Environmental Climate change

Environmental Climate change

Climate change response

  • Climate Change Response Strategy and Medium- to Long-Term Goals

    As a global company focused on businesses that have a significant impact on climate change, Hyosung TNC is dedicated to minimizing the effects of climate change throughout its entire operations.
    To align with the sectoral targets set forth in the National Greenhouse Gas Reduction Target (NDC) announced in 2021, Hyosung TNC has established quantitative greenhouse gas reduction goals under its "Green Management Vision 2030." These goals aim for a 14.5% GHG reduction in emissions compared to 2018 levels.

    To achieve these reduction targets, Hyosung TNC annually formulates investment plans for energy-saving equipment and implements them. Moreover, the company plans, studies, and formulates medium- to long-term reduction strategies across all departments, including production and power generation, reporting regularly to the ESG Management Promotion Committee and the Board of Directors. Recognizing that achieving these reduction goals may be challenging through internal energy-saving efforts alone, Hyosung TNC is pursuing a long-term perspective by engaging in activities such as purchasing third-party power through domestic third-party power purchase agreements (PPAs) generated from the renewable energy sources and acquiring reduction certificates.

    Implementation Strategy

    See below
    Sustainable Development Mechanisms (SDM) - Sustainable development mechanisms as per the Paris Agreement.
  • Climate Change Risk Management

    Hyosung TNC has established and operates a risk management process to systematically address the risks and opportunities associated with the climate change. We identify risks through stakeholder requirements and analysis of internal and external business environments, evaluate their severity, and categorize them. Climate change-related risk factors include transition risks due to market and technological changes associated with the transition to a low-carbon economy, as well as short-term and long-term physical risks resulting from climate change, such as typhoons, droughts, and floods.

    Hyosung TNC updates its risk management status annually to enhance the discovery of a new risks and the formulation of response strategies. For significant risks, reports are submitted to the ESG Management Promotion Committee, and progress toward achieving response goals is evaluated annually.
    Furthermore, to manage the climate change risks and explore opportunities for strategic decision-making, business direction, and investments, we have introduced and implemented an internal carbon price. This includes calculating carbon emissions across the organization and distributing guidelines and greenhouse gas emission calculators. This approach is used for economic analysis, taking into account the costs associated with emission rights trading and reflecting carbon pricing in energy use plans for business facilities and equipment investments.

    Internal Carbon Price: Setting a price on carbon emissions voluntarily within a company to internalize the economic cost of greenhouse gas emissions.

    Risk Management Process

    See below

    Key Risks Related to Climate Change

    Item Content Detail
    Risks Emission trading scheme Increased cost of purchasing emission allowances due to shortage
    Physical risks such as precipitation, typhoons, etc. Loss of revenue due to product quality deterioration caused by physical risks
    Negative stakeholder views (increasing environmental needs) Decrease in revenue due to negative reputation risks from stakeholders
    Transition to a low-carbon market Increased demand for low-carbon products such as recycled materials, bio-based materials, etc.
    Development and expansion of sustainable products Adaptation to stakeholder demand through diversification of eco-friendly products
    Increased stakeholder demand for eco-friendly products Revenue growth due to positive reputation effects from meeting stakeholder demands

Climate Change Indicator

  • Operation of Carbon Asset Management System
    Hyosung TNC has been operating an IT-based carbon asset management system (CAMS) since 2011 to effectively monitor greenhouse gas emissions at each of its facilities.

    Using the CAMS, greenhouse gas inventories for each facility are built, and emissions are monitored by emission source and activity data, systematically managing greenhouse gas emissions. In addition, a product carbon footprint estimation system was established in June 2022 to measure and manage carbon emissions throughout the entire product lifecycle.

  • Carbon Emission Management
    In a line with its Green Management Vision 2030, Hyosung TNC set a quantitative target to reduce greenhouse gas emissions by 14.5% by 2030 compared to the emissions in 2018.

    To achieve this goal, the company predicts the production, energy consumption, and greenhouse gas emissions at each facility based on business plans until 2030. For emissions reduction targets that cannot be met through internal emissions reduction activities alone, the company plans to invest in the long term, including the purchase of a third-party power purchase agreements (PPAs) from domestically produced renewable energy sources, the purchase of emission certificates, and the installation of renewable energy generation facilities. In order to understand the financial impact of these climate change risks, an internal carbon price has been applied.

  • Internal Carbon Pricing
    To address the climate change risks and opportunities resulting from the transition to a low-carbon economy, Hyosung TNC introduced an internal carbon pricing mechanism in 2021.

    Internal carbon pricing refers to setting a price on carbon emissions within the scope of management and business activities. This allows companies to voluntarily internalize the economic costs of greenhouse gas emissions associated with their operations. As a result, Hyosung TNC assesses not only the amount of emitted carbon but also the monetary value of carbon emissions reduction achieved through energy savings. This information is incorporated into cost-benefit evaluations for decisions such as equipment replacement, facility expansion, and business investments. The company is committed to continuing efforts to reduce greenhouse gas emissions to achieve the Vision 2030 target.

  • Climate Change-related Employee Key Performance Indicator (KPI) Management and Incentives
    Hyosung TNC has set energy reduction targets as performance indicators for production executives and plant managers and greenhouse gas reduction targets for Green Management team members.

    Performance is evaluated, and incentives are provided based on the results. In addition, to establish ESG management as part of corporate culture, the company has set ESG management KPIs for employees and introduced performance evaluations starting in 2022. This includes teams responsible for ESG management, Green Management, production, and energy reduction, as well as relevant executives, including C-Level executives.

Climate Change Response Activities

  • Greenhouse Gas Reduction Activities, Including the Use of Renewable Energy

    Hyosung TNC has been actively engaged in greenhouse gas reduction activities at its facilities to mitigate the climate impact of greenhouse gases and align with the government's carbon neutrality and green growth policies. The company continuously pursues initiatives such as the replacement of high-efficiency equipment, process improvements, and the introduction of sustainable facilities. Additionally, it sources waste the heat from nearby municipal waste incinerators to use in its processes and supplies biogas generated from the anaerobic digestion facility at the wastewater treatment plant to its boilers, thus expanding the use of renewable energy. In the future, when conditions are permitted, the company plans to use electricity produced in an sustainable manner.

  • Building Smart Factories

    Hyosung TNC has been actively implementing the establishment of smart factories as part of its group management policy, continuously advancing its systems. A smart factory connects all production-related resources in real-time and analyzes collected data to create an optimized production environment. This approach not only enhances production efficiency by deriving optimal operating conditions but also the results in greenhouse gas reduction through reduced energy consumption.

    Hyosung TNC's Daegu plant has participated in the "Seongseo Industrial Complex Smart Energy Platform Construction Project," led by the Korea Industrial Complex Corporation, since 2020. In this project, the company installed 20 measurement devices on high-capacity electrical equipment and established a Factory Energy Management System (FEMS). Through these efforts, the company aims to identify and manage factors contributing to energy savings effectively.

  • Support for Energy Savings and Greenhouse Gas Reduction in Partner Companies

    Hyosung TNC has signed a business agreement with the Korea Energy Corporation and provides energy diagnosis consulting to partner companies. Energy managers in partner companies receive support in identifying energy-saving and greenhouse gas emission reduction factors through diagnostics of processes and on-site environments. This includes problem identification, economic feasibility analysis, and the development of improvement themes. When necessary, support is given for the implementation of energy-saving equipment, ensuring practical reductions in greenhouse gas emissions.

  • Development of sustainable Products and Technologie

    Hyosung TNC is committed to research and development in sustainable technology and products to secure future growth drivers and achieve sustainable growth. The company conducts R&D investments in three directions: the development of biodegradable products, recycling technology, and the utilization of sustainable materials. By actively pursuing these areas, Hyosung TNC aims to address the climate change challenges and lead the way in creating an sustainable business ecosystem.

  • Biodiversity Conservation Activities

    As ecological destruction continues due to climate change, the responsibility to preserve biodiversity is becoming increasingly more important.
    Hyosung TNC supports and participates in biodiversity conservation and enhancement activities to build a healthy ecosystem for the future generation.

    Item Activity name Activity description Implementation period
    Hyosung Group Climate change and biodiversity online education Enhancing employee awareness of biodiversity Every July
    Adopt-a-river program and cleanup campaign Habitat protection through removal of invasive species Ongoing
    Hyosung TNC Sevit ESG Color Festival - Sevit regen Plogging* Environmental cleanup activity at the Han River Park October 2022
    Hyosung Forest of Sharing - Tree Planting Event Planting over 100 chestnut tree seedlings provided by Hyosung October 2022
    Marine Forest Restoration Project Marine conservation and restoration project 2023 -
    Marine Forest Management Project Marine conservation and habitat protection project December 2022
    Plogging: A portmanteau of the Swedish word "plocka upp" (to pick up) and the English word "jogging," referring to picking up litter while jogging or walking