Hyosung Corp

Our Board of Directors (BOD) and ESG Management Committee are responsible for deliberating on ESG-related policies, establishing related goals, managing risks, and developing investment and action plans. Our board includes outside directors from diverse backgrounds and with expertise in various fields, allowing for in-depth discussions and management of climate issues. For example, a former Minister of Environment served as a member of our ESG Management Committee as a climate change and energy expert until March 2023. In April 2023, a former Minister of Trade, Industry, and Energy joined us as an outside director. In 2022, the BOD addressed a variety of agendas, such as revision of the Green Management Vision 2030 policy, setting carbon emission reduction targets, introduction of internal carbon prices, excess and shortage of carbon credits according to the emission trading system, sales of Certified Emission Reductions (CERs), development of a system for calculating product footprint, and performance and plan for endangered species conservation activities [...] The ESG Management Promotion Committee under the CEO to promote not only the environment, safety, and health, but to also address issues in Social Responsibility and Governance. The ESG Management Promotion Committee is held once a quarter to select major issues to be presented or reported to the BOD and voted to declared its support for TCFD and expand the scope of reporting on Sustainability Report to corporations invested by Hyosung (including ESG data such as GHGs emissions) in 2022. [...] The Green Management Team participates in government briefings and meetings related to Korea ETS, while expressing opinions through related industry associations to ensure the emission trading system can operate smoothly. Major details related to Korea ETS are shared with the Utility & Environment Management Teams of each plant and are reported to the ESG Management Promotion Committee. [...] Hyosung receives annual greenhouse gas emissions allowances and establishes specific reduction targets for each plant to achieve them. When setting reduction targets, Hyosung utilizes internal carbon pricing introduced during the reporting year, incorporating the economic analysis of carbon costs into investment decisions for emission reduction, such as facility investment and fuel conversion. Hyosung actively implements various emission reduction activities to achieve the plant-specific targets, conducting periodic monitoring and performance analysis to assess the progress and reduction volume. The details of greenhouse gas reduction achievements are managed as annual key performance indicators (KPIs) by plant managers and employees, and incentives are provided accordingly. This fosters active engagement in company-wide greenhouse gas reduction activities. Additionally, to monitor the allocation and fulfillment of emission allowances, Hyosung monitors the allocated emission allowances and expected shortages on a PU basis, reporting the findings to the board of directors.

In April 2021, Hyosung underwent a restructuring of the existing Transparent Management Committee under the BoD into the ESG Management Committee. This committee now encompasses environmental and social aspects with expanded roles in deliberating and making decisions on significant ESG management issues. These include formulating ESG-related policies and goals including climate change, risk management, and investment and activity plans. With the former Minister of Environment serving the BoD, the ESG Management Committee handles diverse topics, including the establishment of green management vision, tackling climate change-related issues (e.g. GHG emissions, oversupply and deficit of emission allowances), the development of eco-friendly products and technologies, and investments in ERP systems and environmental facilities for green management. Furthermore, in July 2021, we integrated the two independent committees—EHS and CSR—into the ESG Management Promotion Committee chaired by the CEO so as to promote not only EHS management but also social and governance initiatives. The ESG Management Promotion Committee meets quarterly to address specific ESG management matters and select agenda to be presented or reported to the BoD. The R&D Committee, consisting of the CEO and top management, meets twice a year to formulate R&D strategies based on input from relevant departments ranging from sales and marketing to development and research, with a focus on climate change. As for dedicated organizations, we have an ESG management organization directly under the CEO's control and the Green Management Department within the Strategy Division to develop green and ESG management strategies, implement management, and disclose performance. The Power Generation Environment Team and the Production Department are responsible for reducing energy consumption and GHG emissions, whereas environment-related departments take charge of managing pollutant-emitting facilities and reducing pollutants at business sites.

Describe the process(es) your organization has in place to ensure that your engagement activities are consistent with your overall climate change strategy[…]Hyosung is strengthening cooperation in the entire levels of value chain including the government, supply chain and client company in order to effectively respond to K-ETS.

In order to achieve the national emissions reduction target, it is necessary to improve K-ETS efficiently, and Hyosung is providing information about the industry and suggesting opinions on policy implementation through the Korea Chemical Fibers Association.

Internally, Hyosung is monitoring K-ETS policy trends, establishing strategies to reduce emissions, strengthening the relevant governance system, and implementing reduction activities for each plant.
As the risk management of climate change in the supply chain becomes more important, the company has added additional items about energy use in the supplier evaluation and gives additional points to suppliers enhancing their capacity for climate change. We provide reliable information related to our carbon emissions through annual business report, sustainable management report and environmental information disclosure potal site.

Hyosung's green management aims to reduce carbon emissions and includes detailed action plans such as reducing the use of raw materials, including water and power, and facilitating recycling and reuse.

Government policy along with engagement activities with supply chain and customers are important elements of green management of Hyosung and are integrated in the green management system keeping up with changes in policies and markets

Does your organization have a public commitment or position statement to conduct your engagement activities in line with the goals of the Paris Agreement?[…]Yes

Describe the process(es) your organization has in place to ensure that your external engagement activities are consistent with your climate commitments and/or climate transition plan?[…]Hyosung is strengthening cooperation in the entire levels of value chain including the government, supply chain and client company in order to effectively respond to Korea ETS. In order to achieve the national emissions reduction target, it is necessary to improve Korea ETS efficiently, and Hyosung is providing information about the industry and suggesting opinions on policy implementation through the Korea Chemical Fibers Association.