Since 2011, Hyosung has implemented and operated an IT-based carbon asset management system to monitor GHG emissions at each business site. Using the system, we establish a GHG inventory at each business site and ensure a systematic management by monitoring emissions by facility and activity data in accordance with the Emissions Calculation Plan. In addition, we implemented a system for calculating the carbon footprint of products in June 2022 so as to measure and manage carbon emissions throughout the product life cycle.

Hyosung has set a quantitative goal to reduce GHG emissions by 14.5% by 2030 compared to 2018. To achieve this Green Management Vision 2030, we have predicted production yield, energy consumption, and GHG emissions by business site until 2030 based on the business plan and have established an annual reduction business plan. For reductions that are difficult to achieve through our reduction projects alone, mid- to long-term investments are required, such as the purchase of domestic third-party PPAs produced with new and renewable energies and reduction certificates, as well as the installation of new and renewable energy power generation facilities. We calculate the cost and determine the financial impact of these climate change risks based on internal carbon pricing.

In 2021, Hyosung introduced internal carbon pricing in order to identify risks and opportunities associated with climate change as a result of the transition to a low-carbon economy. We use this information for company-wide business direction and investment decisions. Internal carbon pricing entails the company voluntarily internalizing the economic cost of GHG emissions by establishing a price for carbon emitted from management and business activities. Accordingly, Hyosung converts both the amount of carbon emitted and the amount of carbon emissions cut resulting from energy savings into a monetary value, incorporates it into economic evaluation, and uses it for energy facility replacement, new business expansion, and business investment. We will continue to do all we can to reduce GHG emissions as part of our efforts to achieve the Vision 2030 objective.

As performance indicators, Hyosung establishes energy reduction goals for production executives or plant managers relating to climate change, and GHG reduction goals for members of the Green Management Team. Their performances are evaluated so they are awarded incentives based on the evaluation outcomes. Moreover, in order to establish ESG management as a part of the corporate culture, the ESG Management Promotion Committee and the Board of Directors decided in 2021 to establish ESG management KPIs for employees and evaluate their performance. The initiative has been implemented since 2022. Accordingly, we have setup climate change indicators to evaluate all teams associated with energy conservation and greenhouse gas reduction, such as the ESG Management Team, Green Management Team, Production Team, and Power Generation Team, as well as relevant executives (including C-level).

Hyosung constantly strives to reduce GHG emissions at its business sites in response to the government's carbon neutrality and green growth policies and to mitigate the greenhouse effect. We continue to promote the use of eco-friendly fuel, the replacement of high-efficiency equipment, the enhancement of processes, and the introduction of eco-friendly equipment.

Hyosung has set the establishment of smart factories as one of the Group's management policies and is continually improving its systems. In smart factories, all production-related resources are connected to the workplace in real-time, and the collected data is analyzed to build an optimized production environment. Enabling optimal operating conditions, smart factories not only contribute to increasing production yield but also reducing GHG emissions through lower energy consumption.

Hyosung focuses its efforts on the research and development of eco-friendly technologies and products, thereby securing future growth engines and achieving sustainable growth. We will take the lead in addressing climate change and establishing an eco-friendly business ecosystem through substantial investments in R&D, such as bolstering business capabilities for efficient energy use, setting up an eco-friendly hydrogen business, and developing resource recycling technology.

Since signing business agreements for shared growth with large enterprises and SMEs with the Korea Energy Agency, Hyosung has been offering partners energy diagnosis and consulting services. Through a diagnosis of process and workplace environments, energy managers of partners can receive information on factors such as energy saving and GHG emission reduction factors, analysis of problems and economic feasibility, and improvement themes. We provide partners with support for energy-saving facilities where necessary.

As the ecosystem continues to be destroyed by climate change, the obligation to preserve biodiversity is emerging.
Hyosung supports and participates in efforts to preserve and promote biodiversity in order to nurture a thriving ecosystem for coming generations.

All employees received training on the impact of climate change on biodiversity and the connection to business operations. Through biodiversity training, Hyosung will continue to increase employee awareness of biodiversity.

Employees at the Anyang Plant conduct clean-up activities alongside the Anyang Stream and at Hogye Neighborhood Park each month. By doing so, they aim at improving water quality, protecting habitats, and restoring ecosystems in the surrounding areas.

The hill inside the Anyang Plant is covered with the beautiful Rhododendron colony spanning 10,000 m2 and is also known as “Azalea Hill.” Azalea Hill is one of 49 tourist attractions selected by Anyang local citizens. During the azalea festival, the Anyang Plant opens its doors to the local community, offering them an opportunity to admire the vibrant pink blooms. Every year, approximately 10,000 people visit the festival, enjoying the breathtaking scenery.

During the festival, employees with disabilities from the “Goodwill Store,” Hyosung's social enterprise, and members of the Hyosung Volunteer Corps sell donated goods. Visitors can also enjoy a variety of food options at a bazaar.

The Azalea Hill event dates back to the late 1970s when female workers at the former Dongyang Nylon invited their friends and family to celebrate the season together.

Hyosung hosted the "Sevit ESG Color Festival" on Sebitseom. By planning "Sevit Re-Gen Plogging," a campaign of jogging alongside the Hangang River while cleaning, we carried out environmental cleanup activities together with local residents.
In addition, the "Hyosung Tree Planting" event, in which citizens, Hyosung employees, and their families participate, was created in honor of Hyosung's 50th anniversary in 2016. The event takes place each year at "Hyosung Forest of Sharing" located in Noeul Park, Mapo-gu.
More than 3,000 seedlings of approximately 40 species have been planted as of 2022. In order to preserve the ecology of Noeul Park and support management, we are involved in annual environmental cleanup activities such as funding operating expenses.

Together with the Korea Fisheries Resources Agency, Hyosung engages in a management project for seagrasses (eelgrasses) grown in Dadae-ri and Dapo-ri of Geoje-si, Gyeongsangnam-do.
Seagrasses are species designated as endangered marine plants by the Conservation and Management of Marine Ecosystems Act. They play a vital role in the marine ecosystem by providing food, habitat, and spawning grounds, and are one of the blue carbon whose ability to absorb carbon has also been certified internationally.

Hyosung conducts activities to improve the marine environment, including monitoring the state of business sites subject to management of the seagrass forest created by the Korea Fisheries Resources Agency, monitoring the habitat, planting supplementary seagrasses, and retrieving abandoned fishing gear.
When a seagrass forest is established, the number of benthic animals, the number of species present, and the species diversity index increase 2.5-fold, 1.5-fold, and 1.2-fold, respectively, ensuring a healthy marine ecosystem. Hyosung intends to expand the Seagrass Forest Restoration Project in the future.

Hyosung is carrying out a project to support the installation of wire fence to protect endangered species such as mountain goats and other wildlife living in Yeongyang-gun, Gyeongsangbuk-do. In order to prevent damage to crops, wild animals, including mountain goats, have been caught and killed in the mesh fence, so we are supporting the changing of existing mesh fences with wire fences to prevent damage to wild animals and protect farms.

We are conducting a feeding support project for winter migratory birds that visit Hwapocheon Wetland in Gimhae, South Gyeongsang Province, a national wetland conservation area. To prevent exhaustion and starvation of winter migratory birds (eagle, whooper swan, bean goose, etc.) that come to Korea for winter, we support stable and continuous feeding to protect endangered animals and plants and preserve biodiversity.