Hyundai Drives Towards a Greener Future: Unpacking Their Sustainability and ESG Progress

Hyundai’s Commitment to a Sustainable Future

In an era where environmental consciousness and social responsibility are no longer optional but essential for businesses, the automotive industry faces significant pressure to evolve towards more sustainable practices. Among the global leaders in this sector, Hyundai has been actively strengthening its commitment to sustainability and Environmental, Social, and Governance (ESG) principles. This report delves into Hyundai’s recent strides in key areas, including an impressive surge in electric vehicle sales, the significant milestone of achieving 100% renewable energy in pivotal production plants, a renewed emphasis on human rights, and dedicated efforts to forge a sustainable supply chain.

Electrifying the World: Hyundai’s EV Sales Surge in 2023

Hyundai has demonstrated remarkable progress in the electric vehicle market, with global sales reaching 269,000 units in 2023, marking a substantial 28% increase compared to the previous year. This significant growth signifies a robust consumer appetite for Hyundai’s electric offerings and suggests that the company’s EV strategy is gaining considerable momentum worldwide ¹. The 28% year-over-year increase indicates more than just a marginal rise; it reflects a notable shift in consumer preferences and likely underscores the success of Hyundai’s electric vehicle lineup and its effective market strategies. This expansion positions Hyundai favorably against competitors in the rapidly evolving electric vehicle landscape, suggesting that its investments in EV technology and infrastructure are yielding positive results in terms of market penetration and consumer adoption. While some sources report slightly different figures, such as 268,785 units ¹, the consistent trend of approximately 28% growth reinforces Hyundai’s strong performance in the EV sector throughout 2023. Models like the IONIQ 5 and IONIQ 6 have likely played a crucial role in this success ³, showcasing Hyundai’s ability to produce appealing and competitive electric vehicles. The remarkable 110% increase in IONIQ 5 sales in the US in November 2024 ⁴ further suggests the underlying popularity and market appeal of this model, indicating a sustained demand that likely contributed significantly to the 2023 global sales figures and points towards a positive long-term trajectory for Hyundai’s dedicated EV platform. This surge in electric vehicle sales firmly establishes Hyundai as a serious contender in the global transition towards sustainable transportation, demonstrating its capacity to innovate and manufacture electric vehicles that resonate with consumers on a global scale.

Powering Operations with Renewables: A Global Commitment to Clean Energy

A significant aspect of Hyundai’s sustainability drive is its commitment to transitioning its manufacturing operations to renewable energy sources. The company has achieved a noteworthy milestone by reaching 100% renewable energy usage at its production facilities in the Czech Republic and Indonesia.

Czech Republic: Hyundai Motor Manufacturing Czech (HMMC) holds the distinction of being the first Hyundai plant to achieve 100% renewable energy, a transition that was completed in early 2022 ⁵. The plant sources its renewable electricity from a diverse mix of sources, including local biogas plants, as well as solar, tidal, and wind power generated further afield ⁵. Importantly, all the renewable energy procured by HMMC is backed by Guarantee of Origin certificates, ensuring its verifiable renewable source. This early adoption of 100% renewable energy at the Czech facility underscores Hyundai’s proactive stance on environmental sustainability within its European operations ¹. This strategic move aligns with Europe’s generally stringent environmental regulations and the greater availability of renewable energy infrastructure in the region, potentially enhancing Hyundai’s brand image and appeal to environmentally conscious consumers in the European market.

Indonesia: Hyundai Motor Manufacturing Indonesia (HMMI) followed suit, achieving 100% renewable energy usage by January 1st, 2023 ⁹. The Indonesian plant primarily relies on Renewable Energy Certificates (RECs) sourced from geothermal power provided by the PLN Kamojang Geothermal Power Plant ⁹. This is complemented by the initial installation of a 3.2 MW photovoltaic system in 2021 ¹⁰, indicating a phased approach towards complete renewable energy reliance. The utilization of RECs, particularly from geothermal sources in Indonesia, demonstrates Hyundai’s adaptability in leveraging regionally specific renewable energy resources to meet its sustainability objectives ¹. This strategic partnership with PLN to harness Indonesia’s geothermal potential showcases a tailored approach to clean energy adoption that considers the local energy landscape and supports the country’s sustainable development goals.

Achieving 100% renewable energy in these key production hubs represents a significant reduction in Hyundai’s carbon footprint associated with manufacturing. This commitment to environmentally responsible production on a global scale not only contributes to the company’s overarching carbon neutrality goals but also sets a positive precedent for other manufacturers within the automotive industry and beyond.

Plant Location	Renewable Energy Sources	Start Date
Czech Republic (HMMC)	Local biogas plants, solar, tidal, wind	Early 2022
Indonesia (HMMI)	Renewable Energy Certificates (RECs) from geothermal power, own solar power generation	January 1, 2023

Championing Human Rights and Ethical Practices: A Commitment to People

Hyundai’s commitment to ESG extends beyond environmental considerations to encompass a strong focus on social responsibility, particularly in the realm of human rights. The company has demonstrated this dedication through the revision of its Human Rights Charter and the expansion of its human rights due diligence efforts ².

The revised Human Rights Charter of Hyundai Motor Company, established in June 2023 ¹¹, outlines the company’s commitment to actively implementing human rights management, preventing human rights violations, and mitigating associated risks. Key provisions of this charter include a strict prohibition of child labor and forced labor, adhering to a zero-tolerance principle for such unfair employment practices ¹¹. The charter also emphasizes a commitment to non-discrimination in all aspects of employment, ensuring equal opportunities regardless of gender, race, ethnicity, nationality, religion, disability, age, marital status, or social status ¹¹. Furthermore, it guarantees fair working conditions, humane treatment, and respects the freedom of association and collective bargaining for all employees ¹¹. Ensuring industrial safety and protecting the health and safety of its workforce are also paramount principles within the charter ¹¹. Recognizing its broader responsibilities, Hyundai commits to protecting the human rights of local residents and customers in its operations and through its products and services ¹¹. The charter also addresses the importance of establishing a responsible supply chain with a focus on proactively identifying and preventing human rights risks ¹¹. Notably, the revised charter includes a guarantee of environmental rights, acknowledging that environmental pollution can constitute a serious violation of human rights ¹¹.

In addition to strengthening its foundational principles, Hyundai has expanded the scope of its human rights due diligence to include businesses with 100 or more employees ². This expansion demonstrates a proactive approach to identifying and mitigating potential human rights risks not only within Hyundai’s direct operations but also across a broader segment of its value chain. By lowering the threshold for due diligence, Hyundai is increasing its scrutiny and accountability across a larger network of its operations and potentially its immediate suppliers, recognizing that human rights risks can exist even in smaller entities within its sphere of influence. The emphasis on environmental rights within the Human Rights Charter reflects a growing understanding of the interconnectedness between environmental sustainability and social well-being. Recognizing environmental pollution as a human rights violation signifies that a healthy environment is considered fundamental to human health and quality of life, integrating environmental responsibility directly into Hyundai’s core human rights commitments. By strengthening its human rights charter and due diligence processes, Hyundai is demonstrating a tangible commitment to ethical business practices, aiming to foster a more responsible and equitable workplace and value chain, which can ultimately enhance its reputation and attract ethically conscious stakeholders.

Building a Resilient and Sustainable Supply Chain: Responsibility Across the Value Chain

Hyundai recognizes that its commitment to sustainability extends beyond its direct operations to encompass the entire value chain. The company has been actively working to enhance sustainability throughout its supply chain through various initiatives ².

One key aspect of this effort is the strengthening of supply chain sustainability management, which includes the introduction of risk screening specifically for forced labor and the expansion of the scope of ESG assessments to include overseas suppliers ². The specific focus on screening for forced labor in the supply chain reflects the increasing global attention and regulatory pressure on companies to ensure their supply chains are free from such practices. This proactive measure indicates Hyundai’s awareness of and commitment to addressing this critical social issue within its complex global network.

Hyundai Motor India’s adoption of rail freight for transporting vehicles domestically serves as a notable example of its commitment to sustainable logistics ¹³. In 2024 alone, HMIL transported 156,724 vehicles via rail, representing 26% of its total domestic wholesale volume, which resulted in a significant reduction of 18,352 tonnes of carbon dioxide emissions ¹³. Over the four years from 2021 to 2024, Hyundai India has dispatched an impressive 537,499 units by rail, cutting down CO2 emissions by a staggering 63,452 tonnes ¹³. This strategic shift to rail transport in India, a country with a well-developed railway network, demonstrates a practical and effective approach to reducing the environmental impact of logistics.

Hyundai Motor Group has also established a comprehensive ESG management process for its supply chain, which involves evaluating, managing, and resolving potential risks associated with partner companies in areas such as environment, safety, labor, human rights, and ethical compliance ¹⁵. This holistic approach indicates a commitment to ensuring sustainability across all critical aspects of its supply chain. Furthermore, Hyundai is committed to ethical and transparent raw material procurement, adhering to international standards such as the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals ¹⁵. This highlights the company’s dedication to responsible sourcing practices, particularly for materials used in the production of electric vehicles and other components. Demonstrating its responsiveness to environmental concerns in material sourcing, Hyundai also made the decision to withdraw from an agreement to procure aluminum from a coal-powered plant in Indonesia ¹⁶. This decision, particularly following public pressure, underscores the growing influence of stakeholder activism on corporate sustainability decisions and Hyundai’s willingness to prioritize cleaner energy sources even within its supply chain. By focusing on sustainable procurement and logistics, Hyundai is actively working towards minimizing its environmental and social impact throughout its entire value chain, building a more resilient and responsible business model.

Hyundai’s Broader Vision for a Sustainable Future: Progress for Humanity

Hyundai’s overarching vision for sustainability is deeply rooted in its philosophy of “Progress for Humanity” ¹. This guiding principle underscores the company’s commitment to creating a sustainable future for society. Hyundai has set an ambitious goal to achieve carbon neutrality across its global operations by 2045 ¹. To achieve this, the company is committed to developing a diverse portfolio of renewable energy sources and aims to achieve 100% renewable electricity at all its domestic and international business sites by 2045 ¹. Furthermore, Hyundai is making significant investments in research and development to advance next-generation sustainable technologies, including electric vehicles, hydrogen fuel cells, and other eco-friendly innovations ¹. This forward-looking approach positions Hyundai as a key driver in the automotive industry’s transition towards a more sustainable future.

Conclusion: Driving Change for a Sustainable Tomorrow

Hyundai’s recent achievements in sustainability and ESG management demonstrate a strong and evolving commitment to responsible corporate practices. The significant increase in global electric vehicle sales in 2023 highlights the growing consumer demand for Hyundai’s EVs and positions the company as a major player in the electric mobility revolution. The attainment of 100% renewable energy usage in the production facilities in the Czech Republic and Indonesia marks significant strides in reducing the company’s environmental footprint in manufacturing. The strengthened Human Rights Charter and expanded due diligence efforts underscore Hyundai’s dedication to ethical business conduct and social responsibility across its operations and value chain. Moreover, the focus on building a resilient and sustainable supply chain, including the adoption of eco-friendly logistics solutions and responsible sourcing practices, demonstrates a comprehensive approach to minimizing environmental and social impacts. Hyundai’s broader vision for a sustainable future, encapsulated in its “Progress for Humanity” philosophy and its ambitious carbon neutrality goals, indicates a long-term commitment to driving positive change within the automotive industry and contributing to a more sustainable world. These collective efforts position Hyundai as a leader in corporate responsibility, actively shaping a greener and more ethical future for the automotive sector.