Hyundai Motor Group accelerates ESG agenda

Hyundai Motor and Kia's headquarters in Seoul / Courtesy of Hyundai Motor Group

By Baek Byung-yeul

Hyundai Motor Group's core affiliates ― Hyundai Motor, Kia and Hyundai Mobis ― said Friday their boards will play bigger roles in accelerating initiatives in environmental, social and corporate governance (ESG) measures as the three factors have become important features in measuring the sustainability and ethical impact of investments.

Auto-parts-making affiliate, Hyundai Mobis, reported to financial regulators Feb. 18 that it will hold a shareholders' meeting March 24 to propose changes to its articles of incorporation.

In the revised articles, Hyundai Mobis will reorganize its existing transparent management committee to a sustainability management committee and enable it to make decisions on issues related to ESG.

If approved, the sustainability management committee will have the authority to decide ESG policies, planning and activities.

The automotive group said the same changes will be made at its two core affiliates ― Hyundai Motor and Kia ― as part of efforts to strengthen ESG-based management. Strengthening ESG has become an essential part of a company's growth and survival, Hyundai said.

"By establishing an ESG management system, Hyundai Motor Group will create sustainable future value," a group official said. "Led by our boards, we will continue efforts to become a company admired by markets and society by working together with all of our executives and employees."

To achieve sustainable growth, Hyundai Motor Group has been strengthening its portfolio for eco-friendly vehicles.

Hyundai Motor recently issued 400 billion won ($362 million) worth of ESG bonds and Kia is also reviewing the issuance of ESG bonds to raise money to develop electric and hydrogen-powered vehicles.

The ESG activities of the group's three affiliates have been well received as they all received top grades in an ESG rating in October by the Korea Corporate Governance Service. Hyundai Motor and Kia were upgraded to A from B plus while Hyundai Mobis maintained the same grade.

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