours through the flexible working-hours system, Hyundai aims toenhance employee engagement and support performance outcomes.

Hybrid Work System Hyundai has put in place a hybrid work systemthat utilizes IT technology to enable employees to work flexibly without
being constrained by a specific location. To ensure smooth remote work,
Hyundai has established a mobile PC environment, VPN access for external
connectivity, and online video conferencing servers, thereby creating avirtual work environment. This allows our employees either to work-fromhome arrangements or to work from designated shared spaces rather than
traditional office settings.

Support System for Maternity, Childcare, Family Care, and Employee HealthClassification

Maternity

Childcarefacilities orcontributions

EmployeehealthFamily care

SystemDescription•	The daily working hours of employees in early pregnancy (within 12 weeks) or late pregnancy (beyond 36 weeks) are reduced by
two hours. The reduction can be taken either as 2 hours after the start of the working day, 2 hours before the end of the working day,or 1 hour after the start of the working day plus 1 hour before the end of the working day.

Maternity leave•	Providing a 90 days maternity leave to female employees before and after childbirth (120 days for multiple pregnancies)

Bereavement leave•	Offering a leave whose period is determined by the pregnancy period in case of miscarriage or stillbirthPartner’s leave•	Offering up to 10 days of partner’s leave within 90 days of childbirthChild Happiness Travel•	Providing hotel lodgings and meals within six months before and one year after a childbirth to employees and their spouses,
which includes up to two nights at hotels designated by the company

Parental leave•	Providing up to two years of leave of absence for each child under the age of 8 or a child in second grade to both male and female
employees(Unit: KRW million)

Classification

As of 2021 year-end

As of 2022 year-end

5,840,100

5,985,348

3,235

2,572

5,843,335

5,987,920

Insurance products
Others
Total

Retirement Planning Programs in 2022
Targets

Managers or below (Union members)

Senior employees

CourseFuture planning 57-60

Counseling

Basic course in planning for life
after retirement

Intensive course in planning forlife after retirement

Age

57-60

57-60

59

60

•	The reduced working hours can be taken in conjunction with parental leave or separately, but the total usage of reduced working
hours, including parental leave, cannot exceed 2 years.

Participants

2,716

775

351

390

•	Employees can take a reduction of 2 or 4 hours before starting work, a reduction of 2 or 4 hours before the end of work,
or a reduction of 2 hours after starting work plus 2 hours before ending work.

Type

Lectures, experiential learning,etc.

Counseling

Lectures and counseling(online)Lectures and counseling(online)•	Channing perception about
retirement and exploration ofcareers/interests•	Career analysis and decisions
according to individuals’
desired paths•	For employees with children under the age of 8 or in the 2nd grade of elementary school, both male and female employees are
eligible for a maximum of 2 years of reduced working hours per child. (The reduced working hours can be divided twice in the firstyear, and they can be divided once in the second year)

Providing breast-feedingtime• For female employees with infants under 1 year old, a paid lactation break of 120 minutes per day is provided

In-house daycare centers•	Offering married employees and the children of single-parent families access to in-house daycare centers – available at fivelocations: Headquarters, Ulsan Plant, Asan Plant, Jeonju Plant, and Namyang Technology Research Center

Workplace stressmanagement

Retirement Planning Hyundai operates various programs to support
and assist employees with their post-retirement planning. These programs
include differentiated future planning courses and specialized educational
programs based on employees' positions and job functions, which havebeen provided to a total of 4,232 persons.

Retirement Pension Asset under Management

Reduced hours during
pregnancy

Reduced hours duringchildcare period

RETIREE SUPPORT PROGRAM
Retirement Pension System Hyundai is implementing a retirement
pension scheme for all its employees to enable employees who are eligible
for retirement to prepare for life after retirement and old age. The retirement
pension is protected by the external accumulation of retirement pension
reserves, and education on the relevant products is provided to subscribers
to create a stable foundation for employees after their retirement.

•	Operation of the Talk Talk Center (a psychological counselling center) and the Employee Mindfulness Class(offering psychological counseling and emotional well-being programs that address childcare, job-related stress management, andconflict resolution within the workplace)•	Operation of an International SOS service for employees stationed overseas or GEP employees, as well as their accompanying
family members (support for stress management)

Sports and health initiatives•	Operation of dedicated fitness centers (gymnasiums) and exercise programs for employees at our headquarters, the Ulsan, Asanand Jeonju plants, and the Namyang Research Center

Family care leave•	Offering up to 90 days of family care leave per year to employees whose parents, children, spouses, or spouses’ parents need caredue to illness, accident, or old age

Curricula•	Self-examination forawareness of changes andhappiness in old age•	Customized education andconsulting according toretirement plans•	One-on-one customized
career counseling•	Re-employment, farming, selfdevelopment, lifetime design,business start, etc.

•	Financial diagnosis andplanning

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

57

Sustainable Supply Chain
With “Win-win Growth Agreement” leading suppliercollaboration in the automotive industry, Hyundai
enhances the foundation for win-win growth, throughoperating the Transparent Purchase Practices Center,
Foundation of Korea Automotive Parts Industry
Promotion, and Global Partnership Center. Based on a“Win-win growth agreement” aimed at leading winwin cooperation in the automotive industry, Hyundai
operates the Transparent Purchase Practices Center,
Foundation of Korea Automotive Parts Industry
Promotion, and Global Partnership Center, thereby
strengthening the foundation for win-win growth.
We are also establishing a systematic cooperation
system with suppliers, the government, and relevantorganizations for a successful transition to a future ofmobility, including electrification and autonomous
driving. In our efforts to promote automobile industry,
we run capability-building programs for quality,
technology, and overall management of suppliers;
increase joint R&D activities and patent applications;provide financial and tax support, and facilitatebusiness diversification. Going forward, we will establish
a win-win growth model that goes beyond fair trade
between large companies and SMEs, and thus develop
competitiveness, productivity, and technologicalcapabilities of the entire automotive industry.

Composition of the Transparent Purchase Practices Center Website

Establishing a Win-win Growth Ecosystem
EXPANDING A CULTURE OF WIN-WIN GROWTH
Fair Trade Agreement Hyundai signs “fair trade agreement” to eliminate
unreasonable practices that may arise in supplier trade relations and to
fully establish fair trade between Hyundai and suppliers. We share four
major measures about subcontracting and the Supplier Code of Conduct,
while also operating corruption and irregularity report channels, in order toprevent such unfair conduct as delayed payments. We strive to enhance thecompetitiveness of an industrial ecosystem by providing training, technology,
and fund support to suppliers, and we are also improving payment conditions
for tier-1 as well as tier-2 suppliers. Since signing the first agreement in 2008,
we have concluded the 14th agreement with our suppliers in 2022.
Signing of a New Win-win Growth Agreement In October 2022, Hyundai
Motor Group entered a Win-win Growth Agreement in pursuit of “support
for win-win in the automotive industry and enhanced competitiveness in the
future mobility” with the Ministry of SMEs and Startups and Foundation of
Korea Automotive Parts Industry Promotion. The agreement’s main content
includes contributing funds to stabilize the supply chain of parts suppliers,
spreading the payment linkage system, supporting the construction andadvancement of smart factories, establishing joint investment-type R&D
funds, matching startups with suppliers and supporting their technologicalcooperation, and providing consulting for suppliers’ business diversificationand facilitating commercialization.
Building Long-term Cooperation System Hyundai pursues win-win
growth with tier-1 suppliers that supply parts to it directly, tier-2 suppliers
that supply parts to tier-1 suppliers, and general suppliers that deliver
general raw and subsidiary materials. Through a long-term cooperation
system with suppliers, we actively support them not only in production
technologies but also in R&D efforts.
Outcome of Long-term Cooperation System
Average duration ofbusiness relationship35 years (the average lifespan of small andmedium-sized Korean manufacturers is 13 years)

Size of corporate growth

Sales volume increased by 4.4 times from 2001

Joint entries into
overseas markets

730 suppliers have entered overseas markets with
Hyundai

STRENGTHENING THE FOUNDATION FOR WIN-WIN GROWTH
Supplier Grievance HandlingTransparent Purchase Practices Center It is important for Hyundai toprovide suppliers with guidelines on ethical conduct and carbon neutrality
in order to establish a fair and transparent win-win partnership. To thisend, Hyundai Motor Group operates the Transparent Purchase Practices
Center on its win-win growth website while operating a “suggestion box fortransparency and ethical practices” and “suggestion box for tier-2 and tier-3
suppliers” so that its suppliers can voice their difficulties and propose various
system improvements. We are making utmost efforts to establish fair tradepractices and strengthen transparency throughout the supply chain, such as
implementing a “retaliation prohibition policy” so that even when a supplier
reports Hyundai’s fair trade law violation to a relevant organization or raises anobjection with content in a contract with Hyundai, we do not suspend tradewith the supplier or restrict traded products and quantity.
Supplier Competency Building
Global Partnership Center Global Partnership Center (GPC) is helping
suppliers enhance their competencies and competitiveness in the world’s
automotive industry based on the principle of “establishing a virtuous cycle
in which Hyundai Motor Group and our suppliers can grow together.” In
addition to providing training programs targeting tier-1·tier-2 suppliers, theCenter provides training facilities and instructors to suppliers in need of theirown training. It also offers 18 tracks and some 437 training programs in fivecategories – future competitiveness, global competency, leadership, nurturing
automotive industry experts, and basic job training – for tier-1·tier-2 suppliers.
Supplier Training in 2022
No. ofParticipants

Remarks

Quality andTechnology School

2,869

13 customized training
courses

General training, etc.

1,697

General training,on-site training, etc.

Training by industry,etc.

63,082510 courses

Classification
Foundation of Korea
Automotive Parts
Industry Promotion
GPC(Unit: Persons)Transparent Purchase Practices Center

Supplier Training in 2022

Management Consulting for Suppliers Hyundai offers management
consulting to suppliers, free of charge, through which we share professional
experiences and know-how so that suppliers can strengthen their
management capabilities in the areas of R&D, production, quality, logistics,
cost, and management activities.

No. of Suppliers Received Technical Training orManagement Consulting■ Technical Training

Classification

GPC

No. of Participants

13 customized training courses

General training, etc.

1,697

General training, on-site training, etc.

Training by industry, etc.

63,082510 courses

67,648■ Management Consulting

108
54

2019

106
52

2020

93
46

2021

109
55

2022

110
30

Remarks

2,869

Quality and Technology School(Unit: No. of companies)

2018(Unit: Persons)Foundation of Korea Automotive Parts Industry
Promotion

Total

Technical Training for Suppliers Hyundai provides technical training throughthe Foundation of Korea Automotive Parts Industry Promotion to help both
metal suppliers (presses, heat treatments, welding, metal plating, forging) andnon-metal suppliers (rubber, painting, electrical & electronics, IT) improve theirparts quality and productivity. We anticipate these efforts will lead to improve
suppliers’ quality defects, reduce raw material purchase costs, and increase
productivity.

67,648Total* As of 2022

• Supplier Code of Conduct•	Guidelines on implementing carbon neutrality•	Four major measures about subcontracting•	Guidelines on retaliation prohibition•	Suggestion box for transparency and ethical practices•	Suggestion box for tier-2 and tier-3 suppliersFoundation of Korea Automotive Parts Industry Promotion Hyundai
operates the Foundation of Korea Automotive Parts Industry Promotion
together with Kia and Hyundai MOBIS to strengthen automotive parts
suppliers’ overall capabilities in the areas of quality, technology, andmanagement. We run various programs, including field instruction activities
and training, as a way to contribute to improving quality and technologicalcompetencies as well as to nurture talent in the automotive parts industry.

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

58

Sustainable Supply Chain
ENHANCING QUALITY COMPETITIVENESS
5-Star System Hyundai sets in place the “5-Star System” which quantitatively
evaluates suppliers’ level of quality, technology, and delivery level to provide
the evaluation results so that suppliers can set detailed improvement goals
and achieve them. We provide incentives to 5-star-certified suppliers, such as
giving advantageous payment conditions and priority for new car development.
Through the 5-Star System, suppliers can expect such effects as curtailing
quality control costs and developing independent export capabilities, in addition
to enhancing their competitiveness in quality, technology, and delivery.
Quality Evaluation of Tier-2·Tier-3 Suppliers (SQ Mark) Hyundai operates
the “Supplier-Quality Mark” program with an aim to identify professional
business types that have a major impact on automotive parts quality andimprove the quality of tier-2·tier-3 suppliers in the respective businessareas. We evaluate tier-2·tier-3 suppliers based on process management
activities, such as raw and subsidiary material inspection criteria, facility
preservation and daily inspection activities, and creation and improvementof operation standards, as well as quality management activities, including
finished product inspections, corrective measures, and continuous field
improvements. The SQ Mark is provided to outstanding suppliers.
Activities to Improve Durability Hyundai shares its know-how inenhancing durability with suppliers in order to help them effectively address
their chronic issues (customer inconveniences and economic losses, suchas claims and recalls). We have a technology meeting three times a year
to improve dependability issues that occur at suppliers. In addition, we arecollaborating with around 100 tier-1 suppliers to resolve dependability issues.

5-Star Evaluation Items

Quality Education for Suppliers Hyundai holds the “monthly supplierquality meeting” that is participated in by all local supplier representatives at
all plants in Korea and abroad every month to secure and enhance suppliers’
quality reliability. At this meeting, we share best practices and matters that
require improvement concerning delivery quality. We also monitor the
progress and effectiveness of implemented improvement measures. In
addition, once mass production of a new vehicle is finalized, the head officedispatches an employee in charge of quality to the overseas plant to support
supplier education, thus taking measures so that suppliers’ delivery level is inline with our quality standards.
Quality Management Seminars for Suppliers Hyundai holds quality
management seminars every year for the CEOs and employees of all its tier1 suppliers. At the 2022 quality management seminar, we introduced casesof responding to quality issues in the US and explained about the quality
management items that suppliers needed to manage in the country througha lecture by a third-party auditor (TPA). The Quality Division introduced
Hyundai’s key quality assurance promotion strategies while the Procurement
Division guided the roles of suppliers in strengthening the quality capabilities
for new vehicle development and securing the quality competitiveness ofmass-produced vehicle parts. Suppliers introduced examples and effects
of improving qualitative quality and shared difficulties in responding to
the transition to electrification and the knowledge they have gathered toovercome them.

2022 Quality & Safety Training Programs (Suppliers)

Quality 5-Star

Technology 5-Star

Delivery 5-Star• Quality
management system• Defect rate
• Claim
reimbursement ratio• Quality management
performance, etc.

• Technology development
personnel, investment• New technology
development, patent• Parts development work
system (planning/design/evaluation), etc.

•P
 roduction line
stoppage cases,
time, reimbursement
amount (ratio)• A/S parts delivery rate•C
 KD parts delivery
rate

Quality related training

TargetCycle

No. of suppliers

Quality management
seminar (face-to-face)

All suppliersin KoreaOnce a year345

Quality management
training (Monthly quality
meeting)

All suppliersOnce
a month

1,680

IMPROVING TECHNOLOGY DEVELOPMENT CAPABILITIES
R&D Technical Support for Suppliers Hyundai runs a win-win growthprogram whereby it shares its R&D and technology development know-how
with suppliers, and thus helps suppliers strengthen their capabilities in areas
which need improvements. The supplier R&D technical support program
consists of case studies and function/design concept training to enhance their
quality mindset; customized technical support that conducts prior analysisof areas for R&D improvements and helps suppliers improve key pending
matters; and R&D competency-building support that improves productdevelopment capabilities by using new technologies and methods. We look
into supplier requests in the process of quality improvement, customized
technology, and R&D capability-building support, and then reflect them in
improving the technical support program. We also run consultative bodies andexchange meetings among suppliers in the same industry to continue mutualcommunication and cooperation.
Sharing Technology Patents Hyundai shares patent, free of charge, with
suppliers, and transfers patents that suppliers need. When a supplier requests
for a patent transfer, we conduct on-site investigations and consultations
regarding the supplier’s major business areas; technologies that the supplierowns and is developing; supplier’s patents; and patent that the supplier hopes
to be transferred. By having discussions with the supplier, we finalize thepatent transfer and sign a patent agreement. We also hold New Technology
Exhibitions after patent transfers to share information on cases of patentapplication to advance R&D and patent application to products.
Building Smart Factories Hyundai implements a smart factory-building
project for SME tier-1·tier-2 suppliers. The project uses ICT to integrate theentire production process, ranging from product planning to sales, to produce
customer-tailored products at minimal costs and time. A total of KRW 15 billion
was contributed to the project from 2019 to 2021 to provide consulting andfacility investments required for building a smart factory to 660 suppliers sothat they can switch to a smart factory. The smart factory-building project is
categorized into different levels in consideration of the status of production
facilities of tier-1·tier-2 suppliers. They include the basic level which enables
partial standardization, data management, and real-time production information
monitoring; mid-level which supports collected information-based control andoptimization of decision-making through simulations; and advanced level where
monitoring to control-optimization takes place autonomously.
Guest Engineer System Hyundai sets in place a guest engineer system,
through which parts suppliers’ research staff in charge of design/evaluation takepart in our new car development process. We provide a free office space where
supplier researchers can stay, as well as the facilities, equipment, and test sites
needed for parts performance evaluation. We also transfer our parts design
and performance development know-how. Through new car parts design andperformance development collaboration, Hyundai and suppliers anticipate
to raise parts and performance development efficiency, develop quality inadvance, and nurture technical experts at suppliers.

Benchmarking Advanced Technologies Hyundai operates the technicalmaterial escrow system for safe storage of suppliers’ key technical materials
and trade secrets, and proof of technology development in the event ofleakage of a supplier’s key technology or a dispute. We develop technologies
jointly with suppliers and then make patent applications together toprevent the possibility of infringement upon small- to mid-sized suppliers’
technologies and patents. We also strive to protect supplies’ technology
directory or indirectly by providing online patent education on patentapplication and patent search methods and helping them reduce theirpatent cost.

R&D Supplier Tech Day
In October 2022, Hyundai held the “2022 R&D Supplier Tech Day”,
where suppliers with outstanding new technologies were awarded
and suppliers’ technologies were mutually exchanged, to strengthen
suppliers’ R&D capabilities and promote joint growth based on
mutual cooperation. We chose and rewarded four suppliers withsignificant R&D achievements, including a dual power supply
controller for autonomous driving systems; coolant and refrigerantsystem parts modularization; integrated vehicle body-battery
underbody structure; and high-voltage battery packs. In addition, a
total of 32 suppliers participated in a video exhibition to introduce
new technology and share 60 R&D cases. Useful information
was also shared on ways of cooperation to develop global R&D
competitiveness based on win-win growth.

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

59

Sustainable Supply Chain
STRENGTHENING A FOUNDATION FOR SUSTAINABLE GROWTH
Making Cash Payments and Adjusting Raw Material Prices Since 2006,
Hyundai has been making payments in cash to MEs and SMEs with sales lessthan KRW 500 billion and in promissory notes (60 days) to large companies
and MEs with sales more than KRW 500 billion. Also, we make payments
on a weekly basis. For large companies, MEs, and SMEs that supply partsfor exports, we make payments fully in cash once a month. In addition, toease the burden on suppliers that is caused by raw material price increases,
Hyundai absorbs the impact from raw material price changes. In case ofsteel plates and precious metal, we operate a system whereby we directly
purchase the items at international prices and supply them to suppliers.
In case of aluminum and plastics, we adjust payments made to suppliers
according to international prices.
Joint Entries into Overseas Markets and Support for Increased Exports
Hyundai is jointly entering overseas markets with suppliers to support theircontinued growth and globalization. As of the end of 2022, we expanded to
global markets with a total of 730 suppliers, including 341 tier-1 suppliers and
389 tier-2 suppliers, through which suppliers have harnessed opportunities
to receive orders from overseas OEMs. To help Korean parts suppliers
increase overseas exports, we are supporting the establishment of joint
logistics and proof-of-origin systems. We identify difficulties experienced bysuppliers in the export process and continue to explore activities that makeactual improvements.

Support to Shift to Future Vehicle Parts Business Internal combustion
engine parts business faces a range of challenges due to the expansionof electrification and shift to autonomous driving. In our effort to help our
suppliers preemptively respond to the future vehicle market by moving
forward with business diversification, we built a comprehensive support
system together with the Korea Automotive Technology Institute andFoundation of Korea Automotive Parts Industry Promotion. In addition, we
operate the “automotive parts company innovation support” program thatprovides analysis of R&D capabilities and consulting on future direction,
support for discovery and selection of new business items in relation to future
vehicles, and support for patent analysis and business reorganization for
SMEs that are preparing for expansion of the future vehicle parts business.
We also have the “business reorganization partnership selection and support”
program that provides necessary support for SMEs that are expanding theirbusiness in future vehicle parts to receive government approval on businessreorganization. Incentives are provided to companies approved for businessreorganization, including tax benefits, loan interest discounts, and applicationof additional points when applying to build a smart factory.

STRENGTHENING THE TIER-2 AND TIER-3 COOPERATION NETWORK
5-Star System for Win-Win Cooperation In our efforts to build win-win
relationship between tier-1 suppliers and tier-2 suppliers and to establish aculture of win-win growth, we operate the “5-Star Win-win Cooperation”
system, which evaluates tier-1 suppliers’ win-win efforts toward tier-2
suppliers and reflects the results in the bidding process. We evaluate tier1 suppliers’ win-win activities toward tier-2 suppliers, and evaluation items
include payment terms; including cash payment ratio and payment period;
contractual fairness, such as use of a standard subcontract; and win-win
support, including management fund, R&D, and productivity support. We
also conduct qualitative evaluations on tier-2 suppliers’ subjective evaluation
about tier-1 suppliers’ win-win activities. Survey items include transaction
relationship, including fair trade and transaction conditions; cooperation
relationship, such as for management fund, R&D, and productivity; andoverall operations, such as vision-sharing and implementation system.

5-Star System for Win-win Cooperation
Support for Innovation ofAutomotive Parts Company
in 2022•	Consulting to 20 companies
making preparations

Business Reorganization
Partnership and Support
Program in 2022

Goal

Win-win cooperation and joint growth
between tier-1 and tier-2 suppliers

OutlineEvaluate tier-1 suppliers’ win-win cooperation
efforts toward tier-2 suppliers and reflect theresults in the supplier selection (bidding)
process (Evaluate once a year)•	Identified 27 support companies•	Supported business reorganization
approval for 27 companies

Major Fund Support Programs for Suppliers
Future Growth Mutual Fund

• Deposited KRW 37.4 billion, provided KRW 93.5 billion- Provide investment funds at low interest rates for quality and productivity improvements of tier-1 andtier-2 suppliers (Industrial Bank of Korea)

Future Growth Win-Win Fund

• Deposited KRW 100 billion, provided KRW 150 billion- Provide investment funds at low interest rates for quality and productivity improvements of tier-1 andtier-2 suppliers (Hyundai Commercial)

Tier-1 suppliers’ win-win
cooperation activity
performance(Quantitative evaluation: 50%)

Win-win Mold Equipment Fund

• Deposited KRW 50 billion, provided KRW 75 billion- Support suppliers’ financing based on new model mold and equipment collateral value and theirinterest rate stability• Payment terms• Transaction relationship• Fair contract• Cooperation relationship

Win-win Cooperation Fund

• Provided KRW 50 billion- Support labor costs of tier-2 and tier-3 supplier workers with funds raised by Hyundai• Win-win support• Operational systems

Dedicated Loan for Tier-2 and Tier-3 Suppliers• Provided KRW 200 billion- Provide investment funds intended to improve the management environment of tier-2 and tier-3
suppliers and operating funds at low interest rates

	(cash payment ratio,
payment period, etc.)	(use of a standard contract,etc.)	(financial, R&D, productivity
support, etc.)

Tier-2 suppliers’ subjective
evaluation about win-win
cooperation(Qualitative survey: 50%)	(fair trade, transaction
conditions)	(financial, R&D, productivity
support, etc.)

	(vision-sharing,
implementation system, etc.)

Improving Quality and Technology of Tier-2·Tier-3 Suppliers Hyundai
has been making continued efforts to improve quality, technology, andproductivity of tier-2 and tier-3 suppliers by dispatching experts with
automobile-related expert skills and know-how to tier-2 and tier-3 suppliers.
Win-Win Payment System Hyundai has set in place a win-win payment
system that enables tier-2·tier-3 suppliers to be paid in cash on the payment
date and cash in their payments in advance. Within the limit of the accounts
receivable bond (payment) issued by Hyundai, a tier-1 supplier issues a bondto a tier-2 supplier and a tier-2 supplier issues a bond to a tier-3 supplier for
settlement.
This system ensures tier-2 and tier-3 suppliers to receive payment on thepayment date. Tier-1 and tier-2 suppliers that make payment can receive
financial benefits, including interest income from the win-win payment deposit
account and commission income from early encashment of win-win payment.

Technical Training (Quality and Technology)
Composition

Technical experts in various production areas

Duration &Frequency

3 to 12 months per year, providing guidance on
shortcoming related to manufacturing technologies
free of charge

Areas

Listen to supplier opinions on key quality/technologyrelated difficulties and supports improvements; andprovide focused instruction on quality management
system operation to improve suppliers’ ability torespond to the Supplier-Quality Mark system

Quality and Management Consulting (Supplier Support Group)
Composition

Professionals with experience in the automobile
industry as senior executives

Duration &Frequency

3 to 12 months per year, providing consultation on
overall management, free of charge

Areas

Consulting on overall management, including
managing production, managing quality, andpioneering overseas markets

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

60

ESG Magazine

Sustainable Supply Chain
Supply Chain ESG Management
SPREADING ESG IN THE SUPPLY CHAIN
Enactment and Amendment of the Supplier Code of Conduct Hyundai’s
Supplier Code of Conduct stipulates basic matters in the areas of ethics,
environment, labor and human rights, safety and health, and management
systems that should be observed by all suppliers that provide goods andservices or signed a contract for other transactions. All suppliers that signed
a contract with Hyundai must comply with the Supplier Code of Conduct
and also recommend compliance with matters specified in the Code of
Conduct to the overall supply chain, including companies they trade with(lower suppliers).
Suppliers must consider the matters presented in the Code of Conduct intheir management decision-making and business operation processes, andactively respond to an ESG risk diagnosis and due diligence that Hyundai
carries out directly or through a third-party organization. In addition, in
accordance with Hyundai’s risk improvement recommendations, suppliersmust establish a risk mitigation plan and implement measures based on
mutual discussion. The BOD supervises and reviews important mattersrelated to supply chain ESG management plans and programs.
Implementing ESG in Supplier Selection Process Hyundai distributes
standard guidelines on safety, health, and environmental management andexamines the status of suppliers’ safety and environment accidents throughESG risk diagnosis and due diligence. We apply a penalty during supplierselection to suppliers that had an accident. When choosing a new supplier,
we evaluate the supplier’s quality management system, financial structure,and management capabilities while also evaluating its ESG including safety
and health, after which evaluation results are reflected in trade conditions.

Even suppliers we have been trading with can be subject to a penalty,
such as bidding restrictions, according to evaluation results. In addition,
we strengthened supply chain due diligence regulations and adopted theregulations to our website and basic contracts, thus demanding suppliers tocomply with supply chain ESG-related standards.
Receiving ESG Documents for Supplier Registration If we determine thata supplier is qualified for trade as a result of a supplier evaluation, we receivefrom the supplier its evaluation report, survey on actual conditions, financial
statements, as well as pledges on improving sustainability, including awritten ethics pledge, a written agreement on supplying eco-friendly parts, awritten quality pledge, and a written information protection pledge.
Current Status of Hyundai Suppliers Hyundai’s suppliers are in various
regions across the globe, including Korea, US, China, Europe, India, Latin
America, Southeast Asia, etc. Of these suppliers, those that supply core parts(hydrogen fuel cell parts, battery parts, control parts, electrification parts,etc.), have a low level of replaceability, or have a large trade volume arechosen and managed as significant (key) suppliers.
Tier-1 suppliers registered and managed in 2022 totaled 1,680 (purchasepercentage of 100%), consisting of 380 suppliers in Korea and 1,300
suppliers overseas. Of the tier-1 suppliers, there are 47 core suppliers(purchase percentage of 65%). In addition to tier-1 suppliers, we identify tier2 suppliers that have a significant impact on business operations. Number ofcore suppliers among tier-2 and lower suppliers stands at 24.

Hyundai Motor Company
Supplier Code of Conduct

Basic Principles of the Supplier Code of Conduct

Spreading and Disseminating ESG Among Suppliers
Win-win Growth Newsletter Hyundai produces the “win-win growth
newsletter” to provide information on programs that we operate for win-win
growth with suppliers and to share major policies and activities in the fields
of occupational safety, information security, and sustainability management.
The newsletter is issued every other month and distributed to all tier-1
suppliers through notices, the win-win growth portal (http://winwin.hyundai.
com), and the website of Hyundai Kia Automotive Suppliers Association.

Supplier ESG Improvement Roadmap Hyundai created the “Supplier ESG
Improvement Roadmap” to support suppliers’ sustainable development andsocially responsible activities. In accordance with the ESG improvement
roadmap, we strengthened supplier ESG risk evaluation criteria andexpanded ESG risk diagnosis and due diligence targets to include suppliers
that entered overseas markets. In addition, we shared information with
suppliers so that they can secure ESG capabilities and adopt major ESG
regulations and policies, while also sharing a data management template.

Key Supply Chain Sustainability Management in 2022

Supplier ESG Improvement Roadmap• February	Made key plan on supplier ESG
improvements in 2022
• May	Made notice of guidelines on supplierexecution of carbon neutrality• October	Shared the progress of supplier ESG
evaluation and improvement in 2022
Briefings and Online Training We hold briefings and run training courses
for suppliers to prevent ESG risks throughout the supply chain and improve
suppliers’ ESG capabilities. We operate online training courses that canbe taken by all suppliers. We also hold various briefings for working-level
ESG employees of suppliers and share information on index that should
be managed in major ESG areas, including ethics, environment, labor andhuman rights, and safety and health, major trends, and best practices.

Criteria to Select Significant Suppliers

Supply ofcore parts•	Transparent
management andanti-corruption•	Prevention of unfair
trade, etc.

Environment•	Establishment ofan environmental
management system•	GHG and energy
management, biodiversity,
etc.

Labor andHuman rights•	Guarantee of freedom of
association•	Prohibition of child andforced labor, etc.

Safety and
Health•	Establishment of an
occupational health andsafety management
system•	Response to emergency
situations, etc.

Management
Systems•	Transparent
management andanti-corruption•	Prevention of unfair
trade, etc.

Replaceability
Purchasesize
ESG• Evaluation and feedback- Self-diagnosis, written
evaluation, on-site evaluation- Distribute an evaluation
results report to each supplier2022•	Support for establishing an
ESG management system-S hare guidelines, including adata template- Create an online ESG training
course•	Expand ESG evaluation
targets- Increase the evaluation scope
to include suppliers thatentered overseas markets

2023•	Advance ESG evaluation•	Increase ESG evaluation andconsulting support- Increase the evaluation scope
to include overseas suppliers- Online evaluation,-C ontinue to upgrade the index
on-site inspection, on-site
improvement consulting, etc.

Supplier ESG Capability-Building Training in 2022
Cut-off Line for Significant
Supplier Selection

Ethics2021• ESG briefing-P rovide a seminar on ESG
evaluation and conflictminerals, send a win-win
cooperation letter

Total
hours

No. of participating suppliers/
No. of staff who received training

Significant
suppliers

609

hours

303

suppliers

1,123

persons1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

61

Sustainable Supply Chain
SUPPLY CHAIN ESG DIAGNOSIS AND DUE DILIGENCE
Risk Diagnosis and Due Diligence Process Hyundai’s supply chain ESG risk
evaluation management consists of document-based assessment, on-site
due diligence, high-risk supplier selection, and improvement and monitoring.
We continue to improve diagnostic indicators in accordance with global
trends to effectively identify potential ESG risks in the supply chain.
Composition of Risk Diagnostic Indicators Hyundai established its uniquesupply chain ESG risk diagnostic indicators by using laws related to fair trade/
environment/labor/safety and health/supply chain due diligence, the OECD
Guidelines for Multinational Enterprises, EcoVadis, Responsible Business
Alliance (RBA), Drive Sustainability, and other indices and standards. The
supply chain ESG risk diagnostic indicators consist of ethics, environment,labor and human rights, and safety and health areas. In considerationof a supplier’s size and whether it satisfies key indicators, we reflect theevaluation results in supply chain operation strategies.

Risk Filter Before a risk diagnosis and due diligence, Hyundai identifies, inadvance, risks that it expects or are occurring in the supply chain. Hyundaichose 47 tier-1 core(significant) suppliers and 24 tier-2 core(significant)suppliers in 2022 after going through the prior identification process.

Globalpresence of
suppliers

Asia
52%

Hyundai’s suppliers are located across the globe,
and continue cooperation to build a stable supply
chain, including ESG.

Europe27%

Americas
20%

Other
1%

Identification ofrisks by country,
business type,part and raw
and subsidiarymaterial

We identify and manage risks by country where our
suppliers are located, business type, supplied part,and raw and subsidiary material. To this end, we use
materials disclosed by each country’s governmentand research organizations as well as various media
and social network materials.

Analysis of
supply chain ESG
risk diagnosis

Confirmed risks are managed by categorizingthem based on each ESG area, including ethics,
environment, labor and human rights, and safety
and health. They are reflected in deriving supply
chain risk improvement measures and amending
diagnostic indicators.

During the on-site due diligence process, we checked the relevant supplier’s
systems and regulations to confirm measures regarding code of ethics,
legitimate handling of wastes and pollutants, management of working hours
and payment of salaries based on a working hour management system,
hazard evaluations, and establishment of emergency situation responseplans. We plan to review and apply ways to effectively identify concerning
ESG risks at work sites during on-site visits.

Supply Chain Management Strategies
Strategic Directions

Top five strategic
directions ofsupply chain
management

Risk filter

Documentbased
assessment

A supplier accesses an online system (IT), and conducts aself-diagnosis (checklist) on its ESG risk level and provides
documentary evidence

On-site due
diligence

A visit is made to a supplier together with an outside expert
to check the on-site situation or confirm authenticity of
documentary evidence

Improvement
measureRequest for immediate improvement or recommend to makean improvement plan for high-risk factors identified in the
document-based assessment or on-site due diligence process,Support for
execution

Provide such financial and non-financial support as training,
consulting, and guidance, to suppliers to help them implement
improvement measures

Document-based Assessment Hyundai diagnoses supply chain ESG
risks based on its unique, distinctive indicators and criteria. A documentbased assessment is conducted using an online evaluation system thatcan be accessed by all suppliers in Korea and abroad. Suppliers respond toevaluation indicators by means of a self-diagnosis and attach documentary
evidence. Supplier document-based assessment results serve as basic datafor checking suppliers’ ESG risks, choosing suppliers subject to on-site due
diligence, and categorizing high-risk suppliers.
On-site Hyundai chooses suppliers that are subject to on-site due
diligence by comprehensively considering countries where suppliers arelocated, business type, supplied parts and raw and subsidiary materials, anddocument-based assessment results. Primary on-site due diligence targets
include suppliers that submitted insufficient responses and documentary
evidence for the document-based assessment and suppliers that have been
confirmed to have potential or actual ESG risks based on document-based
assessment results. On-site due diligence and evaluations are conductedby ESG consulting and diagnosis and due diligence experts, in close
collaboration with Hyundai’s purchase sector.

Performance Indicators

Quality competitiveness

Delivery defect rate, claim reimbursement ratio, quality management,
onsite evaluation of manufacturing processes, outsourcing management

Technological competitiveness

Basic competencies, performance competencies, capabilities for the future,reliability testing capabilities, S/W verification capabilities

Supply stability

Smooth supply of parts (prevention of production line stoppage),
A/S parts delivery rate, KD parts delivery rate

Fair trade

Payment terms, contractual fairness, law/regulation compliance,
win-win cooperation (support for win-win growth)

Eco-friendly production system

Steps of Risk Diagnosis and Due Diligence
Analyze expected ESG risks by country where suppliers arelocated, affiliated industry, and supplied product

Diagnosis and Due Diligence Aligned with Supply Chain Management
Strategies Hyundai established top five strategic directions of supply
chain management for suppliers’ quality competitiveness, technologicalcompetitiveness, supply stability, compliance with fair trade, and establishmentof an eco-friendly production system. To achieve the top five strategic directions,
we established major performance indicators (delivery defect rate, reliability
testing capabilities, KD parts delivery rate, payment terms, energy consumption,etc.) for each direction and monitor the execution status on a regular basis. In
addition, we designed “management indicators aligned with strategy” and “ESGrisk diagnostic indicators” to identify whether suppliers are participating in andexecuting our supply chain management strategies. Based on these indicators,
we are conducting a diagnosis and due diligence (evaluation) of supplier levels.

Environmental management system, energy consumption, air pollutant,waste, hazardous chemicals management

Supply Chain ESG Risk Diagnostic Indicators
Ethics

ESG riskdiagnostic
indicators• Prohibition of corruption•	Prevention of unfair
trade•	Prevention of counterfeit
parts•	Compliance with export
restrictions•	Information protection• Responsible purchase

Environment•	Environmental
management system•	Energy and GHG•	Water resources• Air pollutants• Wastes• Chemical substances

Labor and human rights

Safety and healthManagement system•	Non-discrimination•	Wage and welfare•	Working hours•	Humane treatment•	Freedom of association•	Prohibition of child labor•	Prohibition of forcedlabor•	Safety and healthmanagement system•	Machine/instrument/
facility safety•	Emergency response•	Accident management•	Safety diagnosis•	Health management•	Disclosure of corporate
statement•	Appointment of a person
in charge•	Risk checks•	Education andcommunication•	Information management•	Grievance system•	Business partner
management, etc.

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

Sustainable Supply Chain
Results of Supply Chain ESG Risk Diagnosis and Due Diligence(Unit: Companies)

Classification

No. of companies

Tier-1 suppliers
Document-based
assessment of ESG risks

1,680
Tier-1 core suppliers

Identification ofhigh-risk suppliers basedon document-based
assessment

13
Tier-1 core suppliers

Goal: Complete the written assessment of all core suppliers-

Tier-2 core suppliers

1

Tier-1 suppliers

36

Including 13 high-risk suppliers identified through the
document-based assessment

1

Goal: Complete the onsite assessment of all high-risk suppliers

Tier-1 core suppliers
Tier-2 core suppliers

2

Suppliers with negative impacts identified

14

Identified 1 core supplier among tier-1·tier-2 suppliers

Suppliers with established improvement plans agreed upon

14

Including the 1 core supplierSuppliers that completed implementation of improvement plans

14

Including the 1 core supplier

Key Areas of Improvement Hyundai conducted the on-site due diligence(evaluation) and thus identified key areas which need improvement
as follows. We share evaluation result report with the average score ofbenchmark companies and the top score in addition to areas of weakness
and areas for improvement for each company, thereby inducing them tomake improvement.
Areas

65% of tier-1 purchase percentage

24

Tier-1 suppliers

On-site due diligenceof ESG risks

Improvement measuresfor high-risk suppliers

Purchase percentage of 100%

47

Tier-2 core suppliers

Support Cases of Improving Risk Management

Remarks

Improvement required

EthicsHave a responsible raw and subsidiary material procurement
policy, track and manage conflict minerals

Environment

Environmental data index management, environmental
management communication

Labor andhuman rights

Have a human rights charter, adopt a child labor prohibition policy

Safety andhealthEstablish safety and health governance, manage serious accident
index

Finalization of Risks and Establishment of an Improvement Plan We arederiving improvement points to ease suppliers’ ESG risks through on-site
due diligence (evaluation). Immediate corrective measures are taken formatters that can be improved right away during an on-site due diligence.
For other confirmed risks, we hold discussions with the respective supplieron the time and method of implementation and expected issues, andestablish improvement tasks. In addition to conducting a supply chain ESG
risk diagnosis and due diligence, we monitor whether suppliers implement
improvement measures. We also actively provide support in case suppliers
do not have enough ability to make improvements themselves.

Supply Chain Sustainability Goals Hyundai has been making continued
effort to expand the scope of the supplier ESG risk diagnosis and due
diligence to improve its supply chain sustainability. In 2022, we conducteda supply chain ESG evaluation on all tier-1 suppliers around the world, andencouraged them to acquire environmental management system (ISO
14001) and safety and health management system (ISO 45001) certifications.
In addition, we are providing a program that supports the establishment ofsafety facilities and security systems and the reduction of carbon emissions
by 2025 to help suppliers improve their ESG capabilities.
Performancein 2022

Increase the scope of ESG evaluation targets(all tier-1 suppliers)
Environment, health, and safety management system
certification (all tier-1 suppliers)

Supply Chain Sustainability Goals
Classification

Support provided to

Establish safety facilities

Tier-1 and tier-2 suppliers

Establish security systems

Tier-1 and tier-2 suppliers

Support for carbon emission
reduction

Tier-1 suppliers*

Support duration

2023-2025(3 years)	Support target: Choose from tier-1·tier-2 suppliers by taking company size, business
type, and other factors into consideration

Support to strengthen
ESG diagnosis/evaluation
response capabilities

Training to enhance capabilities
in relation to carbon neutrality
in the supply chain

GlobalSupplier Day

We shared improvement guidelines andbest practices of ESG management so that
suppliers can establish ESG risk improvement
plans and take measures. In particular, wehave been strengthening support needed foron-site improvement consulting since 2023
so that suppliers can develop the capabilities
needed to manage and improve ESG risks.

Through the Global Partnership Center andGlobal Learning Center, Hyundai is providing
training to around 360 suppliers on the outlineof carbon neutrality, trends in Korea and abroad,method of calculating GHG emissions, andresponse measures regarding carbon information
disclosure. We also run a program that supports
equipment purchasing when a supplier replaces
a carbon reduction facility that is needed at abusiness site as well as a consulting program thathelps improve business site energy efficiency
and curtail costs. We will continue to develop
diverse carbon reduction programs and provide
support so that they can be applied to suppliers,
helping suppliers continually raise their carbon
management levels to achieve carbon neutrality.

In March 2023, we held the “Global SupplierDay” in Montgomery, US for suppliers in theregion, semiconductor companies, facility
suppliers, and others. This program has enabled
us to strengthen cooperation with global
suppliers and to share trend information on
ESG risks that can arise in the supply chain. In
particular, we shared cases related to supply
chain ESG, including child labor issues in North
America, thereby emphasizing the importanceof supply chain ESG management.

ESG online
training portal

Labor and human rights
management training for the
supply chain in North America

Distribution of safety
and health management
guidesTo raise suppliers’ ESG awareness and strengthen their ESG capabilities, we operate the“ESG online training portal” that employeesof all suppliers can use anytime. It provides
content (ESG concept, trends in Korea andabroad, best practices, etc.) that is connected
to our supply chain ESG risk diagnosis
and due diligence items, including ethics,
environment, labor and human rights, andsafety and health.

In partnership with the US Department of Labor,
we offered a training program to the overall
supply chain in North America with regards tocompliance with worker employment-related
regulations. Through this training program,
we informed participants of Hyundai’s zerotolerance principle on unfair employment, andexplained ways to check identity in the worker
employment process, Supplier Code of Conduct
compliance requirements, opening of ananonymous channel for grievance counseling,
and prohibition of employment through a thirdparty employment broker.

We have developed and distributed the“safety and health management guides” tohelp suppliers establish a systematic safety
and health management system, such as
creating an organization dedicated to safety
and health; establishing a management
system; increasing training and investments;
identifying and addressing risks; and analyzing
disaster factors and establishing reduction
measures. We also create online safety andhealth training materials, which can be viewed
by any of supplier employees.

62

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

63

Sustainable Supply ChainRESPONSIBLE MINERALS MANAGEMENT
Conflict Minerals Management Governance Hyundai understands
the significant seriousness of human rights violations and environmental
destruction caused by mineral mining in conflict and high-risk areas. We are
therefore striving to eradicate human rights violations, including exploitationof child labor, and environmental destruction that take place in the processof mining minerals, and to protect worker health and safety.
To this end, we have established management governance to operate amanagement process for compliance with policies and execution of social
responsibilities in relation to conflict minerals. The Procurement Division’s
Win-Win Cooperation & Safety Promotion Team supervises the operationof the conflict minerals-related management process and continually
examines responsible mineral risks of each Purchase Division and supplier.
In addition, it closely collaborates with relevant departments, including the
Sustainability Management Team that manages company-wide ESG risks.
Important matters related to conflict minerals are supervised and reviewed
by Sustainability Management Committee under BOD, and are also includedin the KPIs for CEO as a way to ensure active management of the matters.

Conflict Minerals Management Governance

Conflict Minerals (Responsible Minerals) Policy

Conflict Minerals Management Policy Hyundai recognizes that there
are conflict minerals that are unethically mined and distributed, including
human rights violations and environmental destruction, in conflict zones,
and prohibits use of conflict minerals (tin, tantalum, tungsten, gold) that are
unethically mined in conflict areas. Based on the basic policy of “providing
products to consumers that went through a legitimate and ethicaldistribution process”, we operate a conflict minerals management process
jointly with suppliers and strictly investigate inclusion of conflict minerals in
products. In addition, we are continually monitoring the cobalt supply chainin accordance with the OECD Due Diligence Guidance to manage the issueof child labor in cobalt mines of the Democratic Republic of Congo. We
provide suppliers with conflict minerals management guidelines and holdrelevant briefing sessions to help raise their awareness of conflict minerals.
In addition, we will make continued efforts to expand the mineral purchasepolicy that calls for non-use of conflict minerals and fulfillment of social
responsibilities to include suppliers’ clients.
Conflict Minerals Management Process Hyundai has established aprocess by reviewing and analyzing the OECD Due Diligence Guidance, theUS Dodd-Frank Regulatory Reform Act, and US Securities and Exchange
Commission’s requirements, based on which it is striving for responsible
mineral supply chain management. Based on the Conflict Minerals Reporting
Template (CMRT) and Extended Mineral Reporting Template (EMRT) for
supplier information collection that are provided by the Responsible Mineral
Initiative (RMI), we are tracking the supply chain (mine-smelter-tier-1
supplier, etc.) for tin, tantalum, tungsten, gold, and cobalt. In cases where
we identify and recognize human rights and environmental risks in themineral supply chain, we strive to mitigate or prevent them. In addition, we
recommend suppliers to monitor whether they are trading with a smelter
located in a high-risk area or did not receive Responsible Minerals Assurance
Process (RMAP) certification. We assess whether our suppliers are tradingwith smelters that obtained RMAP certification on an annual basis.

Selection of High-Risk (Risk Management) Areas Hyundai has classified
10 African countries (Democratic Republic of the Congo, Rwanda, Burundi,
Sudan, Angola, Uganda, Zambia, Central African Republic, Congo, Tanzania)
and other conflict areas as Conflict Affected and High Risk Areas (CAHRAs).
We continue to monitor suppliers’ use of conflict minerals and cobalt thatare illegally or unethically mined/distributed in these areas. We have alsoestablished a process for cases in which we inevitably source minerals fromconflicted areas, we confirm that there is no issue through an internal review
before use.
Investigating the Conflict Mineral Status of Suppliers and Checking Risks
We investigated the status of suppliers that use tin, tantalum, tungsten,gold, and cobalt. For tier-1 suppliers and electric vehicle battery suppliers (43suppliers), we received CMRT/EMRT materials from lower-level suppliers
that supply parts that used conflict minerals and cobalt. We listened todifficulties experienced by suppliers that were having difficulty in creating
CMRT/EMRT materials or whose materials were insufficient. We also
explained on several occasions the need to actively respond to the conflictminerals management process and recommended all suppliers subject toinvestigation to submit materials.
Based on the CMRT/EMRT data submitted by our suppliers, we conducted
an analysis to determine if the suppliers were engaged in trade with
RMAP-certified smelters. In cases where suppliers were not tradingwith certified smelters, we proactively requested that they implementa mineral purchasing policy that aligns with social responsibilities andto engage exclusively with certified smelters. We also approached tier-1
suppliers sourcing conflict minerals from uncertified smelters, requesting
a comprehensive improvement plan outlining their mid to long-term
intentions to transition to certified smelters. These measures included all
suppliers in our conflict minerals management program, allowing us to fulfill
our social responsibilities and address risks effectively.

Sustainability
Management
Committee
Relevant
Departments

Sustainability
Management Team

Conflict Minerals Management Process

Procurement
Division

Win-Win Cooperation &Safety Promotion Team

Vehicle Parts
Procurement Sub-Division

Electric Vehicle Parts
Procurement Sub-Division

Suppliers

EstablishingpolicyRaising supplierawareness

Investigating
suppliers’ status

Checking
risks

Disclosing
activity details• Clarification ofmanagement
system, operation of
governance• Acquisition of
information throughprior investigations,holding of briefing
sessions for suppliers• Analysis of suppliers’
actual status,
compliance with RMI
standard forms• Expansion of lowerlevel suppliermanagement, annual
monitoring of certified
smelter trading• Hyundai Motor
Company Conflict
Minerals Report, etc.

Despite our efforts, we explore alternative procurement options and takedecisive actions, such as suspending relationships with suppliers whoshow reluctance to improve their practices. These endeavors exemplify ourcommitment to responsible sourcing and minimizing the impact of conflictminerals in our supply chain.
Disclosing Conflict Mineral Activity Details Hyundai established aconflict minerals management policy and disclose it through its website,while also issuing an annual Conflict Minerals Report. We are striving tocreate greater corporate value by communicating and identifying with all
stakeholders, including customers, employees, and shareholders, and bycontinuing change and innovation. We will continue our efforts to strengthencommunication by issuing reports in accordance with standards required by
the international community.
Raising Supplier Awareness of Conflict Minerals Beginning with theestablishment of criteria and finalization of a schedule to investigate theconflict mineral status of suppliers in March 2022, we identified in advance,
whether items that are used for major electric model production use conflictminerals or cobalt. In addition, we held briefing sessions and provided
training to tier-1 and tier-2 suppliers that use conflict minerals, electricvehicle battery suppliers, and Hyundai employees in charge of purchasing
with regard to the background of conflict minerals management, conflictminerals regulation trends in major countries, Hyundai’s conflict minerals
management policy, CMRT/EMRT outline and investigation plan, and tradingwith RMAP-certified smelters as part of our activities aimed at raising overallawareness of conflict minerals management.

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

64

Customer Experience Innovation

Quality Management Techniques Hyundai has introduced and applied
quality management techniques to strengthen its market competitivenesson the basis of “defect-free quality”. The techniques consist of “the bestexperts in each field (Man)”; “optimal equipment (Machine)”; “thoroughverification (Measurement)”; and “commitment to defect-free quality(Moral).” Based on the merits, we provide customers with the highest quality
vehicles in all areas, including R&D, production, sales, and services.

• Plan new vehicles by taking
customer complaints into
account, vehicle breakdown
information, and otherquality and safety issues

Prior Verification of Quality Risks with the Participation of Employees
Hyundai runs an experiential program in which its employees experienceits products and services from the customer’s point of view, aimed at
product perfection with higher standards while they feel rewarded andimmerse themselves in their work. In 2022, our employees in a variety
of sectors participated in the final quality inspection of new cars aheadof mass production as test drivers, for a total of six new models and fullchange models (IONIQ 6, The all-new Grandeur, The all-new Kona ICE,
G90, ELECTRIFIED GV70, and G70 SHOOTING BRAKE). They meticulously
checked even the smallest details from the customer’s point of view andstrived to procure the highest level of quality.
Quality Mindset Campaign Through the Quality Mindset Campaign,
Hyundai continues striving to internalize the quality-first mindset among its
employees and build a quality culture throughout the entire process fromvehicle development, production, sales and beyond. In order to minimize
inconvenience through casual communication with customers, we conductcustomers’ quality diagnosis and employees’ input; meetings between
customers and employees; and on-site meetings between customers andproduction quality officers.
Strengthening Quality Verification Capabilities We enhance ourverification capabilities throughout our quality value chain by regularly
conducting training on roles and major tasks in the areas of premanufacturing quality, manufacturing quality, and market quality. Eachcourse includes not only basic theoretical education but also practicaland experience-oriented education if necessary. Furthermore, we offer
expert courses on quality verification in collaboration with external
educational institutions to verify new technologies following the transition
to electrification and to strengthen the verification of quality issues from thecustomer’s point of view.
2022 Quality & Safety Training Programs (Employees)• Establish quality requirements
and quality management
plans according to quality
management techniques andstandards• Review and verify partfunction, structure, reliability
and durability along withinspection of suppliers’
production processes• Review and verify partfunction, structure, reliability
and durability along withinspection of suppliers’
production processes• Prevent risk and prepare
countermeasures in the areasof process management,
regular vehicle inspection,
shipment pass rate, etc.

Quality related training

Test

Planning

100

Prevention of Mass Production Quality Risks When a quality risk is detectedfrom information acquired through statistical process control, periodic
inspections, and shipment pass rates, we conduct joint investigations and takenecessary countermeasures for quality improvement. Also, in order to prevent
quality risks from occurring in the vehicle production process, we take thoroughpreventive measures, such as suppliers’ process management, assessment ofquality prevention activities, validation of quality inspection equipment, andreliability testing of parts. We have established a control tower devoted to the
management of vehicle quality risks in the production process.

Quality Management Process

Third-party
certification rate%

Preemptive Management of Quality Risks From the early stage of new vehicle
development, such as vehicle design, Hyundai conducts pre-verification of parts
suppliers and inspects the quality of our own production processes to eliminate
quality risks and related production process impediments in advance. Based on
product drawings, we inspect the function, structure, reliability, and durability ofparts. We issue the final approval through the inspection of supplier processes,
self-inspection of production processes, etc. In addition to our own verificationof test vehicles, the test-drive opinions of customers and professional quality
organizations are utilized as guidelines to identify major issues and carry out
improvement activities in parallel. Moreover, Hyundai holds quality inspection
meetings on a regular basis, and reports the quality risk assessment results andtaken measures to the highest level of management on the verge of new car
models’ mass production.

Purchase

14

Establishing an Integrated Quality Management System We haveestablished a company-wide integrated quality management system tosatisfy our customers’ diverse quality and safety requirements, while eachof our production sites operates their own quality management system
to promote thorough quality management in all processes, including
automobile design, parts development, process operation, pre-mass
production, and mass production. Both domestic and overseas production
sites have acquired ISO 9001 (quality management system) or automotive
industry quality management system standard certification based on it.
We convert and update certifications in line with the conversion of quality
management system standards.

Quality Management Standards for Electrified Vehicles Hyundai hasestablished quality management standards and criteria designed for eachtype of electrified vehicles, such as hybrid vehicles, EVs and FCEVs, in its efforts
to actively respond to the global paradigm shift towards electrification. We
manage our quality risks through continuous quality checks, case analysis, andimprovement activities while continuously revising our quality management
standards and criteria based on the data collected and analyzed.

Mass
Production

No. of businesssites subject toacquisition

PRODUCT QUALITY MANAGEMENT
Establishing Quality Management System Hyundai operates a quality
management process for preemptive quality management of new car
development, quality management of mass-produced vehicles, response
to customer complaints, and quality assurance. We achieve systematic
quality management by sharing quality risks, quality defects, and consumer
complaints identified through our quality management system with all ourbusiness sites as well as our suppliers to produce improvement plans. Prior
to mass production, the Pilot Center at the Namyang R&D Center measuresand verifies quality, such as body strength and function, with a test vehicle,
and we opened the Global Quality Control Center to inspect the quality ofleading mass-produced vehicles from the customer’s point of view.

DesignStatus of Quality
Management System(ISO 9001) Certification

Product Responsibility

Sales

Hyundai is striving to achieve its quality philosophy of“producing defect-free vehicles without breakdowns”
and develop new safety technologies that protect
drivers, passengers, and pedestrians. To this end, we
continue upgrading overall quality and safety systems
not only by promoting preemptive quality and safetymeasures from the vehicle development stage but
also by preventing any significant problems afterward
through early detection, early improvement, and early
after-sales actions. In particular, we are focused onbuilding a sustainable safety management system bydeveloping training programs, operating quality andsafety reporting centers, analyzing safety information,and establishing safety test sites to strengthen our
quality verification capabilities, which in turn will enable
us to maximize customer satisfaction and build trust.

• Conduct in-house quality
verification for test
vehicles and collect quality
improvement opinions fromthird-party agency

TargetRegular training(group training, e-learning, etc.)
Continuous learning(videos, digital textbooks, etc.)
Quality-related certifications

Cycle

Once ayear
All quality
relatedorganizations

Constantbasis

No. oftrainees

11,412

23,13182

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

65

ESG Magazine

Customer Experience InnovationQUALITY ASSURANCE AND MANAGEMENT
Hyundai has expanded the scope of its quality assurance and managementfrom quality control and vehicle development and production to include
after-sales customer safety and protection.
Warranty for Free Repairs Hyundai applies the free repair warranty period
in consideration of the average life cycle, durability, and sustainability ofeach type of vehicle, such as passenger cars, SUVs, and commercial vehicles(trucks and buses). In particular, we expand the sustainability of eco-friendly
vehicles by extending the warranty period for engines and main powertransmission parts applied to hybrids, EVs and FCEVs. Regarding older highemitting models, we strive to minimize their air pollutant emissions withguarantees for catalyst devices, electric control devices, and other exhaustgas parts.
Voluntary Recall Hyundai voluntarily implements vehicle recalls topreemptively protect customers. When we identify a manufacturing defectlikely to cause accidents through our constant monitoring of customer
complaints, we determine a vehicle recall and inform our customers ofthe defect, corrective actions, and compensation such as free service. In
addition, warranty provisions are set aside as a way to proactively manage
our financial risks caused by recalls and quality assurance.
Blue Basic Inspection Hyundai provides its Bluemembers customers witha basic inspection service free of charge to enable them to maintain theirvehicles in top condition (8 times in 8 years for passenger vehicles, 7 times in
3 years for commercial vehicles).
Emergency Roadside Service Hyundai offers emergency roadside services
to help with on-site first aid, simple maintenance, and transportation toa designated maintenance shop in the event of vehicle breakdown. The
services are provided free of charge within a warranty period of up to six
years after a vehicle leaves the factory.

Warranty for Eco-friendly Car Engines and Power Transmission Parts
Classification

HybridEV

Model nameGrandeur, Sonata, IONIQ, AVANTE (Elantra),Tucson, KONA Hybrid, IONIQ Plug-in
KONA Electric, IONIQ Electric, IONIQ 5,
IONIQ 6

* Based on passenger vehicles and SUVs

Warranty
period10 years /200,000 km
10 years /160,000 km

Response to Quality VOCs Hyundai continues to promote business
innovation based on voice of customers (VOCs) to establish a companywide customer complaint response system. In addition, we operate the VOC
Improvement Council participated by the Quality Division and R&D Center,and other related divisions, to diversify quality improvement agendas andrespond to urgent VOCs in our efforts to focus on quality improvement
based on customer opinions. We operate a variety of techniques andsystems to connect, integrate, and analyze VOC data while passing on
customer complaints to each service center for improvement measures. As
an extension of our efforts to prioritize customer safety and satisfaction, we
reflect and manage the quality index, which is linked to the number of claims
that occur within three months of customer use after vehicle sales, as 5% of
the CEO’s KPI.
AI-based Quality Control Hyundai operates smart factories using AI
and big data to create the best products. We collect and analyze external
information as well as data from all our systems in the factory, such as
product quality management, production facilities, and logistics. Then,
we turn it into big data so that AI can operate the factories based on theinformation. We increase the accuracy and efficiency of our production
processes by securing accurate data and eliminating unnecessary
processes. We are accelerating the construction of a complete smart factory
following the completion of the Hyundai Mobility Global Innovation Center in
Singapore (HMGICS) in April 2023. HMGICS serves as a test bed to develop
and verify intelligent manufacturing platforms that incorporate AI and the
IoT while the data obtained by the center is used to build E-FOREST, a smart
factory ecosystem.
Voluntary Recall Status
Classification

2019

2020

2021

623

272

389

Costs of recalls

78,000305,200

1,442,300

320,900

Warranty costs
during the period

5,177,128

Automatic Wheel Alignment Adjustment Technology Hyundai is
improving driving stability by incorporating AI technology into the wheelalignment adjustment process. Wheel alignment is the process of aligning
the angles of the wheels of a vehicle. If it is not properly adjusted, the wheels
will pull to one side or the steering will not be smooth, causing problems
with normal driving. The automatic wheel alignment adjustment technology
improves adjustment accuracy by utilizing deep learning in the process. AI
learns past wheel alignment data and works with the predicted adjustment
value. Through iterative learning, which is the process of passing data backto the computer, the technology can predict the optimal adjustment valueeven when given a new wheel angle.

VOC Filings in 2022

2

Warranty Provisions

Provision
warranty balanceat the beginningof the period

In June 2022, following the proliferation of TikTok videos of Hyundai
vehicle thefts in the U.S., victims filed a class action lawsuit in
response to a series of thefts of older models without engine
immobilizers. In response, we provided free software upgrades
for anti-theft, subsidized the purchase of anti-theft devices tosome vehicle owners who were unable to upgrade the software,and distribute over 65,000wheel locks. In addition, we plan toprovide cash compensation for damages not covered by insurance,
while providing a variety of insurance options in collaboration
with American Automobile Association to customers who havedifficulties purchasing and maintaining insurance. All vehicles soldby Hyundai Motor America comply with the laws and regulations
required by the US authorities, with the subsidiary doing its best toensure customer safety and compensate for damages based on our
corporate philosophy of putting customers first.

2022

196

2019

Key Case of Quality VOC Response(Unit: 10,000 units, KRW million)

No. of recalled
vehiclesClassification

Scanning & Deep-Learning of Paint Inspection Sheets The scanning &deep-learning of paint inspection sheets developed by AIRS Company, an
in-house organization dedicated to AI, has incorporated AI technology into
the automotive paintwork inspection process. The technology builds big
data by quickly extracting information written on the checklists (inspection
time, vehicle model, type of abnormality, location of abnormality). This helps
to improve quality by quickly identifying problems that frequently occur
in the painting process or errors that repeatedly appear in certain vehicle
models without human intervention. Going forward, we plan to expand theapplication of this technology to other production processes and factories,
such as under-vehicle inspection and vision inspection of finished vehicles.

2022 VOCs by Type

3 4Classification

1 Inquiry(Unit: KRW million)
2020

5,447,307

2021

8,514,173

2022

Total

1,857,575

1

No. of cases

6

Ratio

1,731,538

93.2%

2 Complaint

107,119

5.8%

3 Suggestion

13,537

0.7%

4 Compliment

5,381

0.3%

1

5

4

1,963,782

2,551,716

No. of cases

Ratio

1 Service495,99626.7%

2 Sales

420,204

22.6%

1,857,575

3 Quality

385,991

20.8%

4 Membership

200,359

10.8%

5 Support

159,284

8.6%

6 Others

104,089

5.6%

7 Reservation

91,6524.9%

9,048,185

3,133,544

Type

Total

3

2,261,010

72

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

66

Customer Experience Innovation
PRODUCT SAFETY TECHNOLOGY
Determination of Safety Specifications (Crash Test) In order to ensure
optimal crash safety, Hyundai established a 40,000-square-meter Safety
Test Building at its Namyang R&D Center in 2005 and has since conducted
approximately 650 crash tests per year. The Crash Test Site with an area of
2,900 square meters can perform tests required to tow vehicles weighing up
to 5 tons at speeds of up to 100 kilometers per hour. In addition to achieving
the highest level of passenger safety, the site is equipped with various test
environments to respond to major crash safety assessments around the world.
More than 500 collision analysis processes are performed to determine thesafety specifications of a test vehicle while upwards of 100 tests are carriedout until the vehicle is mass-produced. We conduct vehicle-to-vehicle crashtests and vehicle-to-structure crash tests in parallel. We also conduct crashtests that simulate a variety of accident situations, such as collisions on ramps,
collisions with pedestrians, and collisions in diagonal directions.
After the crash test, we systematically verify the safety of the vehicle. The
verification process is divided into the verification process immediately after
the collision and the analysis process after the crash test. First, immediately
after a collision, we focus on the speed of the vehicle and the area of impact
to ensure that the vehicle meets the safety performance requirements.
Subsequent analytical verification measures collision more accurately. Sensors
applied to the dummy are used to calculate injury measurement data andmeasure the degree of body deformation to analyze overall vehicle safety. If
an item is found that fails to meet the target requirements, the data is analyzed
to identify the cause and an improvement plan is established accordingly.
Depending on the collision part, close consultations are carried out withthe relevant divisions while verification is repeated until the actual vehicle
reflecting the improved specifications meets the final safety standards.
Collision Preparedness (Structural and Construction Methods) Hyundai
enhances safety against collisions with a body structure that is divided into anannular structure and a sequential structure as well as a rigid body completedwith the hot stamping method. The annular structure connects the horizontal
and vertical parts of the body like a loop and weaves them like a skein of
thread, allowing the vehicle to have solid rigidity and reduced weight.

The sequential structure allows the car body to sequentially absorb theenergy of a high-speed car colliding with another object. In the event of ahead-on collision, the side member is first distorted to absorb energy, thenthe impact is transmitted to the fender apron, and at the same time, it isalso transmitted to the top of the A-pillar to distribute the rest of the energy
evenly. Furthermore, to ensure the even distribution of impact energy duringside-impact collisions, bulkheads (partitions) are installed in areas where theimpact is most likely to occur.
The hot stamping method technology increases the rigidity of the car
body while reducing development costs. The material heated at a hightemperature is pressed and cooled rapidly at the same time to ensure thatthe car body is quenched firmly. The body becomes 3-5 times stronger than
before processing, so the passenger compartment is safely protected in theevent of a collision.
Collision Shock Dispersion (3rd-Generation Platform) Hyundai’s thirdgeneration platform is designed to minimize the final energy received
by passengers by efficiently dispersing collision energy in the engine
compartment. We have developed a multi-skeleton engine compartment
to minimize the impact transmitted to passengers in frontal and smalloverlap collision situations and to reduce the impact energy to the othervehicle. We have increased the initial collision energy absorption rate by
newly applying a “#”-shaped subframe to the front wide crash box andhave ensured that not only the side members that support both sides of theengine room, but also the subframe and fender apron are organically woven
together to allow the impact energy to be absorbed or dispersed in multiple
paths. Furthermore, we have increased the dispersion effect by widening thesubframe and strengthening the connection between the side members andthe surrounding skeletal members. In particular, the additional application of
the slide away behavior technology, which moves the wheels slightly outside
the body in the event of a small overlap collision, has further reduced thepossibility of occupant injury. It can significantly reduce secondary accidents
as it maintains the driving direction while minimizing the impact energy
transmitted to passengers.

Prevention of Accidents
Multi-Collision Brake Hyundai uses a multi-collision braking (MCB) system
to prevent secondary accidents. When a vehicle airbag deploys as a result of
an initial crash, the system activates the appropriate braking function in thevehicle to mitigate multiple collisions. All of this is done in a fraction of thetime, thanks to a third-generation CAN network with speeds of up to 200
MB per second. While the purpose of traditional safety technologies was to
avoid or prevent accidents, the MCB plays an expanded role in determining
the aftermath of an accident and protecting not only the occupants but also
the surroundings of the accident vehicle.
Advanced Driver Assistance System Equipped with advanced driverassistance systems (ADAS), Hyundai analyzes risk factors and preventsaccidents in advance. ADAS accurately recognizes objects and movements
around the vehicle using a front camera mounted on the windshield, front
and rear radars. It warns the driver or controls the vehicle when a collisionrisk is detected. ADAS has advanced to the level where vehicles drive at a
distance from the vehicles in front of them in their own lane while the camera
recognizes traffic signs and slows down to meet the prescribed speed.
Key Features of ADAS
Forward CollisionAvoidance Assist(FCA)

Warns and automatically assists with braking whena risk of collision is detected, such as when thepreceding vehicle rapidly decelerates or a stopped
vehicle or pedestrian appears in front

Lane Keeping Assist(LKA)

Warns and automatically assists steering if thedriver leaves the lane without operating the turnsignal switch while driving above a certain speed

Blind-Spot CollisionAvoidance Assist(BCA)

Gives an alert when there is a risk of collision witha vehicle behind while driving, and automaticallyassists with braking when there is a risk of collision
with a vehicle nearby while reversing out of aparking space

Safety Features for the EV-dedicated Platform “E-GMP”, Hyundai’s EVdedicated platform, features Hyundai’s commitment to passenger safety.
The platform uses the battery pack as a structure increasing body rigidity
while aluminum extrusions applied inside the side sills distribute impact inthe event of a side collision to ensure safety. In addition, the rear member isdeliberately deformed to absorb shocks in order to prevent accidents caused
by battery damage in a rear-end collision, and at the same time, the lower
member is reinforced with hot-stamped steel plates to prevent deformationof the safety zone. A lattice-structured battery case and a protective lower
cover are also added to perfectly cope with any collision energy that may
occur in driving situations.
Redundancy System As driver intervention is being reduced according to
the development of autonomous driving technology, it is essential to secure
precise safety technology in preparation for emergency situations. Hyundai
has developed an autonomous driving redundancy system that ensures
the safety of passengers by safely driving and stopping the vehicle when asystem failure is detected during autonomous driving. Redundancy refers toa dual configuration of steering, braking, power, and communication. Whena function does not work properly, the redundancy system helps the vehicle
to run safely by replacing it with an assistive device. We plan to speed up thedevelopment of level 4 autonomous driving element technologies, including
redundancy systems, with the goal of internalizing autonomous driving
technology by 2025.

E-GMP Safety Features
Forward collision structure
Mitigating impact andminimizing damage
to passengers andbatteries

Rear collision
structure
Shockabsorption

Crash Test Procedures

Define vehicle
specifications andcrash criteria

Crash test
(situational,
environmental)

Verification of safety
performance before/
after collision

Verification ofanalysis based on
measurement data

Establishment of safety
performance goals anddevelopment of newtechnologies

Battery through-bolt
fastening structure(2 points in the front,
6 points in the middle)

Strengthening the stiffness ofthe battery and body coupling

Battery
protection structure
Battery protection in the eventof a side-impact collision

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

67

ESG Magazine

Customer Experience Innovation
Driver Protection Devices that protect drivers and passengers in the eventof an accident are just as important as multi-collision prevention automaticbraking, advanced driver assistance, and autonomous driving redundancy
systems that prevent accidents while driving. Hyundai ensures the safetyof drivers and passengers by researching and developing devices thatstrengthen/utilize vehicle platform functions, apply collision prevention/
mitigation technology, and reduce the rate of injury in the event of an
accident. To help drivers make safe driving a habit, we run various programs
such as the Safe Driving Habit Guide Broadcast, School Bus Safe Driving
Campaign, and Connected Car Safe Driving Insurance Discount.
Pedestrian Protection The active hood system unveiled by Hyundai uses ahood multi-cone structure that allows the vehicle to detect a collision with apedestrian and lift the bonnet to protect the pedestrian. When a pedestriancollides with a vehicle, the actuator under the bonnet moves, raising thebonnet by about 6 cm. The shock-absorbing space between the bonnet
and the engine compartment can significantly reduce the risk of injury to
the pedestrian’s head. Preventing a pedestrian’s head injury is a criticalfactor influencing a pedestrian’s survival. In addition, the lower leg form andlower stiffener features increase safety by minimizing the bending of thepedestrian's knees in the event of a collision while preventing the pedestrian
from entering under the vehicle after the collision, preventing the first impact
followed by the second impact. They lower the possibility of a secondary
accident in which, in a collision with a vehicle, the pedestrian will fall into theroad in the direction the vehicle was traveling and be hit again by the vehicle.

VEHICLE SAFETY ASSESSMENT
Crash Safety Assessment Hyundai responds to more complex types ofaccidents by utilizing actual accident data disclosed by the NHTSA (National
Highway Traffic Safety Administration) and GIDAS (German In Depth
Accident Study), and a variety of information provided by the company’s
after-sales service network and quality divisions in our research, which isreflected in the product development process. As a result of these studies,in 2019, we developed the world’s first “multi-collision airbag” to prevent
secondary accidents. In addition, we have 170 sets of 27 types of manikins(dummies) that take over the role of occupants in real vehicle crash tests. Thisis the largest in the industry, enabling us to precisely measure even minuteinjuries in a variety of collision situations, contributing greatly to improving
passenger safety performance. For your reference, when Hyundai develops
a new vehicle model, it invests an average of 4,000 hours in evaluation andtesting and KRW 10 billion in costs to ensure the highest level of crash safety.

2022 National Camp Accreditation Program In 2022, IONIQ 6, Hyundai’s
dedicated EV model, and Genesis GV70 proved their excellent safety byobtaining the highest safety rating of 5 stars from Euro European New Car
Assessment Program (NCAP), Europe’s leading vehicle safety assessment
agency. Euro NCAP evaluates four main categories: adult occupant safety,
child occupant safety, pedestrian collision safety, and safety assistancesystems. Both the IONIQ 6 and GV70 received high marks for adult occupantsafety and safety assistance systems, demonstrating their superior occupant
protection features.

Hyundai’s world-first multi-collision airbag precisely calculates a variety of conditions such as the occupants’ unstable posture and speed when
the impact is so weak that the airbag does not deploy in the first collision. In subsequent collisions, the reference impact strength is lowered or thetiming of activation is adjusted to make the airbag easier and faster to operate.

Center Side
Airbag

The center side airbag is mainly deployed between the driver and the passenger in the event of a side-impact collision to prevent the passenger
from crossing to the other side, thereby preventing collisions between people as well as collisions with interior materials. Hyundai has applied the“thermal compression folding” method to achieve the world’s smallest and lightest form while maintaining safety and obtained domestic andinternational patents for the related technology.

Hug Airbag

Developed by Hyundai to compensate for the limitations of fixed airbags for self-driving cars, the Hug airbag consists of three chambers that
perform their respective roles. As if they were one body, the six chambers on the left and right protect the occupants. Going forward, we plan torefine the technology so that it can be applied to autonomous vehicles in the 4-5 stage.

Test building

40,000m2

Collision test site

2,900

m2

Winners of the 2022 NACP
RegionRatio1)5-star (top rating)

Korea

100%

IONIQ 6, GV70

Europe100%

IONIQ 6, GV70

U.S.

69.2%

18 models including Kona, Santa Fe, Elantra,
Sonata, Tucson, Palisade, IONIQ 5, G80, GV80

No. of crash tests

About

650

	Ratio: The number of vehicle models rated by the NCAP with a 5-star (top rating)divided by the total number of vehicle models rated by the Program

times per year

Performance

1)

Maximum speed

100
5

Maximum weight

Main Functions of the Occupant Protection Airbag
Multi-collision
AirbagScale

Crash test site of Hyundai Motor Group (Safety Test Building at Namyang R&D Center)

km/h

tons

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

Customer Experience Innovation
Maximizing Customer Satisfaction
SERVICES BOOSTING CUSTOMER SATISFACTION
Customer Service Standard Guide Hyundai produces and distributes
the “Customer Service Standard Guide” based on customer experience inthe process of purchasing and maintaining vehicles. This guide distinctly
presents the direction of individual customer service and focuses on
the key response elements for each customer contact point so that
customers can receive uniform and excellent service. In addition, overseas
regional headquarters and sales subsidiaries have established customer
service strategic directions to carry out customer response activities
that comprehensively consider the market characteristics and customer
expectations of each region.
Reinforcing Customer Service Capabilities Hyundai sets in place a“service convergence education system” to strengthen the CS capabilities
of its employees in customer contact channels such as vehicle sales
and service. In the ICT-based CS learning environment, our employees
receive training related to customer service skills along with knowledgeof vehicles. Most notably, Hyundai’s Domestic Business Division improves
the company’s customer service capabilities by disseminating specific andpractical customer service solutions called “CS Way” to the business sites.

CS Training Programs in 2022
Educational Programs

H-Map (service skills for visiting customers)

No. of Attendees / Target

330
89

Skill of articulation

121

CS master (CS philosophy, responding todissatisfied customers)

169

First meet with commercial vehicle customers

8

Customer service standards

35

On-site coaching by customer
experience champion

85

Master’s explanation skills

141

Hole-in-one approach to handling ofcustomer dissatisfaction

44

CS Way58

Service skills for dissatisfied customers

58

Business manners

58

CS WayH-Ear – Customer Communication Channel Hyundai operates “H-ear”(https://hear.hyundai.com), an open customer communication channel, tolisten to customer opinions and suggestions online and develop products
and services jointly with customers. Those who sign up for the H-ear website
can freely write and discuss ideas and suggestions for various fields suchas customer service, maintenance services, sales channels, markets andtrends, as well as opinions on vehicle marketability, new technology, andeco-friendliness. Hyundai actively listens to customer opinions from thedevelopment stage of vehicles and services as part of its efforts to design
the future together with customers through honest communication.

Bluelink – Connected Car Service Hyundai provides “Bluelink,” connected
car services that enable vehicle control and vehicle management based on
the in-vehicle infotainment system and smart applications by converging
information and communications technology (ICT) with vehicles. Customers
who subscribe to Bluelink can access services such as remote control, safety
and security, vehicle management, route search, and simple payment.
My Hyundai – Mobile Service We offer our customers an integrated
customer service app, “my Hyundai,” which conveniently provides all
the services we provide, from Hyundai Motor membership to vehicle
management and life of the car. When customers access the “my Hyundai”
app, they can view the same model and color as their vehicle on thehome screen, and can also view vehicle contract information, breakdown
information, and related recall information. In addition, it is equipped withsimple reservation and payment, use of Blue Members points, various
coupon benefits, and non-face-to-face service functions, through whichcustomers can use door-to-door car wash, hand wash, chauffeur service,
vehicle transfer (consignment), and EV pick-up and charging services.

“Genesis Space” providing
unique differentiated experience
for the luxury brand
The “Genesis Space” provides a unique customer experience with
the Genesis brand philosophy. It features a design where customers
can experience the unique elegance and sensibility of Genesis.
“Genesis House New York”, unveiled in 2021, is a complex brandbase that includes not only a car showroom, but also a restaurant,
a library, a concert hall, and a terrace garden, with an aim to be a“cultural oasis” that satisfies the need for daily relaxation and artistic
inspiration. Visitors can experience a variety of vehicles, including
the entire Genesis lineup and concept cars that embody the future
brand vision. The Genesis Space extents the Genesis brand spirit
to customers while providing a differentiated experience unique toGenesis with superior customer service.

Major Services Related to Connected Car

A stroke of genius (overcoming objections)One-line Counseling Center

Moreover, we introduce service trends and ways to improve Bluehands
CS to those representatives who operate Hyundai’s official service
suppliers “Bluehands” while sharing best practices in customer service andcustomized service plans according to various situations as part of training
to improve customer service capabilities.

All employees in sales
and service divisions

Remote Control•	Remotely controls air conditioning, charging, locking the vehicle, checking parking location, transmitting
destinations, home-to-car and car-to-home services, voice recognition to adjust various devices and functionsin the vehicle, among others.

Safety & Security•	Emergency rescue and accident handling support in the event of an airbag deployment accident,
SOS emergency dispatch, theft tracking, burglar alarm notification, driver attention notification, rear passenger
notification, among others.

Vehicle Management•	A/S linkage measures according to the vehicle diagnosis results, navigation software wireless update, automatic
notification of battery discharge, driving habit analysis results and safety score guidance, among others.

Directions•	Fast and accurate directions using traffic condition and forecast information, real-time traffic situation information,
search for destinations through portal sites, sharing the current location of the vehicle, among others.

Music Streaming•	Streaming service of music content platforms

Digital Key 2•	Door locking/unlocking, starting the vehicle using a smartphone and an NFC card key or a smartphone withUWB function

Genesis House New York

Bluelink Fleet
Hyundai’s customers who own commercial vehicles (trucks and buses)
can use connected services such as vehicle control, breakdown
notification SMS, and maintenance requests through the specialized
control system “Bluelink Fleet”. By harnessing the driving analysis
data of a vehicle, along with real-time monitoring of vehicle control
parameters such as speed, battery status, and voltage, it enables toenhance both safe driving practices and optimize vehicle operation
efficiency. In particular, green house gas (GHG) emissions fromvehicle operation are measured in real time while GHG emissions
reduced when operating eco-friendly vehicles are provided as tree
planting results. If the vehicle operating customer is a company
subject to carbon credit allocation or is participating in an external
reduction project, the estimated revenue and cost are also provided
by comparing the GHG reduction estimate with the target value.

681. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

69

Customer Experience Innovation
Building Service Bases Hyundai does its utmost to ensure that customers
can enjoy the best “CAR-LIFE” anytime, anywhere through a service basethat instills trust and confidence in its customers. We have strengthened
our after-sales service accessibility by establishing 1,200 Bluehands, official
service suppliers nationwide, in addition to the numerous directly-run hightech service centers. Furthermore, for the ever-increasing number of EV
owners, we have expanded the number of “Bluehands” dedicated to EVs toapproximately 500 while increasing the number of those dedicated to FCEVs
to over 70.

External Customer Satisfaction Evaluation On the back of its efforts
to provide products and services that satisfy its customers, Hyundai hasachieved outstanding results in the National Customer Satisfaction Index(NCSI), Korea Customer Satisfaction Index (KCSI), Korean Standard Quality
Satisfaction Index (KS-QEI), and Korean-Standard Service Quality Index(KS-SQI), among others.
Customer Satisfaction in the Passenger Vehicle Category(Korea Customer Satisfaction Index)

IMPROVING THE QUALITY OF TECHNICAL AND MAINTENANCE SERVICES
Strengthening Engineers’ Technical and Maintenance Capabilities
Hyundai strives to improve the quality of technical and maintenance services
provided by its directly managed service centers and “Bluehands” engineers.
We train the best engineers who can comprehensively deal with problems
that may occur in vehicles, in addition to training engineers to enhancetheir basic competencies in maintenance. We also continue to upgrade
maintenance manuals and vehicle manuals according to technology
development and new vehicle launches while running workshops to share
relevant knowledge.

Training Support for Bluehands Maintenance Personnel Hyundai
nurtures outstanding engineers through mutual exchange of informationand human and material resources necessary for maintenance education
with various specialized institutions such as the Ministry of Employment
and Labor, universities, and vocational schools while hiring highly qualified
engineers who have completed professional training. In addition, we havesigned an MOU with the Ministry of Employment and Labor to train ecofriendly vehicle maintenance personnel and are working hard to cultivate
excellent talent.

(Unit: Points)

Service Brands

Bluehands

Bluemembers

Bluelink• Hyundai’s official service suppliers- This network of Hyundai’s official service suppliers
is dedicated to improving the environment for thesafety and convenience of customers, as well as
providing services closest to customers.
• Services for Hyundai vehicle owners- Launched in 2007, these services for Hyundai
vehicle owners provide various membersspecific programs as well as vehicle
management services to support customers'
fun and convenient CAR-LIFE.
• Hyundai Connected Car Service- Hyundai’s connected car service taps into thelatest IT and communication technology toprovide remote control, safety security, vehicle
management, and navigation services.

Major Services

2019

89.9

2020

91.8

2021

92.8

2022

93.0

Differentiation of Customized Services Based on the CS philosophyof “Connecting People with Quality Time,” Hyundai provides customized
services for each customer. We provide optimized, customized services bydigitizing the after-sales service required for vehicle maintenance. In addition
to customized services for customers in overseas regional headquarters
and sales subsidiaries, we also provide services for each vehicle model,such as vehicle management, charging, and battery repair optimization forcustomers who purchase Hyundai EVs. Hyundai will do its best to enhancecustomer satisfaction by providing tailored services during all stages
following vehicle purchase.

Visiting Before
Service•	Visit a location designated by a customer andprovides vehicle maintenance and advice andassistance

Emergency
Charging Service•	Provide 7 kWh worth of free EV charging for
stranded drivers, enough for 22-44 km of driving

GenesisVisiting Auto
Care Service•	Visit any location that customers desire and provide
a replacement service for engine oil and otherconsumables

Home-to-Home
Service•	Pick up vehicles where and when designated bycustomers and deliver them after repairs are made

GenesisAirport Service•	Provide Genesis customers using Gimpo International
Airport with free car valet services, consumables
replacement services while traveling

Car Rental
Service•	Provide car rental service for customer
convenience when repairs are needed during thewarranty period

GenesisHome-to-Home
Service•	A home-to-home service, free of charge, as part ofGenesis Mobility Care service

Hyundai Master Certification Program (HMCP) Since 2012, Hyundai
has been running “HMCP (Hyundai Master Certification Program),” anindependent technology certification system, to offer maintenance servicesof top-notch quality through the cultivation of exceptional engineers.
Technical certification consists of four levels according to engineer
competency – Level 1-2 (Technician), Level 3 (Master), and Level 4 (Grand
Master). In 2022, a total of 26 people obtained Level 4 (Grand Master)following the evaluation of expertise in a total of seven categories, includingEVs, FCEVs, engines, vehicle networks, and advanced driver assistancesystems, during the practical test.
Excessive Maintenance Prevention Program In 2012, Hyundai launched
an excessive maintenance prevention program to provide responsible
maintenance services. If any suspicious repairs or excessive maintenanceactivities are detected during the maintenance process, we offer compensation
up to tenfold based on the findings of an investigation conducted by an
external insurance company. We strive to prevent recurrence by imposing
penalties on excessive maintenance suppliers, thereby striving to provide ourcustomers a sense of security about our transparent customer service.

Hyundai Master Certification Program Electrified (HMCPe) Hyundai
operates the Hyundai Master Certification Program Electrified (HMCPe),a technology certification program, to nurture maintenance personnel
specializing in vehicle electrification. Bluehands engineers complete courses
such as electrification basics, electrification customer response skill-up,
and diagnostic convocation training according to their competencies.
The e-Technician certification is given to engineers who understand theelectrification function and the overall system and can respond to customers
smoothly whereas the e-Master certification is given to engineers who
understand the entire field of electrification and are capable of independent
diagnosis, high-level repairs, and high-tech work.
Maintenance Manuals and Vehicle Manuals Hyundai offers online accessto vehicle maintenance information. We provide maintenance manuals
and electronic circuit diagrams to customers who purchase vehicles,
directly-managed service centers, and Bluehands engineers through ourdomestic technical information website (gsw.Hyundai.com). After a simple
membership registration, customers can access information necessary forvehicle maintenance and search for necessary (genuine) parts, which has
helped improve the convenience of self-maintenance.

Directions for Improving the Quality of Technical and Maintenance Services

Special Services for Genesis Car Owners
Strengthening
MaintenanceCapabilities•	Reinforcing Engineers’ Technology
and Maintenance Capabilities•	Training of Bluehands Maintenance
Personnel

Nurturing
Outstanding
Talent•	Hyundai Master Certification
Program•	Hyundai Master Certification
Program Electrified

Setting
MaintenanceStandards•	Excessive MaintenancePrevention Program•	Maintenance Manuals andVehicle Manuals

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

70

Customer Experience Innovation
Sustainable Brand
BRAND MANAGEMENT
Brand Management System Hyundai’s brand management system(BMS) supports the effective operation of its Brand Strategy System, Brand
Architecture, and Brand Image Guidelines. The Brand Strategy System
guides the company-wide direction for consistent external communication.
The “Brand Architecture” defines the brand and trademark system (usage
method, etc.) of vehicles, technologies, and services. We suggest how tovisually implement the brand in detail by developing and distributing theBrand Image Guidelines as a manual.
Brand Tracking Study We conduct a Brand Tracking Study (BTS) to checkcustomers’ brand awareness, purchase intention, satisfaction, etc. basedon price, performance, quality, and eco-friendliness for each brand. Most
notably, in terms of brand preference, we examine not only the reliability,competitiveness, service, and affordability of our brands, but also their ecofriendliness, social responsibility, and authenticity factors. Additionally, we
identify the market competitiveness of our brands by evaluating the market
value of our brand vehicles to our customers. The results of the brandtracking study are used as basic data for establishing a brand strategy foreach sales region. We also reflect them in the marketing process, such asderiving customer communication messages.

Tracking Study of Eco-friendly Brand Hyundai conducts surveys on
customer purchase intentions, awareness, preference, and attributeinformation (innovativeness, convenience, eco-friendliness, etc.) for ecofriendly vehicle (HEV, PHEV, EV) brands (IONIQ, Nexo). In addition, we
conduct global brand monitoring through which we inspect the application
and utilization of brands and trademark images on a regular basis, whichenables us to manage whether brand strategies, systems, and guidelines
are being applied correctly in the field. We also operate an in-house portal“Brand Home” and a help desk “Brand Desk” to conduct brand quality
management activities such as reviewing the use of brands in promotional
materials produced by each business division and support division. Hyundai
aims to continually enhance its brand management system, with a focus on
enhancing the value of its corporate brands and products, and implementing
systematic management practices.
Analysis of Brand Tracking Study Results Through a brand tracking study,
we identify reasons why customers do not prefer our brands, the reasonsfor dissatisfaction at each stage of the customer experience, and negative
experiences in online and offline channels. Based on the results, we identify
and redefine the attributes that a brand should have to improve customer
perception while seeking ways to manage content and improve sales
channel operation in an effort to innovate customer experience.

BRAND ENHANCEMENT ACTIVITIES
Sustainability-based Brand Campaign Hyundai conducts marketing
activities to enhance its brand value in line with its determination totransform itself into a smart mobility solution company. Additionally, weare strengthening the efficiency of our sales network with a focus on
high-quality dealers while promoting various CSV activities to overcome
problems such as environmental pollution and climate change that mankind
is experiencing. Following the implementation of sustainability-focused
initiatives to enhance our brand image, with an emphasis on eco-friendlinessand public benefits, we assess the impact of these activities on key businessmetrics, including vehicle sales growth, customer satisfaction improvement,
and enhanced corporate value.
“for Tomorrow” Global Project “for Tomorrow” is a global sustainability
campaign powered by Hyundai and the United Nations Development
Program (UNDP). Launched in 2020, the “for Tomorrow” campaign
aims to increase the world’s capacity to accelerate the achievement of
the 2030 Sustainable Development Goals agreed upon by the United
Nations. To commemorate the second anniversary of the “for Tomorrow”
platform in 2022, we joined forces with local teams from many countries
including Vietnam, Sierra Leone, Peru, India, the U.S. Together, we created adocumentary with an inspiring story on grassroots innovation to combat thesustainability challenges we all face, and presented it at the Lincoln Center’s
Walter Reade Theater in New York, in celebration of the 77th United Nations
General Assembly.

HMG Driving Experience Program Hyundai is operating the “HMG Driving
Experience” program to give customers first-hand experience of various
brands of Hyundai Motor Group, including Kia and Genesis. Opened in 2022,
the “HMG Driving Experience Center” is the largest driving experience
center in Korea and has eight experience courses including a braking course,a high-speed main circuit, an off-road, a round-turning course, and a kickplate course. Starting from the 2023 season, we plan to expand opportunities
to experience Hyundai Motor Group’s EVs by adding IONIQ 6 and EV6 GT
vehicles to the EV Experience Program.
N Brand’s Electrification Vision Since its launch as a high-performancesub-brand of Hyundai Motor Company, the N brand has consistently
pursued pure driving pleasure from the customer’s perspective. Hyundai
has established a vision to reflect the three core elements of N vehicles(cornering maneuvers, everyday sports cars, and racetrack driving ability)that can maximize the fun of driving pursued by the N brand in the EV era. In
2023, the N brand plans to launch its first electric high-performance car, the
IONIQ 5 N. Starting with the launch, it will continue to conduct research anddevelopment aiming to realize high-performance sensibilities in a hydrogensociety beyond the electrification era.

Brand Tracking Study Items
Price• Customer acceptance of Hyundai vehicle prices compared to competitors’ (based on a price perception survey)

Performance• Score analysis of warranty level, after-sales service quality, reliability, etc. (based on the market average of 100 points)

Quality• Score analysis of warranty level, after-sales service quality, reliability, etc. (based on the market average of 100 points)

Brand• Score analysis of brand reputation, authenticity, tradition, awareness, etc. (based on the market average of 100 points)

Sustainability•	Score analysis of eco-friendliness, social responsibility, mobility vision, innovativeness, prospects, etc.
(based on the market average of 100 points)• Separate analysis of the impact of eco-friendly vehicle models on aided awareness, brand perception, etc.

“for Tomorrow” campaign

N Vision 74– high-performance hydrogen fuel cell-hybrid “Rolling Lab”

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

71

Customer Experience Innovation
HYDROGEN CAMPAIGN“H2U” Campaign for a Hydrogen Society Hyundai is running the “H2U
(Hydrogen to You) Campaign” mainly in Europe to promote the value of
FCEVs and hydrogen energy, and to emphasize the urgency of transitioning
to a hydrogen society and the importance of creating a hydrogen ecosystem.
Influencers from various fields such as science YouTuber and researcher
Jacob Beautemps, German fashion model Toni Dreher-Adenuga, future
mobility journalist Don Dahlmann and Mobile Geeks co-founder Nicole
Scott are at the forefront of promoting the infinite value of hydrogen throughthe H2U campaign.
“Dear My Hero” – Hydrogen Cleaning Truck “Dear My Hero” is an integral
component of the Big Idea Campaign by Hyundai Motor Group, dedicatedto advancing new technologies that seek to revolutionize the challenging
working conditions faced by sanitation workers, promoting a safer andhealthier environment for them. A hydrogen cleaning truck is an ecofriendly vehicle that runs on electricity by combining hydrogen and oxygen.
It produces less noise and vibration than conventional internal combustion
engine cleaning trucks while emitting less heat and dust. Hyundai willcontinue to strive to contribute to creating a more comfortable and safe life
through hydrogen, an eco-friendly energy.

Hydrogen Commercial Vehicle Unveiled at “H2 MEET 2022” At the“H2 Meet 2022”, Kores’s premier hydrogen industry exhibition held in
August 2022, Hyundai showcased hydrogen energy solutions designed foruniversal applicability, emphasizing their potential to benefit “Everyone,
Everything, Everywhere”. Moreover, we unveiled a cutting-edge hydrogencommercial vehicle that showcased the company’s advancements inhydrogen-based future technologies. To showcase Hyundai’s technology
for hydrogen-powered commercial vehicles, we exhibited hydrogen fuelcell buses, police buses, cleaning trucks, sprinkler trucks, and multicopter
drones. In addition, we introduced our hydrogen fuel cell-based M. Vision
Tug vehicles, and hydrogen-based carbon-neutral steelmaking process.
We also spared no effort to discover new sources of demand for hydrogenbased mobility with governments, and domestic and foreign hydrogen
industry-related organizations.

ETHICAL MARKETING
Advertising & Marketing Ethics Declaration Hyundai announced its“Advertising & Marketing Ethics Declaration” to induce customers to makethe right decision to purchase products and services and to create a healthy
advertising and marketing environment. Accordingly, Hyundai prohibits
misrepresentation or omission of product/service information, exaggeration
or reduction of product and service utility, unfair comparison of competitors
or products, deceiving consumers, and advertising and marketing activities
that do not protect the information vulnerable. We also encourage
outsourcing companies that are entrusted with advertising and marketingby Hyundai to respect the Declaration.

Labeling of Product Environment and Safety Information Hyundaitransparently discloses not only environment-related information, suchas GHG emissions and the amount of water used during the entire vehicle
manufacturing process, but also safety-related information such as seatbelts, occupant detection systems, and car seat attachment devices. We
strictly prohibit the dissemination of false, exaggerated, or understated
information on the environmental and social impacts of our products andservices while striving to ensure the right to know of our customers bylabeling relevant information.

Hyundai Motor Company Advertising &Marketing Ethics Declaration

Product Information Labeling in Major Markets

Korea

China

EuropeProduct

ID labeling (type and model of car, vehicle
identification number, vehicle weight, year of
production, tire, etc.)

Environment

Fuel efficiency labeling, exhaust gas warninglabeling

SafetyAirbag warning labeling, etc.

Product

ID labeling, vehicle identification number(W/screen), anti-theft warning labeling

Environment

Fuel efficiency labeling

Safety

CCC labeling, child restraint system (CRS)
warning airbag labeling

Product

ID labeling, E-marks certifying various items(lights, safety belts, horn, mirrors, window glass,etc.)

Environment

Diesel engine labeling, battery recycling labeling,fuel labeling, refrigerant labeling

SafetyAirbag warning labeling, Airbag warning labeling,
ISOFIX CRS anchor labeling

Product

Manufacturer’s suggested retail price (MSRP)
labeling

North
Environment
America
H2U (Hydrogen to You) Campaign

Dear My Hero Campaign

Hyundai’s hydrogen-powered commercial vehicles unveiledat the H2 MEET 2022

SafetyVECI labeling (certified exhaust emissions data),
refrigerant labeling
Tire pressure information labeling, safety
certification labeling, airbag warning labeling1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

Creating Shared Value
Hyundai aims to expand its positive social impact andbuild a sustainable corporate ecosystem by creating
shared value (CSV). To this end, we launched the“Hyundai Continue” initiative which represents ourcommitment to a sustainable future. We will growtogether with local communities by creating social
value and solving social problems in connection withmobility business. We will also continue our efforts
to promote harmonious coexistence with the planet,
provide freedom in mobility and connections, anddeliver hope for future generations. Moving forward,
Hyundai will strive to create a virtuous cycle ofconnection by thinking and working together withvarious global partners as well as our employees,
customers, and local communities.

CSV Strategy System

Brand Vision

Progress for Humanity
CSV Mission

Scaling social impacts and building a sustainable business eco-system by creating shared values

CSV Initiative

Core Areas

earth

Direction

CSV Initiative
CSV IMPLEMENTATION SYSTEM
Implementation of CSV Strategy In 2022, Hyundai unveiled “Hyundai
Continue”, a global CSV initiative for sustainable management focused on threemain areas – earth, mobility, and hope – based on which various activities arebeing carried out as part of this initiative at business sites in Korea and overseas.

mobility

hope

Continue to Take Careof the Planet

Continue to Innovate
for a New Mobility

Continue to Create Hopefor Future Generations

Ecosystem restoration,
resource circulation, climate change response,
biodiversity conservation

Provide solutions for individuals and sectors with limited
mobility or who live in isolated regions, support for traffic
safety technology, activities aligned with future mobility

Education for future generations,
support for growth,talent development72

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

Creating Shared Value
CSV Activities

Hyundai has been carrying out upcycling projects such as collecting marine
wastes and recycling them to make textile products since 2021, aimed atpreserving marine ecosystems in Europe, Africa, and Korea. Together withour cooperative partner, Healthy Seas, we are working to restore the marine
ecosystem by collecting lost fishing nets, one of the many kinds of waste thatthreaten the marine ecosystem. The collected ghost nets are regenerated
into a nylon fiber called ECONYL® by the textile producer Aquafil. ECONYL®
is used as a floor mat material for IONIQ 5 and IONIQ 6 vehicles sold in
Europe, as well as in the production of various other products such as socks,
swimwear, sportswear, and carpets. Leveraging our experiences and knowhow in launching and operating these projects, we will continue to expand
eco-friendly activities and take the lead in building a global circular economy.
2022 Key Achievements Since 2021, we have collected more than 100 tons ofwaste in eight European countries as well as Korea over some 20 occasions. We
have also worked with major broadcasters such as the Discovery Channel toproduce documentaries about the subject.

Together with the HMG Materials Research & Engineering Center,
we plan to expand the application of materials recycled from marine waste. To
minimize carbon emissions, we will strengthen our prior search of suitable areas
for collection activities while considering introducing drones and electric boats
for our collection activities.

Future Plans

73

Earth
Waste Plastic Collection
and Upcycling
Hyundai has been carrying out waste plastic collection andupcycling projects in Indonesia since August 2022, with thegoal of addressing environmental problems in the nation
which produces tones of plastic waste every. In partnershipwith Save the Children and Plasticpay, we have offeredenvironmental education and installed collection bins at 10
middle and high schools in Jakarta, Indonesia, as well as two
RPTRAs which are child-friendly integrated public spaces. We
also plan to produce and provide upcycling goods using thecollected waste plastic. In addition, we have been operating
a waste recycling center in Bekasi, Indonesia since October
2022. In this way, Hyundai is helping Indonesian communities
to build a circular economy by reducing waste in their villages
and using it as a valuable resource.

Marine Waste Collection
and Upcycling

ESG Magazine

IONIQ
ForestWe have installed 15
plastic collection bins in major schools and public
spaces in Jakarta, and provided environmental
education to 8,300 children. We also haveestablished a waste recycling center in Bekasi
which was recognized as the best case of CSR in
West Java in 2022.

2022 Key Achievements

Future Plans In 2023, we will expand theinstallation of plastic collection bins while
continuing to provide children with environmental education related to plastic collection.

Hyundai launched the IONIQ Forest project in 2016 and has been creating ecofriendly forests around the world to absorb carbon and conserve biodiversity.
In 2022, we planted a total of 8,000 trees in Hongcheon, Gangwon-do tocreate a new eco-friendly forest of 16,000m2 also while creating a naturalgarden covering 300m2 at the National Sinsido Recreation Forest in Gunsan,
Jeollabuk-do. In the IONIQ Forest Hongcheon, we planted Korean fir trees,
which have been designated as an endangered species by the International
Union for Conservation of Nature (IUCN); black locust trees, which are asource of pollen for honey bees whose population has declined dramatically inrecent years; and ash trees, a fire-resistant species.
We are creating the IONIQ Forest project not only in Korea but also in North
America, Brazil, Mexico, Germany, Serbia, Turkey, and the Czech Republic.
IONIQ Forest North America is conducting activities using IONIQ 5 and IONIQ
6, as well as employee volunteering. IONIQ Forest Brazil aims to restore theAtlantic Forest by planting 100,000 trees, and operates a research forest near
our Brazilian plant with the aim of developing a methodology for restoring
rainforests in cooperation with Sao Paulo's de Queiroz College of Agriculture.
Meanwhile, IONIQ Forest Czech Republic is providing regular care of typicalmountain meadow by planting seedlings, hay raking and monitoring rare
species to preserve the biodiversity of the Beskydy Mountains.
Through its global IONIQ Forest project, Hyundai has planted approximately
210,000 trees as of 2022. Going forward, we will continue to carry out various
eco-friendly activities – such as restoring ecosystems, responding to climatechange, and conserving biodiversity – with various partners around the world
to promote coexistence between the Earth and humanity.

With the creation andexpansion of the IONIQ Forests in Hongcheon-gun
and in Sinsido of Jeollabuk-do, some 12,000 trees
have been planted in a total area of 36,000m2,
absorbing about 85 tons of carbon dioxide and
250kg of fine dust, while producing additional
oxygen that can be consumed by some 6,000
people every year. Over the past three years,
Hyundai has planted a total of 215,923 trees not
only in Korea and overseas, including the US,
Mexico, and Germany.

2022 Key Achievements

Future Plans We aim to plant one million trees
worldwide by 2024. To this end, we will plant
314,929 trees in Korea, North America, Brazil,
Mexico, and Serbia by 2023. In April 2023, we
promoted the IONIQ Forest North American projectat the New York Motor Show. Going forward, we
will expand our contribution areas and induce
stakeholders’ participation through active publicity.

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

Creating Shared Value
Supporting Underprivileged
Areas, Using Mobility
Leveraging our mobility to help Foodbank, aimed at resolving the imbalancein the supply of food ingredients due to income inequality in downtown andsuburban areas in the Middle East. Using Hyundai STARIA, in partnershipwith local Foodbank and colleges, we have supplied food ingredients andnutritional kits to marginalized areas with low accessibility from March to
April 2022 in five cities – two in the UAE (Ajman in March and Sharjah in
April) and three in Saudi Arabia (Riyadh, Jeddah, and Dammam in April). In
particular, we donated STARIA to NGOs in those cities to assist their donation
activities during Ramadan, when Muslims practice coexistence and sharing.

Hyundai is taking the lead in overcoming the physicallimitations and improving the mobility of people with
reduced mobility by offering rehabilitation support forpatients with paraplegia, using robotics technology. HMG
Robotics Lab has developed a medical wearable robot called“X-ble MEX” that assists lower muscle reconstruction andjoint movement for people with limited mobility. In January2023, we obtained permission for medical devices from
the Ministry of Food and Drug Safety, and also completed
the certification of batteries as a power source for walking
assistance. In April 2023, we signed an MOU with Asan
Medical Center and the National Rehabilitation Center tocooperate in conducting rehabilitation treatment and related
research for paraplegic patients using X-ble MEX. Moving
forward, Hyundai will promote activities designed to support
the mobility of people with reduced mobility by actively
incorporating not only wearable robots but also other future
mobility solutions with the goal of improving human life.
We plan to deliver two wearable
robots each to the Asan Medical Center and the National
Rehabilitation Center for the rehabilitation treatment ofparaplegic patients and related research.

2022 Key Achievements

74

Mobility

CSV Activities

Rehabilitation Support
Using a Wearable Robot(X-ble MEX)

ESG Magazine

Driving Rehabilitation
Support Using Virtual
Driving Simulators
Hyundai has been running a virtual reality driving experience social
contribution program since February 2019, designed to help drivers
overcome their fear of driving and build their self-confidence. The
driving simulators used in the program are designed to enable
driving practice in various environments and situations, including
city centers, highways, national roads, and alleyways. Since 2021, incooperation with the National Rehabilitation Center, we have used
the simulators in the rehabilitation of victims of traffic accidents.
In 2022, we expanded the cooperative relationship to Chungnam
National University Hospital and Pusan National University Hospital.
In 2023, we plan to promote rehabilitation support activities by
providing simulators to Seoul Rehabilitation Hospital.
2022 Key Achievements We have signed agreements with Chungnam
National University Hospital and Pusan National University Hospital tooperate rehabilitation training programs for traffic accident patients.

In the first half of 2023, we plan to donate a new
simulator to the Seoul Rehabilitation Hospital where it will be used totreat patients who need rehabilitation.

Future Plans

Using four STARIA
vehicles, we delivered a total of 2,000 boxes of foodingredients in partnership with four universities andlocal volunteer groups in the regions.

2022 Key Achievements

Future Plans In 2023, we plan to deliver a total of
2,800 boxes of food ingredients, a 40% increase
from the previous year, and donate four Hyundai
Mighty vehicles for NGO activities.

H-Special
Movement Project
Hyundai donates eco-friendly vehicles and provides customized mobility solutions to local
governments that operate welfare vehicles for the disabled to improve the mobility of thevulnerable. In November 2022, we donated an electric vehicle (EV), specialized for thevisually impaired, to the daily mobility support center for the disabled in Chungcheongbukdo. The donated vehicle was developed by applying Braille and voice guidance
convenience specifications to the IONIQ 5, an eco-friendly EV, to help visually impaired
people move about more safely and conveniently. It is expected that this eco-friendly
welfare vehicle for the visually impaired using IONIQ 5 will contribute to promoting themobility rights of the disabled in the province.
2022 Key Achievements We donated three IONIQ 5 vehicles specialized for the visually
impaired to the daily mobility support centers for the disabled in Chungju City, Jecheon City, andBoeun-gun. The donation was particularly meaningful in that it was the first ever donation ofenvironmentally-friendly welfare vehicles for the visually impaired in Korea.
Future Plans We plan to expand the IONIQ 5 EV supply project to local governments that
operate welfare vehicles for the visually impaired.

1. Introduction

2. Environmental

3. Social

4. Governance

Creating Shared Value

ESG Magazine

75

Hope
H.I.R.E.

CSV Activities

H.I.R.E. stands for Hyundai Initiative for Robotics Excellence, a robotics talent training programthat Hyundai Motor Manufacturing Alabama has been promoting since 2020. The H.I.R.E.
program is run in conjunction with the Montgomery public education system to provide
education on robotics to middle and high school students, with the goal of creating a poolof future talents for the growing technology-based industries in Montgomery and the River
Region. H.I.R.E. enables students to move beyond learning the scientific principles related toengineering design to develop their teamwork, leadership, coding, and literacy skills, while
supporting them in their dream of forging a career in a robotics-based industry by helping themto get into robotics at an early age.

H-Mobility Class
Since 2020, Hyundai has been operating the H-Mobility Class to nurture scienceand engineering college (graduate) students in Korea into future talents, withthe goal of enhancing national competitiveness. The H-Mobility class consistsof three courses of future strategic technologies such as vehicle electrification,
autonomous driving, and robotics, with each course being composed of basic
education and advanced education. Launched in 2022, the robotics course
includes a hackathon as one of its in-depth education programs designed
to provide trainees with project experience and opportunities to improvetheir practical capabilities. We provide recruitment benefits (exemption fromapplication review) to trainees who are selected as excellent learners after
completing advanced education.

2022 Key Achievements All 10 middle schools in Montgomery participated in the program held inJanuary 2022, and a total of 90 students received robotics education. In August, the program was
expanded to include a total of eight high schools in Montgomery, and in November of the same year
a total of 17 teams participated in the H.I.R.E. Robotics Competition.
Future Plans Hyundai Motor Manufacturing Alabama (HMMA) plan to expand the H.I.R.E. program
in collaboration with the education system in central Alabama.

2022 Key Achievements In 2022, we opened a new robotics course and operated an

Hyundai Hope on Wheels &Help for Kids

H-mobility class for a total of 2,805 trainees.
In 2023, we plan to open software (SW) lecture in addition toautonomous driving course to contribute to strengthening the trainees’ SW
capabilities and fostering their mobility skills.
Future Plans

Hyundai Motor America (HMA) conducts the Hope on Wheels campaign to support
pediatric oncology research and raise awareness about childhood cancer with its dealers
participating in the campaign. Launched in 1998 with the aim of creating a happy futurein which children do not suffer from cancer, this campaign is currently being carried out
across the United States.

Future Mobility School
Hyundai signed an MOU with the Ministry of Education to launch the Future
Mobility School in 2016. It is a free-semester middle school providing specialized
career education based on theory, practice, and experience, with the aim ofallowing young people to understand the automobile industry and explore therelated occupations. The curriculum is composed of content on eco-friendly
mobility and sustainability to enhance the students’ understanding of mobilityrelated industries. In order to resolve inequality in career education opportunities,
priority is given to schools in rural areas, special schools, and alternative schools.
In 2022, we organized a creative experiential learning for elementary school
students as regular program in order to make education fun and easy from theperspective of children.

5. ESG Factbook

In 2022, we expanded the target
over the previous year to provide education to 14,000
students in 350 schools. In addition, we launched creative
experiential learning for elementary school students as aregular program.

2022 Key Achievements

In 2023, we plan to start a mobility-related
career experiential learning support project for students
in ASEAN countries in collaboration with the Asia-PacificCenter of Education for International Understanding under
the auspices of UNESCO (APCEIU).

Future Plans

Hyundai Motor Company Australia (HMCA), together with its dealers, is running the Help
for Kids program, which provides financial and vehicle support to children’s charities. The
program has been ongoing since 2014, providing children and families in Australia with arange of activities beyond essential funding, including transportation and education.
In 2022, the Hope on Wheels campaign donated USD 15 million andsupported the research of 1,100 pediatric oncologists, while the Help for Kids program raised
funds from donations over AUD 11 million between 2014 and 2022.

2022 Key Achievements

In 2023, the dealer networks participating in Hope on Wheels increased theirfund-raising from USD 14 to USD 22 per vehicle sold, while the network of Australian dealers
participating in Help for Kids decided to increase their fund-raising from AUD 7.5 per vehicle sale
to AUD 10 in August 2022, which is expected to lead to an increase in the donation amount.

Future Plans

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

Creating Shared Value
CSV Activities

76

Community
Employee
Volunteering

Art for HopeAs social distancing was eased in 2022, various volunteer activities wereconducted in which our employees could actively participate. Leading
example includes H-pop-up trucks operated at our headquarters,
Namyang R&D Center, and Ulsan Plant. H-pop-up trucks is designed topromote development rights and participation rights for children in local
children’s centers nationwide. 55 employees who participated in theactivity set up a play experience booth where children could enjoy VR
experiences and traditional games, as well as conducting creative craft
activities such as making wooden cars. In June 2022, Hyundai’s Ulsan
Plant resumed its various face-to-face volunteer activities such as balloon
art instruction at a local children’s center and hand and foot massage
service for people with intellectual disabilities, as well as volunteering at
soup kitchens. In addition, they conducted various volunteer activities anddelivered donations as part of H-Local Partner, a community-based social
contribution activity.

Art for Hope is an art revival program operated by Hyundai Motor India.
It was launched to provide financial support to artists who had lost theirlivelihood after ceasing their creative activities due to the COVID-19
pandemic, and to increase access to the arts by building a platform
for youth, women, and local artists. It has developed into a flourishingartist support program that grants a total of INR 4 million to 35 teams ofartists who are active in various arts fields across the 17 states of India,
based on proposals for community art projects on the theme of “Hope,
Solidarity, Gratitude”. It currently supports traditional Indian arts, crafts,
and performances. In particular, it is developing into a platform foryoung artists belonging to the underprivileged classes.
2022 Key Achievements As of the end of 2022, the program supported five
types of traditional arts and four archive projects in India, providing financial
support for a total of 60 teams (120 artists), and attracting more than 3,700
exhibition visitors. In parrel with the program, we made 12 environmental
and social issues to be the subject of public deliberation in local
communities, while inducing people to be aware of social issues throughart. It was well received for it enabled persons with visual impairment ordevelopment disorders to enjoy the exhibition and provided audiences withinteractive workshop and guided tours.

2022 Key Achievements In 2022, 5,592 Hyundai employees participated in 627
volunteer activities for a cumulative total of 15,016 hours.

Korea Archery Association

Disaster Relief

Since 1985, Hyundai has been supporting the operating expenses of the Korea
Archery Association while providing various awards to the national team whenit achieves outstanding results in international competitions. Moreover, Hyundai
has used the technological resources of its research institute to develop ashooting machine that can not only sort out bad arrows but can also apply
a precision-analysis technology to identify abnormal or defective parts, thus
enabling the national squad to achieve a very high level of skill and continue
beating their personal records. We also sponsor a number of leading archerytournaments, including the World Archery Championships.
While continuing to support the Korea Archery Association, Hyundai
intends to establish a sponsorship with the World Archery Association and support
it until 2025. Based on this, we will contribute to improving the competitiveness ofarchery in Korea by expanding the archery base and fostering promising archers.

ESG Magazine

Future Plans

TurkeyKorea

Indonesia

Hyundai fulfills its social responsibility by taking
active part in supporting damage recovery in theevent of disasters or accidents globally. In Korea, wedonated funds to assist the recover from the UljinSamcheok wildfire in March 2022, the heavy rains incentral Korea in August 2022, and the Gangneung
wildfire in April 2023. Overseas, we provided help
through donations for the recovery from theIndonesian earthquake in November 2022 andthe devastating earthquake in Turkey in February
2023. These are good examples to show that we
make continued efforts to support recovery fromdisasters both in Korea and abroad. In addition, if
disasters or accidents occur near our business sites
and subsidiaries, Hyundai employees work hard to
help the affected local communities recover fromthe damages by conducting fundraising activities
on their own or by providing relief goods at thediscretion of each business site.

2022 Key Achievements
In March 2022,
Hyundai donated about KRW 2.3 billion toassist the recovery from wildfire in Uljin andSamcheok, and provided KRW 900 million
each to help the victims of heavy rainfall in
the central region in August 2022 and thewildfire in Gangneung in April 2023. Overseas,
we donated IDR 2 billion in November 2022
for earthquake relief in Indonesia. In February
2023, we helped victims affected by theearthquakes in Turkey by donating USD 1
million and supporting life-saving equipment,
daily necessities, and other goods, worth EUR
0.5 million total.

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

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77

Creating Shared Value
Global Partnership for Arts and Culture
Hyundai supports a wide range of exhibitions andprograms in partnership with art institutions aroundthe globe to offer a greater number of audiences
the opportunity to enjoy and experience art.

National Museum of Modern and Contemporary Art, Korea

Tate

Los Angeles County Museum of Art

In partnership with the National Museum of Modern and Contemporary
Art, Korea (MMCA), Hyundai has been holding the “MMCA Hyundai Motor
Series” since 2014 to expand the boundaries of Korean art. Every year, we
support a large-scale solo exhibition by an esteemed Korean artist as well
as related seminars and publication activities. In 2022, the MMCA Hyundai
Motor Series 2022: Choe U-Ram – Little Ark exhibition was held, andvarious programs were conducted during the exhibition period, including
critic and artist talks, collaborative performances with choreographers andmusicians, to communicate with the audience.

The “Hyundai Commission,” made possible by the long-term partnership
between Tate and Hyundai, is a series of site-specific installations byinternational artists for Tate Modern's Turbine Hall. In 2022, artist andpoet Cecilia Vicuña created two monumental new sculptures for Hyundai
Commission: Cecilia Vicuña: Brain Forest Quipu . Continuing her longstanding work with the Andean tradition of the quipu, quipu sculptures hung27 meters from the ceiling at opposite ends of the Turbine Hall combinedwith audio and digital installations. This multi-part installation was an act
of mourning for the destruction of the forests, the subsequent impact ofclimate change, and the violence against Indigenous people, and also an
opportunity to create a space for new voices.

Since 2015, in partnership with Los Angeles County Museum of Art(LACMA), “The Hyundai Project at LACMA” has been supporting
exhibitions and lab projects, aimed at promoting the convergence oftechnology and art, as well as research activities in Korean art history. As
part of this partnership, the The Space Between: The Modern in Korean
Art exhibition was held in September 2022. This exhibition featured about
150 works of art that reflect the historical uniqueness of Korea's modern
era and was based on long-term research and planning through ourpartnership program. By showcasing modern art works reinterpreted by
Korean artists influenced by foreign cultures and contemporary works byoverseas artists, the exhibition presented an integrated perspective on
modern Korean art.

Hyundai has also been supporting “PROJECT HASHTAG” since 2019 todiscover next-generation creators in Korea and support their experimental
and creative activities. Two teams are chosen every year to be provided
with a grant of KRW 30 million, a studio, and exhibition opportunities.
In 2022, the PROJECT HASHTAG 2022 presented a showcase of thegeopolitical significance of underground party spaces and cultural andsocial issues in virtual ecosystems from the perspective of young creators.

The “Hyundai Tate Research Centre: Transnational” continues to encourage
new perspectives on global art histories and critical research to highlightglobal exchanges of artists and ideas. Including an annual symposium, the“Hyundai Tate Research Centre: Transnational” hosts research events tofacilitate collective research and intellectual exchange.

MMCA Hyundai Motor Series 2022: Choe U-Ram — Little Ark, Little Ark, 2022, recycled cardboard

Hyundai Commission: Cecilia Vicuña: Brain Forest Quipu © Cecilia Vicuña, Installation View at Tateboxes, metallic material, machinery, electronic device (CPU board, motor), 210 x 230 x 1272cm. Image
provided by MMCA

Modern 2022. Photo © Tate (Ben Fisher)

We also support innovative exhibitions and creative activities that converge
art and technology through the “Art + Technology exhibition” and the “Art+ Technology Lab.” The selected artists for the “Art + Technology Lab”
have been working on activities that incorporate rapidly growing newtechnologies such as blockchain, metaverse, and NFTs. In addition, many
artists have been implementing various ideas into their works with thehelp of technology consultations from companies such as Hyundai Motor
Company, Google, SpaceX, and Snapchat.

The Space Between: The Modern in Korean Art, Installation photograph, Los Angeles County
Museum of Art, Sep 11, 2022-Feb 19, 2023. Photo © Museum Associates/LACMA

1. Introduction

Governance

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

78

The “G” in ESG refers to the governance factors– the fundamental basis for creating ESG
value. The establishment of a strong corporate
governance coupled with responsible corporate
behaviors can increase corporate value andachieve sustainable growth by responding tovarious risks and seizing business opportunities
appropriately. Hyundai therefore spares noefforts in growing in an economically, sociallyand environmentally right way based on theadvanced governance structure befitting its
status as a global company.
4.1

Board-centered Management System

4.2

Shareholder-friendly Management

4.3

Ethics and Compliance Management

4.4

Risk Management

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

79

Board-centered Management System
Hyundai strives to appoint directors with diversity,
expertise and independence, aimed at establishing asound and transparent governance structure, while
also doing its utmost to maximize shareholder rights
and interests as well as corporate value based on theunderstanding of its diverse stakeholders, including
shareholders and customers. As Hyundai’s highest
decision-making body, the BOD is operated with thegoal of achieving sustainable and balanced growth
based on the company’s Articles of Incorporation byfaithfully supervising the activities of management.
We have established independence and diversity
policies for our independent directors, appointed
directors with expertise, and enacted the Corporate
Governance Charter in an effort to build a better
governance system.

Composition of the BOD
BOARD COMPOSITION
Hyundai’s BOD is composed of 13 members for effective and prudent
decision-making, with independent directors making up more than half of
its members (seven) in order to ensure its independence in accordance with
the Commercial Act. The Board consists of experts in such various fields as
management, accounting, finance, law, governance and future technology,
and respects diversity without discrimination on the grounds of gender, race,
religion, etc.
DIRECTOR TENURE
As of the end of March 2023, the average tenure of the 13 board members isabout two years and seven months. In accordance with the Commercial Act,the term of office of independent directors cannot exceed six years. Those
appointed in March 2023 include two internal directors (one re-appointed,
one newly appointed) and two independent directors (all newly appointed).

APPOINTMENT OF DIRECTORSAll of Hyundai’s directors are appointed through a resolution of the generalshareholder’s meeting (GSM). The independent directors are selected fromamong the candidates recommended by the Recommendation Committee
on Candidates for Outside Directors to appoint competent and responsible
personnel armed with expertise who can make substantial contributions tocorporate management in a balanced way. We seek to respond flexibly tochanges in the business environment by appointing independent directors
with diverse perspectives and experiences.
INDEPENDENCE OF DIRECTORS AND RESTRICTIONS ON CONCURRENTPOSITIONSHyundai has put in place strict independence guidelines, meeting thelegal standards required by the Korean Commercial Act, based on theinternational standards. Independent directors must not only comply
with them, but also represent the rights and interests of stakeholders with
exemplary ethics and professionalism. Hyundai therefore only appoints
persons with no significant stake in the company as independent directors,

BOD Composition
Classification

Internal
Directors

Independent
Directors

*
**

Name

Title

CareerDate ofAppointment

GenderNationality

Euisun Chung

Executive Chair

Currently Executive Chairman of Hyundai Motor Group

March 12, 2010

Male

Korea

Jaehoon Chang

President & CEO

Currently President & CEO of HMC

March 24, 2021

Male

Korea

Chung Kook Park

Executive President Currently President and Head of HMC R&D Division

March 24, 2022

Male

Korea

Dong Seock Lee

CEOMarch 24, 2022

Male

Korea

March 23, 2023

Male

US, Spain

March 24, 2021

Male

Korea

March 22, 2019

Male

Korea

March 22, 2019

Male

US

March 22, 2019

Male

Korea

March 24, 2021

Male

Korea

March 24, 2021

FemaleKorea

March 23, 2023

Male

Korea

March 23, 2023

FemaleKorea

Currently Executive Vice President and CSO of Domestic Productions

Currently Global COO of HMC and CEO of Hyundai and Genesis Motor North America
Jose Munoz
President & GCOO
Former Chief Performance Officer of Nissan and Chairman China, Nissan
Executive Vice
Gang Hyun Seo
Currently Executive Vice President of HMC Planning & Finance Division
President
Independent
Former Chairman of EQONEX
Chi-Won Yoon
Director
Former Vice Chairman of UBS Wealth Management
Independent
Eugene M. Ohr
Former Partner of Capital International Inc.1
Director
Independent
Currently Dean and Professor of Economics, Seoul National University
Sang-Seung Yi
Director
Former Chairman of Korea Academic Society of Industrial Organization
Independent
Currently Representative of Woorin Tax Partners
Dal Hoon Shim
Director
Former Head of NTS Jungbu Regional Office
Independent
Currently Professor, Department of Aerospace Engineering of KAISTJi Yun Lee
Director
Former Director of American Society of Navigation
Independent
Currently Professor of Graduate Law School, Seoul National University
Seung-Hwa Chang
Director
Currently Arbitrator of the International Court of Arbitration (ICC)
Independent
Currently Professor of Graduate Law School, Konkuk University
Yoon-Hee Choi
Director
Former Member of National Election Commission

As of March 31, 2023
Executive President & Standing Director Chung Kook Park resigned before end of term in April 2023

and they maintain independency from top management, monitor theefficient operation of the company, and play a role in enhancing corporate
value. In addition, the independent directors must devote sufficient timeand effort to the faithful performance of their duties, and according to theCommercial Act, they cannot be appointed as directors, executive members,
and/or auditors of two or more companies other than the company itself. In
order to be permitted to hold concurrent positions in other companies, theymust report the details of the duties they wish to hold concurrently to theBoard in advance and obtain its approval.
Concurrent Positions of Independent Directors
Name

Date of Initial
Appointment

Date of Term
Expiration

Details of Concurrent Positions(Institution / Position)

Chi-Won Yoon

March 22, 2019 March 23, 2025

Sang-Seung Yi

March 22, 2019 March 23, 2025

Samsung C&T /Independent Director

Eugene M. Ohr

March 22, 2019 March 23, 2025-

Dal Hoon Shim

March 24, 2021 March 23, 2024

Samhwa Paints Industrial /Independent Director

Ji Yun Lee

March 24, 2021 March 23, 2024-

Seung-Hwa Chang

March 23, 2023 March 22, 2026-

Yoon-Hee Choi

March 23, 2023 March 22, 2026

Hanjin KAL /Independent Director

DIVERSITY OF THE BOD
Hyundai appoints directors based on the principle of diversity, such as
gender, nationality, race and religion. As of the end of March 2023, the Board
has two directors with foreign nationality (Jose Munoz and Eugene M. Ohr)
and two female directors (Ji Yun Lee, Yoon-Hee Choi).
As Global Chief Operating Officer (COO), director Jose Munoz has greatly
contributed to improving Hyundai’s performance in the global market and willcontinue to play an important role in securing global market competitiveness.
Eugene M. Ohr, an independent director who is an expert in global businessand asset management, was appointed to contribute to improving ourbusiness transparency. Ji Yun Lee, independent director, is a professor at
the Department of Aerospace Engineering at KAIST. As a world-recognizedauthority on ensuring the safety of intelligent transportation and autonomous
driving systems, she contributes to innovation in future core technologies
and future mobility by advising on mid- to long-term business plans forautonomous driving technology and urban air mobility (UAM). Professor YoonHee Choi is a legal expert and has abundant expertise in labor-management
relations, including activities at the National Labor Relations Commission and
the National Human Rights Commission of Korea.

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

80

Board-centered Management System
Operation of the BOD

Board Meetings in 2022

BOD MEETING
Board meetings are convened by its chair or another member appointed by
the Board. At the time of convening the BOD, each director is notified of the
convocation in writing or orally seven days prior to the date of the meeting.
However, the convocation process may be omitted when all directors agree.
A BOD resolution must be made with the attendance of a majority of thedirectors and the consent of a majority of the directors in attendance. Should
the relevant laws and regulations stipulate otherwise, they shall apply.

BOD Activities in 2022

Number of meetings

Number of agenda items for resolution

Number of agenda items for report

The BOD agenda is proposed by the chairperson, and if the otherdirectors wish to propose an item, the summary must be submitted to thechairperson. The Board must prepare the minutes, in which the agenda of
the meeting, its progress and results, any opponents to the agenda and thereasons for their opposition must be entered, and the chairperson and the
directors present must seal or sign the minutes.

1st General
Meeting

BOD Participation in 2022

9
23
12

Classification

Average participation rate

Jan.25

Board of Directors

98
96
100

Participation rate of internal directors
Participation rate ofindependent directors

Date

Extraordinary
Meeting%%

Extraordinary
MeetingFeb.23Mar.24%

2nd General
Meeting

Apr.25

Decision-making Process of the BOD
Extraordinary
Meeting

Appointment of directors and approvalof compensation limits

Shareholders
Participate in key decision-making by
exercising their voting rights

GSM

Jun.30Appointment of CEO

BOD

CEO

Report on BOD activities
BOD’s committees

Audit Committee

Facilitate BOD’s efficient
operations

Recommendation Committee
on Candidates for
Non-executive Directors
Compensation Committee
Sustainability
Management Committee

3rd General
Meeting

Jul.21

Extraordinary
Meeting

Aug.11

Extraordinary
Meeting

Sep.07

4th General
Meeting

Oct.24

Contents

Whether Attendance Approval
Approved
Rate
Rate

Approval of financial statements for the 54th fiscal year

Approved

100%

Re-approval of the 47th-53rd separate financial statements

Approved

100%

Approval of the 54th annual report

Approved

100%

Approval of the business plan for 2022

Approved

100%

Approval of the health and safety plan

Approved

100%

Approval of the limit on corporate bond issuanceApproved

100%

Appointment of the manager

Approved

100%

Assessment of the 2021 internal accounting management system, compliance management activities
and plan, and geopolitical risks related to Russia and China

Reported-

Approval of the convocation and agenda to be submitted to the 54th GSM

Approved

100%

Results of the 2021 internal accounting management system

Reported-

Appointment of the Chief Executive Officer

Approved

100%

Appointment of the chairperson of the BOD

Approved

100%

Appointment of Committee members (Sustainability Management Committee, Recommendation
Committee on Candidates for Outside Directors, Compensation Committee)

Approved

100%

Approval of dual-directorship (Euisun Chung –Kia and Hyundai MOBIS; Sang-Seung Yi –Samsung C&T; and Dal Hoon Shim – Samhwa Paints Industrial)

Approved

100%

Approval of capital increase for an overseas sales subsidiary

Approved

100%

Business results of Q1 2022, business status and investment plan of Supernal,
occurrence of major health and safety issues

Reported-

Approval of transaction between directors, etc. and the company

Approved

100%

Approval of the amendment of regulations for the Sustainability Management Committee

Approved

100%

Approval of the establishment of an overseas affiliate

Approved

100%

Participation in overseas subsidiary capital increase, establishment status of an EV company in the US

Reported-

Approval of the 55th fiscal year interim dividend payment

Approved

100%

Approval of liquidity support for suppliers

Approved

100%

Business results of Q2 2022

Reported-

Approval of equity investment in another corporation

Approved

100%

Approval of the establishment of an AI research institute in North America

Approved

100%

Approval of treasury stock exchange with another corporation

Approved

100%

Approval of transaction between directors, etc. and the company

Approved

100%

Approval of disposition of treasury stocks

Approved

100%

Business results of Q3 2022, Hyundai’s response to the US IRA

Reported

-

100%

100%

100%

100%

91%

91%

100%
100%

100%

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

81

Board-centered Management System
DIRECTOR’S RESPONSIBILITIESHyundai’s directors must faithfully perform their duties to the company
in accordance with the provisions of the relevant laws and the Articles ofIncorporation. Hyundai compensates directors for litigation expenses, otherlosses, damages, and liabilities incurred in connection with the performanceof their duties. However, we do not compensate the losses, damages andliabilities which arise due to the malicious or gross negligence of the directors
concerned, or if compensation by the company is not permitted by law.
In addition, directors are liable to the company and third parties in accordancewith the Commercial Act and other laws in case of neglect of duties, etc. A
director’s liability to the company is limited to an amount equal to six times
the amount of remuneration he or she has received in the last one year (threetimes in the case of an independent director), but this does not apply if thedirector causes damages either intentionally or by gross negligence, or if thelaw does not allow directors’ responsibilities to be reduced.
CHAIRPERSON OF THE BOARD
Hyundai’s BOD appoints its chairperson at the first board meeting after a
GSM, and the chairperson’s term of office is three years. The chairperson
convenes and presides over the BOD and ensures that the Board plays
its role effectively in all respects. The chairperson determines the order ofpriority in which directors will act as interim chairperson in the event thathe or she is unable to attend the board meeting in person, and appoints a
temporary chairperson from among the directors to act as the chairperson.
If no chairperson is appointed, the duties of the chairperson of the Board areassumed in the order designated in advance.

EVALUATION OF BOD OPERATIONS AND ACTIVITIESAt Hyundai, the independent directors conduct an annual evaluation of the
BOD’s operations every year, with the results discussed at Board meetings
as a way to improve the efficiency of its operations. In 2022, a third-party
evaluation was conducted by an independent evaluation agency to ensure
objectivity, and thus identified the current status of the composition andoperation of the BOD in terms of expertise, efficiency and effectiveness, withthe result that there was neither inappropriateness of the Board composition
nor ineffectiveness in its operations. In addition, we derive improvement
plans for the BOD by benchmarking best practices at home and abroad in
the same industry and, going forward, based on the final opinion of the thirdparty, we will reflect the ideas for the improvement of the BOD compositionand operations.

Profile of the BOD Members
Classification

Internal
Directors

EXPERTISE OF THE BOD
Hyundai appoints directors with expertise in various fields such as global
business, R&D, accounting, finance, legal affairs, and future technology. In
addition, we make sure that our independent directors’ ability to fulfill their duties
faithfully is being strengthened through regular visits to factories and research
institutes at home and abroad and meetings with executives in key sectors.
BOARD MEMBER TRAINING
Hyundai conducts training seminars on various topics such as businessstatus, ESG risks, diversity, and new businesses in order to enhance thebusiness understanding of its independent directors, and supports thestrengthening of their professional competency to help them fulfill their roles
as independent directors.

Board Member Training in 2022
Date ofTraining

Training Content

Date ofTraining

Apr. 25

Overview and business status of Hyundai Capital

Jul. 18

Apr. 25

Follow-up progress of Hyundai’s future business
investment (Boston Dynamics, Motional)

Apr. 25
Apr. 25
Apr. 25

Participants

Eun Soo Choi,
Chi-Won Yoon,
Eugene M. Ohr,
Sang-Seung Yi,
Dal Hoon Shim,Ji Yun Lee

Strategic direction for Hyundai’s charging
infrastructure
Development progress and schedule Hyundai
Global Business Center (GBC)

Jul. 18
Oct. 24
Oct. 24

Participants

Training Content

Eun Soo Choi,
Chi-Won Yoon,
Eugene M. Ohr,
Sang-Seung Yi,
Dal Hoon Shim,Ji Yun Lee

ESG trends and future directions

Independent
Directors

Current status of Hyundai’s female workforce andresponse to the aging society
ESG risks and the BOD monitoring obligations
Hyundai’s design heritage

Overview and progress of overseas plantinvestment*

Name

ProfileEuisunChung•	CEO of Kia (2005-2008)•	Vice-chairman of HMC (2009-2018)•	Senior Vice-Chairman of HMC (2018-2020)•	Chairman of HMC (2020-present)

JaehoonChang•	Head of the Management Support Division & Head of theDomestic Business Division (2019-2020), Head of the Genesis
Business Division of HMC (2019-2022)•	President & CEO of HMC (2021-present)

Chung Kook
Park•	CEO and President of Hyundai KEFICO (2015-2018)•	CEO and President of Hyundai MOBIS (2018-20)•	Deputy Head of HMC R&D Division (2020-2021)•	President and Head of HMC R&D Division (2022-Apr. 2023)

Dong Seock
Lee•	Head of HMC General Production Management Division(2017-2018)•	Head of HMC Engine Transmission Business Division (2018-2020)•	Production Support Director of HMC (2021)•	Executive Vice President and CSO of Domestic Productions(2022-present)

Jose Munoz•	Chief Performance Officer of Nissan and Chairman North America,
Nissan (2016-2018)•	Chief Performance Officer of Nissan and Chairman China, Nissan(2018-2019)•	Global COO of HMC and CEO of Hyundai and Genesis Motor
North America Division (2019-present)

Gang Hyun
Seo•	Head of HMC Accounting Office (2015-2019)•	Head of Finance Division, Hyundai Steel (2019-2020)•	Executive Vice President of HMC Planning & Finance Division(2021-present)

Chi-WonYoon•	Chairman and CEO of UBS Asia Pacific (2009-2015)•	Vice Chairman of UBS Wealth Management (2016-2019)•	Chairman of EQONEX (2020-2022)

Eugene M.
Ohr•	Member of BOD, Capital International Research Inc. (2004-2009)

Sang-Seung
Yi•	External Expert of Governance Committee, Samsung C&T(2015-2020)•	Professor of Economics, Seoul National University (2001-present)•	Dean of Economics, Seoul National University (2020-present)

Dal Hoon
Shim•	Director of the Corporate Taxation Bureau and Director of Taxationand Legal Affairs, National Tax Service (2013-2015)•	Head of NTS Jungbu Regional Office (2015-2017)•	Representative of Woorin Tax Partners (2017-present)

Ji Yun Lee•	Director of American Society of Navigation (2019-Jan. 2021)•	Professor, Department of Aerospace Engineering of KAIST(2009-present)

Seung-Hwa
Chang•	Chairman of the Trade Committee, Ministry of Trade, Industry and •	Professor of Graduate Law School, Seoul National University(1995-present)
Energy (2019-2022)•	Arbitrator of the International Court of Arbitration (ICC)(2000-present)

Yoon-Hee
Choi•	Adjudication Committee Member of National Labor Relations
Commission (2005-2014)•	Member of National Election Commission (2014-2020)

Internal Director Chung Kook Park resigned before the expiry of the term in April 2023.

•	Partner of Capital International Inc. (2010-2017)•	Professor of Graduate Law School, Konkuk University(2005-present)

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

82

Board-centered Management System
Functions of the BOD
RISK MANAGEMENT
Hyundai’s BOD is upgrading its management system to respond more
effectively to risks that may arise from rapid changes in automotive
industry trends, energy conversion to electric energy, and accelerated
value consumption by customers. In April 2022, Hyundai established the
Cross Functional Team, an organization directly under the CEO, to respondpromptly to internal and external risks and opportunity factors occurringin the entire process of development, production, and sales of finishedvehicles, including the supply chain.
COMPLIANCE MANAGEMENT
Hyundai’s BOD has established a compliance management system to review
and manage its legal risks. To this end, we have designated independent
director Yoon-Hee Choi, who has considerable legal expertise, as the person
in charge of compliance management as a way to expand our compliancemanagement and strengthen the BOD’s compliance monitoring function,and to play an active supervisory role in the company's compliancemanagement. In addition, we are striving to spread a company-wide cultureof compliance by conducting compliance inspections and compliancetraining for employees.
ETHICAL MANAGEMENT
Under the supervision of the Sustainability Management Committee within
the Board, Hyundai closely reviews the protection of shareholder rights andinterests, transparency in insider transactions, and the promotion of ethicalmanagement. Moreover, we continuously reflect improvements in thecompany’s Ethics Charter through resolutions and deliberation on ethics
management-related policies and the establishment and/or revision of
ethical standards.

BOD Remuneration
INTERNAL ACCOUNTING MANAGEMENT
Hyundai’s BOD has developed and launched an internal accounting control
system with the aim of providing reasonable assurance that the company’s
financial statements are prepared and disclosed in accordance with thegenerally accepted accounting standards. The evaluation of the operational
status of the internal accounting management system, the progress, andthe approval of the evaluation plan are reported to the Audit Committee.
At the Audit Committee meeting held in February 2023, Hyundai’s internal
accounting management system was evaluated based on the Internal
Accounting Management System Design and Operation Concept System,
and it was determined that the system had been designed and operated
effectively. The external auditor also expressed the opinion that thecompany’s internal accounting control system has been effectively designed
and operated from the viewpoint of materiality in accordance with theInternal Accounting Management System Design and Operation Concept
System. In addition to the Audit Committee, the results of the evaluation of
the internal accounting control system’s operational status are reported to
the Board and the GSM every business year.
MANAGEMENT OF CLIMATE CHANGE
Firm in the belief that it must assume its responsibility to actively respondto climate change, Hyundai has established environmental management
to strengthen its ability to respond to global environmental issues andregulations in a comprehensive fashion. To this end, we have established astrategy for converting to electrified vehicles and developed a roadmap toachieve RE100. All our sustainability management strategies and climatechange issues are discussed and monitored in detail by the Sustainability
Management Committee.
HEALTH AND SAFETY MANAGEMENT
Government regulations on automobile safety at home and abroad aretightening every year. Reflecting this trend, Hyundai establishes a healthand safety plan every year and reports it to the Board for its approval. In
order to manage its health and safety issues comprehensively, Hyundai
has newly appointed an internal director with expertise in health andsafety, and is systematically managing major health and safety plans andprogress inspections through discussions at the Sustainability Management
Committee.

CRITERIA FOR BOD REMUNERATION
Remuneration for directors is executed within the limits determined at
a GSM and is determined through deliberation by the Remuneration
Committee. The salaries of internal directors are calculated by reflecting
such evaluation factors as job function, position, leadership, contribution to
the company, talent development, etc. based on the internal executive salarytable. Bonuses are paid based on financial performance (sales, operating
profit, etc.) and contribution to the company based on performance
incentives. In the case of independent directors and members of the Audit
Committee, fixed amounts are paid to ensure their independence andtransparency, but no separate performance bonus is paid.

CRITERIA FOR EXECUTIVE REMUNERATION
Hyundai determines the remuneration of its executives based on internal
standards such as the executive salary table and the executive wage
setting standards. Management’s salaries are determined based on acomprehensive performance evaluation that takes into consideration theirleadership, expertise, contribution to the company, length of service, andtalent development. In addition, bonuses are paid based on executive
remuneration standards (performance incentives) – the amount of bonus
is determined by their business performance, such as sales and operating
profit, achievement of business goals and contributions as members of the
management, as well as their internal and external management activities.
CEO PERFORMANCE EVALUATION AND REMUNERATION
When evaluating and rewarding the CEO’s performance, Hyundai reflects
the results of financial evaluations relating to sales, profit ratios, net cash
liquidity, debt ratios, and market shares, as well as the results of comparativeevaluations among peers with regard to stock prices, ESG, and brandpower. As of 2022, the CEO’s remuneration amounted to KRW 2,932 million,
consisting of a basic salary of KRW 1,116 million, bonuses of KRW 1,805
million, and other wage and salary incomes of KRW 11 million.

Criteria for BOD Remuneration
Classification

Internal Directors(CEO and management)

Payment Criteria•	Salary: Paid within the limit of directors’ remuneration set by the GSM resolution based on internal criteria, such as Hyundai’s
executive salary table and executive wage setting standards, job title, tenure, leadership, professionalism, contribution to thecompany, and human resource development, etc.
•	Bonus: Paid based on performance incentives, according to both quantitative and non-quantitative indicators – the former includes
business performance, such as sales and operating profit; degree of achievement of business goals; ESG-related indicators; and brandpower, and the latter includes management performance, contribution to the company, and internal/external business environment•	Other earned income: Paid according to the company regulations on welfare support and long-term service rewards

Independent Directors•	Fixed amounts are paid to ensure their independence and transparency within the limit of remuneration for directors determinedby the GSM resolution, with no separate performance bonus paid.

BOD Remuneration(Unit: KRW million)
Classification

Average compensation per person

CEO1)

Board member

Independent director

Employee2)

CEO-to-employee pay ratio

2,932

1,221

108

105

28 x

* For further details, please refer to the 2022 business report published on the electronic disclosure system of the Financial Supervisory Service
1)
CEO: Based on remuneration for Jaehoon Chang, President & CEO of Hyundai Motor Company
2)
Employees: Excluding registered executives (unregistered executives and employees)

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

83

Board-centered Management System
BOD Subcommittees
AUDIT COMMITTEE
Composition of the Audit Committee The Commercial Act stipulates
strict criteria for appointing and forming the committee member aimed atsecuring the transparency and independence of the Audit Committee, andthus the Audit Committee must be composed of at least three directors
appointed at a GSM, and at least two-thirds of them should be independent
directors. It should also contain at least one member who is a specialist inaccounting and finance. All five members of Hyundai’s Audit Committee are
independent directors, with three (Chi-Won Yoon, Sang-Seung Yi, Dal Hoon
Shim) of whom are experts in accounting and finance. In particular, director
Dal Hoon Shim, who has accumulated a wealth of experience as a tax expert
while serving as the head of NTS’s Jungbu Regional Office among otherposts, supports the company’s overall risk management from a different
perspective to the company’s internal audit organization.

Roles of the Audit Committee Hyundai’s Audit Committee is composedof five independent directors with expertise in various areas including legal,finance, accounting, and future technology. The Committee verifies thelegality of the business activities of the directors and management andsupervises the soundness and propriety of corporate financial activities andthe accuracy of its financial reporting, and also reviews matters stipulated by
the GSM related to the selection, change, and dismissal of external auditors,
other laws and the Articles of Incorporation, and the operating regulations of
the Committee.
Approval of Non-audit Services Hyundai regularly monitors the independenceof its external auditors, and only allows them to conduct non-audit services
to the extent that they do not affect their independence. We report any
important matters identified during their activities to the Audit Committee
and disclose them through quarterly reports. In order to further strengthen
the independence of the external auditors, prior approval from the Audit
Committee is required as of 2023 when signing a non-audit service contract
with an external auditor.

Audit Committee Composition
Name
Classification
Expertise

COMPENSATION COMMITTEE
Composition of the Compensation Committee Following the amendment
to the Articles of Incorporation for the establishment of the Compensation
Committee at the 2019 GSM, Hyundai enacted the Compensation
Committee regulations at the 4th General BOD Meeting. According to
the BOD’s rules, independent directors must constitute a majority of themembers of the Committee, which consists of two independent directors
and one internal director.
Roles of the Compensation Committee Hyundai’s Compensation
Committee helps the company to ensure objectivity and transparency
in the remuneration decision-making process for registered directors. It
also deliberates and make decisions on matters related to the limit on
remuneration for registered directors and the remuneration system forinternal directors.

Chi-Won Yoon

Sang-Seung Yi

Dal Hoon ShimJi Yun Lee

Seung-Hwa Chang

Name

Independent director

Independent director

Independent director

Independent director

Independent director

Classification

Management,
financial service

Business,governance

Finance, accounting,tax service

Future/industrial
technology

International trade/legal affairs

Expertise

Chi-Won Yoon

Dal Hoon Shim

Gang Hyun Seo

Independent director

Independent director

Internal director

Management, financial service

Finance, accounting, tax service

Finance and economy, strategy

Recommendation Committee on Candidates for Outside Directors Composition
Name

55th

Roles of the Recommendation Committee on Candidates for Outside
Directors The Recommendation Committee on Candidates for Outside
Directors plays the role of recommending candidates for independent
directors prior to a GSM. The Committee recommends candidates who
can make substantial contributions to corporate management after
carefully examining whether the candidates’ professionalism and personalcapabilities are in line with the interests of the shareholders, and whether
there is a history of their causing damages to corporate value or infringing
shareholders’ rights.

Compensation Committee Composition

Non-audit Service Contracts with External Auditors
Business Year

RECOMMENDATION COMMITTEE ON CANDIDATES FOROUTSIDE DIRECTORS
Composition of the Recommendation Committee on Candidates for
Outside Directors Hyundai’s Recommendation Committee on Candidates
for Outside Directors recommends independent director candidates inaccordance with the relevant laws, the Articles of Incorporation, and the BOD
regulations. The Committee is composed of three independent directors
and two internal directors, with independent directors making up a majorityof the total number of directors, according to the laws and regulations.

Date of Contract

Service Offered

Mar. 25, 2020

Support for renewal of the US APA

Mar. 02, 2021

Refund request for the local tax assessed

Contract Period

Mar. 2020 - Mar. 2022

Service Fee (KRW million)

250

Mar. 2021 – Contract termination

10% of the refund amount

Apr. 12, 2021

Refund request for the local tax paid

Apr. 2021 – Contract termination

10 + 10% of the refund amount

Dec. 21, 2021

Support for renewal of the APA of Germany (HMD)

Jan. 2022 – Contract termination180

Dec. 17, 2021

Support for renewal of the APA of the Czech Republic

Jan. 2022 – Contract termination

180

Jan. 26, 2022

Development of the next-generation contact cente
data analysis modelJan. 2022 – Jul. 2022

489

Mar. 18, 2022

Determination of the origin of automated facilities

Mar. 2022 – Mar. 2023

35

May 23, 2022

Support for renewal of the APA of Germany (HME)

May 2022 – Contract termination

180

Jul. 25, 2022

Inspection of laboratory processes

Jul. 2022 – Aug. 2022

250

Oct. 30, 2022

Review of claims for rectification

Nov. 2022 – Mar. 2023

400

Dec. 22, 2022

Consulting on FTA training for overseas subsidiaries

Dec. 2022 – Mar. 2023

10Classification
Expertise

Eugene M. Ohr

Sang-Seung Yi

Yoon-Hee Choi

Euisun Chung

Jaehoon Chang

Independent director

Independent director

Independent director

Internal director

Internal director

Global businessBusiness, governance

Legal affairs

Overall management

Overall management

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

84

Board-centered Management System
Sustainability Management Committee

Sustainability Management Committee Activities in 2022

Composition of the Sustainability Management Committee In 2021,
Hyundai established the Sustainability Management Committee by
expanding and reorganizing the Corporate Governance & Communication
Committee. The Committee is composed of seven independent directors
and one internal director, as the functions of the former Corporate
Governance & Communication Committee with four members have been
expanded. In particular, director Chi-Won Yoon provides expert insights on
Hyundai’s shareholder return value and capital allocation policy as a global
financial expert who has worked for UBS Wealth Management.
Roles of the Sustainability Management Committee Hyundai’s Sustainability
Management Committee serves as a practical control tower for its ESG
management, with the responsibility and obligation to deliberate and decide on
its ESG policies, plans, and major activities. In addition, going beyond the role ofthe former Corporate Governance and Communication Committee, it discusses
major health and safety-related plans and implementation inspections, and theprotection of shareholders’ rights and interests, which are gradually increasing
in importance. The Committee also carries out a variety of activities to improve
Hyundai’s sustainability management practices internally and externally, such as
strengthening the transparency of the Board, expanding communication withshareholders, and checking ethical issues related to employees.

Chi-WonYoon

Eugene M.
Ohr

Sang-Seung
Yi

Dal Hoon
Shim

Classification

Independent Independent Independent Independent
director
director
director
director

Expertise

Management,
financialservice

Globalbusiness

Business,governance

Finance,accounting,tax service

Ji Yun
Lee

Seung-Hwa
Chang

Yoon-Hee
Choi

Jaehoon
Chang

Classification

Independent Independent Independent
director
director
director

Internal
director

Expertise

Future/industrial
technology

NameInternational
trade/legal
affairs

Legal affairs

Date

Agenda items

Whether
approved

Approval
rate

Attendancerate

1st General
MeetingJan. 25

Approval of financial transactions under the terms and conditions agreed with affiliated financial
companies

Approved

100%

100%

Approval of transaction limit with stakeholders

Approved

100%

100%

Approval of the major social contribution plans for 2022

Approved

100%

100%

Reports (6)−	Social contribution activities, etc. (Q4 2021)−	Inspection results of the implementation of the Employee Code of Ethics, etc. (2nd half of 2021)

Reported--

Feb. 23

Reports (2)−	2021 ESG evaluation results and 2022 improvement directions−	Mid- to long-term business strategies and financial goals

Reported--

Approval of transactions
with stakeholders under
the Commercial Act, etc.

Apr. 25

Approval of financial transactions under the terms and conditions agreed with affiliated financial
companies

Approved

100%

100%

Reports related to ESG and
health and safety

Reports (5)−	Compliance support activities, etc. (Q1 2022)−	ESG NDR promotion plan, etc. (2nd half of 2022)

Reported--

Deliberation of transactions between directors, etc. and the company

Approved

100%

100%

Appointment of an independent director in charge of compliance management

Approved

100%

100%

Approval of financial transactions under the terms and conditions agreed with affiliated financial
companies

Approved

100%

100%

Reports (7)−	Inspection results of the implementation of the Employee Code of Ethics, etc. (1st half of 2022)−	Implementation status and plan for the Compliance Program, etc. for Fair Trade Governance

Reported--

Deliberation on equity investment in another corporation

Approved

100%

100%

Deliberation on the establishment of an AI research institute in North America

Approved

100%

100%

Extraordinary
Meeting
2nd General
Meeting

Extraordinary
Meeting

Sustainability Management Committee Composition
Name

Classification

Overallmanagement

3rd General
Meeting

Extraordinary
Meeting

Jun. 30

Jul. 21

Aug. 09

Extraordinary
Meeting

Sep. 05

Approval of treasury stock exchange with another corporation

Approved

100%

100%

4th General
Meeting

Oct. 18

Approval of financial transactions under the terms and conditions agreed with affiliated financial
companies

Approved

100%

100%

Approval of transactions with affiliates (brand usage fee)

Approved

100%

100%

Approval of transactions with an affiliate (lease of the office building in Gye-dong)

Approved

100%

100%

Deliberation of transactions between directors, etc. and the company

Approved

100%

100%

Reports (7)−	Current status of Hyundai’s carbon neutrality efforts, etc.
−	ESG NDR activities, etc. in 2022

Reported--

Major matters approved at andreported to the Sustainability
Management in 2022
Approval of large-scale insidertransactions under the Monopoly
Regulation and Fair Trade Act

Reports on governanceactivities, etc.

Prior review of large-scale
investments, etc.

11
6
6
13
5

cases

cases

cases

cases

cases

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

85

Shareholder-friendly Management
Hyundai respects the legitimate demands andsuggestions of its shareholders and strives to protect
their values and interests. We maintain the soundnessof our decision-making process and management sothat our corporate value can be duly evaluated, while
also doing our utmost to ensure that our shareholders’interests and rights are not infringed upon by making
management decisions in consideration of the interestsof all our shareholders. To this end, we guarantee
their basic right to participate in profit distribution,
attend GSMs and exercise voting rights, and receive
information in a regular and timely manner as stipulated
in the Commercial Act. Moreover, we make active
efforts to communicate with our shareholders throughvarious IR activities, including corporate briefings and
NDRs, and thus provide them with information in atransparent manner.

General Shareholder’s Meeting (GSM)
STATUS OF STOCK ISSUANCE
Hyundai’s total number of issued shares is 274,169,670, consisting of
211,531,506 shares of common stock and 62,638,164 shares of preferred stock.
According to the Articles of Incorporation, the total number of shares that canbe issued is 600,000,000 shares (par value of one share: KRW 5,000), of which
150,000,000 shares of preferred stock without voting rights can be issued.
As of march 31, 2023, three types of preferred stocks are issued in addition
to common stocks, but the rights for the distribution of residual assets,
redemption, conversion, etc. is not provided for preferred stocks. No preferredstockholder’s meeting has been held for the past three years.
Stock Issuance Status
Classification

No. of shares thatcan be issued

No. of sharesissuedNote

450,000,000

211,531,506

With voting
rights24,113,119

Without voting
rights36,120,597

Without voting
rights2,404,448

Without voting
rightsCommon stocks
PreferredstocksPreferredstocks2 Preferredstocks150,000,000

3 PreferredstocksGSM CONVOCATION AND NOTICEHyundai convenes a regular shareholder’s meeting within three months ofthe end of each accounting period. An extraordinary shareholder’s meeting
may be convened, if necessary, by the CEO pursuant to a BOD resolution.
Unless all shareholders agree, no other resolutions can be made apart fromthose of which they are notified in advance. When convening a GSM, a noticeor electronic document stating the purpose of the meeting must be sent toeach shareholder two weeks prior to the date of the meeting. Hyundai has
improved its work process in order to provide shareholders with information
related to GSM within a sufficient period of time, and since 2020 it has issued
each convocation notice four weeks before the GSM concerned.
GSM RESOLUTION (ONE SHARE, ONE VOTE)
In accordance with the Commercial Act and the Articles of Incorporation,
Hyundai grants one equal voting right per share owned by its shareholders
according to the type and number of stocks held by them. Unless otherwise
provided by law, GSM resolutions are made by a majority of the voting rights ofthe shareholders present, who must hold at least a quarter of the total number
of issued stocks. Shareholders may exercise their voting rights with othershareholders serving as their proxy, and the proxy must submit a document
proving their proxy right to the company prior to the opening of a GSM.

EXERCISE OF SHAREHOLDERS’ VOTING RIGHTS AND THEIR DELEGATIONAt Hyundai’s GSM, voting rights are exercised through the shareholders’direct participation or by proxy, or by solicitation of the proxy exercise of
voting rights. In order to secure a quorum for GSM resolutions and facilitate
the smooth operation of a GSM on the principle of ‘one share, one vote’, thepower of attorney form is issued to the shareholders directly, posted on theInternet homepage, or sent by e-mail.
We introduced an electronic voting system at the 52nd GSM to facilitate ourshareholders’ voting rights. Furthermore, we are making efforts to disclose
information in a transparent manner by disclosing the number of shares forand against each item of agenda at each GSM.
APPOINTMENT OF DIRECTORS AS AN INDIVIDUAL ITEM OF AGENDA
Hyundai proposes the appointment of directors as an individual item of
agenda, and they are appointed with the consent of the majority of theshareholders present at a GSM.

* As of march 31, 2023

Share Ownership

The 55th GSM (March 2023)
Agenda Items

Agenda item No. 1

1

Total
6

211,531,506 2
Amendments to the Articles of Incorporation

3
4
5

Shareholder name*

As of march 31, 2023
There are no golden shares possess by a government institution***
	The number of stocks owned by the National Pension Service is based on thelatest register of holders (as of March 31, 2023), so it may differ from the actual
stock ownership status as of now.
**

Type of stock

Ownership (%)

No. of shares

1 Hyundai MOBISCommon stock

21.64

45,782,023

2 National Pension Service

Common stock

7.13

15,077,560

3 Mong-Koo Chung

Common stock

5.39

11,395,859

4 Euisun Chung
Common stock5	Employee’s Stock Ownership
Common stock
Association
6 Others
Common stock

2.65

5,598,478

1.46

3,095,779

61.73

130,581,807

Appointment of directors

Approval of the 55th financial statements

Whether approved

Approved as proposed

No. 2-1

Modification and addition of business purposes

Approved as proposed

No. 2-2

Reflecting the implementation of the electronic securities system

Approved as proposed

No. 2-3

Improvement of governanceApproved as proposed

No. 2-4

Expansion of the directors’ quota

Approved as proposed

No. 2-5

Amendment to the ground rules for directors’ severance pay(including approval of the rules).

Approved as proposed

No. 2-6

Reflecting the improvement of the dividend procedures

Approved as proposed

No. 2-7

Addendum (March 23, 2023)

Approved as proposed

No. 3-1-1

Appointment of an independent director (Seung-Hwa Chang)Approved as proposed

No. 3-1-2

Appointment of an independent director (Yoon-Hee Choi)

Approved as proposed

No. 3-2-1

Appointment of an internal director (Jose Munoz)

Approved as proposed

No. 3-2-2

Appointment of an internal director (Gang Hyun Seo)Approved as proposed

Appointment of an Audit Committee member

No. 4

Appointment of an Audit Committee member (Seung-Hwa Chang)Approved as proposed

Approval of director remuneration limit

No. 5

Approval of the limit on directors’ remuneration

Approved as proposed1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

86

Shareholder-friendly Management
Communication with Shareholders

Shareholder Interest Protection Systems

Shareholder Return

CORPORATE BRIEFINGS
Investor Relations Events
Hyundai holds corporate briefings in January, April, July, and October toannounce its annual, first quarter, first half, and third quarter business results,
respectively. In March 2022, we held the first online corporate briefing
session for individual shareholders on YouTube in order to share informationand strengthen communication on shareholders’ major concerns.

CONTROLS RELATED TO INSIDER TRADING AND SELF-DEALINGSTo enhance transparency regarding large-scale internal transactions under
the Monopoly Regulation and Fair Trade Act and self-dealings under theCommercial Act, Hyundai’s large-scale internal transactions are subject todeliberation and resolution by the Sustainability Management Committee,
which is composed of a majority of independent directors. It is stipulated
that self-dealings with the directors and major shareholders must be carriedout after deliberation by the Sustainability Management Committee andresolution by the Board.

SHAREHOLDER RETURN POLICYTo enhance shareholder value, Hyundai has been paying dividends whose
size is determined in consideration of the company’s investment, businessperformance, and cash flow. On January 25, 2017, we announced the midto long-term dividend policy through public disclosure. Under this policy,
we aim to return 30-50% of the annual free cash flow to our shareholders,
achieve a mid- to long-term dividend payout ratio comparable to that ofglobal competitors, and provide a reason for significant reduction or increaseof the dividend in consideration of the business environment in the future.

We comply with the large-scale insider trading regulations of the Monopoly
Regulation and Fair Trade Act and the self-dealing regulations of theCommercial Act. Anticipated transactions with subsidiaries and major
shareholders are subject to prior approval of their transaction details,
including the period and amount, by the Sustainability Management
Committee and the Board. Transactions with Hyundai MOBIS, the largest
shareholder, are considered ordinary transactions under normal conditions,with their limit approved for a period of less than one year.

Subsequently, we announced our Mid- to long-term shareholder return
policy on April 25, 2023 to implement a more transparent shareholder return
policy. In order to expand the visibility and stability of dividends, we willachieve a dividend ratio of more than 25% (including preferred shares) basedon the annual consolidated net income of the controlling shareholders,
while implementing quarterly dividends from the second quarter of 2023. In
addition, we plan to enhance our shareholder value and build shareholder
trust by implementing an aggressive stock retirement policy, such as stock
retirement of 3% of the outstanding shares held by the company at a rate of
1% over the next three years.

Since the announcement of our business results in the first quarter of 2020,
we have been providing webcasts that anyone can listen to in real time toimprove IR accessibility for all our shareholders. The non-deal roadshow(NDR), which is held once a year, also includes an independent director
within the Sustainability Management Committee in charge of protecting
the rights and interests of shareholders and communicating with them
about Hyundai’s sustainability management activities and goals. In addition,
since 2019, Hyundai has held a CEO Investor Day to present its mid- to longterm management goals and to enhance investors’ understanding of thecompany. Meanwhile, we also conduct meetings with domestic and foreign
institutional investors and minority shareholders; and, when necessary, our top
management participates and communicates directly with our shareholders.
TRANSPARENT INFORMATION DISCLOSURE
Information related to Hyundai can be found on its website and throughvarious disclosure/inquiry systems such as DART and KIND. We operate
a separate English-language website for foreign shareholders andstakeholders, and disclose key information in IR News on the website.
We strive to provide diverse and in-depth IR materials to enhance ourshareholders' understanding of the company, while continuously improving
the level of information provided by reflecting the requests of ourshareholders and stakeholders. In particular, since 2019, we have disclosed
our mid- to long-term financial goals and strategies, while presenting ourdirection for ESG improvement in the Corporate Governance Charter andcorporate briefing materials.
Going forward, we will make continuous efforts to and expand the disclosureof our English-language materials for overseas investors. To this end, we are
improving our IR materials and the IR website.

PROTECTION OF SHAREHOLDER INTERESTS FOLLOWING CHANGESIN THE OWNERSHIP STRUCTURE OR BUSINESS
Hyundai clarifies the basic principles of shareholder rights and fair treatmentin the Corporate Governance Charter, while the Sustainability Management
Committee deliberates and decides on the protection of shareholder
rights and interests. As well as guaranteeing shareholders’ basic rights toparticipate in profit distribution, attend GSMs and exercise their voting rights,
and receive information in a regular and timely manner as stipulated in theCommercial Act, we do our utmost to establish transparent governance bycommunicating with our shareholders through various channels.
In 2019, we began operating a new shareholder-friendly system, in which
independent director candidates in charge of protecting shareholder
rights and interests are directly recommended by general shareholders athome and abroad, in a bid to further expand their rights and interests whilestrengthening the company’s management transparency.

On the day of the Board’s decision to implement dividends, we disclose it
to the stock exchange, issue periodic reports, and notify the shareholders of
the relevant facts, including the payment of dividends. In line with the trendof improving performance in 2021, efforts were made to ensure that therights of shareholders were respected by paying them an appropriate levelof dividend, such as by raising the amount of dividend per share at the endof the year. The table below shows the details of the dividends issued for the
past three years.
Online Dividend Inquiry System
ONLINE DIVIDEND INQUIRY SYSTEMIn April 2022, Hyundai opened an online dividend inquiry system designed
to enhance the convenience of shareholders and allow them to check thedetails of dividends easily and from anywhere. By providing an online inquiry
service instead of the previous dividend notification sent by mail, we have
reduced the use of paper for mailing purposes, as well as carbon emissions
during the delivery process, thereby conserving resources and implementing
eco-friendly management.

Shareholder Return Trend for the Past 3 years
Business Year

2022

2021

2020

Cash Dividend

Payout Ratio

Stock Type

Stock
Dividend

Dividend Per Share (KRW)

Total Dividend (KRW million)

Common stock

-

7,000

1,412,321

4.5%

Preferred stock

-

7,050

154,579

8.8%

2 Preferred stock

-

7,100

246,846

8.8%

3 Preferred stock

-

7,050

16,609

9.1%

Common stock

-

5,000

999,057

2.4%

Preferred stock

-

5,050

111,365

5.0%

2 Preferred stock

-

5,100

178,275

4.9%

3 Preferred stock

-

5,050

11,961

5.2%

Dividend Yield

Common stock

-

3,000

601,730

1.6%

Preferred stock

-

3,050

67,618

3.4%

2 Preferred stock

-

3,100

108,909

3.4%

3 Preferred stock

-

3,050

7,259

3.5%

Consolidated Basis

Separate Basis

24.9%

49.4%

26.3%

201.5%

55.1%

149.1%

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

87

Ethics and Compliance Management
Hyundai strives to fulfill its economic and legal
responsibilities to all of its stakeholders – including
customers, shareholders, suppliers and local
communities – by practicing and spreading ethicalmanagement activities and promoting fair tradecompliance. We have enacted the Ethics Charter andthe Employee Code of Conduct to help our employees
conduct in an ethical and responsible way, while also
setting a compliance support online system, selfassessments, guidelines and newsletters in place as
a way to raise their compliance awareness. Moreover,
we are spreading the management's determination
to strengthen fair trade compliance throughout thecompany and conduct regular employee trainings.

Spreading Ethical Management
ETHICS CHARTER
Hyundai has established the Ethics Management Charter with the aim ofsetting an example as a global leading company that conducts its businessbased on the principles of ethics and compliance. The following Five
Guiding Principles of the Hyundai Motor Group Ethics Charter serve as theguidelines on ethical management which Hyundai employees must follow
to when dealing with various stakeholders such as customers, shareholders,
suppliers, and members of local communities.
Hyundai Motor Company Ethics Charterand Code of Conduct

CODE OF CONDUCTHyundai Motor Company Ethics Charter and Code of Conduct is designed
to increase ethical awareness among its employees by providing themwith specific procedures and measures related to the implementation of
ethical management. The Code of Conduct specifically covers corruption
and bribery, discrimination, information confidentiality, conflicts of interest,
antitrust/anti-competitive practices, money laundering and insider trading,environment, health and safety, and whistleblowing.
Anti-Corruption/Bribery Policy

Hyundai Motor Group’s Ethics Charter
1.	We shall perform our duties based on clear and transparent standards
and do our utmost to fulfill our responsibilities with integrity.
2.	We shall compete fairly in the market and conduct business ethicallywith all parties that engage in contractual relationships with us.
3.	We shall provide safe products, exceptional services and accurate
information, and we rigorously protect personal information to increasecustomer value.
4.	We shall respect our members as independent individuals and, to thisend, provide fair working conditions and safe working environments.
5.	We shall contribute to sustainable development by fulfilling our social& environmental responsibilities as a member of society, so that diverse
stakeholders may prosper together in harmony.

of Hyundai Motor Company
ANTI-CORRUPTION/BRIBERY POLICY
Anti-Corruption/Bribery Policy of Hyundai Motor Company was enacted
in June 2021 to prevent risks associated with corruption and bribery andguide its members towards upholding ethical and moral values. The policy
includes such guidelines as the prohibition of all forms of bribery andsolicitation, the eradication of facilitation payments, the prohibition ofpolitical donations and sponsorships, and rules on charitable donations andsponsorships in accordance with the company’s standards and procedures.
It also contains a clause which stipulates that the company shall establish areporting system accessible to all employees and stakeholders to monitor
corruption and bribery risks at all times and to take the necessary measures
immediately in the event of violations.

INTERNALIZATION OF ETHICAL/COMPLIANCE MANAGEMENT
Employee Performance Management and Promotion (Ethics/Compliance)
Hyundai includes items related to workplace ethics in its employeecompetency evaluation. The core elements of the evaluation include respect
for talent and compliance with the established norms, while the evaluationof leaders’ competency also includes their principles and convictions. In
addition, when reviewing employees’ prospects for promotion, we exclude
from promotion those who have received severe penalties related to ethics/
compliance, which is a common deliberation item for promotion and amandatory item that is applied equally to all our executives and employees.

Disciplinary System (Ethics/Compliance) In accordance with Article
11 of the company’s internal rules relating to workplace ethics, entitled“Disciplinary Actions for Violations of the Code of Ethics,” violators of theCode are dealt with in accordance with the regulations of the Internal
Disciplinary Committee, and may be subject to disciplinary measures suchas dismissal, suspension, or a reduction of their salary.
ETHICS AUDIT AND REPORTHyundai strives to build an ethical culture and prevent risks related tobusiness ethics and compliance. To this end, we have established theCompliance Support Advice Center within its compliance management
system to ensure employee compliance and report violations of thelaw. Furthermore, with the goal of establishing and realizing transparent
management, we operate various reporting channels including the
Cyber Audit Office to handle reports of violations of ethical management,such as unfair trade practices, unreasonable demands for or provision ofmoney, goods or entertainment, and misuses and abuses of authority andsolicitation. If a violation of Hyundai Motor Company Ethics Charter andCode of Conduct is detected, the employee(s) in question may be subject
to disciplinary action that could lead to the eventual termination of theiremployment, pursuant to Article 64 of the Employment Rules. In addition, wemonitor our employees’ implementation of the Code of Ethics throughout
their performance in its semi-annual and ad hoc audits, and reports theresults to the Sustainability Management Committee under the BOD.
PROTECTION OF WHISTLEBLOWERSHyundai guarantees the protection of whistleblowers related to employee
business ethics and compliance in its Ethics Charter, Code of Conduct, andinternal rules relating to workplace ethics regulations, while complying withthe relevant laws. We have also put in place measures for protecting theconfidentiality of whistleblowers, and posted the related information, andwe strictly prohibit the imposition of any disadvantages or retaliatory acts
against them. In the event that protection for a whistleblower is violated,such as cases of retaliation against internal whistleblowers, the company
may impose aggravated punishment on the offenders in accordance with
Article 9 of Chapter 3 (Handling of violations of the regulations) of theregulations on workplace ethics.

INTERNALIZATION OF CODE OF CONDUCTHyundai requires all its employees to pledge compliance and ethicalmanagement on a regular basis in an effort to help them internalize thecompany’s Code of Conduct. In 2022, we used our online platform and inhouse broadcasting system to conduct ethics education aimed at raising
their awareness of major ethical issues such as anti-corruption, fair trade,and cyber security. The Sustainability Management Committee within the
BOD, which was expanded and reorganized in March 2021, is in charge ofoverseeing the implementation of ethical management, as well as passing
resolutions on the revision of our major policies and codes of practice related
to ethical management.
CODE OF CONDUCT INVESTIGATION
In 2022, Hyundai took disciplinary action (such as dismissal, suspension,
reduction of salary, reprimand, warning, etc.) in 12 cases related to corruption
or bribery, discrimination and harassment, misuse of customer information,
conflicts of interest, money laundering and insider trading.

Reporting Channels

Cyber Audit Office

By Phone+82-2-3464-3500

By FaxBy Mail+82-2-3464-8813

Hyundai Motor Group Audit Office

Whistleblower Protections
1.	Confidentiality: Personal information of the informant cannot be disclosed
to the public without the informant’s consent.
2.	Guarantee of status: The employer or relevant department is prohibitedfrom imposing any disadvantages or discriminating against the informant
because of supplied information, statements and submission of evidence.
3.	Reduction or exemption of liabilities: If any mistake or negligence of theinformant are discovered during the investigation process, the liabilities of
the information for such faults or negligence may be reduced or waived.
Hyundai Motor Company Cyber Audit Office1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

88

ESG Magazine

Ethics and Compliance Management
Compliance Management &Compliance Support System
HMC COMPLIANCE MANAGEMENT
Compliance management embodies the management spirit by which thecompany pursues transparent and fair business performance in order tocomply with the established norms and uphold sound business ethics in its
management and corporate activities. Hyundai established its compliance
control standards for compliance management in 2012, and since then it has
since introduced a compliance support system including the appointment of
the Chief Compliance Officer under the Commercial Act, while carrying out
various compliance support activities.
COMPLIANCE SUPPORT SYSTEM
Compliance Control Regulations and Policies The Compliance Control
Standards prescribe the standards and procedures for compliance control
with which the company’s executives and employees must comply when
performing their duties in order to ensure that the company complies withthe laws and regulations and executes its corporate management practices
properly. Hyundai conducts compliance support activities based on its own
compliance control standards. In addition, through its own Ethics Charterand Code of Conduct, Hyundai presents the standards for the conduct of
its executives and employees, while ensuring that they comply with thecompany’s other compliance-related policies, such as the anti-corruption/bribery policy and the personal information protection policy.
Compliance Support Organization At Hyundai, the Chief Compliance
Officer is in charge of compliance support activities to prevent legal risks
and report the details and results of the effectiveness evaluation to the boardof directors on a regular basis. Furthermore, we appoint each departmental
head as the compliance officer of his or her respective department so thathe or she can carry out compliance control activities within the department.
In 2022, we appointed an independent director to take charge of compliancemanagement and act as an advisor and supervisor throughout thecompliance monitoring system.
Monitoring Hyundai conducts departmental compliance inspections invarious legal areas, such as anti-corruption and personal information, so thateach department can diagnose its own work-related legal risks. In addition,
we encourage each department to improve its identified risks. In 2022, welaunched an individual compliance self-checking system, and expanded
the subjects of the inspection to include all senior employees in general,
research, and legal positions.

Compliance Program
PROVIDING INFORMATION FOR COMPLIANCE MANAGEMENT
Distribution of Compliance Guidelines Hyundai has published more thanforty types of compliance guidelines for its different business areas in order toprovide guidance on the main contents of the related laws and regulations thatits employees should know when performing their duties. In 2022, we publishedthe new NFT/Metaverse Guidelines and the guidelines on compliance with the
Serious Accidents Punishment Act, while completely revising the Guidelines
for Preventing Illegal Cartel Conduct specified in the Monopoly Regulation andFair Trade Act. In addition, we have produced and distributed a compliancemanagement handbook, which explains the necessity of compliancemanagement and provides specific ways of implementing it, for our executives
and employees. We also publish a compliance newsletter on a regular basis tointroduce legal issues and regulatory trends related to the automotive industry
to our employees.

IMPLEMENTING THE COMPLIANCE PROGRAM
Hyundai promotes fair and transparent management starting with its CEO’scommitment to compliance program (CP) in the first and second half of every
year. In this way, Hyundai spreads its top management’s strong CP commitment
to all of its employees in addition to getting its own Guidelines on CP, which areapplied to their actual work performance.
In addition, we appoint a CP officer at a BOD meeting to manage and supervise
the company’s overall performance in terms of fair trade. In order to strengthen
the responsibilities and obligations of each business site, we report the fairtrade self-compliance operation performance and plans for the following year
to the Sustainability Management Committee, a committee within the Board,
on a semi-annual basis while fostering a CP culture by offering various fair trade
training programs and newsletters company-wide.

DIFFUSION OF A COMPLIANCE CULTURE
Hyundai aims to promote a culture of compliance by adopting diverse
approaches and distributing the relevant contents. Through the online system,
we provide legal advice, contract reviews, and compliance consultation to ouremployees at all times, while providing standard contracts (30 Korean contracts,
20 English contracts) for each business area to ensure that our employees
can perform their duties in compliance with the law. In addition, to raise our
employees’ awareness of the importance of compliance and expand the cultureof compliance, we encourage them to sign the pledge to practice complianceand ethical management, and offer them rewards for compliance.
EVALUATION OF THE EFFECTIVENESS OF THE COMPLIANCE
CONTROL SYSTEM
Each year Hyundai has a third-party evaluate whether its compliance control
standards and related systems are effectively designed and operated to preventor detect legal risks in a timely manner, and undertakes improvement activities
based on the results of the evaluation.

Fair Trading Education PerformanceYear

CP Implementation Process
Compliance Education Hyundai provides both regular and ad hoc compliancetraining for its executives and employees, including new recruits, newly
promoted employees, key employees, and expatriates. Notably, in 2022, we
conducted online compliance training on the Serious Accidents Punishment
Act for employees in general, research, and legal positions along with online
compliance training on the necessity of compliance management and major
legal risks for new team leaders and senior-level employees in an effort toprevent the various types of legal risks that may arise in the course of business.

FAIR TRADING EDUCATION
Hyundai not only conducts fair trading education for its employees every year,
but also informs new employees of the importance of complying with the Fair
Trade Act from the moment they join the company. We also conduct annual CP
training for all new executives and employees working in areas that are subject
or closely related to the fair trade laws. In addition, we regularly send out fairtrade newsletters so that our executives and employees can understand andpractice fair trade-related precautions. In particular, in 2022, we continued ourefforts to improve employee compliance awareness by inviting external experts
to conduct training on such topics as collusion, subcontracting, and technology
misappropriation.

Planning• Dissemination of the CEO’s
message emphasizing fair trade(all employees, twice a year)• Operation of the CP Council

Increasing
employeeawareness• Offline and online training on
the Fair Trade Act, etc.
• Distribution of fair trade
newsletters

Reportingresults• Reporting of CP performancestatus and plans to the
Sustainability Management
Committee

Number of training sessions

Number of participants

2019

8

1,429

2020

3

8,456

2021

4

8,261

2022

4

1,779

* Replaced by online training due to COVID-19 in 2020 and 2021

FAIR TRADE AND ANTI-CORRUPTION PROGRAMS FOR SUPPLIERS
In the Ethics Charter and Code of Conduct, Hyundai includes contents such asbribes and customary fees, including rebates, to ensure that its own employees
and those of its suppliers adhere to the principles of transparent and fair trade.
We also conduct anti-corruption risk checks and report the results to the
Sustainability Management Committee under the BOD.

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

89

Risk Management
Hyundai is facing a situation in which it must respondto rapidly changing internal and external businessenvironments due to increasing ESG and management
risks, in addition to the automotive megatrends such as
electrification, autonomous driving, and connectivity.
The new paradigm presents an opportunity for Hyundai
to leap forward as a global leading company while alsoentailing risks due to uncertainty. We therefore strive
to build proactive risk management culture based on
a company-wide risk management and monitoring
system, risk-linked employee performance evaluation,and employee training on related topics. Going forward,
we make concentrated efforts to turn crisis into an
opportunity and thus leap forward on the back of athorough analysis of the core risks and strengthening of
our risk management process.

Risk Management System

BOD

Global Risk Management System
RISK MANAGEMENT DIRECTION
The automotive industry is closely intertwined with both internal andexternal changes related to the government’s industrial policies andeconomic fluctuations. To minimize the risks that may arise during thesetransition, it is crucial to establish a responsive system to comply withgovernment’s regulatory standards and guarantee market competitivenessby ensuring high-quality products with superior vehicle performance,
greater safety, and competitive pricing. Hyundai has been striving toenhance its comprehensive capabilities in response to the increasingly
stringent regulations related to safety, the environment and the automotive
industry by strengthening its environmental management, transitioning
products and business structures towards electrification, improving
resource circulation systems, and reinforcing safety management systems.
Furthermore, we have demonstrated our commitment to improving risk
management system based on a precise analysis of the global market.
Our commitment to sustainable growth through more effective risk
management is also reflected in our medium- to long-term strategy – 2025
Strategy. By 2025, we aim to achieve such goals as winning leadership inelectrification through the ‘Smart Mobility Device’ strategy; innovating
cost structures; capturing the hydrogen fuel cell-based market; enhancing
product competitiveness and customer satisfaction; ensuring stableprofits; and mitigating supply chain and regulatory risks. We will respondcomprehensively to these goals to achieve successful outcomes.

Sustainability Management Committee

Audit Committee(Head of Sustainability Management Committee)(Head of Audit Committee)• Response to major ESG issues and risks• 2-4 meetings per year

Management
Strategy
Committee• Management of response to major
company-wide risks• Meetings held every month

Risk Management
Monitoring Line

Planning & Finance Strategy Division(Head of Planning & Finance Strategy Division)

Business Lines
Product development
and research

Procurement

Production

Risk Management LineSales

A planning part within each business division manages
business risks in their respective fields

Legal Division(Head of Legal Division)

Periodic risk
monitoring andmanagement

Professional
HMG Businessorganizations by function Intelligence Institute
Risk management
regarding finance,labor, quality, etc.

Research on
macro/micro risks
in the automotive
industry andglobal economy

Corporate Audit Division(Head of Corporate Audit Division)

Audit of corruption
and unfair trade, andmonitoring of companywide risk management

COMPANY-WIDE RISK MANAGEMENTThe ongoing Russia-Ukraine War, concerns about a post-pandemic
economic slowdown, and other uncertainties in the international
geopolitical landscape have exposed businesses to various risks. Amidsuch a complex situation, Hyundai has implemented a company-wide risk
management system that ensures proactive and comprehensive responses
to risks across different areas. This system involves the participation of all its
members – from staff to the board of directors and key executives (division
heads and above including C-suite) – in risk management. Company-widerisks are discussed by the Management Strategy Committee, which iscomposed of key executives, including the CEO, on a monthly basis. Eachdivision has established a risk reporting line, thereby enabling them to share
information on activities aimed at managing identified risks with the CEO
and the BOD.
Furthermore, we conduct risk response training for all employees in theform of a video session that provides updates on the company’s overall
response strategy, such as the 2025 Strategy, to prepare future crises
and opportunities, as well as providing separate training on risks in the
ESG domain. In addition, we share the latest major risk trends throughinternal risk monitoring reports such as the Weekly B.I. Briefing, thereby
promoting risk management education. Hyundai also conducts research
projects on the risk status and outlook related to various key issues suchas market trends, climate change, and legal developments. Through the
project, we derive proactive risk response strategies for managing risks andidentify insights that can leverage opportunities as active value creation
opportunities.
COMPANY-WIDE RISK SHARINGHMG Business Intelligence Institute, Hyundai’s in-house research institution,
analyzes specific scenarios involving macro and microeconomic risks, aswell as industrial risks, on a medium-term (potential) and long-term (over 3-5
years) basis. According to the findings of internal analysis, significant risks
that could have a substantial impact on Hyundai’s business activities havebeen identified, including an overall reduction in consumer and investment
capacity due to the economic slowdown and deepening recession in the
US, Europe and China, as well as risks related with geopolitical factors
affecting the supply chain of raw materials. Based on the risk analysis,
Hyundai identifies issues that could have a significant impact on thecompany's finances, such as an increased cost burden and a decline inprofitability due to a contraction of demand. We also actively explore
strategic response measures to address these issues.

RISK MANAGEMENT BY DIVISION
Hyundai operates a segmented risk management system at the divisionlevel, in addition to its company-wide approach. Within each business
unit organized by value chains, there are dedicated sales organizations
responsible for different regions, such as Korea, China, the Americas,
Europe-Russia, and India-Africa and the Middle East. The planning
organizations prioritize the assessment and management of market
risks specific to each region. Furthermore, there are separate risk-related
departments that operate independently from the business units, such as
the Legal Office, which is responsible for managing legal risks; and various
specialized functional organizations responsible for managing finances,human resources, quality, etc. In addition, the HMG Business Intelligence
Institute conducts research on macro and microeconomic risks, and the
Audit Office under the Audit Committee carries out continuous monitoringof acts of corruption and unfair transactions.
In order to boost the efficiency of each department’s risk management
system, Hyundai has established a risk identification and reporting
procedure for employees. Once identified, risks are managed in the orderof identification/check, report and preemptive response through weekly/monthly/ongoing risk assessment meetings. In addition, we incorporaterisk criteria into the product development and approval process in orderto manage product-level risks more effectively. For significant issues thathave a direct impact on overall business operations, separate risk review
meetings are organized to have a monthly meeting to discuss and address
risk-related matters. Separate risk review meetings include sales andproduction meetings, product management meetings for overseeing new
car development, and product strategy meetings.
OPERATION OF RISK REVIEWHyundai operates risk review council to proactively identify and eliminate
risk factors throughout its business operations. In April 2022, the Integrated
Risk Management CFT (Cross Functional Team) was established under the
direct supervision of the CEO to ensure swift responses to both internaland external risks. This company-wide CFT includes representatives
from various departments, such as strategy, planning, purchasing, anddevelopment, aimed at facilitating collaboration and decision-making.
Furthermore, the Sustainability Management Committee and the ESG
Committee, both of which operate under the supervision of the BOD,
Hyundai’s top decision-making body, receive biannual reports on risks
identified in the ESG domain, and engage in discussions, deliberations, anddecision-making processes related to the reported significant issues. They
also formulate plans and monitor the progress of their implementation,
playing a vital role in operating effective risk review council. Also Hyundai
conducts external review on its internal risk response strategies andprocess such as EV optimal price strategy, operation process. The external
reviews are conducted by consulting firms.

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

90

Risk Management
Management of Major Non-financial and
Financial Risks
ANALYSIS OF RISK SENSITIVITY AND STRESSHyundai sets the priorities for risk management across various non-financial
and financial categories, including company strategy, operations, finance,
regulations and reputation by taking risk appetite into consideration. We
analyze sensitivity to these risks and conduct stress test to assess the impactof these risks on the company. Based on this analysis, we select key risks
that could significantly affect business operations and finance, while theManagement Strategy Committee, comprising C-level executives including
the CEO, reviews the results of the analysis of key risks on a monthly basis
and formulates response plans. In particular, we focus on proactively
preventing and/or mitigating key risks. If prompt responses to key risks are
inadequate, they may result in constraints on business activities and financial
losses. We therefore place a strong emphasis on proactive measures toprevent and mitigate key risks.

REGULATORY RISKS
Automobile companies are exposed to various regulatory risks related totheir business activities, as well as the environmental, safety, quality, andcertification aspects of their products. These regulations have significant
impacts not only on their operations but also on their financial performance.
In particular, fleet-wide CO2 emission standards or corporate average fueleconomy standards, which are being implemented in major countries,
are being tightened continuously in order to achieve the carbon reduction
targets of those countries. In February 2023, the European Union (EU)
Parliament adopted an ambitious targets for reducing CO2 emissions frompassenger cars. The new target sets the path towards zero CO2 emissions for
new passenger cars by mandating a 55% reduction by 2030 compared to2021 levels, and 100% by 2035. To meet these targets, a significant expansionof electric vehicles (EVs) is deemed necessary.
Hyundai, in response to the CO2 emissions or fuel efficiency standards inmajor countries, has been actively strengthening its EV lineup and sales.
We also incorporate regulatory compliance volumes, including EV volumes,
into our short- and long-term sales plans. We regularly monitor and evaluate
our compliance progress based on monthly sales performance. In addition,
we take measures to minimize regulatory risks, such as adjusting sales
volumes and utilizing accumulated credits, in preparation for potential noncompliance with the regulations.

Hyundai’s Risk Appetite

Very low
Laws andregulations
Geopolitical andgeoeconomic
Macroeconomics

MediumHigh

Very high150 2021~2024
119g/km (WLTP)
95g/km (NEDC)
100

150
2025~2029

Components-15% from 2021
(101g/km)

100

2030~2035

Criticalminerals-55% from 2021
(54g/km)
50

50
2035~

Procurement
Tax-100% from 2021
(0g/km)

0
2020

2025

Hyundai has established a dedicated organization called the Policy
Coordination Office (PCO) to monitor political and policy risks in key
countries such as Korea, the US, the EU and China. The PCO proactively
identifies and analyzes political and policy risks and formulates appropriate
responses. In particular, Hyundai is analyzing global supply chain
competitiveness in response to protectionist policies, including subsidies
related to establishing domestic production and securing key raw materials
supply chains in the US and the EU. We are also seeking strategies aimed
at increasing local production shares and establishing local integrated
production systems within major countries.

Analysis of IRA’s Sourcing Requirements for EV Battery Components andCritical Minerals

EU CO2 Emission Reduction Targets for New Passenger Cars

Low

GEOPOLITICAL AND GEOECONOMIC RISKS
Political and policy-related risks, such as the serious impact on Hyundai’ssales in China due to the Korean government’s deployment of THAAD(Terminal High Altitude Area Defense) in 2017, have significant implications
for business operations and finances. As such, a preemptive response is
crucial. Amid escalating conflicts and tensions between Russia, China,
and Western countries, protectionist policies based on the U.S. Inflation
Reduction Act (IRA) and the EU Critical Raw Materials Act (CRMA), including
the establishment of self-sufficient supply chains for critical raw materials,
including battery materials, are posing significant risks to Hyundai.

2030

2035

2040

0

2024

2025

2026

2027

2028

2029

60%

60%

70%

80%

90%

100%

Percentage of components that must be produced or
manufactured in North America

40%

60%

70%

80%

80%

80%

Percentage of critical minerals that must be mined andprocessed in the U.S. or US ally with FTA

PROCUREMENT RISK
The shortage of vehicle semiconductors, leading to prolonged production
delays for automotive companies, is an example of how supply uncertainties
for specific components can escalate into risks that delay overall production.
In addition, the recent increase in raw material and energy prices hascaused a rise in production costs, negatively impacting profitability. In
particular, for EVs, which consume approximately six times more minerals
than internal combustion engine vehicles (ICEVs), the supply-side risks suchas mineral shortages have intensified as the production of EVs has surged
among automotive companies. Furthermore, as new mining developments
increase, there is growing demand among stakeholders for responsible
mineral sourcing due to the increase in cases of environmental and humanrights violations associated with mining activities.
Hyundai is addressing material and component procurement risks throughsuch measures as securing an adequate inventory for strategic materials
and components, promoting the in-house production of key components,and expanding its direct purchasing of strategic materials. Moreover,to address the risk of rising raw materials prices, we established a raw
material coordination body early in 2023, which involves the participationof all departments, including the purchasing, research institutes, sales, andfinance departments. This centralized approach aims to streamline theresponse system for raw material-related issues. We have also identified six
major categories for raw materials management and established a system
for real-time monitoring of market conditions and automated calculationof profit and loss impacts. These initiatives should enable Hyundai to
respond actively to the profit and loss risks caused by fluctuations in raw
material prices.

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

91

Risk Management

Hyundai has been making continuous efforts to mitigate financial risks arisingfrom market uncertainties by monitoring debt ratio for short-term and long-termborrowings of each of its subsidiaries, with an aim to optimize our borrowing
structure. In relation to exchange rate risks, we identify exchange rate risks basedon various scenarios involving the appreciation or depreciation of the Korean
won. We also establish preemptive measures for expanding hedging activities
and devise plans to offset potential foreign exchange losses, with the goal ofmanaging financial risks resulting from currency fluctuations.

Path and Impact Analysis by Global Economic Crisis Scenario
Scenario

Baseline

Downturn

CrisisOccurrence factor/path

Duration and recovery period

Intensity of crisis•	Continued US interest rate hikes due to high inflation−	Global stock market and exchange rate volatility,
and a sharp decline in asset prices−	Increased capital outflows from emerging markets•	After intensified sluggishness in the first half of 2023,
signs of recovery are observed in the second half•	Baseline scenario + deepening economic downturn in
Europe−	Gas crisis amid worsening European interest rate hikes•	In 2023, a mild economic slowdown occurs in the middleof the year−	Gradual recovery from the downturn in the US andEurope starting from 2024
−	An economic crisis occurs in some emerging markets →Aftereffects persist until 2024

•	Global economic slump
intensifies, and financial turmoil
escalates (approaching global
financial crisis levels)•	The economic downturn continues until 2024.
−	Gentle signs of recovery in the US and Europe after thesecond half of 2024.
−	Crisis spreads across emerging markets →Gradual easing expected after 2025.

•	A global economic crisis occurs(at pandemic crisis levels)•	Some emerging economies experience financial andeconomic crises•	Downturn scenario + worsening economic uncertainty in
China−	Expansion of the post-COVID-19 sequelae in China andcollapse of the real estate bubble•	An economic downturn in the US and Europe continued
and intensified•	Spread of the economic crisis across emerging markets

Impact Analysis of Exchange Rate Fluctuations on Pretax Income in
Major Countries

Impact Analysis of Interest Rate Fluctuations on Pretax Income(Unit: KRW million)
Currency

5% increase(Unit: KRW million)

5% decrease

Classification

1% increase

1% decrease

USD

111,585(111,585)

Cash and cash equivalents

35,897(35,897)

EUR

20,435(20,435)

Financial assets at fair value
through profit or loss

1,644

(1,644)JPY(3,585)

3,585

Short-term and long-term
financial instruments

15,584(15,584)

Borrowings and debentures(99,610)

99,610Major Non-financial and Financial Risks

Non-financial risks

Hyundai has strengthened its ability to predict changes in demand due toeconomic cycles by creating a model based on macroeconomic and industrial
risk analysis, which was primarily developed by its specialized organization, the
HMG Business Intelligence Institute. It utilizes leading indicators closely related
to the demand for new vehicles to predict and analyze both the business cycle
and medium-term demand for new vehicles. In addition, it has analyzed various
global economic crisis scenarios, assuming the simultaneous occurrence ofmacroeconomic risks such as accelerated US interest rate hikes, a European
economic downturn, and deepening uncertainties in the Chinese economy.
To effectively address macroeconomic risks and prepare for the worst-casescenario, we have formulated company-wide response measures, including
production and sales adjustments, the exploration of new alternative markets,and the strengthening of new model launches.

MAJOR FINANCIAL RISKS
Due to the ongoing trend of interest rate hikes initiated by the US in 2022, theinterest costs associated with global funding have been increasing. In particular,
the strength of the US dollar has led to a depreciation in the currencies ofmajor countries, and the continuous rise in the KRW-USD exchange rate andincreased financial market volatility have accelerated these trends. To maximize
shareholder value and reduce capital costs, Hyundai strives to maintain an
optimal capital structure. In addition, we conduct sensitivity and stress tests toevaluate the impact of market risks (exchange rates, interest rates, and prices),
credit risk, liquidity risk, derivative risk, and other related risks on Hyundai. We
also have signed derivative contracts and use them as a means of hedging risks
so as to manage identified risks more effectively.

•	The global economic downturn
worsens amid financial
uncertainty

Financial risks

MACROECONOMIC RISKS
Automobiles are a prime example of consumer goods that are highly sensitive
to macroeconomic risks. They are greatly influenced by economic conditions
due to such factors as consumer spending and business investment. Major
countries have implemented quantitative easing and experienced supply chain
disruptions due to the economic downturn caused by the COVID-19 pandemic,
while events like the Russia-Ukraine War have led to even greater inflationarypressures. In response to the high inflation crisis, major countries, particularly theUnited States, have implemented rigorous monetary tightening policies, withthe result that the global economy is now facing the ‘3 Highs’ – high inflation,high interest rates and high exchange rates. These policies are expected tofurther accelerate economic downturns in major countries, and some emerging
economies with high debt levels and weak fundamentals may also faceeconomic crises.

Classification

Key risk factors

Mitigation measures

Regulatory risks

Risks of regulatory violations due to product and workplace-related
regulations (CO2 regulations, etc.), including environment and safety

Reflecting regulatory response volume in short- and mid- to longterm business plans, etc. in response to fleet-wide emission
standards and corporate average fuel economy standards, etc.

Geopolitical andgeoeconomic risks

Risk of restrictions on sales and exports due to protectionist policies
to establish a self-sufficient supply chain for key raw materials
centered on the US and Europe

Increasing the proportion of local production and establishing a selfsufficient local production system, etc.

Macroeconomic risks

Risk of a decline in new car demand due to a global economic
downturn

Reinforcing demand change forecasting due to economic conditions,analysis by scenario of global economic crisis, etc.

Procurement risks

Cost increase risk due to increase in procurement costs, production
delay/stop risk due to supply shortage

Securing adequate inventories of strategic materials and core parts,
internalizing core parts, expanding direct purchases of strategic
materials, etc.

Operational risks

Risks related to business operations such as product/technology
development, production, and sales

Identifying, analyzing, and responding to operational risks in theplanning department of each division

Exchange risks

Exchange risk due to major foreign currency market fluctuations(USD, EUR, and JPY)

Eliminating risks by matching foreign exchange inflows and outflows,
and managing exchange risks based on an analysis of Korean won
appreciation/depreciation scenarios, etc.

Interest rate risks

Rising interest costs on borrowings due to interest rate hikes in majorcountries such as the U.S.

Mitigating the risk of rising interest rates by implementing suchmeasures as prioritizing borrowing and repayment by corporations
with ample liquidity and enhancing financial soundness, etc.

Liquidity risks

Risk of insufficient cash flow and overexposure to market risk

Drawing up long-term and short-term funding plans, establishing afunding system, managing the duration of financial assets, etc.

Tax risksPossible tax-related risks in overall business activities

Fulfilling the tax obligations in accordance with each country’s laws
and regulations

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

Risk Management
TAX STRATEGY
Hyundai recognizes that tax risk management is a prerequisite forsustainability management, and that compliance with the tax laws plays animportant role in securing customer profits, maximizing shareholder profits,
and contributing to national finances. Therefore, as a taxpayer, we are faithfully
fulfilling our tax obligations. We also respect the principle of fair taxation by tax
authorities and strive to comply with the tax rules and principles established by
the tax authorities of the countries in which we operate.
MANAGING TAX RISKS
Strict compliance with the laws is the core of Hyundai’s tax risk management
policy. The company faithfully provides all the evidence requested by tax
authorities to take the lead in creating a transparent tax culture. Hyundai
strictly prohibits the use of tax avoidance schemes such as the creationof non-existent commercial entities and the utilization of tax havens. We
do not engage in any practices that involve transferring value to low-tax
jurisdictions. Furthermore, as a global company, we prevent tax risks inadvance by identifying differences in the tax laws of different countries andtheir intention and by analyzing their respective dispute risks. Good example
includes the arm’s length principle as a way to prevent the risk of double
taxation arising from competition for taxation rights between tax authorities
in advance.

POTENTIAL RISKS

Digital Service Competition Expected toIntensify due to Stricter Regulations on
Data Sharing

Increased Regulatory Risks Associated with the
Establishment of a Plastic Circular Economy
in Europe and Korea

Risk Context
With the advancement of connectivity and autonomous driving technologies, vehicles aregradually being transformed into digital devices. The emergence of mobility service businesses
based on data generated by automobiles is becoming a new area of focus for automotive
companies. However, starting with the enforcement of the EU General Data Protection
Regulation (GDPR) in 2018, the data-related regulations are being increasingly strengthened in
major countries. In particular, the EU has taken steps to address the current industry practicewhereby the legal ownership of data generated through the use of products or services
is unclear and the usage rights are exclusively retained by IoT (Internet of Things) productmanufacturers. To tackle this issue, the EU has introduced a draft data law that establishes
the conditions for data sharing, and imposes data sharing obligations on manufacturers.
When this law takes effect in the future, manufacturers who currently have data will be legallyobligated to provide data between B2C, B2B, and B2G when certain conditions are met, andfair contracts related to data access and use between companies will be mandatory. Due topersonal information protection measures and data-sharing obligations, there is an increased
regulatory risk regarding the utilization of vehicle data. At the same time, it is anticipated thatcompetition in the mobility service market will intensify due to the future sharing of vehicle
data with external companies. Furthermore, the expansion of data requests from externalsources raises concerns about the management of critical data, such as customer informationand trade secrets, as well as increasing the risk of cyber safety issues, including hacking
incidents, during the data sharing process.

Risk Context
The European Commission, under its circular economy strategy for plastics published in2018, has set ambitious targets for managing plastic packaging and waste. Its principal goal
is to reuse or recycle 100% of plastic packaging and to recycle over 50% of all plastic waste
generated in Europe by 2030. To achieve these objectives, the EU implemented a ban on
major single-use plastics (SUPs) in 2021. It has also been strengthening its regulations on
the use of plastics in vehicles, and is currently pushing for the enforcement of regulations
that would require the use of recycled plastics in new vehicles. In Korea, the government ispresenting the establishment of a plastic circular economy as a major national task, so that it
is expected to change the current recommendation on the recycling of scrap cars to a 95%
recycling mandate, in addition to introducing the mandatory use of recycled plastics in newcars, as is already the case in Europe. Once Korea has enforced the regulation mandating theuse of recycled plastic materials in new cars, it is expected that Hyundai will face multiple risks
such as the risk of an interruption of production due to a rise in the price of recycled plastic
materials combined with a shortage in supply, as well as regulatory risks stemming from ashortage of high-quality recycled plastics that meet the safety and quality requirements for
new cars. In particular, the regulatory risks are most likely to increase when Korea enforces a
95% compulsory regulation on the recycling rate of scrapped cars, like the European ELV (Endof-Life Vehicles) regulation because, unlike in Europe, if Korea implements the pre-shredder
method (the manual dismantling and recycling of the parts of a scrapped car), there will belimits to the disposal and recycling of scrapped cars in large quantities.

Hyundai’s Approach
Hyundai has established a company-wide task force team (TFT) to address the strengthened
data regulations in major countries, including the EU. In the short term, we plan to revise theinternal criteria and management systems regarding the types and scope of publicly available
data for vehicle data generated when driving in order to comply with the EU data law. We will
also strengthen security systems in the data sharing process in order to minimize potential
risks to cyber security and safety that may arise from increased data sharing with external
parties. To preemptively prevent a decline in service competitiveness due to the weakening ofHyundai’s exclusive position in the utilization of our vehicle data, we are making continuous
efforts to improve the Hyundai Developers platform, an open platform for vehicle data, incollaboration with external service developers, with the aim of establishing Hyundai's own
digital service ecosystem. Furthermore, we plan to secure our own capabilities in the field of
data intelligence, leveraging data processing, analysis, and services, to generate high-value
businesses, which will in turn help sustain and strengthen our digital service competitiveness.

Hyundai’s Approach
Plastics make up the second largest segment after metals, accounting for 17% of all vehicle
materials on average on an ICEV basis. However, the recycling rate of plastics used in
vehicles is low because they are composites. Hyundai has been making active efforts toimplement various plastic recycling activities with the aim of establishing a closed-loopsystem for recycling end-of-life plastic components in vehicles, while concurrently promoting
the recycling of plastic waste from other industries through an open-loop system. We aredeveloping a mid-to long-term plan for the exploration of new waste resources and thedevelopment of recycling technologies. We are also formulating strategies to incorporate
recycled plastics into our upcoming vehicle models by leveraging our internal resources. In
addition, Hyundai is establishing a monitoring system to track the implementation of recycledplastics, which will ensure efficient management of the entire process of utilizing recycledplastics. We also have developed technologies for recycling discarded fishing nets, a major
marine pollutant, and applied them to carpets and plastic components. In order to promote
the widespread application and reuse of these technologies, Hyundai is seeking external
collaborations and building partnerships with other businesses including maritime industries.

Hyundai Developers92

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

93

Risk Management
Personal Information Protection
PERSONAL INFORMATION
Privacy Policy of
PROTECTION GOVERNANCE
Hyundai Motor Company
Hyundai has set in place a framework for systematic personal information
protection governance and has formed the Security Compliance Team, adedicated body that is responsible for handling tasks related to personal
information protection. The company has also appointed a Chief Information
Security Officer (CISO) and Chief Privacy Officer (CPO), who serves as the headsof the Hyundai Security Center and hold overall responsibility for personal
information protection. Each division and business unit has designateddepartments, personnel, and responsible individuals who are involved inhandling tasks related to personal information protection. The Security
Compliance Team develops and distributes policies and guidelines, ensuringcontinuous management and monitoring of personal information protection.
In 2022, there were no cases in which our customers’ personal data wereused for purposes other than the “purpose of collecting and using personal
information” as specified in our privacy policy for users, etc. Furthermore, wehave established a Personal Information Protection Committee composed of
key service operation teams from various divisions and dedicated departments.
The Committee meets annually to discuss major issues and matters related topersonal information protection.
MANAGEMENT MEASURES FORPERSONAL INFORMATION PROTECTION
Hyundai applies various management safeguards to ensure the secure
protection of customers’ personal information. In addition to establishinga company-wide personal information protection policy and operating a
dedicated team, we conduct regular and ad-hoc training programs using
newsletters, videos, and other means to provide education to all employees
and outsourced partners involved in the relevant tasks. Furthermore, whendeveloping or modifying personal information processing services or systems,
we carefully assess their impact on personal information and analyze potential
vulnerabilities at the design stage, thus allowing them to establish a response
system that minimizes threats and ensures the construction of a secureframework.
TECHNICAL MEASURES FOR PERSONAL INFORMATION PROTECTION
Hyundai applies various technical measures to enhance the effectiveness andsecurity of personal information protection. We ensure that customer data aretransmitted securely by encrypting communication channels and customer
information. Even in the event of external breaches, the use of customers’
personal information is made impossible. In addition, we have put in placesecurity solutions and intrusion prevention/detection systems, regularly update
them, and conduct periodic monitoring as a way to defend against external
threats such as hacking attempts.

INTERNAL INSPECTION AND THIRD-PARTY AUDITS OF
THE PRIVACY POLICY COMPLIANCE
Hyundai performs internal and external audits to ensure compliance with thepersonal information protection laws and internal regulations (privacy policy),while also conducting its own assessments of outsourced personal information
management practices. Furthermore, we have maintained the Information
Security Management System (ISMS) certification since 2019, and the ISO
27001 certification since 2006 for its major services and systems, including thecustomer portal and connected car service. In accordance with the relevantlaws, we undergo regular inspections such as the Personal Information
Protection Commission’s survey on personally identifiable information and
the Korea Communications Commission’s survey on the status of location
information service providers.

Cybersecurity
CYBERSECURITY SCHEME
Hyundai strives to establish an advanced cybersecurity scheme, which isessential for the transition to a smart mobility system. Through a dedicatedsecurity organization, we have been building and monitoring a response
system for potential hacking and information leakage threats that may arise
during business operations. In January 2022, we obtained the Cyber Security
Management System (CSMS) certification in Europe. Furthermore, we set
security policies for all our internal employees and conduct an annual reviewof these policies. To enhance employees’ security awareness, various efforts
are made as education on security policies, security newsletters, Security Day
campaigns, and training on responding to malicious emails.

RESPONSE TO DATA REGULATIONS
Data play a crucial role in the transition to the digital economy and serve
as a key driver for new businesses. Both domestically and internationally,
discussions on strengthening data regulation policies have been accelerating.
Hyundai recognizes the importance of establishing a data management
system that can adapt to regulatory changes. Through a centralizedorganization for data protection, we conduct ongoing and regular inspectionsof our data systems and operate a management system to address
vulnerabilities and take necessary measures.
ANALYSIS OF CYBER ASSET VULNERABILITY
Hyundai has established security review procedures for its computer
systems, aimed at the secure construction and operation of its businesssystems, based on which it manages security vulnerabilities and improves its
security guidelines in line with advancements in IT technology. Furthermore,
we have maintained the ISO 27001 certification since 2006, demonstrating
our commitment to comprehensive information security management.
In addition, we have obtained the ISMS certification which verifies our
integrated information protection management system.

CEO
People & Business Operation Support Division
Hyundai Security Center (CISO, CPO)

•	Appoint experts to strengthen security at overseas
subsidiaries; and expand inspection activities.

•	Specify incident response procedures according to the business
continuity plan (BCP) in the Security Incident Prevention andResponse Guidelines; and conduct inspections at least once a year•	Provide phishing email training for employees and education
on preventing malware infections from infected individuals atleast once a year•	Distribute a monthly security newsletter to all employees;
and hold the Employee Security Day atleast once a year

SECURITY DELIBERATION COMMITTEEThe Security Deliberation Committee, headed by the Head of the People &Business Operation Support Division, serves as the top decision-making bodyfor security matters. Together with the heads of the relevant departments,
namely the HR, Corporate Audit, Legal, Research Center, and Production Plant
Security, the committee convenes at least once a year to deliberate and makejoint decisions on the company’s security-related issues.

Organization of the Hyundai Security Center

Major Activities Related to Cybersecurity•	Strengthen security threat response via the advanced security
monitoring system/performance of self-infiltration activities

ORGANIZATION AND ROLE OF THE HYUNDAI SECURITY CENTER
Hyundai operates a dedicated organization aimed at systematic andeffective information security management. We have appointed the CISO
and CPO as the Head of the Hyundai Security Center, who is responsible foroverseeing overall information security and personal data protection. Their
responsibilities include developing security policies, establishing security
systems, conducting security audits and analyses, incident response, andmanaging overseas security. The Center is composed of an Information
Security Team which focuses on protecting trade secrets, and a Security
Compliance Team which handles personal information protection, nationalcore technology protection, and information security certification.

Information Security Team

Security
strategies• Establish security
policies• Raise security
awareness

Security Compliance Team

Globalsecurity

Security
inspection

Security
analysis

Personal
information protection

Core technology
security

Information
protection certification• Security of overseas
subsidiaries• Security of
manufacturing plants• Security audits/
inspections• Respond to security
breaches• Detect anomalies• Prevent recurrenceof security incident• Establish policies,
provide training,
conduct inspections• Impact assessmentof personal
information• Establish security
policies for NationalCore Technology• Deliberate NationalCore Technology
export• Information security
disclosure• ISMS, ISO 27001
certifications
management

1. Introduction

ESG Factbook

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

5.1

Facts & Figures

5.2

ESG Certifications

5.3

GRI Index

5.4

ESRS Index

5.5

TCFD Index

5.6

SASB Index

5.7

WEF IBC Stakeholder Capitalism Metrics

5.8

Independent Assurance Statement

5.9

GHG Assurance Statement

5.10

About This Report941. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

Facts & Figures
Sales and Financial Information
Classification

Global
Production

Unit

2020

2021

2022

Domestic

Vehicle1,618,411

1,620,231

1,732,639

1)

India

Vehicle521,300

636,000

706,000

China

Vehicle465,388334,700

255,000

U.S.

Vehicle268,700

291,500

332,900

Czech Republic

Vehicle238,750275,000

322,500

1)

RussiaVehicle219,491

234,150

44,163

BrazilVehicle150,610

187,300

209,045

Vehicle137,100

162,140

208,100

TurkeyGlobalSales

GlobalBest-selling
ModelsNote

Vietnam

Vehicle71,14071,44363,020Indonesia

Vehicle--82,500

Others2)

Vehicle42,53257,311

44,427

Total

Vehicle3,733,422

3,869,775

4,000,294

Domestic

Vehicle787,854

726,838

688,884

Overseas

Vehicle2,956,883

3,163,888

3,254,038

Total

Vehicle3,744,737

3,890,726

3,942,922

Tucson

Vehicle429,241

493,689

570,058

Based on Tucson

Elantra (AVANTE)

Vehicle439,194

391,899367,209

Based on Elantra

Santa Fe

Vehicle221,597

227,536

218,688

Based on SantaFe

SonataVehicle217,289

168,878

134,752

Based on Sonata

AccentVehicle293,560

190,833

133,847

Based on Accent, Verna, Solaris

Including production performances derived from the joint venture (JV) subsidiary, in addition to those disclosed in Hyundai Motor Company’s Business Report2)

Performance of CKD and consigned commercial vehicle production

2020

2021

2022

Note

Total assets

KRW billion

209,344

233,946

255,742

Total liabilities

KRW billion

133,003

151,331

164,846

Total equity

KRW billion

76,341

82,61690,897

Statementsof Financial
Position(Separate)

Total assets

KRW billion

78,25279,75883,412

Total liabilities

KRW billion

25,06427,08327,657

Total equity

KRW billion

53,18952,67555,756Sales

KRW billion

103,998

117,611

142,528

Operating profit

KRW billion

2,395

6,679

9,820

Selling andadministrative expenses

KRW billion

16,087

15,252

18,498Net profit

KRW billion

1,925

5,693

7,984

Including non-controlling interests

EBITDAKRW billion

6,580

11,235

14,867

Based on Bloomberg3)

Sales

KRW billion

50,66155,60565,308Operating profit

KRW billion

769

662

2,829

Selling andadministrative expenses

KRW billion

8,885

8,404

9,342

Net profit

KRW billion

527

646

3,702

EBITDAKRW billion

3,550

3,766

6,222

Operatingprofit margin

%

2.3

5.7

6.9

Net profit margin

%

1.9

4.8

5.6

Operatingprofit margin

%

1.5

1.2

4.3

Net profit margin

%

1.0

1.2

5.7

Financial
Performance

Statements
of income(Separate)

Profitability
Ratio(Consolidated)
Profitability
Ratio(Separate)
3)

Unit

Statementsof Financial
Position(Consolidated)

Statements
of income(Consolidated)

1)

1)

Classification

Sum of operating profit, depreciation of tangible assets, depreciation of real estate held for investment, and depreciation of intangible assets

2022 Audited Financial Statements of Hyundai Motor Company

Based on Bloomberg3)95

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

96

Facts & Figures
Environmental
Classification

Distributionof Economic
Value(Consolidated)

Financial
Performance

Distributionof Economic
Value(Separate)

R&D/
Investment

2020

2021

2022

Classification

Note

Unit

2020

2021

2022

Electricity(Non-renewable)

Note

MWh

3,344,292

3,338,657

3,377,133

Electricity (Renewable)MWh70,376

120,171

280,498

LNG

MWh3,534,350

3,562,760

3,442,276

Diesel, kerosene, gasoline

MWh184,158

154,015

131,268

Dividends(Shareholders and investors)

KRW billion

786

1,301

1,830

Interest expenses(Shareholders and investors)

KRW billion

362

305

536

Salaries(Employees)

KRW billion

9,099

9,614

10,667

Refer to “classification of expenses bynature” in the notes to the consolidated
financial statement

Steam, heatMWh98,77790,51094,027

OthersMWh

123,433

143,460

172,986

Total energy
consumption4)

MWh7,355,386

7,409,573

7,498,188

Energy consumption in
producing one vehicle

MWh/Vehicle

1.97

1.91

1.87

Scope 1tCO2-eq716,237

724,013704,726

Scope 2tCO2-eq

1,680,079

1,660,058

1,684,121

Scope 3tCO2-eq

100,536,484

101,790,793

105,790,785

Refer to “financial income and financial
expense” in the notes to the consolidated
financial statement

Raw materials costs(Suppliers)

KRW billion

59,08567,57980,774

Refer to “classification of expenses bynature” in the notes to the consolidated
financial statement

Income tax(Government)

KRW billion

169

2,266

2,964

Refer to “income tax” in the notes to theconsolidated financial statement

Donation(Local communities)

KRW billion

74

66

90

Refer to “other income/expense” inthe notes to the consolidated financial
statement

Total

KRW billion

69,575

81,131

96,861Dividends(Shareholders and investors)

KRW billion

786

1,301

1,830

Interest expenses(Shareholders and investors)

KRW billion

124

87

190

Refer to “financial income and financial
expense” in the notes to the financial
statement

Salaries (Employees)

KRW billion

6,190

6,392

7,007

Refer to “classification of expenses bynature” in the notes to the financial
statement

Raw materials costs(Suppliers)

KRW billion

32,80337,011

44,184

Refer to “classification of expenses bynature” in the notes to the financial
statement

Income tax (Government)

KRW billion

(0.1)

344

474

Refer to “income tax” in the notes to thefinancial statement

Donation(Local communities)

KRW billion

52

38

46

Refer to “other income/expense” in thenotes to the financial statement

Total

KRW billion

39,95545,17353,731

Total R&D expense

KRW million

3,108,591

3,100,111

3,340,589

Government subsidy

KRW million(11,530)(2,214)(4,016)

%

3.0

2.6

2.3

CAPEX

KRW billion

4,553

3,767

3,879

Based on head office and overseas
business sites

Depreciation

KRW billion

4,185

4,556

5,048

Refer to “classification of expenses bynature” in the notes to the consolidated
financial statements

R&D expense to sales ratio

Distributionof Investment(Consolidated)

Unit

Difference(CAPEX – depreciation)

KRW billion

368

(789)

(1,169)Treasury stock buyback

KRW billion

303

305

193

Total
(dividend + treasury stock)

KRW billion

1,089

1,606

2,023

EnergyConsumption

EnergyIntensity

Environment
Greenhouse
Gas (GHG)
Emissions

GHG
Emissions
Intensity

Raw
Materials

Total R&D expenses/
sales of the year X 100

Raw Materials
Intensity
4)5)

Sum of Scope 1 and 25)

tCO2-eq2,396,316

2,384,071

2,388,847

GHG emissions in
producing one vehicle(Scope 1+2)

tCO2-eq/
Vehicle

0.642

0.616

0.597

Steel (amounts used)Ton

940,277

1,041,124

1,074,071

Steel (scrap)

Ton

357,494375,924

369,730

Aluminum (amounts used)Ton

90,83697,805103,011

Aluminum (scrap)Ton25,471

24,49538,892

Ton/Vehicle

0.276

0.293

0.294

Raw materials used for
producing one vehicle

Due to changes in energy consumption
calculation criteria and an expansionof the calculation scope, the data forprevious years has been revised.

Scope 2 of 2022 is calculated bymarket-based approach1)	2021 emissions were slightly
adjusted according to the resultsof a conformity assessment of thedomestic emission trading scheme2)	Business sites subject to calculation
were added in 2022 (Indonesia,
Mexico, Vietnam)

Business sites (Indonesia, Vietnam, Mexico) subject to calculation were added in 2022. Total energy consumption in 2022, excluding the added business sites, is 7,217,893 MWh.

	Business sites (Indonesia, Vietnam, Mexico) subject to calculation were added in 2022. Total Scope 1+2 GHG emissions in 2022, excluding the added business sites, is 2,242,879 tCO2-eq.

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

97

Facts & Figures
Classification

Water
withdrawal
Water

Water UseIntensity

Environment

Unit
Municipal(Industrial)water(or fromother water
utilities)

Ton

Fresh
surface water(lakes,rivers, etc.)

Ton

Fresh
ground waterTon

853,340

229,871

225,861

9,941,274

10,790,093

Water dischargeTon8,732,837

8,265,244

9,149,477

2.94

2.57

2.70

Ton/Vehicle

Note508,701

Designated
waste

Ton

35,89534,59039,914

Ton

498,316

538,773548,615

Ton/Vehicle

0.01150.01190.0126

Ton

6,297

5,900

7,164

Ton

32,23033,147

34,975

Collected
as thermalenergy

Ton

2,531

3,754

5,451

Not collected
as thermalenergyTon

29,69929,39329,524

RecyclingTon455,211492,787

498,162

Biodegradation

Ton

962

1,729

1,310

Others

Ton

3,616

5,210

7,004

Total

Ton

498,316

538,773548,615

Ton

2,781

2,333

3,859

Ton

11,047

10,756

7,796

kg/Vehicle

2.96

2.78

1.95

CO

Ton

358

489

786

Weight of Harmful Chemical Substances

SOx

Ton

14

96

37

722.5

506.1

333

351

370

Costs and investments forenvironmental protection8)

563.3

Ton

Environmental
Investment

KRW billion

NOx
PM

Ton

214

249

218

Green
Purchasing

Total

KRW billion

8.65

6.25

1.22

The amount of purchasing domestic tires(parts with environmental certification)
has been relatively decreased due to theincrease of imported tire purchasing.

Sales Portionof Eco-friendly
Vehicles9)

Total

%

9.6

14.4

17.3

Based on managerial accounting

Sales Portionof Models
for whichFull-LCA was
Conducted

Total

%

2.62

14.14

25.03

Based on no. of vehicles sold (shipment)

Others

Ton

16

26

0

Ton

935

1,211

1,411

kg/Vehicle

0.251

0.313

0.353

TOC

Ton

313

313

403

BOD

Ton

56

79

75

SS

Ton

45

55

48

Others

Ton

191

196

197

Air pollutant emissions in
producing one vehicle

Total

Ton

605

643

723

7)

Waste per one vehicle of subtracting the recycled amount from total waste

8)	Includes electrified vehicle development costs and investment costs in environmental improvement facilities at business sites (Only business sites in Korea are included in case of investment costs forbusiness site environment improvements)

9)

Water pollutant emissions in
producing one vehicle

VOCs: Volatile Organic Compounds

2022

504,183

Waste discharge inproducing one vehicle

Weight of
Waste by
Disposal
MethodEnvironment

2021

462,421

Incineration

755,8042020

Ton

Landfill

10,967,709

By type

Waste
Intensity7)

942,842

Total

Total

6)

761,644

Water consumption

By type

Weight ofWaste

By type

Unit
General
waste

Total

19,939,570

Water used for producing
one vehicle

Classification

18,240,924

18,206,518

VOC emissions in producing
one vehicle

Water
Pollutant
Emissions
Intensity

17,127,317

Note

19,700,546

VOCs
Emissions
Intensity

Water
Pollutant

18,709,031

2022

Ton

Total

Air Pollutant
Emissions
Intensity

2021

Total

VOCs6)
Emissions

Air Pollutant

2020

kg/Vehicle

0.162

0.166

0.181

Eco-friendly vehicles : EV, HEV, PHEV, FCEV
Sales portion of IONIQ 5 in 2022: 4.3%

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

Facts & Figures
SocialClassification

Number of
Employees by
Region (Korea/
Overseas,
By country)

Employees

Number of
Employees
by Nationality(Korea)

2020

2021

2022

Note

Korea

Person72,02072,49673,431

Overseas

Person49,38350,32552,638

North America

Person10,304

15,953

18,229EuropePerson10,014

9,480

10,010China

Person13,15910,741

9,340

India

Person10,106

9,725

9,976

Others

Person

5,800

4,426

5,083

%

40.7

41.0

41.8

Percentage of overseas

Number of
Employees
by Duty(Korea)Unit

Classification

As of the last business day;and based on the number of directly
employed staff

Unit

Korea
Male

2020

2021

2022

Note

Person72,02072,49673.431

Person68,014

68,21568,809FemalePerson

4,006

4,281

4,622

Overseas

Person49,38350,32552,638Male

Person42,97743,50445,045

FemalePerson

6,406

6,821

7,593

Korea

Person

14

15

17

North
America

Person111217EuropePerson

2

3

4

China

Person

8

7

5

India

Person000Others

Person

2

2

3

Total

Person121,403

122,821126,069

Management

Person

470

476

466

Research fellow

Person23

22

20

Research

Person11,716

12,502

13,212

Total

Person37

39

46

Office work

Person12,716

12,903

13,373

Korea

Person

4,006

4,281

4,622

North
America

Person

1,811

2,740

3,431

EuropePerson

1,479

1,476

1,563

China

Person

2,040

1,761

1,645

India

Person

214

242

288

Others

Person

862

602

666

Total

Person10,412

11,102

12,215

8.6

9.0

9.6

Excluding 20 senior researchers/
researchers in executive positions

Technical/Production/
Maintenance

Person36,38534,75432,887

Sales

Person

5,798

5,562

5,264

Others

Person

4,912

6,277

8,209

Total

Person72,02072,49673,431

Korea

Person71,922

71,191

73,325

Foreign

Person

73

75

70

US

Person37

42

42

34 managers(0.2% of total managers)

Germany

Person17

12

11

9 managers(0.05% of total managers)

China

Person11

9

9

6 managers(0.04% of total managers)

CanadaPerson8

12

8

7 managers(0.04% of total managers)

%

0.10

0.11

0.10

Person71,99571,26673,395Percentage of foreign
Total

Advisor, specially appointed staff for
special duties, temporary staff, etc.

17,004 managers(99.51% of total managers)

Employees

Number of
Employees
by Region/
GenderFemaleexecutives

Femalestaff

Percentage offemale employees%

Number of female employees /Total number of employees

981. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

99

Facts & Figures
Classification

Number of
Employees by
Position/Duty

2021

2022

Note

Person15,534

16,77917,088

Number of female
managers in Korea

Person

710

1,042

1,071

Number of managers
overseas

Person

7,013

7,303

6,625

Number of female
managers overseas

Person

822

947

1,084

Total number of managers

Person22,54724,082

23,713

Total number of female
managers

Person

1,532

1,989

2,155

Percentage of female
managers

%

6.8

8.3

9.1

Number of female
low level managers

Person

1,084

1,504

1,603

Percentage of female
low level managers

%

6.6

8.3

9.2

Number of female
top level managers

Person37

42

46

Percentage of female
top level managers

%

5.38

5.84

6.06

Percentage of female
employees in revenuegenerating departments/
positions

Person%Number of female
employees in STEM11)
positions

PersonPercentage of female
employees in STEM
positions

%

8,500

7.4

2,295

4.0

9,182

7.9

2,418

4.1

Labor Union
Membership(Korea)StrikesNumber of female managers /Total number of managers
Low level manager: Defined as G2 level

9,695

Employees

Employee
Training(Korea)

8.3

2,590

4.4

Person

2,108

2,101

1,920

%

3.12

3.13

2.82

Number of employees with disabilities/ Total number of employees * 100

Under 30 years old

Person

7,147

7,516

9,263

30-50 years old

Person32,11432,94832,067

Over 50 years old

Person32,75932,032

32,101

Total

Person72,02072,49673,43110)	Revenue-generating departments: Product/R&D/Purchasing/Quality Division, Pilot Center, Manufacturing Area, Ulsan/Asan/Jeonju Plant, Global Business Management Division, Domestic Business/Customer
Experience/Commercial/ICT Division, Innovation Division, AIRS Company, AAM Division, CDO, EV Division, Genesis Division

11)

Classification

Managers: Includes managerial level
and higher office, research, and special
staff, and executives except for advisors

Based on the reported number in
December (Korea Employment Agency
for Persons with Disabilities)

Number of employees
Number ofwith disabilities
Employeeswith Disabilities
Percentage of employees(Korea)with disabilities
Number of
Employees by
Age(Korea)2020

Number of managers
in Korea

Number of female
employees in revenuegenerating departments/
positions10)

Employees

Unit	STEM (Science, Technology, Engineering, Math) employees: R&D Division, Innovation Division, AAM Division, TaaS Division, Ulsan/Asan/Jeonju Pant, Advanced Technology Institute, Manufacturing/Quality/
Purchasing/India Regional Headquarters, CDO, EV Division, Pilot Center, ICT Division

Unit

2020

2021

2022

Note

Number of people with labor
union membership

Person48,93347,53845,751

Labor union membership
percentage

%

68.2

66.3

63.1

Total number of strikes

Case

0

0

0

Number of days of work loss
due to strikes

Day

0

0

0

Total training expenses

KRW billion

29.0

41.7

63.6

Training expenses per
employee

KRW 10,000

43.3

60.3

88.0

Executive level
KRW 10,000
management

293.8

161.8

399.6

Training
expenses
per person(by position)

Middle level
management

KRW 10,000

49.7

98.3

314.5

New
employees
and nonmanagers

KRW 10,000

41.0

56.7

59.2

Training
expenses
per person(by gender)

Male

KRW 10,000

-

59.5

86.7

FemaleKRW 10,000

-

72.9

107.6

Under
30 years old

KRW 10,000

-

134.0

77.9

30-50 years
old

KRW 10,000

-

72.5

150.4

Over
50 years old

KRW 10,000

-

41.5

29.9

Training
expenses
per person(by age)

Training hours per employee

Hour

19.8

27.9

34.3

Executive level
management

Hour

108.5

29.3

32.4

Training
hours perperson(by position)

Middle level
management

Hour

42.5

35.9

23.5

New
employees andnon-managers

Hour

17.4

27.3

35.6

Training
hours perperson(by gender)

Male

Hour

-

27.5

33.2

Female

Hour

-

34.4

50.9

Hour

-

75.6

62.8

Hour

-

30.7

38.8

Hour

-

20.5

21.7

Training
hours perperson(by age)Under
30 years old
30-50 years
oldOver
50 years old

Total training expense / Total numberof employees

Total training hours provided
to employees / Total number of
employees

Total training hours by position /Number of employees by position

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

100

Facts & Figures
Classification

Parental
Leave(Korea)

Unit

2021

2022

Note

Person

171

188

285

Number of employees onparental leave (Female)

Person

162

162

234

Return-to-work rate afterparental leave (Male)

%

92.4

89.5

81.7

Return-to-work rate afterparental leave (Female)

%

98.6

92.6

75.0

Retention rate after parental
leave (Male)

%

97.3

97.6

93.7

Retention rate after parental
leave (Female)

%

91.7

98.6

95.3

Number of people hired
By gender

By ageEmployees
New
EmployeeHires

Bynationality(Korea)7,096

21,48423,018Male

Person6,529

18,97920,344

FemalePerson

567

2,505

2,674

Under 30
years old

Person3,820

13,883

13,93930-50
years old

Person

1,983

5,603

6,624

Over
50 years old

Person

1,293

1,998

2,455

Korea

Person

7,076

7,490

8,110

France

Korea

2

2

1

CanadaPerson

2

-

China

Person43Austria

Person1-

U.K.

Person1-

Belgium

Person1-

U.S.

Person4

94Germany

Person4

1

1

Republic ofSouth Africa

Person1-

TaiwanPerson

-

-

1

India

Person--1

Internal Recruitment Ratio

Youth Interns
Hired

2020

Number of employees onparental leave (Male)

Total number of hired people
Full-time conversion rate

Person99.3

99.0

Classification
By gender

By ageEmployee
Turnover(Korea)By position

Employees

Employee
Turnover(Korea +Overseas)92.0

Female

%

0.20

0.29

0.22

Under 30
years old

%

0.58

0.95

0.23

30-50
years old

%

0.37

0.72

0.60

Over 50
years old

%

3.47

4.31

4.65

Executive level
management

%

0.01

0.03

0.14

Middle level
management

%

0.01

0.11

0.15

%

3.83

5.04

5.18

4.41

6.00

5.47

Voluntary turnover rate

%

0.43

0.70

0.94

Turnover rate

%

-

17.19

18.97

Voluntary turnover rate

%

-

11.00

14.00

Turnover rate

%

-

10.6

11.4

Voluntary turnover rate

%

-

5.0

6.8

Average basic
salaryKRW298,307,953

292,430,000

329,929,105

Average total
wage

KRW

308,729,036

330,950,106

429,225,256

Average basic
salaryKRW299,885,453

257,678,571

323,461,538

Average total
wage

KRW

315,797,291

325,828,057

417,714,941

Average basic
salaryKRW71,464,873

73,253,066

77,864,821

Average total
wage

KRW

89,036,905

99,688,405

114,997,449

Average basic
salaryKRW67,252,851

70,490,756

72,522,553

Average total
wage

KRW

82,802,044

95,522,021

108,073,603

Sum of basic salary and bonus

Male staff

Average basic
salaryKRW72,661,301

79,293,050

88,283,218

Sum of basic salary and bonus

Female staff

Average total
wage

KRW

71,636,398

79,408,784

89,364,988

Sum of basic salary and bonus

Employee engagement rate

%

66.6

68.5

72.9

Femaleexecutives

Wage by GenderMalemanagers

Femalemanagers
Placement-to-vacancy ratio thatreflects internal recruit and transfer

Person

132

213

120

Intern / Research intern / Recruitmenttype intern / Experience-based intern

%

30.3

53.1

30.0

Number of personnel converted toregular employment: 36

Organizational
Culture Survey
12)

Note
5.26

%

Male
executives

The categorization of new hires into
different nationalities is reported withregards to domestic data only

2022
5.72

12)

Employee
Turnover(Overseas)

2021
4.21

Non-manager

New employee hires in Korea andabroad have been aggregated/
reported since 2021
(Only domestic data was aggregated/
reported in 2020)

2020

%

Turnover rate

1
2

Unit
Male

Voluntary turnover: When employees voluntarily leave their positions for reasons other than retirement, dismissal, etc.

Began to collect data for overseas
employee turnover in 2021

Sum of basic salary and bonus

Sum of basic salary and bonus

Sum of basic salary and bonus

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

101

Facts & Figures
Classification
SocialContributions
Expenditures
by Type

SocialContributions
Expenditures
by Area
SocialContributions
Expenditures
by Region

Employees
Volunteering(Korea)SocialContributions

Expenditure
by Donation/
Contribution
Type

Expenditureby Major
Contributed
Association14)

13)

Unit

2020

2021

2022

Cash donations

KRW million

50,63939,01544,998In-kind contributions

KRW million

2,739

2,123

2,925

Employee volunteer

KRW million

451

696

832

Management overhead

KRW million

9,008

6,124

10,466

Local community
investment

KRW million

44,88037,05439,506

Simple donation

KRW million

8,498

3,658

6,632

For commercial use

KRW million

9,007

6,549

12,251Korea

KRW million

62,38647,26258,389Overseas

USD

34,111,984

16,288,622

22,394,209

Number of volunteer
activities

Case

859

375

627

Number of participants

Person

3,107

6,330

5,592

Number of hours
participated

Hour

10,42014,03415,016

Associations andtax-free groups

KRW million

6,208

6,251

5,180

Lobbyist and interest
groupsKRW million

0

0

0

Political donations

KRW million

0

0

0

OthersKRW million

0

0

0

Total donations/contributions

KRW million

6,208

6,251

5,180

Foundation of Korea
Automotive Parts
Industry Promotion

KRW million

3,300

3,300

3,300

Korea Automobile
Manufacturers Association

KRW million

2,146

2,243

2,178

Korea Automotive
Technology Institute

KRW million

328

322

332

H2Korea

KRW million

237

200

200

Korea Traffic Disabled
Association

KRW million

110

100

100

Quality Index(based on
the survey
conducted by
J.D. Power andAssociates)

Monetary value conversion of employees’
volunteer hours13)

Quality
Management
SystemQuality &SafetyAssociations and groups related to theindustry

Employees’ annual volunteer hours x employees’ average hourly wage (average annual income / annual no. of work days / hour)	When selecting associations and organizations, thorough internal review is conducted. In addition, when reviewing the associations and organizations, HMC evaluates whether they are aligned with the Paris
Agreements, and makes efforts not to make contributions or expenditures to those that do not align.

14)

Classification

Note

Customer
Satisfaction
Survey

Unit

2020

2021

2022

Note

U.S. Vehicle Dependability
Study (Hyundai)

Ranking(Score)Non-premium 7th(132)

Non-premium 4th(101)

Non-premium 3rd(148)

U.S. Initial Quality Study(Hyundai)Ranking(Score)Non-premium 9th(153)

Non-premium 6th Non-premium 12th
(149)
(185)

U.S. Vehicle Dependability
Study (Genesis)

Ranking(Score))Premium 1st(89)

Premium 4th102)

Premium 1st(155)

U.S. Initial Quality Study(Genesis)

Ranking(Score)Premium 1st(142)

Premium 2nd(148)

Premium 1st(156)

Percentage of business sites
with quality management
system certification

%

100%

100%

100%

All business sites in Korea and overseas
are ISO 9001 certified

Customer Satisfaction
Score - Hyundai Customer
Experience Index (HCXI)

Score

71.6

71.2

72.1

1:1 weight assigned to sales/maintenance

External evaluation –National Customer
Satisfaction Index (NCSI)

Ranking

1st place at all
segments

1st place at all
segments

1st place at all
segments

Semi-medium, medium, semi-large,
large, RV

External evaluation –Korean Standard-Quality
Excellence Index (KS-QEI)

Ranking

1st place at all
segments

1st place at all
segments

1st place at all
segments

Luxury sedan E-segment, medium,medium SUV, electric vehicle, automobile
AS, and other seven segments

External evaluation –Korean Customer Satisfaction
Index (KCSI)

Ranking

1st place at all
segments

1st place at all
segments

1st place at all
segments

Passenger vehicle, RV

Domestic Maintenance
Service Satisfaction (HCXI)

Score(Rank)

69.7
(1st)

70.1
(1st)

71.8
(1st)

Overseas Sales Customer
Satisfaction (NPS)

Score(Country of
Implementation)

90.3(26 countries)

86.3(31 countries)

87.7(35 countries)

Changed management index in 2021
(SSi → Sales NPS)

Overseas Maintenance
Service Satisfaction (NPS)

Score(Country of
Implementation)

90.3(29 countries)

75.9(31 countries)

77.5(35 countries)

Changed management index in 2021
(HCXI → Service NPS)

1:1 weight assigned to directly-run/
Bluehands

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

102

Facts & Figures
Classification

Safety and
Health

15)
16)

Unit

2020

2021

2022

Note

Number of work-related fatalities
for employees

Person011Number of work-related fatalities forcontractors

Person1

30Number of employees involved in
occupational accidents (Korea)

Person

351

424

478

Number of employees involved in
occupational accidents (Overseas)

Person17

1130

Total number of employees involved in
occupational accidents

Person

368

435

508

Accident rate (Korea)

%

0.85

0.73

0.81

Accident rate (Overseas)

%

0.05

0.04

0.07

Accident rate (Total)

%

0.50

0.49

0.55

Employee LTIFR15)

1.72

1.76

1.94

Supplier employee LTIFR16)

0.93

1.43

1.53

Classification

Compliance/
EthicalTraining
Changed the aggregate method
starting in 2022
(Illness + accident → accident)

Non-compliancewith
Regulations
and Voluntary
Codes
Based on figures of the Ulsan, Asan,and Jeonju plants in Korea, andoverseas manufacturing plants
Number of injuries that prevent
workers from recovering to the samestate before the accident within
six months: 125 cases

Lost-Time Injuries Frequency Rate (LTIFR): Number of lost-time injuries per million hours worked during an accounting period
When investigating the number of in-house supplier workers at the Jeonju Plant in 2021, the total number of workers of suppliers was indicated, resulting in an overestimatedfigure

17)
18 )

2020

2021

2022

Note

Number of training sessions (Korea)

Case

8

11

26

Number of participants (Korea)

Person22,92821,567

8,651

Number of training sessions (Overseas)

Case

1

9

0

Number of participants (Overseas)

Person816

80

0Total number of personal
Information leakage
Incidents

Case

0

117)

0

Number of customers
affected by the Incidents

Person0

60Number of cyber asset damage incidents

Case

0

0

0

Number of labeling/advertising violations

Case

0

0

0

Case

0

0

017)

KRW million

0

0

0

KRW million

0

0

0

Number of
personal
Information
leakage
Incidents

108 cases of work-related illness,and 1 work-related death

Unit

No. of cases ofPenalty andenvironmental violations18)
fine fornon-compliance
Penalty and finewithenvironmental
Environment-related
regulations
provisions

A public announcement was made regarding the case in 2022. The penalty was paid in 2023.
The Ulsan Plant is in a single trial with the Ministry of Environment on whether it violated the law.

Based on an environment-related fineof at least $ 10,000

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Certifications
Certification Status by Business Site (ISO Certification)
Classification

Term of Validity

Business sites in Korea (Ulsan Plant, Asan Plant, Jeonju Plant, Namyang Technology ResearchCenter, Headquarters, Korea Business Division)

2020-2023

Hyundai Motor Manufacturing Alabama (HMMA)

2021-2024

Beijing Hyundai Motor Company (BHMC)

2021-2024

Hyundai Motor India (HMI)

2020-2023

Hyundai Motor Manufacturing Russia (HMMR)

2022-2025

Hyundai Motor Brasil (HMB)

2021-2024

Hyundai Motor Manufacturing Czech (HMMC)

2021-2024

Hyundai Assan Otomotiv Sanayi (HAOS)

2021-2024

Hyundai Motor Manufacturing Indonesia (HMMI)

2022-2025

Hyundai Truck & Bus China (HTBC)

2020-2023

ISO 45001(Health and Safety Management)

Business sites in Korea

2020-2023 (Jeonju Plant)
2021-2024 (Asan Plant)
2021-2024 (Namyang Technology Research Center)2022-2025 (Ulsan Plant)

ISO 27001(Information Security Management)

Business sites in Korea

2021-2024

ISO 9001(Quality Management)

Business sites in Korea & Overseas

2021-2024

Beijing Hyundai Motor Company (BHMC)

2022-2025 (Renhe/Yangzhen Plants)
2021-2024 (Changzhou Plant)

Hyundai Motor India (HMI)

2021-2024

Hyundai Assan Otomotiv Sanayi (HAOS)

2021-2024

ISO 14001(Environmental Management)

ISO 50001(Energy Management)

Note

Integrated certification

ESG Magazine103

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

Page

Note

Page

Note

GRI Index
Universal Standards
GRI Standards
No.

Page

Title

2-1

Organizational details

120

2-2

Entities included in the organization’s sustainability reporting-

2-3

Reporting period, frequency and contact point

120

2-4

Restatements of information

32, 962-5

External assurance

2-6
2-7

No.

Title

2-28

Membership associations

101

2-29

Approach to stakeholder engagement

12-13

2-30

Collective bargaining agreements

99

3-1

Process to determine material topics

14-17

114-119

3-2

List of material topics

15

Activities, value chain and other business relationships

04

3-3

Management of material topics

16-17

Employees

98-1001)

2-8Workers who are not employees-

2-9

Governance structure and composition

79-84

2-10

Nomination and selection of the highest governance body

79

2-11

Chair of the highest governance body

79

2-12

Role of the highest governance body in overseeing the management of
impacts

09, 82, 84

2-13Delegation of responsibility for managing impacts

84

2-14

Role of the highest governance body in sustainability reporting

84

2-15

Conflicts of interest

79, 83, 86-88

2-16

Communication of critical concerns

80

2-17

Collective knowledge of the highest governance body

81

2-18

Evaluation of the performance of the highest governance body

81

2-19

Remuneration policies

82

2-20

Process to determine remuneration

82

2-21

Annual total compensation ratio

82

2-22

Statement on sustainable development strategy

03

2-23

Policy commitments

50, 532-24

Embedding policy commitments

50, 532-25

Processes to remediate negative impacts

17, 52, 55-56

2-26

Mechanisms for seeking advice and raising concerns

2-27Compliance with laws and regulations

1)

GRI Standards

Notep.373-379 of Business Report

Energy consumption

Topic Specific Standards - Economic
GRI Standards
No.

Title

201-1

Direct economic value generated and distributed

96

201-2

Financial implications and other risks and opportunities due to climatechange

22-23

201-3

Defined benefit plan obligations and other retirement plans

56

201-4

Financial assistance received from government

96

202-1

Ratios of standard entry level wage by gender compared to local
minimum wage

100

202-2

Proportion of senior management hired from the local community

98

203-1

Infrastructure investments and services supported

101

203-2

Significant indirect economic impacts

101

205-1

Operations assessed for risks related to corruption

87-88

205-2

Communication and training about anti-corruption policies andprocedures

87-88

205-3

Confirmed incidents of corruption and actions taken

87-88

206-1

Legal actions for anti-competitive behavior, anti-trust, and monopoly
practices87

50, 87-88

207-1

Approach to tax

92

102

207-2

Tax governance, control, and risk management92	Reason for non-disclosure: Confidentiality. We manage information on workers who are not employees but it is difficult to disclose information on workers who are not
Hyundai employees due to company regulations.

104

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

Page

Note

GRI Index
Topic Specific Standards - Environmental
GRI Standards
No.

Page

Title

GRI Standards

Note

No.

Title

301-1

Materials used by weight or volume38, 96305-1

Direct (Scope 1) GHG emissions

27, 96

301-2

Recycled input materials used

38

305-2

Energy indirect (Scope 2) GHG emissions

27, 96

301-3

Reclaimed products and their packaging materials

38

305-3

Other indirect (Scope 3) GHG emissions

27, 96

302-1

Energy consumption within the organization

32

305-4

GHG emissions intensity

27, 96

302-2

Energy consumption outside of the organization

32

305-5

Reduction of GHG emissions

25-34

302-3

Energy intensity

96

302-4

Reduction of energy consumption

32

305-7

Nitrogen oxides (NOx), sulfur oxides (SOx), and other significant air
emissions

97

303-1

Interactions with water as a shared resource

38

306-1

Waste generation and significant waste-related impacts

38

303-3

Water withdrawal

97

306-2

Management of significant waste-related impacts

38

303-4

Water discharge

97

306-3

Waste generated

97

303-5

Water consumption

38, 97306-4

Waste diverted from disposal

38, 97

304-1

Operational sites owned, leased, managed in, or adjacent to, protectedareas and areas of high biodiversity value outside protected areas

41-43

306-5

Waste directed to disposal

97

308-1

New suppliers that were screened using environmental criteria

61

304-2

Significant impacts of activities, products and services on biodiversity

41-43

308-2

Negative environmental impacts in the supply chain and actions taken

62

304-3

Habitats protected or restored

41-43

304-4

IUCN Red List species and national conservation list species with
habitats in areas affected by operations

43

105

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

Page

Note

106

GRI Index
Topic Specific Standards - Social
GRI Standards
No.

Page

Title

401-1

New employee hires and employee turnover

100

401-2

Benefits provided to full-time employees that are not provided totemporary or part-time employees

48-49, 56

401-3

Parental leave

56, 100

403-1

Occupational health and safety management system

53

403-2

Hazard identification, risk assessment, and incident investigation

55

403-3

Occupational health services

55

403-4

Worker participation, consultation, and communication on occupational
health and safety

53-55

403-5

Worker training on occupational health and safety

53-55

403-6

Promotion of worker health403-7

Prevention and mitigation of occupational health and safety impacts
directly linked by business relationships

GRI Standards

Note

No.

Title

405-1

Diversity of governance bodies and employees

79, 98405-2

Ratio of basic salary and remuneration of women to men

100

406-1

Incidents of discrimination and corrective actions taken

50

407-1

Operations and suppliers in which the right to freedom of association and48
collective bargaining may be at risk

408-1

Operations and suppliers at significant risk for incidents of child labor

51

409-1

Operations and suppliers at significant risk for incidents of forced orcompulsory labor

51

411-1

Incidents of violations involving rights of indigenous peoples

-

55

413-1

Operations with local community engagement, impact assessments, anddevelopment programs

12, 72-77, 101

55

414-1

New suppliers that were screened using social criteria

61

414-2

Negative social impacts in the supply chain and actions taken

62

No incidents of violations
occurred403-8

Workers covered by an occupational health and safety management
system53

415-1

Political contributions

101

403-9

Work-related injuries

102

416-1

67

403-10Work-related ill health102

Assessment of the health and safety impacts of product and service
categories

404-1

Average hours of training per year per employee

99

416-2

Incidents of non-compliance concerning the health and safety impacts of65
products and services

404-2

Programs for upgrading employee skills and transition assistanceprograms

46

417-1

Requirements for product and service information and labeling

404-3

Percentage of employees receiving regular performance and careerdevelopment reviews

46

417-2

Incidents of non-compliance concerning product and service information102
and labelingNo incidents of violations
occurred417-3

Incidents of non-compliance concerning marketing communications

102

No incidents of violations
occurred

418-1

Substantiated complaints concerning breaches of customer privacy andlosses of customer data102

No political contributions made70

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

107

ESRS Index
European Sustainability Reporting Standards (ESRS) is a management tool for executing the Corporate Sustainability Reporting Directive (CSRD), which is a guideline that was enforced in March 2023 by the EU to make sustainability reports mandatory.
It specifies the scope and criteria of information that a company should disclose in relation to sustainability. The European Financial Reporting Advisory Group (EFRAG) announced the final ESRS in November 2022 which includes two common standards,
11 theme-level standards, 84 information disclosure requirements, and 1,144 quantitative and qualitative data. Hyundai has subsidiaries and branches in the EU and achieves considerable sales from them. As such, we are striving to make preparations by
developing thorough knowledge of CSRD and ESRS and establishing a system that manages information.
ESRS 2. General Disclosures
Indicator No.

ESRS E1. Climate Change
Title

Page

Indicator No.

Title

Page

ESRS 2 BP-1

General basis for preparation of the sustainability statements

120

ESRS E1-1

Transition plan for climate change mitigation

25

ESRS 2 BP-2

Disclosures in relation to specific circumstances

114-119ESRS E1-2

Policies related to climate change mitigation and adaptation

26, 28-29, 32-34

ESRS 2 GOV-1

The role of the administrative, management and supervisory bodies

09, 79-84

ESRS E1-3

Actions and resources in relation to climate change policies

21, 28ESRS 2 GOV-2

Information provided to and sustainability matters addressed by the undertaking’s administrative,
management and supervisory bodies

14-17, 84

ESRS E1-4

Targets related to climate change mitigation and adaptation

25, 28-29, 32-33

ESRS E1-5

Energy consumption and mix

32, 96ESRS 2 GOV-3

Integration of sustainability-related performance in incentive schemes

09, 20ESRS E1-6

Gross Scopes 1, 2, 3 and Total GHG emissions

27, 96ESRS 2 GOV-4

Statement on sustainability due diligence

50-51, 60-64

GHG removals and GHG mitigation projects financed through carbon credits

16, 20, 26-27

ESRS 2 GOV-5

Risk management and internal controls over sustainability reporting1)-

Avoided emissions of products and services

16, 29ESRS 2 SBM-1

Market position, strategy, business model(s) and value chain

06-07, 28-29

ESRS 2 SBM-2

Interests and views of stakeholders

11-13

ESRS 2 SBM-3

Material impacts, risks and opportunities and their interaction with strategy and business model(s)15-17ESRS 2 IRO-1

Description of the processes to identify and assess material impacts, risks and opportunities

14

ESRS 2 IRO-2

Disclosure Requirements in ESRS covered by the undertaking’s sustainability statements

107-109

1)

ESRS E1-7

2)

ESRS E1-8

Internal carbon pricing-

ESRS E1-9

Potential financial effects from material physical and transition risks and potential climate-related
opportunities

22-24

2)

 he internal carbon price is calculated in connection with the Emission Trading Scheme (ETS) price, and is used for improving energy efficiency, implementing low-carbon
T
strategies and investments, and discovering and harnessing low carbon business opportunities

 e have been operating an IT system-based “ESG platform” since 2022 to secure ESG data collection-inspection-disclosure efficiency and credibility of all business sites inW
Korea and abroad

ESRS E2. Pollution
Indicator No.

Title

Page

ESRS E2-1

Policies related to pollution

19

ESRS E2-2

Actions and resources related to pollution

20, 38-40

ESRS E2-3

Targets related to pollution

39

ESRS E2-4

Pollution of air, water and soil

38-39, 97

ESRS E2-5

Substances of concern and substances of very high concern

39, 97ESRS E2-6

Potential financial effects from pollution-related impacts, risks and opportunities-

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

108

ESRS Index
ESRS E3. Water and Marine Resources
Indicator No.

ESRS S1. Own Workforce
Title

Page

Indicator No.

Title

Page

ESRS E3-1

Policies implemented to manage water and marine resources

19, 38ESRS S1-1

Policies related to own workforce

49-50

ESRS E3-2

Actions and resources related to water and marine resources

38

ESRS S1-2

Processes for engaging with own workers and workers’ representatives about impacts

48, 53

ESRS E3-3

Targets related to water and marine resources

26, 73

ESRS S1-3

Processes to remediate negative impacts and channels for own workers to raise concerns

48, 50, 87

ESRS E3-4

Water consumption

38, 97ESRS S1-4

51-55

ESRS E3-5

Potential financial effects from water and marine resources-related impacts, risks and opportunities-

Taking action on material impacts on own workforce, and approaches to mitigating material risks andpursuing material opportunities related to own workforce, and effectiveness of those actions

ESRS S1-5

Targets related to managing material negative impacts, advancing positive impacts, and managing
material risks and opportunities

52-53

ESRS S1-6

Characteristics of the undertaking’s employees

98-99

ESRS S1-7

Characteristics of non-employee workers in the undertaking’s own workforce

98

ESRS S1-8

Percentage of total employees covered by collective bargaining agreements
For employees not covered by collective bargaining agreements, a description of reasons andcountermeasures

48, 99No. of strikes, no. of work loss days due to strikes, measures and discussions to resolve strikes, etc.

99

Average hourly wage difference between genders, ratio of women’s hourly wage against men’shourly wage

100

Persons subject to family care leave (maternity leave, parental leave, etc.), no. of persons who went ona leave, retention rate after returning to work after leave

100

ESRS S1-10

Adequate wages4)

46, 100

ESRS S1-11

Social protection

56

ESRS S1-12

Persons with disabilities

99

Percentage of employees that participated in regular performance and career development reviews

46

Average number of training hours and expenses per person

99

Percentage of own workers who are covered by the undertaking’s health and safety management
system based on legal requirements and/or recognized standards or guidelines

53, 103

Number and rate of work-related injuries and ill health, the number of days lost to work-related injuries,
accidents, and ill health

102, 113ESRS S1-15

Work-life balance indicators

56

ESRS S1-16

Ratio of the annual total compensation ratio of the highest paid individual to the median annual totalcompensation for all employees

82

Number of work-related incidents and severe human rights impacts and incidents within its own
workforce and any related material fines or sanctions for the reporting period

51, 54

Number of complaints and severe human rights impacts and incidents within its own workforce andany related countermeasures and plans to prevent reoccurrence

52, 54-55

ESRS E4. Biodiversity and Ecosystems
Indicator No.

Title

Page

ESRS E4-1

Transition plan on biodiversity and ecosystems3)-

ESRS E4-2

Policies related to biodiversity and ecosystems

19, 41ESRS E4-3

Actions and resources related to biodiversity and ecosystems

42

ESRS E4-4

Targets related to biodiversity and ecosystems3)-

ESRS E4-5

Impact metrics related to biodiversity and ecosystems change

43

ESRS E4-6

Potential financial effects from biodiversity and ecosystem-related risks and opportunities-

3)

ESRS S1-9

 e present a mid- to long-term goal as well as activity and performance target through Hyundai Motor Company Biodiversity Protection Policy and Hyundai Motor Company
W
No Deforestation Policy
Biodiversity Protection Policy

No Deforestation Policy

ESRS S1-13

ESRS E5. Resource Use and Circular Economy
Indicator No.

Title

Page

ESRS E5-1

Policies related to resource use and circular economy

19, 35, 37

ESRS E5-2

Actions and resources related to resource use and circular economy

35-37

ESRS E5-3

Targets related to resource use and circular economy

36-37

ESRS E5-4

Resource inflows

38, 96ESRS E5-5

Resource outflows

36, 97ESRS E5-6

Potential financial effects from resource use and circular economy-related impacts, risks and opportunities-

ESRS S1-14

ESRS S1-17

4)

 e set a wage that is more than the minimum wage specified in local laws where our domestic and overseas business sites are located. An accurate wage that is calculated according to work hours isWregularly paid on a set date.

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

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109

ESRS Index
ESRS S2. (Workers in the Value Chain
Indicator No.

ESRS S2-1

ESRS G1. Business Conduct
Title

Policies related to value chain workers

Page

Indicator No.

55, 60ESRS G1-1

Title

Page

Top decision-making body’s declaration of ethical management and roles and responsibilities in relation
to management and supervision87

ESRS S2-2

Processes for engaging with value chain workers about impacts

60, 62ESRS S2-3

Processes to remediate negative impacts and channels for value chain workers to raise concerns5)

57

Requirements in the Ethics Charter and Code of Conduct

87

ESRS S2-4

Taking action on material impacts on value chain workers, and approaches to mitigating material risks
and pursuing material opportunities related to value chain workers, and effectiveness of those actions

62

Operating the compliance program, conducting activities to make payment improvements, such as thewin-win payment system

59, 88ESRS S2-5

Targets related to managing material negative impacts, advancing positive impacts, and managing
material risks and opportunities

62

Diagnosing and conducting a due diligence on supplier ESG risks, reflecting diagnosis and due diligence
results in supplier selection criteria7)

58, 60

Activities to prevent corruption or bribery, and a system to investigate and report outcomes to theadministrative, management and supervisory bodies

87-88

Activities to prevent unfair trading, and a system to investigate and report outcomes to the administrative,
management and supervisory bodies

87-88

Number of confirmed incidents of corruption or bribery, details of public legal cases, the number ofconfirmed incidents in which own workers were dismissed or disciplined

87

Number of confirmed incidents of unfair trading, details of public legal cases, the number of confirmed
incidents in which own workers were dismissed or disciplined

87

ESRS G1-5

Political influence and lobbying activities8)

101

ESRS G1-6

Payment practices

59

5)

ESRS G1-2

 hrough Hyundai Motor Group’s Transparent Purchase Practices Center, we operate a “suggestion box for transparency and ethical practices” and “suggestion box for tier-2
T
and tier-3 suppliers”

ESRS G1-3

ESRS S3. Affected Communities
Indicator No.

Title

Page

ESRS S3-1

Policies related to affected communities

72

ESRS S3-2

Processes for engaging with affected communities about impacts

12

ESRS S3-3

Processes to remediate negative impacts and channels for affected communities to raise concerns

12

ESRS S3-4

Taking action on material impacts on affected communities, and approaches to mitigating material
risks and pursuing material opportunities related to affected communities, and effectiveness of thoseactions

73-77

Targets related to managing material negative impacts, advancing positive impacts, and managing
material risks and opportunities

73-77

ESRS S3-5

ESRS G1-4

Title

Page

ESRS S4-1

Policies related to consumers and end-users

68-69

ESRS S4-2

Processes for engaging with consumers and end-users about impacts

65, 68ESRS S4-3

Processes to remediate negative impacts and channels for consumers and end-users to raise concerns

68

ESRS S4-4

Taking action on material impacts on consumers and end-users, and approaches to mitigating material
risks and pursuing material opportunities related to consumers and end-users, and effectiveness of those 64-67
actions

ESRS S4-5

Targets related to managing material negative impacts, advancing positive impacts, and managing
material risks and opportunities6)6)

 e operate the “5-star System,” which evaluates technology/quality/delivery levels to certify outstanding suppliers. We also reflect the results of evaluating ESG and safety/Wenvironment/security in trade conditions.

8)In accordance with Anti-Corruption/Bribery Policy of Hyundai Motor Company, we handle charitable donations and sponsorships fairly according to internal execution
standards and processes. Donations and sponsorships for political purposes are prohibited.
Anti-Corruption/Bribery Policy of Hyundai Motor Company

ESRS S4. Consumers and End Users
Indicator No.

7)69 e are continually carrying out activities based on three major directions – “strengthen maintenance capabilities,” “secure outstanding personnel,” and “operateWmaintenance regulations” – to enhance customer and consumer service quality

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

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110

TCFD Index
Disclosure Focus Area

Title

Page

Describe the board’s oversight of climate-related risks and opportunities.

9, 21

Report to Sustainability Management Committee of the BOD and review thereof (once/semi-annually)
CDP questions: C1.1b

Describe management’s role in assessing and managing climate-related risks and opportunities.

9, 21

Operation of the ESG Committee, a subcommittee under the Hyundai Business Strategy Meeting(hosted by the CEO)CDP questions: C1.2

Describe the climate-related risks and opportunities the organization has identified over the short, medium, and long term.

21-24

CDP questions: C1.1a, C2.2a, C2.3, C2.3a, C2.4, C2.4a

Describe the impact of climate related risks and opportunities on the organization’s businesses, strategy, and financial planning.

22-24

CDP questions: C2.3a, C2.4a, C3.3, C3.4, C3.5, C3.5a, C3.5b, C3.5c

Describe the resilience of the organization’s strategy, taking into consideration different climate-related scenarios, including
a 2°C or lower scenario.

21-24

CDP questions: C3.1, C3.2, C3.2a, C3.2b

Describe the organization’s processes for identifying and assessing climate-related risks.

21-24

CDP questions: C2.1 C2.1a, C2.1b, C2.2

Describe the organization’s processes for managing climate-related risks.

21, 23-24

CDP questions: C2.1b, C2.2

Describe how processes for identifying, assessing, and managing climate-related risks are integrated into the organization’s overall risk
management.

9, 21, 89

CDP questions: C2.1 C2.1a, C2.1b, C2.2

Disclose the metrics used by the organization to assess climate related risks and opportunities in line with its strategy and risk
management process.

6, 27-34, 95-97

Energy consumption, vehicle production and sales status, vehicle CO2 emissions, sales, etc.
CDP questions: C8.2, C8.2a, C8.2b, C8.2c, C8.2e, C11.3a

Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas (GHG) emissions, and the related risks.

27, 96

CDP questions: C6.1, C6.3, C6.5, C7.1a, C7.2, C7.3b, C7.5, C7.6b, C7.7, C7.7a

Describe the targets used by the organization to manage climate-related risks and opportunities and performance against targets.

21, 25, 28-29, 32

CDP questions: C1.3, C1.3a, C4.1, C4.1a, C4.1c

Governance

Strategy

Risk Management

Metrics and Targets

Note1. Introduction

2. Environmental

3. Social

5. ESG Factbook

4. Governance

ESG Magazine

111

SASB Index
Accounting Metric

Page

Note

Korea: 100%, U.S.: 69.2%
TR-AU-250a.1

Percentage of vehicle models rated by NCAP
programs with an overall 5-star safety rating,by region

67

Product Safety

Classification

Percentage

Vehicle models rated 5-star

Korea

100%

IONIQ 6, GV70

U.S.

69.2%

Kona, Santa Fe, Elantra, Sonata, Tucson Palisade Ioniq5, G80, GV80, etc.

TR-AU-250a.2

Number of safety-related defect complaints,
percentage investigated

TR-AU-250a.3

Number of vehicles recalled

65

2022: 3.89 million vehicles (voluntary recall)

TR-AU-310a.1

Percentage of active workforce covered undercollective bargaining agreements

99

2022: 63.1% (domestic basis)

TR-AU-310a.2(1) Number of work stoppages, and(2) total days idle

992022: No strike history of more than 1,000 people taking a break from work (domestic and overseas)

Labor Practices

64-65

Constant monitoring of customer complaints and 100% voluntary recall immediately when potential issues are recognized to customers of Ministry of Land, Infrastructure
and Transport (Korea), NHTSA (U.S. Department of Transportation’s National Highway Traffic Safety Administration)

EU average passenger fleet carbon emissions, China/U.S. average fleet fuel economy
2019

TR-AU-410a.1

Sales-weighted average passenger fleet fueleconomy, by region

31

TR-AU-410a.2

Materials Sourcing

Materials Efficiency &Recycling

Activity Metrics

Number of(1) zero emission vehicles (ZEV),(2) hybrid vehicles, and(3) plug-in hybrid vehicles sold

2021

2022

123.5

94.7

107.1

106.0

Average fleet fuel economy in China (L/100km)

6.00

5.61

6.15

6.28

Passenger car

38.5

40.0

42.8

44.8

Light truck

27.1

29.4

30.9

36.0

Average fleet fuel economy in U.S. (mpg)

Fuel Economy &Use-phase Emissions

2020

Average fleet carbon emissions in EU (g/km)

Number of electrified vehicles sold in 2022 and percentage thereofClassification

29

GlobalHEV/PHEV(Unit: 1,000)
EV

285(7.2%)

FCEV
209(5.3%)

TR-AU-410a.3

Discussion of strategy for managing fleet fueleconomy and emissions risks and opportunities

TR-AU-440a.1

Management of risks related to use of mainmaterials

37, 63, 90

TR-AU-440b.1

Total amount of waste from manufacturing,
percentage recycled

38, 97

TR-AU-440b.2

Weight (ton) of end-of-life material recovered,percentage recycled

36

Weight of materials reused/used after end-of-life in 2022 was around 199,000 tons.
End-of-life recycling rate in 2022 was 82.4% excluding heat recovery, 91% including heat recovery.

TR-AU-440b.3

Average recyclability of vehicles sold

35

Recyclability: 85% (95%, when including waste energy recovery)

TR-AU-000.A

Number of vehicles manufactured

95

TR-AU-000.B

Number of vehicles sold

95

-

29-30

Total
11(0.3%)

Increase sales of electrified vehicles and promote fuel efficiency improvement of internal combustion engines
Details are provided on the respective page of the report andHyundai’s conflict mineral management report

Hyundai Motor Company Conflict Minerals Report

90.8% of waste discharged at Hyundai business sites was recycled.

505(12.8%)

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine112

WEF IBC Stakeholder Capitalism Metrics
Theme

Governing Purpose

Metrics

Setting purpose

Page

Note

3, 8

We are continuously making sincere efforts to pursue the creation of economic value by continually securing a competitive edge, realization of customer value
through quality management, and creation of social value through corporate citizenship.

Quality ofGoverning Body

Governance body composition

79-82

The BOD consists of 6 directors and 7 independent directors (including 2 female directors). Among the members of the BOD, the independent director in charge ofprotecting shareholder rights (Independent Director Chi-won Yoon) participates in meetings with domestic investors and corporate briefings for overseas investors
in aim of strengthening communications between the BOD and shareholders, and strives to improve our shareholder values. In order to faithfully perform the dutiesof the independent director, taking concurrent positions as a director, executive officer, or auditor of two or more other companies is prohibited. In order to prevent
conflicts of interest, it is not allowed to engage in transactions in nature of the company's business activities without obtaining a prior approval from the BOD, or to
become a general partner or director of other companies in the same industry.

Stakeholder
Engagement

Material issues impacting stakeholders

14-17

In order to identify material sustainability management issues that impact Hyundai's stakeholders, we performed a materiality analysis in target of Hyundai employees
and outside sustainability management experts.

Anti-corruption

87-88, 102

Reports on unfair and corrupted acts are submitted and processed through the Cyber Audit Office. Additionally, we provide compliance management and ethics
trainings to raise our members’ compliance awareness and to build an ethical compliance culture.

Protected ethics advice and reporting mechanisms

50-51, 87-88

Through a regular half-yearly audit and frequent audits every year, we examine the status of employees’ practice of the Code of Ethics, and report the results to the
BOD’s Sustainability Management Committee.

Integrating risk and opportunity into business process

16, 23-24, 89-92

By identifying regional/organizational issues on climate change issues, we evaluate the impacts of each factor affecting the company in aim of establishing a decent,company-wide response strategy. In addition, we carry out a materiality analysis to disclose the management directions for each major issue, key performance andmid- to long-term plans.

25, 27, 96, 116-119

We disclose the total greenhouse gas emissions occurring from all domestic business sites and 8 overseas subsidiaries.
Greenhouse gas emissions (Scope 1+2, tCO2-eq): 2,388,847
Emissions for a total of 11 categories (6 upstream and 5 downstream) are disclosed.
Greenhouse gas emissions (Scope 3, tCO2-eq): 105,790,785

Ethical Behavior

Risk and Opportunity
Oversight

Climate Change

Nature Loss

Greenhouse gas (GHG) emissions

TCFD implementation

110

Details of all recommendations in the TCFD Index can be found in the Sustainability Report and the Carbon Disclosure Project (CDP).

Land use and ecological sensitivity-

There is no business site located adjacent to the Biodiversity Area (KBA).
Hyundai Motor India and Hyundai Assan Otomotive Sanayi (Turkey plant) locate in areas of extreme water stress in the WRI Aqueduct water risk atlas tool.
HMI & HAOS

Freshwater Availability

Dignity and Equality

Water consumption and withdrawal in water-stressed areas

38, 40, 97

Diversity and Inclusion

49, 98-99

Pay equality

82, 100

Wage level82, 100

Risk for incidents of child, forced or compulsory labor

51

Volume of water withdrawal (Ton)Volume of water consumption (Ton)Rate of water withdrawal

Rate of water consumption

1,549,769

1,246,046

7.8%

11.5%

Data on employees by age, female employees, and employment status of the disabled is disclosed in the Sustainability Report.
The average remuneration per person is disclosed in the Sustainability Report.
There are no business sites or suppliers with a high risk of child/forced labor.

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3. Social

4. Governance5. ESG Factbook

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WEF IBC Stakeholder Capitalism Metrics
Theme

Metrics

Page

Note

The number of industrial accident victims, industrial accident rate, work loss rate and occupational disease rate are disclosed in the Sustainability Report.
LTIFR & OIFRClassification

Health and Well-being

Skills for the Future

Employment andWealth Generation

Health and safety

102

Accident rate

OIFR

Employees (Korea)

0.81

0.89

Employees (Overseas)

0.07

0.01

Employees (Total)

0.50

0.53

Suppliers (Korea)

2.38

-

Suppliers (Overseas)

0.00

-

Suppliers (Total)

1.52

-

Training provided

99

The status of employee training (training hours by position, training expense) is disclosed in the Sustainability Report.

Absolute number and rate of employment

100

The number of new employees in Korea and the turnover rate are disclosed in the Sustainability Report.

Economic contribution

95-96

Sales and financial information, R&D expenses (details of the company’s investments and government subsidies), information on economic values distributed are disclosed
in the Sustainability Report and the Business Report.

Financial investment contribution

96

Hyundai Motor Company is committed to improving the company’s successful investment and profitability.
Total capital expenditure - Depreciation expense: KRW (1,169) billion
Buyback of treasury stock + dividend payment: KRW 2,023 billion

Innovation of Better
Products and Services

Total R&D expense

96

Total R&D expense spent is as follows.
- Total R&D expenses in 2022: KRW 3.3 trillion- 2022 government subsidy: KRW (4,016) million

Community andSocial Vitality

Total tax paid

96

Details of corporate income tax are disclosed in the Sustainability Report and business reports.

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114

Independent Assurance Statement
Hyundai Motor Co., Ltd. (“the Company” or “Hyundai Motor”) commissioned DNV Business Assurance Korea, Ltd. (“DNV”, “we” or “us”), part of DNV Group, toundertake independent assurance of the Company’s 2023 Sustainability Report (the “Report”).

Our Opinion
On the basis of the work undertaken, nothing came to our attention to suggest that the Report does not properly describe Hyundai Motor’s adherence to the
Assurance Principles described below. In terms of reliability of the performance data, nothing came to our attention to suggest that these data have not been
properly collated from information reported at operational level, nor that the assumptions used were inappropriate. We believe that Hyundai Motor is reportingin accordance with the GRI Standards.
We have reviewed that the topic-specific disclosures of GRI Sustainability Reporting Standards 2021 which are identified in the process for defining reportcontent;
No.

Material Topic

Topic Standard

1

Leading the transition to eco-friendly/electric vehicles

2

Efforts to reduce GHG emissions

3

Enhancement of global corporate value

201-1

4

Diffusion of human rights management407-1, 408-1, 409-1

5Strategic management of supply chain ESG

302-5, 305-5, 306-4
305-1, 305-2, 305-3, 305-5

414-1, 414-2

Without affecting our assurance opinion, we also provide the following observations:• The Principle of Inclusivity	Hyundai Motor defines customers, dealers, employees, suppliers, local communities, government and shareholders/investors are their major stakeholder
groups and reports on each group’s definitions, communication channels, and major interests. In particular major interests from them have been appliedin the materiality assessment process for promoting participation from stakeholders.
• The Principle of Materiality	Hyundai Motor conducted double materiality assessment, taking into consideration the environmental and social (non-financial) impacts and financial
impacts. During the assessment process, the survey with employees and outside stakeholders was conducted to reflect their opinions appropriately. DNV
confirms that material topics chosen from this assessment were reflected in the Report.
• The Principle of Responsiveness	Hyundai Motor has set an overarching objective of sustainable development, “The Right Move for the Right Future”, with three sub-set directions inrelation to planet, people, and community and 15 focus area. For realising this objective, the Company reports roles and responsibilities of Sustainable
Management Committee, ESG Committee, the dedicated sustainability team in a detailed manner.
	DNV recommends that the Company exhibit material topics and their performances in relation to the Company’s mid/long-term ESG objectives in orderthat stakeholders get to know performance of each material topic in the context of the Company’s core ESG objectives and keep track of records on anannual basis.
• The Principle of Impact	Hyundai Motor discloses background of choosing the material topics along with performance progress, whose interests and expectations of stakeholders
are reflected in. Hyundai Motor helps stakeholders understand the Company better by managing environmental and social impact effectively andpresenting related performance in a quantitative manner. DNV confirms that the material topics selected through the materiality assessment are notmissed in terms of the spatial and time boundaries.
• Reliability of Specific Sustainability Performance Information
	DNV conducted a review of compliance with the principles of AA1000AP(2018) of the Report with Type 1 verification (Type 2 for accident rate, weight ofdisposal, and water consumption). The assurance team has sampled data and tested accuracy and reliability of the sustainability performance data of theCompany and interviewed responsible people and reviewed the data gathering process with the supporting documents and records. Based on the test,
the intentional error or misstatement was not noted. Data owners were able to demonstrate to trace the origin of the data and to interpret the processeddata in a reliable manner. The data was identifiable and traceable. The Company reports the sustainability performance of the last three years and can becompared over time. Any errors or unclear expressions found during the verification process were corrected prior to the publication of the Report.

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115

Independent Assurance Statement
Scope and Approach

Basis of Our Opinion

We performed our work using AA1000AS v3, Assurance Standard set for by AccountAbility, and DNV’s assurance methodology VeriSustain™ (Ver. 5.0) which
is based on our professional experience, international assurance best practices including the International Standard on Assurance Engagements 3000 (“ISAE3000”), and the Global Reporting Initiative Sustainability Reporting Standards (“GRI Standards”). DNV provides Type 1 and the moderate assurance. But
some part of performance data has been verified by Type 2 as described above.

The assurance was carried out from May to June 2023. We undertook the following activities as part of the assurance process:The engagement excludes the sustainability management, performance and reporting practices of Hyundai Motor’s subsidiaries, associated companies,
suppliers, contractors and any third-parties mentioned in the Report. We did not interview external stakeholders as part of this assurance engagement.
Economic performance based on the financial data is cross-checked with internal documents, the audited consolidated financial statements and theannouncement disclosed at the website of Korea Financial Supervisory Service (http://dart.fss.or.kr) as well as Hyundai Motor’s website (https://www.
hyundai.com/worldwide/en/#utm_source=hmc-kr&utm_medium=referral&utm_campaign=top_util). The review of financial data taken from these sources
is not within the scope of our work.
We planned and performed our work to obtain the evidence we considered necessary to provide a basis for our assurance opinion. We are providing a ‘limited
level’ of assurance. Limited depth of evidence gathering including inquiry and analytical procedures and limited sampling at lower levels in the company
were applied. The baseline data for environmental and social performance are not verified, while the aggregated data at the corporate level are used for theverification.

• Challenged the sustainability-related statements and claims made in the Report and assessed the robustness of the underlying data management
system, information flow and controls;• Site visits to Hyundai Motor HQ in to review process and system for preparing sustainability data and implementation of sustainability strategy.
• Conducted interviews with representatives from the ESG team;• Conducted document reviews, data sampling and interrogation of supporting databases and associated reporting system as they relate to selected
content and performance data;• Reviewed the process and the result of materiality assessment.

For and on behalf of DNV Business Assurance Korea Ltd.
June 26, 2023

Chang Rok Yun

Yu Lee Jang

Sang Yeon Park

Senior Auditor and Lead Auditor

Senior Auditor

Technical Reviewer

Responsibilities of the Directors of Hyundai Motor and DNVThe Directors of Hyundai Motor have sole responsibility for the preparation of the Report. Our statement represents our independent opinion and is intended to inform all stakeholders. DNV was not involved in the preparation of any statements or data included in the Report except for this Assurance Statement.
DNV’s assurance engagements are based on the assumption that the data and information provided by the client to us as part of our review have been provided in good faith. DNV expressly disclaims any liability or coresponsibility for any decision a person or an entity may make based on this Independent
Assurance Statement.
Competence and Independence
DNV’s established policies and procedures are designed to ensure that DNV, its personnel and, where applicable, others are subject to independence requirements (including personnel of other entities of DNV) and maintain independence where required by relevant ethical requirements. This engagement work
was carried out by an independent team of sustainability assurance professionals. This engagement work was carried out by an independent team of sustainability assurance professionals.
DNV - Business Assurance
DNV Business Assurance Korea Ltd. is part of DNV Group, a global provider of certification, verification, assessment and training services, helping customers to build sustainable business performance.

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

GHG Assurance Statement
Relating to Hyundai Motor Company’s Scope 1 & 2 GHG emissions in domestic sites for the 2022 calendar year
This Assurance Statement has been prepared for Hyundai Motor Company.

Terms of Engagement

LRQA’s Opinion

LRQA was commissioned by Hyundai Motor Company (HMC) to provide independent assurance on its Greenhouse Gas (GHG) Inventory Report forthe calendar year 2022 (the report) against “the guidelines on emission reporting and certification under the GHG emissions trading system” and themonitoring plan for the calendar year 2022 using “the verification guidelines for GHG emissions trading system”.

Based on LRQA’s approach, we believe that the report is prepared in accordance with “the guidelines on emission reporting and certification under the
GHG emissions trading system” and the monitoring plan for the calendar year 2022 using “the verification guidelines for GHG emissions trading system”
and the GHG emissions data in the Table 1 is materially correct.

The report relates to direct GHG emissions and energy indirect GHG emissions. HMC’s geographical boundary includes its domestic operations at Ulsan
Plant, Asan Plant, Jeonju Plant, R&D Centers, HQ and owned buildings, Service Centers, Sales Branches (including car delivery centers), and Genesis Sales
Branches. GHG emissions have been consolidated using operational control approach.
Dated: 16 March 2023

Management Responsibility
LRQA’s responsibility is only to HMC. LRQA disclaims any liability or responsibility to others as explained in the end footnote. The management of HMC.
is responsible for preparing the report and for maintaining effective internal controls over all the data and information within the report. Ultimately, thereport has been approved by, and remains the responsibility of HMC.

LRQA’s Approach
LRQA’s assurance engagement has been carried out in accordance with our verification procedure using “the verification guidelines for GHG emissions
trading system” to reasonable level of assurance.
The following tasks were undertaken as part of the evidence gathering process for this assurance engagement:• Visiting sites and auditing management system to control the data and records regarding GHG emissions and energy uses
• Interviewing the relevant persons responsible for managing and maintaining data and associated records• Reviewing the historical data and information back to source for the calendar year 2022.

Level of Assurance & Materiality
The opinion expressed in this Assurance Statement has been formed on the basis of a reasonable level of assurance, and at the materiality of the professional
judgement of the verifier and at the materiality level of 2.5%.

Il-Hyoung Lee
LRQA
17th Floor, Singsong Building, 67 Yeouinaru-ro, Yeongdeungpo-gu, Seoul, 07327, Korea
LRQA Reference: SEO6012382

Table1. Summary of GHG emissions

Unit: tCO2eq
Scope of GHG emissions

2022

Direct GHG Emissions

483,376

Energy Indirect GHG Emissions

1,057,126

Total GHG Emissions

1,540,502

Note: The total GHG emissions may differ from the sum of GHG emissions disclosed by the Ministry of Environment due to the decimal value processing of GHG emissions at
each site.
LRQA Group Limited, its affiliates and subsidiaries, and their respective officers, employees or agents are, individually and collectively, referred to in this clause as 'LRQA'.
LRQA assumes no responsibility and shall not be liable to any person for any loss, damage or expense caused by reliance on the information or advice in this document
or howsoever provided, unless that person has signed a contract with the relevant LRQA entity for the provision of this information or advice and in that case any
responsibility or liability is exclusively on the terms and conditions set out in that contract.
The Korean version of this Assurance Statement is the only valid version. LRQA assumes no responsibility for versions translated into other languages.
This Assurance Statement is only valid when published with the report to which it refers. It may only be reproduced in its entirety.
Copyright © LRQA, 2023.

116

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

GHG Assurance Statement
Relating to Hyundai Motor Company’s Scope 1 & 2 GHG emissions in overseas sites and Scope 3 emissions for the calendar year 2022
This Assurance Statement has been prepared for Hyundai Motor Company in accordance with our contract.

Terms of engagement

LRQA’s approach

LRQA was commissioned by Hyundai Motor Company to provide independent assurance on its GHG emissions inventory and energy consumption
for the calendar year 2022 (here after referred to as “the report”) against the assurance criteria below to a limited level of assurance and materiality ofprofessional judgement using LRQA’s verification procedure, which is in accordance with ISAE 3000 and ISAE 3410.

LRQA’s assurance engagements are carried out in accordance with our verification procedure. The following tasks though were undertaken as part of theevidence gathering process for this assurance engagement:• interviewing key people of the organization responsible for managing GHG emissions and energy consumption data and records;• sampling specific overseas factories and reviewing processes related to the control of GHG emissions and energy consumption data and records;• reviewing whether GHG emissions have been calculated with parameters from recognized sources;•	checking whether direct GHG emissions and non-renewable energy consumption of HMMC in Czech were transposed correctly from the GHG
inventory which was verified by the third-party assurance provider other than LRQA;• verifying historical GHG emissions and energy consumption data and records at an aggregated level for the calendar year 2022; and• visiting Hyundai Motor Company’s head office and reviewed additional evidence made available by Hyundai Motor Company.

Our assurance engagement covered Hyundai Motor Company’s domestic and overseas operations and activities, and specifically the following requirements:• Evaluating conformance with World Resources Institute / World Business Council for Sustainable Development Greenhouse Gas Protocol:
A Corporate Accounting and Reporting Standard, revised edition1• Evaluating the accuracy and reliability of data and information for direct GHG emissions (Scope 1), energy indirect GHG emissions (Scope 2) and energy
consumption in operations of overseas factories2• Evaluating the accuracy and reliability of data and information for other indirect GHG emissions (Scope 3) in domestic and overseas sites.
LRQA’s responsibility is only to Hyundai Motor Company. LRQA disclaims any liability or responsibility to others as explained in the end footnote. Hyundai Motor
Company’s responsibility is for collecting, aggregating, analysing and presenting all the data and information within the report and for maintaining effective
internal controls over the systems from which the report is derived. Ultimately, the report has been approved by, and remains the responsibility of Hyundai
Motor Company.

LRQA’s standards, competence and independence

LRQA’s Opinion

LRQA implements and maintains a comprehensive management system that meets accreditation requirements for ISO 14065 Greenhouse gases –Requirements for greenhouse gas validation and verification bodies for use in accreditation or other forms of recognition and ISO/IEC 17021 Conformity
assessment – Requirements for bodies providing audit and certification of management systems that are at least as demanding as the requirementsof the International Standard on Quality Control 1 and comply with the Code of Ethics for Professional Accountants issued by the International Ethics
Standards Board for Accountants.

Based on LRQA’s approach nothing has come to our attention that would cause us to believe that Hyundai Motor Company has not,in all material respects:• Met the requirements above; and• Disclosed accurate and reliable data and information as summarized in Tables 1, 2-1, 2-2 and 3 below.

LRQA ensures the selection of appropriately qualified individuals based on their qualifications, training and experience. The outcome of all verificationand certification assessments is then internally reviewed by senior management to ensure that the approach applied is rigorous and transparent.
LRQA is Hyundai Motor Company’s verification body for its GHG emissions under the GHG emissions trading system of Korea. The verification is the only
work undertaken by LRQA for Hyundai Motor Company and as such does not compromise our independence or impartiality.

The opinion expressed is formed on the basis of a limited level of assurance and at the materiality of the professional judgement of the verifier.
Note: The extent of evidence-gathering for a limited assurance engagement is less than for a reasonable assurance engagement. Limited assurance engagements focus on aggregated data rather
than physically checking source data at sites. Consequently, the level of assurance obtained in a limited assurance engagement is substantially lower than the assurance that would have beenobtained had a reasonable assurance engagement been performed.

Dated: 14 May 2023
Tae-Kyoung Kim
LRQA Lead Verifier
On behalf of LRQA
2nd Floor, T Tower, 30, Sowol-ro 2-gil, Jung-gu, Seoul, Republic of Korea
LRQA reference: SEO00001260

1

https://www.ghgprotocol.org

2	This engagement excludes verification of Scope 1 and 2 emissions for domestic operations in accordance with our contract with Hyundai Motor. Scope 1 and Scope 2 GHG emissions fordomestic operations of Hyundai Motor Company have been verified for the same reporting period by LRQA in accordance with the GHG emissions trading system of Korea.

117

1. Introduction

2. Environmental

3. Social

4. Governance

HTBC

HTMV

5. ESG Factbook

ESG Magazine

GHG Assurance Statement

Table 1. Summary of Hyundai Motor Company’s Overseas Factories, Scope 1 and Scope 2 GHG Emissions 2022
Scope of GHG emissions

Tonnes CO2e
HMMA

BHMC

HMI

HAOS

HMMC

HMMR

HMB

HMMI

HYMEX

Direct GHG emissions (Scope 1)

33,821

59,526

27,57430,741

32,205

13,396

6,936

868

3,953

5,733

6,597

Energy indirect GHG emissions (Scope 2, Location-based)

170,690

129,901

266,987

22,82549,272

10,11910,427

6,780

23,20147,82458,660

Energy indirect GHG emissions (Scope 2, Market-based)

170,690

129,901

158,357

11,0350

10,11910,427

6,780

23,20147,82458,660Note 1: Scope 2, Location-based and market-based are defined in the GHG Protocol Scope 2 Guidance, 2015

Table 2-1. Summary of Hyundai Motor Company’s Overseas Factories, Energy Consumption (TJ) 2022
EnergyTJ
HMMA

Non-renewable energy
Renewable energy

BHMC

HMI

HAOS

HMMC

HMMR

HMB

HTBC

HTMV

HMMI

HYMEX

1,830

1,970

1,101

699

581

367

433

59

160

376

460

0

0

452

108

435

0

0

0

0

13

0

Table 2-2. Summary of Hyundai Motor Company’s Overseas Factories, Energy Consumption (MWh) 2022
EnergyNon-renewable energy
Renewable energy

MWh
HMMA

BHMC

HMI

HAOS

HMMC

HMMR

HMB

HTBC

HTMV

HMMI

HYMEX

508,239

547,173

305,763

194,201

161,314

101,818

120,203

16,34444,490104,513

127,67000125,506

30,000120,766

0

0

0

0

3,622

0

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1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

GHG Assurance Statement

Table 3. Summary of Hyundai Motor Company, Scope 3 GHG Emissions 2022
Scope of GHG emissions

tCO2e

Other indirect GHG emissions (Scope 3)
Purchased goods & services – raw materials for parts used in vehicles manufactured in domestic and overseas factories
Capital goods – computers & monitors purchased in domestic sites
Fuel- and energy-related activities – upstream emissions of fuels consumed in domestic sites and overseas factories (excluding electricity and steam purchased)(Overseas factories only include HMMA, BHMC, HMI, HAOS, HMMC, HMMR, HMB, HTBC, HTMV, HMMI and HYMEX)

19,852,763
326
145,177

Waste generated in operations – treatment of waste generated from operations in domestic sites (Ulsan/Jeonju/Asan factories, research centres and service centres)

1,978

Business travel – emissions of personal cars, buses, trains and domestic & international flights by employees working in domestic sites

21,370

Employee commuting – commuting by buses in domestic operations

6,617

Downstream transportation and distribution – vehicles manufactured in domestic factories (This includes shipping and land transportation by Hyundai Glovis)

964,206

Use of sold products - internal combustion engine vehicles sold domestically and overseas (This is based on mileage of 150,000 km for 10 years, and excludes electric vehicles and hydrogen vehicles)

81,959,096

End-of-life treatment of sold products – vehicles sold domestically and overseas

2,133,743

Downstream leased assets – lessee companies in the headquarters building
Investments – Scope 1 and Scope 2 GHG emissions of six investee companies, in which Hyundai Motor Company owns 20% or more shares and which are listed on the stock market of Korea.

539
704,970

LRQA Group Limited, its affiliates and subsidiaries, and their respective officers, employees or agents are, individually and collectively, referred to in this clause as 'LRQA'. LRQA assumes no responsibility and shall not be liable to any person for any loss, damage or expense caused by reliance on the information or advice in this document or howsoever
provided, unless that person has signed a contract with the relevant LRQA entity for the provision of this information or advice and in that case any responsibility or liability is exclusively on the terms and conditions set out in that contract.
The English version of this Assurance Statement is the only valid version. LRQA assumes no responsibility for versions translated into other languages.
This Assurance Statement is only valid when published with the Report to which it refers. It may only be reproduced in its entirety.
Copyright © LRQA, 2023.

1191. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

120

About This Report
Hyundai Motor Company has been publishing a sustainability report every year since 2003 in order to disclose both financial and non-financial performance, including its efforts to promote sustainable management, in an integrated manner and tocommunicate with stakeholders. This 2023 Sustainability Report elaborates on its key performances achieved in the areas of ESG management strategy, environment, society and governance, and the issues associated therewith. Through this, we will
actively communicate with stakeholders to realize social value as a global leading company.

Reporting Principles and Standards

Reporting Period

Scope and Boundary of Report

Third Party Assurance

UN Global Compact

This report is in accordance with the Global Reporting
Initiative (GRI) Standards. In addition, this report satisfies
the four principles – Inclusivity, Materiality, Responsiveness,
and Impact – of the AA1000APS (Accountability Principles
Standard) that includes the obligation to explain sustainability
management.

This report covers activities undertaken from January 1st,
2022 to December 31st, 2022, including some key activities
conducted until the first half of 2023. As for quantitative
performance, if the results need to be tracked continuously,
we have used data for the past three years.

This report covers the activities of the headquarters as wellas manufacturing plants, R&D centers, design centers, andsales corporations operated by Hyundai Motor Company in
Korea and overseas.

This report has been assured by an independent assurance
corporation (DNV) to ensure the accuracy, objectivity andcredibility of the report preparation process and all theinformation created. The financial information provided inthis report has been audited by an independent auditor,
and assurance on greenhouse gas emissions and energy
usage was carried out by LRQA, an independent assurance
corporation. Detailed assurance results can be found in
the third-party assurance statement and greenhouse gas
assurance statement.

The UN Global Compact (UNGC) is an international
agreement that former UN Secretary-General Kofi Annansuggested in 2000 to emphasize corporate execution ofsocial responsibilities, and consists of ten major principles
in the four areas of human rights, labor, environment, andanti-corruption. Hyundai supports the ten principles of the
UNGC and strives to observe them in overall management.

In addition, this report was prepared to align with theinformation disclosure guidelines of the Task Force on
Climate-related Financial Disclosures (TCFD), Sustainability
Accounting Standards Board (SASB), WEF IBC Stakeholder
Capitalism Metrics, and European Sustainability ReportingStandards (ESRS).

Publisher

Hyundai Motor Company
Headquarters: 12, Heolleung-ro, Seocho-gu,
Seoul, 06797, Korea

Publication
Date

July 2023

Production(Contact
Information)

Sustainability Management Team,
Hyundai Motor Company
Tel: +82-2-3464-8886
E-mail: ESG@hyundai.com

ReportingPrinciple

GRIStandards, TCFD, SASB,WEF IBC Stakeholder Capitalism Metrics, ESRS

ReportingBoundary

Hyundai Motor Company (also include somedata and information of Hyundai Motor Group)

Reporting
Scope

Economic (based on Korean International
Financial Reporting Standards), social andenvironmental area

Reporting
PeriodJanuary 1st, 2022 - December 31st, 2022
(also include some data and information fromthe first half of 2023)

Reporting
Cycle

Annual (last report was published in July 2022)

The reporting cycle for this report is one year. The previous
report was published in July 2022.

Financial information is based on the consolidated financial
statements in accordance with the Korean International
Financial Reporting Standards (K-IFRS). Nonfinancial data
regarding environmental and social performance is basedon the separate figures of Hyundai Motor Company, andsome performances include those of Hyundai Motor Group.
In case the reporting scope differs, the reporting scope of
the information is indicated separately in the annotation.

1. Introduction

2. Environmental

3. Social

4. Governance5. ESG Factbook

ESG Magazine

121

Contribution (In alphabetical order)
Dongwoon Jung
Aaron Lee

Gunhee Cho

Jaehyun Jung

Joosuk Park

Moonsang Yoon

Suksan Yoon

Anna Jo

Gwanghyun Hahn

Jaesik Shim

Ju Hyun Han

Moonsue Park

Sungeun Kang

Bit-Na Yoo

Gwangkyu Cho

Jaewoon Hwang

Jun Hyungchul

Naehwan Hyun

Sunggeun Park

Bokyung Choi

Gyeol Han

Jaeyun Shin

Juneho Park

Naeun Lee

Sungsam Kim

Bora Han

Hajoo Han

Jangho Kuk

Jungchi Kim

Naeun Yoo

Sungwhan Kim

Byung Chul Im

Hanseok Kim

Jayoung SongJungchul Lim

Namsu Han

Suwon Choi

Byungil Jo

Hanseong Cho

Jee-eun Chung

Jungho Kim

Nari Park

Suyeon Kim

Byungmun Choi

Heeook Lee

Jeein Kim

Jungmin Park

Sanga Choi

Taejung Lee

Byungwook Park

Huiyeol Lee

Jeonbeom Kang

Jungwoo Lee

Sangbum Kim

Wonbae Lee

Chaeyun Lee

Hwikyu Choi

Jeongeun Kwon

Junho Kim

Sangtan Kwak

Wonchan Lee

Chanah Jung

Hyein Kim

Jieun Jeong

Juseok Kang

Sangyun Ahn

Woosup Kim

Changho Yoo

Hyeje Lim

Jihoon Go

Kihan Shin

Sean Hwang

Yejin Yoon

Changje Kim

Hyejin Kim

Jihwan Yoon

Kiseok Kim

Sejun Kim

Yelin Ko

Chanhee Jang

Hyejung Noh

Jiman Lee

Kiyoung Jung

Seokho Kim

Yeonju Ryu

Cheolwoong Seo

Hyoik An

Jimin Kwon

Kwangil Lee

Seongjae Lee

Yeri Kim

Daehwan Kim

Hyosu Namgung

Jinhoon Chang

Kwonhyoung Choi

Seri Kim

Yongbeom Jo

Dalsu Park

Hyungju Choi

Jinhwa Lee

Kyeongmin Do

Seulki Yang

Yonghee Park

Dongbin Seo

Hyungsuk Yeo

Jinhyuk Park

Kyusang Choi

Seung Su Kang

Yoonjae Lee

Donghun Kim

Hyunho Seo

Jinhyung Lee

Kyuyeon Han

Seungbum Kim

Yoonseok Sohn

Dongsoo Kim

Hyunjae Huh

Jinkyung Noh

Merza Chung

Seungji Kang

Youngjin Song

Dongsung Kim

Hyunjoon Lee

Jinsoo Shin

Minsoo Chae

Seungkyum Ra

Youngpyoe Hong

Doyoung Hwang

Hyunsik BaikJinwon Bae

Minchang Cha

Seungyeub Lee

Youngsu Kim

Euihyun Seo

Hyunsoo Park

Jinwook Song

Minho Choi

Sewan Park

Yujeong Lee

Eunhye Kim

Hyunwoo Kim

Jiyun Shin

Minhyoung Jo

Shindong Yun

Yunryeong Song

Eunjee Seo

Hyuyeon Jang

Jongmoon Choi

Minjae Kwon

Shinwon Lee

Yushin Kim

Eunjin Seok

Ian KimJongok Kim

Minok Park

Simon Kim

Eunyeong Park

Inchang Seong

Jongyul Park

Minseok Kim

Soohyun Bae

Gilhoon Kim

Jaebok Lee

Jooheung Park

Minwoo Kim

Soonbok Kim

Guanhee Park

Jaehyeok Ahn

Joonho ShinMinyoung Kim

Soonsang Hong

Jaekyoung An
Jihyeong Ha
Hyundai Motor Company
Sustainability Management TeamMinkyung Kim
Wonjun Choi
Yooseong Choi
Youngmin Kang
Yunjae Lee
Seohee Park

Planning & Design
Hyundai Motor Company
Brand Design Team

Sukgyu Choi
Sungwoo Suh
Hyungyun Jeong
Junyoung Lee

Korea Productivity Center

Kwangho Jeong
Sangwoo Han
Ahreum Min

Talantone Creative Group

Younhee Park

What moves us:
ESG Magazine

Humanity.
Progress for Humanity –Journey to future mobility, to move everyone.
Hyundai pursues a better future for humanity through innovation.
If we had only talked the talk but not walked the walk regarding
mobility solutions for all, we wouldn’t have been able to develop
ideas of creating a better tomorrow.

To bring about changes in all our lives through future mobility
technology and to enable an innovative ecosystem where
all objects have mobility, Hyundai offers smart mobility solutions
that transcend the limitations of time and space, thereby usheringin a new future where people’s dreams do come true.

Advanced Air Mobility for Everyday

Robotics for Everyone

Mobility Experiments for Humanity

Contents
Future Mobility
We Envision

Robotics forEveryone

Meet the Future, Today.

Wearable Robot

Advanced
Air Mobility for
Everyday06

Human and robot moving as one to help
people overcome physical limitations
Service Robot

New future rising from the fusion ofrobotics and mobility technology

12

Designing a new concept of
future air mobility
07

Realizing AAM
Creating a new way to moveno one had imagined

Humanity’s new helper andfriendly companion
Agile Mobile Robot

Redefining AAM

Mobility
Experiments for
Humanity

09

Mobility Becomes Space

15

Vision of a new living spacecompleted by future mobility
13

Mobility Becomes Shelter
Vision of a new living environment
for future generations

16

04

FUTURE MOBILITYWE ENVISION“Progress for Humanity”, Hyundai’s vision of future mobility
has emerged from a sincere heart for humanity. We havebeen thinking long and hard about what people need
and what they want from Hyundai, and finding answers
in mobility solutions that provide freedom of mobility toeveryone. As there are no limits to what we can achievein our desires to see all humanity share a better future,
we are expanding the sphere of our influence beyond
automotive innovation. While creating value that benefits
people through mobility, we are taking meaningful stepsof progress for humanity by introducing robots that areembodied with affection and care for people.

Mobility for You

Robotics for Everyone –a significant leap toward‘Progress for Humanity’

05

MEET THE FUTURE,
TODAY.

HMC Robotics Lab

Hyundai Motor Company Robotics
Mobility for humanity, towards the world

Wearable Robot• CEX: Chair-type wearable robot supporting the legs
•	VEX: Vest-type wearable robot assisting the worker withoverhead tasks•	HMEX: Medical wearable robot enabling patients withwaist-down paralysis to walk

PRODUCTS
We
ara
ble

Ro
bo
t

ce
rvi
Se

Service Robot• DAL-e: Customer service robot• DAL-e Delivery: Indoor and outdoor delivery robot• ACR: Automatic electric vehicle-charging robot

t
bo
Ro

Expanding
Human Reach –Human-centeredTechnology
Hyundai sees robots as a new partner to a better life. Robots are already a familiar part of our daily
lives – wearable robots help people walk again; service robots charge electric vehicles in a parking lot
without human interactions; cute delivery robots effortlessly weave through the crowd; and a four-legged
walking robot “Spot” dances at a BTS concert and serves as a member of “Team Century”, promoting the2022 FIFA World Cup™. Taking a step further, Hyundai is redefining robotics as a new mobility concept thatwill expand the realm of the human reach and help humanity realize ultimate freedoms of mobility,
and leading the lifestyle innovation that will be brought about by robots.

Boston Dynamics

Platform
MobileGoal

Mobile Platform•	PnD: An open mobile module that combines driving, steering,braking and sensing•	MobED: 12 degrees of freedom mobile robot platform that canmaintain its horizontal body posture even on inclined roads
and uneven ground

Metamobility
New dimension of mobility experience enabled by using
smart devices
Execution
Mobility of Things
Ecosystem where all objects move freely by themselves basedon robotics technology

Boston Dynamics•	Spot: Four-legged robot dog for industrial inspection
applications•	Atlas: Two-legged humanoid robot for advanced research• Stretch: Logistics-specialized robot

06

Exploring new horizons of
future mobility, free of limits
The goal of Hyundai’s R&D of robotics is to create a better
future for humanity. Wearable robots complement the
movements of the human body by becoming a part ofthe body, thus extending freedom of mobility beyond
physical limitations.
Hyundai’s brand campaign film, released in January
2020, shows a Korean National Team para-archer walking
steady with the help of Hyundai’s medical exoskeleton“MEX”. With the feet placed on MEX’s footholds and thelegs and back fastened by a belt, even people paralyzed
from the waist down can walk by pushing the buttonon the walking poles. In its early 2023 presentation of
the video titled “Journey to Move Everyone”, Hyundai
reaffirmed its commitment to innovating robotics
technology for anyone with freedom of mobility.

Wearable Robot
Human and robot moving as one to help people overcome physical limitations
We transgress the boundaries of means of transportation to overcome limitations
in mobility. Even people with physical disabilities gain new strength through robotics solutions Hyundai offers.
We abide by the basics of mobility and always present bigger goals regarding humanity’s movement so that
all walks of life can freely move from starting point to destination.

Journey to Move Everyone

In the Fourth Industrial Revolution era where excitementsof advancing technologies and concerns over technologicalinequality prevail, Hyundai is focused on R&D of robots that
truly benefit humanity. Our robotics R&D has begun with adesire to augment the progress of humanity, and our robots
are at work in all sectors, small and big, of industry and daily
life, creating a more humane world.

07

AI Robot “DAL-e” | Hyundai Motor Group Robotics Lab

Communicating and communing withpeople and evolving for humanity
Equipped with AI technology, robots are evolving in the
direction of communing with people. Drawing on thetechnological capabilities it has accumulated as a global
automotive company, Hyundai has been developing service
robots that move as quietly and reliably as non-vibration
vehicles, provide as much information and entertainment
as vehicle infotainment systems, and navigate thesurrounding area using LiDAR and camera sensors as well
as autonomous driving vehicles. What’s more, we haveadded AI technology to robots to improve them so thatthey can readily respond to changes in people’s emotions,
thereby getting closer to developing robots that cancommunicate and even commune with people.
A leading example is service robot “DAL-e” developed forserving customers. As implied in its full name, “Drive you,
Assist you, Link with you – experience”, DAL-e can avoid
moving obstacles that can appear in its paths toward
customers. In addition to using words, it communicateswith customers using non-linguistic elements, such as
postures, facial expressions and intonations. It also cantake pictures of customers, dance to music, and perform
other entertainment functions upon request. Since
2021 following its pilot operation in June 2019 at theHyundai Motor Studio Seoul, DAL-e has been welcoming
customers at Hyundai showrooms. In addition, it madeappearance at the 2022 general shareholders’ meeting to
the delight of many attendees and showed off some of its
many talents at BTS’ concert in Busan.

AI-based Self-Driving Hotel Delivery Robot

Service Robot
Humanity’s new helper and friendly companion
Anticipations and concerns are multiplying over the rapid
development of AI technologies and robots as they increasingly become a part of our lives.
Hyundai bridges the gap with people-centric technologies. Just like automobiles that have
evolved for hundreds of years for the benefit of humanity, robots that have come together with
AI assist our daily lives with their measured and reassuring motions.

Moreover, Hyundai commenced the pilot operationof its indoor and outdoor delivery robots in early 2023,
demonstrating that delivery robots, which was regarded
as something of the future, are on our doorsteps. Ourdelivery robot made its debut at a multi-purpose building
located in Gwanggyo near Seoul, efficiently performing
its task of delivering food to various destinations in thecongested area. The robot moves at 5.4 km/h, slightly
faster than people walking. The robot can move faster but
maintains the speed for safety reason. It uses elevators
in apartment buildings and, upon completion of its task,
finds its way back to the charging station using Hyundai’s
Plug & Drive (PnD) module platform. The PnD module
can be attached to any objects and enables mobilityof traditionally inanimate things, from small objects
to large community spaces. It is an all-in-one mobility
solution that combines intelligent steering, braking, inwheel electric drive and suspension hardware. The fourPnD modules attached to the delivery robot constitutethe secret behind the robot’s ability to freely and quickly
move in all directions.
As robots evolve with a higher degree of precision, people
can enjoy their lives more. Hyundai’s robotics technologies
will bring about delightful changes in people’s daily lives.
Drawing on our fast-advancing robotics knowhow, we willcontinue to create a more inspiring future where robots
help improve the quality of people’s lives in a genial way
as an integral part of daily life.

08

MobED is a new concept ofmobility, traveling anywhere as reliably as a quadruped.
Simple yet agile and dynamic yet stable, MobED brings
its infinite possibilities into our daily lives.

Creating new opportunities of
movement with a new-concept
mobile platform
Hyundai is going beyond producing robots and advancing
robotics technology and humanizing it in the coat of newservices that generate unprecedented value. A leading
example is “MobED”, which is replacing existing service
robots. MobED, which stands for “Mobile Eccentric
Droid”, is a small mobility platform that is superior inmaneuverability even in a complex urban environment.
Robots have become a part of our daily lives as people
enjoy the convenience and benefits of using such mobile
robots as robot vacuums. A robot vacuum is a smart home
appliance that moves by itself and cleans or vacuums
floors, but its maneuverability is somewhat limited that
it often gets stuck in a corner or stopped by an obstacle.
Not only robot vacuums but most other mobile platforms
can be used only in certain environments, which also
restricts the extent of their usage. To overcome theselimitations, we have looked beyond the concept of asimple wheeled mode of transportation and started
commencing the development of a new mobile robot
with dynamic, stable driving capabilities, and as a result,unveiled MobED in December 2021, thus creating newopportunities of movement.

Hyundai Motor Group’s New Mobility Platform – MobED

Contrary to its simple appearance, MobED is extremely
agile and dynamic and can stably travel even on roughsurfaces. Thanks to the “Eccentric Wheel” technologythat enables each wheel to operate independently,
MobED can travel over bumpy surfaces with less lateral
movements. Also, the four-wheel steering function
allows it to stop and turn 360 degrees as well as to avoid
obstacles by moving diagonally, which minimizes the
distance to travel.
Another distinctive feature of MobED is that it expresses
diverse types of information to the user using its flexible
joint movements. Such human-robot interactions not
only give people pleasure and a sense of closeness, butalso make people see robots as a trusty partner to their
daily lives. What’s more, user experiences of such diverse
interactions can lead to the creation of new mobile robotbased services.

MobED is a universal platform that enables producers
and users to freely expand functions to their needs. It cantherefore vastly extend the limits of existing mobile robots,
easily change the roles of service robots, and has unlimited
potential to provide diverse services unimagined before.
A MobED of the future will be creating new experiencesin our daily lives. To realize such a future today, Hyundai isexpediting its development of mobility services that cansatisfy both users and consumers.

Mobility for You –MobED Action Cam

09Adding to the value of humanityfrom the closest place to people
Boston Dynamics, a global robot company joined Hyundai
Motor Group in June 2021, has been working closely with
Hyundai to develop robotics technologies that will enablehumanity’s ever-expanding movements and progress. At
the center of the collaboration stands 4-legged walking
robot “Spot” that performs diverse roles in various areas.

Spot had an especially busy year in 2022. At Consumer
Electronics Show (CES) 2022 held in Las Vegas in January,
Spot went on the main stage together with Hyundai Motor
Group Executive Chair Euisun Chung. During the 2022 FIFA
World Cup™, of which Hyundai was an official sponsor,
Spot, sporting jersey number 1, played an outstanding partin the Goal of the Century campaign as a member of Team
Century, the campaign leaders. Spot also took part in anart project, contributing to creating an arena for discussion
on diverse subjects, including robotics, art and climatechange. At BTS’ concert in Busan, Spot escorted BTS
members to the main stage to the surprise and delight offans in attendance.
Spot can do many other things. It can go anywhere people
can and also explore areas inaccessible to humans. It can beused in a wide range of industry, including manufacturing,
construction, research, mining and public safety. By
autonomously handling various forms of work, it changes
and upgrades the way of working. Spot is actually used atHyundai’s worksites. It performs vehicle quality inspections
at the production line and patrols the worksite at night todetect fires or leakages of harmful substances. By playing an
exclusive role in ensuring the safety of hard-to-reach areas,
Spot is proactively responding to changes expected in the
future industrial environment.

Future of Robotics for Humanity

Spot’s potential is infinite, and so is the potential of robots
to create new value for humans through their interactions
with humans. Through robotics technology, Hyundai
seeks to enrich the lives of people, and our robots are
created to provide people with values that are meaningful
and beneficial. Robots will be soon serving as a reliablehelper, freeing people of repetitive work and dangerous
tasks so that people can focus more on cultivating theircreative potential to the fullest extent. They also will be an
integral part of our lives, interacting and sharing fun withpeople, just like a dear friend. The journey has alreadybegun towards a future where people will be together
with robots as a new mobility partner. Through mobility
innovation, we will make daily life more dynamic, help
build a better world, and lead the journey towards a moresustainable future.

Agile Mobile Robot
New future rising from the fusion of robotics and mobility technology
It has been two years since Boston Dynamics became a member of Hyundai Motor Group.
Since then, it has been conducting bold ventures in close collaboration with Hyundai. As a result, meaningful outcomes
have been produced that will lead the infinite movement and progress of humanity. Our dynamic and innovative
mobility drive, spearheaded by Spot, presents a new path of exploration to the robot industry.

10

FUTURE MOBILITYWE ENVISION
The future Hyundai envisions is a smart city where people
are at the center, as we look beyond automotive business toemerge as a “Smart Mobility Solution Provider”. Then what
would be most important to the realization of such a future?
Our answer is freedom of mobility in everyone’s daily life. To
bring the tomorrow we all dream of into reality today, we aretranscending vehicle innovation to focus our resources andenergy on mobility technologies that can establish the smart
city’s identity.

Hyundai Enables the New Economy

Advanced Air Mobility for Everyday –ready for take-off toward sustainable
future mobility

11

MEET THE FUTURE,
TODAY.

A new concept of mobility tochange our daily lives
KEY MILESTONES OFAAM DEVELOPMENT

UAM
2022-2023

2024-2025

2028

Quarter-Scale Tech Demo

Full-Scale Tech Demo

Entry-Into-Service

RAM
RAM

• 	Applying hydrogen fuel cell-based CTOL1)/
STOL2) and autonomous flying technologies• 	Developing a vehicle concept optimal forpoint-to-point transport• 	Production costs minimized throughdesign and manufacturing innovation(design for manufacturability)

2030

Entry-Into-Service

2022-2025

Tech Demo

Developing the“Zero Carbon Fixed-Wing”,
a new alternative for intercity/
regional movements

Human-centeredTechnology
To expand the human reach to include the sky for the convenience of humanity, Hyundai is focusing on researching anddeveloping Advanced Air Mobility (AAM), which will extend freedom of mobility to the skies above major cities. In a future citywhere AAM will have become an integral part of daily life, people can free themselves from the chaos of ground transportation anddevote their precious time to something more worthwhile. Air mobility, free of traffic congestions as well as carbon emissions,will present a better way for humanity to co-exist with nature. Although an unexplored course, it is the direction we must beheaded for the sake of a sustainable future as well as a destination Hyundai can reach for sure. This is why we are speeding up
our innovation, expanding the scope of collaboration, and flying high towards a human-centric, smart future city.

UAM

Developing an eVTOL vehicle,
a new mobility that will
redefine urban passenger
transport• 	Applying eVTOL3) and autonomous flying
technologies• 	Developing lithium metal-based battery
pack technology• 	Vehicle designed for mass production fromthe early development stage

1)

CTOL: Conventional Take Off & Landing
STOL: Short Take Off & Landing
3)
eVTOL: electric Vertical Take Off & Landing2)

12

Redefining AAM
Hyundai creates new paths to enable people to enjoy mobility
freedom, and we now are blazing new paths in the skies.
AAM can lessen the environmental impact of automobiles andother existing transportation measures, while also expanding
people’s time and space. AAM is the next-generation mobility
solution for the sky roads Hyundai is creating.
Designing a new concept of
future air mobility
A human-centric smart city should present visions andopportunities to all people and invigorate their relationships.
Essential to this end is infrastructure and services thatenable people’s efficient and smart movements, which is
why Hyundai is creating a platform for future cities throughAdvanced Air Mobility (AAM).

Also, its vertical take-off and landing ability enables relatively
freer and more efficient movements of people within cities
than conventional airplanes which require long and costly
runways. Saving travel time can also lead to an increase in
the quality of people’s lives while reducing negative impact
on the environment.

AAM is a rising sector in the air mobility market. National
Aeronautics and Space Administration (NASA) defines
AAM as an air transportation system that moves people
and cargo between places previously not served orunderserved by aviation. In other words, AAM covers both
Urban Air Mobility (UAM), which provides transportation
within cities, and Regional Air Mobility (RAM), whichinterconnects cities. By adding the concept of ecofriendliness to this definition of AAM, Hyundai is focusing
on developing a safe and innovative AAM system thatanyone can use as well as eco-friendly air-mobile vehicles.

As a way to preoccupy the soon-to-be AAM market, widely
expected to boom as a result of satisfying the unmet needsof automobiles and conventional air transport, Hyundai
elevated the status of UAM Sub-Division to AAM Divisionin January 2022 and is expediting its development ofAdvanced Air Mobility solutions. A business decision has
been made public to service UAMs from 2028 throughSupernal, a US entity dedicated to UAM, along with the
Entry-Into-Service (EIS) plan of RAM vehicles after 2030.
In an effort to realize such goals, Hyundai has establishedpartnerships with global players including Rolls-Royce andMicrosoft, and is working together to cultivate the AAM
market and the ecosystem as a whole.

Although AAM has yet to materialize, it has huge growthpotential. According to the global investment bank Morgan
Stanley, the global UAM-related market, estimated at
USD 8 billion in 2020, is forecast to reach USD 9,042
billion in 2050. The market size will be even bigger with
the inclusion of the AAM market that will cover the entire
global aviation industry, which has pledged to becomecarbon neutral by 2050. Such an inspiring forecast isbased mainly on popular expectation that air mobility
will resolve many issues assailing over-crowded cities.
For example, UAM causes no road traffic congestions like
automobiles do.

Hyundai has been offering customers reliable, highperformance vehicles, and in turn, earning due recognition
for its top-tier products and services. We now are looking
beyond automobile innovation in search of ways to open up
sky roads for AAM and thus help resolve traffic congestion,
housing shortage, and various other issues besetting cities.
We are ready to make the future people dream of into reality.
Hyundai will focus all of its technologies and competencies
on enabling everyone to enjoy freedom of mobility more
comfortably and more efficiently at reasonable costs.

Estimates of Urban Air Mobility Market Size
(Unit: USD billion)

2020

8

2030

55

2035

1,001

2050

9,042

* Source: Estimates by Morgan Stanley

Smart Mobility Solution Provider for
Human-Centered Cities

13

Realizing AAM
Future air mobility is an inevitable future, and Hyundai isrealizing the future with its accumulated technologies andcapabilities. A global automotive company with products
and services infused with its innovation DNA, Hyundai is
stepping up its progress for humanity towards a world where
imagination is a competitive edge.

Creating a new way tomove no one had imagined
Hyundai’s vision of innovative future mobility is entailingconcerted efforts and promising outcomes. At “AAM
Tech Day 2022” held at the Hyundai Motor Studio Goyang
in May 2022, Hyundai revealed its AAM business vision
as well as related technology development plans andstatus. Also revealed was the actual vehicle of “ProjectN”, in the shape of a multi-copter drone. Project N is thefirst R&D outcome unveiled by AAM Division, the heartof Hyundai’s AAM innovation. The project name was a
befitting choice in that the first letter of Hyundai’s FCEV“Nexo” was used, as the application of hydrogen fuel cellas the energy source was one of its main characteristics.
Developed as a flight vehicle with a maximum payloadof 700 kg measuring 6-meters in diameter, Project N
features a hybrid propulsion system of hydrogen fuel celland battery. The prototype of Project N obtained a special
airworthiness certification1) from the Korean government
in February 2022, resulting in Hyundai Motor Group
becoming Korea’s first automobile maker to obtain atail number for hydrogen fuel cell-based aircraft. Having
successfully completed flight test, Hyundai has clearly set
the direction for its development of RAM vehicles that usehydrogen as an energy source.
The global aviation industry is paying attention toHyundai’s AAM innovations as well. Supernal attracted
keen attention when it revealed the concept cabin designfor its eVTOL vehicle in July 2022 at the UK’s FarnboroughInternational Airshow. Supernal aims to commercialize thevehicle in 2028. One of the most unique characteristicsof this model, which effectively reflects keywords of the
AAM innovation Hyundai pursues, is the intuitive, simple
yet refined interior design, an outcome of its adoptionof interior design elements from automobiles, without
following conventional aircraft design norms. The
seat design in particular, an inspiration burrowed frombutterflies, emanates both safety and comfort, a clear
contrast to seat designs common among conventional
aircraft. Another leading keyword is eco-friendliness. The
propulsion system, which consists of multiple rotors, ispowered by an eco-friendly electric motor. Hyundai’s
pursuit of sustainability is reflected in its use of ecofriendly materials, including cutting-edge recyclable
carbon fiber and other fiber materials made out of either
recycled plastics or plant extracts.

To make air mobility a part of our daily lives, it is importantto have relevant infrastructure built in where it is best suited.
Accordingly, Hyundai Motor Company, in cooperation
with Hyundai E&C, has signed a number of MOUs andcollaboration agreements for realization and successful
demonstration of pilot operation of K-UAM in 2020;
realization and establishment of lasting ecosystems for
UAM in 2021; and realization and successful operationof UAM vertiports in 2022. In accordance with these
agreements, Hyundai is actively participating in Korea’s
UAM ecosystem development, together with Incheon
International Airport Corporation, KT, Korean Air and otherleaders in the industry. The vertiport is a new mobility
hub crucial to smart cities as well a space that can easily
accommodate the growth of nearby residential andbusiness communities. It is one of the top key infrastructure
facilities for sustainable UAM ecosystems.
Future cities require a new means of transportation thatcan fly at low altitude, emit less noise, and uses ecofriendly energy sources. Hyundai creates new modesof movement to enable people to enjoy their freedomof mobility with as few restrictions as possible. Hyundai
will continue to develop AAM business and establish
AAM ecosystems through cooperation among Hyundai
Motor Group affiliates and business partners. Taking
a step further, by embracing hydrogen fuel cell andelectrification technologies, we will do our best to realize
a future where no emissions are produced in the skies aswell as on the ground.

1)

 overnment-issued certification verifying the safety standards ofGaircraft for test-flying purposes

14

FUTURE MOBILITYWE ENVISION
If Hyundai had limited its innovation to making better automobiles, we would not have challenged ourselves to pioneer
future mobility. If we had regarded mobility only as a meansof transformation, the scope of the challenges we have taken
on would have been also limited. We are connecting mobility
to various spheres of human life, in the hope of seeing daily
movements become more seamless and daily lives more
comfortable. Children playing at home turning a newly
delivered mobility into another sphere of play, and mobility
creating a spacious sphere in a building packed with people.
To make technologies long thought of a distant future into apart of daily life, we have recently applied for patents on some
10 future mobility technologies under the brand name of“Mobile Living Space”. Drawing on the mobility experiments
for whole new mobility, Hyundai will transcend all mobility
limitations and expand the sphere of human lives.

Mobility Experiments
for Humanity

15

Mobility
Becomes Space
Mobile Living Space –Vision of a new living space completed by future mobility
Hyundai has recently unveiled a vision in which mobility space is redefined through avideo titled “Mobile Living Space”, which shows scenarios of organic connection between
mobility and a building. In the video, mobility support infrastructure is attached to aresidential building to enable passengers to seamlessly move between the two without
any exposure to the elements. Also shown is the possibility of residents using not only themobility space but also the vehicle’s features, such as air-conditioning and entertainment
systems, just like the electronic devices of their own home or office. The video visibly
illustrates our commitment to offering higher value and richer life experiences to customers
through diverse new technologies that can transform mobility into not only an innovativemeans of transportation but also into a futuristic living space
Hyundai Motor Group in 2020 introduced the concept of connecting living/working
spaces with mobility in a future technology video titled “Active House”, and has since been
conducting R&D in relevant fields. The unveiled vision is particularly significant in that
it is based on detailed technologies and patents that can readily be applied to daily life.
We have made patent applications on 10 technologies that enable connection between
mobility and buildings in Korea and major overseas markets.
Hyundai is redefining and expanding the boundary of mobility into new fields, including
robotics, AAM and smart city, as well as in electrification, autonomous driving, andconnectivity. Keeping up with the fast-evolving definition of mobility, we will conduct R&D
in various areas for the progress of human wellbeing.

Mobile Living Space |What If Mobility And Buildings Were Combined?

16

Mobility
Becomes Shelter
Habitat One –Vision of a new living environment for future generations
Habitat One Exhibition at Hyundai Motorstudio Busan

In 2021, Hyundai declared “2045 Carbon Neutrality”, an ambitious pledge to achieve zeronet carbon emissions across all of its business activity, from production to operation anddisposal of automobiles. The declaration was followed by the presentation of a video witha message for “Generation One”, the first generation to live in a carbon neutral world. The
name Generation One is coined by Hyundai to identify the first future generation that will
be breathing in and feeling the positive changes that will take place with the realization ofcarbon neutrality.

Expecting Generation One

In 2022, we more defined the future in which Generation One will live than ever before. We
introduced “Shelter”, a housing solution of a new form for future generations, in addition to
making company-wide efforts to devise an integrated climate change solution that standson three legs of clean mobility, next-generation platforms and green energy.
The “Habitat One” exhibition is a result of collaboration with famous artist groups in Korea
and abroad, highlighting the creative ideas about a living environment where people
can enjoy more sustainable lives. Held at the Hyundai Motorstudio Busan from July 2022
through January 2023, the exhibition focused on enabling visitors to imagine daily lives infuture cities and experience new possibilities of sustainable lives.
Hyundai hopes that the Habitat One exhibition has served as a journey through whichpeople could get a taste of what sustainable lives of the future would be like and to share
how such lives can be possible. Based on the vision, “Progress for Humanity”, Hyundai
will continue efforts to realize carbon neutrality by 2045 and take compassionate andconsiderate actions for the future generations to come.

2

3
1

4

1	BARE,Air of Blooms , 2022, Assembly of customized
robot units–Air(e), lidar sensor, multi-channel
video, customized LED displays, air-inflated blobs,
OPV panel mock-ups, kinetic control system, app.
1,500×600×500cm
2	ecoLogicStudio,H.O.R.T.U.S. XL Astaxanthin.g, 2019,
3D printed substratum, living cultures of Chlorella SPin bio-gel medium, 320x272x114cm
3	BARE,Inhabiting Air , 2022, Assembly of customized
robot units–Air(e), pneumatic control system, OPV
panel mock-ups, kinetic control system, LED lights,
app. 460×510×400cm

Online Tour
Online space for experiencing the Habitat
One exhibition site without time or movement constraints

4	ecoLogicStudio,Tree One , 2022, robotically 3D
printed algal bio polymers, lab grade borosilicate
glass, living cultures of Cyanid-ium Caldarium inliquid medium, 300x400x1,000cm

17

United and guided
by humanity.
Hyundai’s journey of progress for humanity has always been a bold attempt to overcome
challenges. Even when we are faced with many difficulties lying in the course of numerable
challenges, the objectives and directions we set and follow always point toward people andour stride of innovation stay mindful of people.
To transform mobility into not only an individual means of transportation
but also a path leading to a sustainable future, we will continue to take on challenges for,and grow together with, humanity.
The story of the journey is transparently presented to all stakeholders through several
communication channels, including this ESG Magazine.