Hyosung Chemical Corp

###### Climate Change Response

Hyosung Corporation has established the ESG Management Committee within the board of directors (BoD) to address climate change at the corporate level. The operating companies handle climate change issues through the ESG Management Promotion Committee and the R&D Committee, which are the highest decision-making bodies under the CEO. They report major agenda items to the BoD on a regular basis. [...] 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 Hyosung Corporation's 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 [...] The ESG Management Promotion Committee, under the supervision of the CEO, oversees not only the environmental, safety, and health aspects, but also the social and governance aspects of the company. It operates on a quarterly basis and selects major agenda items to be submitted or reported to the BoD. The R&D Committee is joined by the CEO and the management, and it operates on a semiannual basis to establish R&D strategies that reflect the opinions of climate change-related departments, such as sales, marketing, development, and research. [...] The dedicated organization consists of the ESG Management Department under the CEO and the Green Management Team under the Strategy Division, and is responsible for establishing climate change strategies, managing implementation, and disclosing performance. Onsite utility and production departments are charged with reducing energy usage and GHG emissions. [...] Hyosung has established dedicated organizations for ESG management and climate change in each operating company to address the global challenge of climate change. Hyosung TNC, Hyosung Heavy Industries, and Hyosung Chemical have formed the ESG Management Promotion Committee under the leadership of the CEO, and they submit or report major agenda items from the committees to the BoD. Hyosung Advanced Materials operates both the Sustainability Steering Committee and subcommittees for each sector to deliberate on climate change issues, and they present and report major agenda items to the BoD.

Hyosung Chemical established an ESG management promotion committee headed by the CEO to meet social demands for ESG management participation, and the EHS committee established in 2020 has been changed and operated under the ESG management promotion committee. The ESG Management Promotion Committee operates a regular meeting once a quarter under the supervision of the CEO, reviews the progress of ESG management and agendas, and submits them to the board of directors if necessary. [...] The CEO is the highest decision-maker of the ESG Management Promotion Committee and also serves as the chair of the board of directors. The ESG Management Promotion Committee ultimately approves activities related to climate change issues (including sustainable management vision, oversight and guidance on business strategy development, setting greenhouse gas reduction targets, critical strategies related to environmental regulations, and oversight and guidance on value chain engagement) as well as business investment plans and budget formulation, and reports regularly to the board of directors. In 2023, the board of directors held a total of four quarterly meetings, during which the following environmental issues were reported: Q1. ESG Materiality Assessment Items Q2. ESG Responses to External Stakeholders Q3. Operation of Internal Carbon Pricing System and Environmental Protection Activities Q4. Plan for Key ESG Activities [...] Hyosung Chemical reports on climate change related issues every 4 weeks at the PU (Performance Unit) meeting concerning the ones specified by plant managers, the persons in charge of environment, safety and health of all domestic business sites and the environmental safety team of each business site. The matters needing a decision making is reported to the EHS Committee, a consultative group for the primary decision making of green management at a lower level than the board. Some agendas need to be reflected in management plans such as company-wide strategy for R&D and decision makings. The EHS Committee considers the importance of each issue after reviewing those agendas and then receives the final approval from the board. Since April 2021, Hyosung Chemical has expanded and restructured the EHS Committee, integrating it with the CSR Committee, to form the ESG Management Promotion Committee, with the CEO as the chairman. This committee drives not only environmental, safety, and health initiatives but also social and governance aspects. It holds quarterly meetings to select and present significant agenda items for consideration or reporting to the Board of Directors, including in 2023.

Describe the process(es) your organization has in place to ensure that your engagement activities are consistent with your overall climate change strategy[…]In order to respond to K-ETS efficiently, Hyosung Chemical has strengthened the cooperation with the government and supply networks, customer companies in the entire value chain.
It needs to improve K-ETS efficiently to accomplish the government's emissions target and Hyosung Chemical suggests its opinion about characteristics of the industry and views to be reflected when implementing policies through the Korea Petrochemical Industry Association (KPIA). Activities with KPIA include regular activities such as research on reduction activities between KPIA and member companies, and irregularities activities such as presenting opinions according to the enactment and revision of the government's legislation.
Internally, Hyosung Chemical establishes strategies for GHG reduction and enhances governance by monitoring K-ETS trends and each pant implements activities for GHG reduction. As the climate change-related risk management of the networks gets more important, it adds the item such as energy use and recycling waste in the environment part of the assessment of cooperative companies and gives additional points to those companies who reinforce their ability of climate change through the assessment. It annually provides the reliable information based on the PAS 2050 as film customers demand for the information on carbon emissions by a product unit and participates in EcoVadis program to answer sincerely.
The results of the above activities are reflected in Hyosung Chemical's climate change response strategy, and in 2021, to meet the industrial sector target of the Nationally Determined Contributions (NDC), the greenhouse gas quantitative target of 'Green Management Vision 2030' was updated from 20.5% emission reduction compared to 2017, to 14.5% compared to 2018. The engagement activity with the government, supply networks and customers is a crucial factor for the green management of Hyosung Chemical so that Hyosung Chemical reflects them in the internal green management depending on 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