ESG Governance
Kumho Tire has established a governance system for promoting ESG management from the Board of Directors, the highest decision-making body, to the team units that perform the actual work. The ESG Committee under the Board of Directors actively incorporates the ESG philosophy into important decision-making and oversees ESG management. The CEO and executive management operate the ESG Management Committee to swiftly respond to and manage major ESG agendas. The dedicated ESG management organization within the Business Development & ESG Sector fulfills the role of promoting ESG management. To execute and operate ESG tasks according to strategic directions, five ESG Working Groups have been formed to enhance the company’s ESG execution capabilities.
Expansion of ESG Management in Overseas Operations
To establish a global ESG management system, Kumho Tire has designated ESG leaders and managers for each overseas business site. Kumho Tire has established an ESG operational system divided into environment and carbon, safety, supplier management, HR management and human rights, and ethics and compliance, and Kumho Tire is systematically implementing ESG management tasks. Through this, we aim to expand ESG management to global business sites, meet customer requirements, and elevate the level of ESG management.
Provision of Translated Versions of ESG Policy Book
Kumho Tire translates and guides its ESG policies and guidelines into various languages to ensure that employees at global business sites and stakeholders worldwide can read and understand them. Translated into English, Chinese, and Vietnamese, these policies are distributed and disseminated to employees at overseas business sites and posted on the official website for anyone to view. In 2023, new policies were established in response to the expansion of ESG issue management, including sustainable supply chains, conflict minerals, fair trade, board independence·expertise·diversity, and biodiversity.
Major Discussion Agendas of the BOD
To promote ESG management, the Board of Directors are getting reported and resolve on the following agenda items:
| Meeting Date | Report and Approval Agenda |
|---|---|
| February 2023 | · Report on major ESG achievements in 2022 (Net-Zero roadmap and introduction of renewable energy, CDP evaluation results, etc.) · Approval of the 2023 Industrial Safety and Health Plan |
| May 2023 | · Report on ESG materiality assessment results and response plans |
| November 2023 | · Report on 2023 ESG management performance |
| January 2024 | · Report on compliance with 2023 compliance control standards · Approval of the 2024 Industrial Safety and Health Plan |
| May 2024 | · Report on ESG materiality assessment results and opportunities and risks (including establishment and plans of ESG management indicators) |
ESG Committee under the Board of Directors
The ESG Committee consists of one executive directors (Chairman Iltaik Jung) and two independent directors (Directors Moonsun Song and Jinyoung Kim). The ESG committee deliberates and decides on ESG management promotion plans and strategies, and continuously assesses and reviews related risks. The ESG committee meets semi-annually, but can convene as needed.
| Meeting Date | Report and Approval Agenda |
|---|---|
| May 2023 | · Comprehensive ESG management diagnosis results (ESG management system, environment, society, governance) · Approval of the 2045 Net-Zero roadmap and reduction targets |
| November 2023 | · Results of the KCGS ESG evaluation and improvement measures · Mid to long-term roadmap for ESG management |
| May 2024 | · Report on ESG materiality assessment results and opportunity risks · Report on Net-Zero and renewable energy implementation plans · Report on ESG management systems for overseas business sites · Results of the 2023 ESG evaluation and 2024 plans |
ESG Management Committee under the CEO
The ESG Management Committee at Kumho Tire makes decisions on sustainable management strategies and regularly reviews the goals and performance of the Working Groups. As a decision-making body that proactively responds to significant financial and non-financial risks, the ESG Management Committee includes the CEO as the chairman and major division heads as members, meeting quarterly.
| Meeting Date | Report and Approval Agenda |
|---|---|
| January 2023 | · Latest trends in 2023 ESG management · Comprehensive diagnosis results of KH ESG management and mid to long-term roadmap · Establishment of quantitative targets for key tasks and major promotion tasks (Strengthening ESG management governance, promoting Net-Zero, establishing a human rights management system, promoting supplier ESG management, disclosing ESG information and enhancing response to evaluations) |
| April 2023 | · Status of response to Car makers on ESG management · Carbon emission reduction targets |
| July 2023 | · Publication of the 2023 Sustainability Report · Results of supplier ESG evaluations |
| October 2023 | · 2023 ESG management performance (Establishment of ESG governance, performance of ESG Working Groups, internal and external communication) |
| January 2024 | · ESG regulations and C/M requirements |
| April 2024 | · ESG regulations and C/M requirements · Review of agenda items by the BOD and ESG Committee (review of electronic voting system introduction) |
ESG Management Indicators and Implementation Status
Kumho Tire establishes and transparently discloses annual ESG tasks to promote ESG management and diligently implements them. In 2023, under the Working Groups of Environmental Management, People & Culture, Responsible Supply Chain, Ethical Management, and Governance, a total of 40 tasks were established and completed, achieving a 100% task implementation rate. The 2024 tasks are also planned to be implemented within the year in collaboration with the responsible departments.
| Performance Indicators | 2023 | Mid to Long-Term Goals | Achievement Level 2025) | 2023 Completed Tasks | 2024 Planned Tasks | ||
|---|---|---|---|---|---|---|---|
| 2025 | 2030 | ||||||
Environmental | Renewable Energy Usage Ratio | 4% | 21% | 100% (2045) | ●○○○○ | · Enhancement of Scope 1-3 Calculation · Reporting to BOD on Climate Change · Stipulation of Climate Change Response in Investment Decision-Making · Response to CDP Water Security · Activities to improve water intensity and recycling rate and performance monitoring · Establishment and Internalization of Biodiversity Policy · Achieved 25.7% Usage Rate of Sustainable Raw Materials | · Setting and Pursuing Annual and Plant-specific Environmental Impact Reduction Targets (Energy, Air, Water, Chemicals) · Acquired Environmental ProductDeclaration Certification · Obtained ISO 50001 Energy ManagementSystem Certification |
Reduction in Carbon Emissions (Compared to 2022) | In Progress | 10.7% | 100% ( 2045) | ○○○○○ | |||
Revenue Proportion from products with reduced environmental impacts | 37.4% | 45% | 70% | ●●●●○ | |||
| Ratio of Sustainable Raw Materials | 25.7% | 40% | 100%(2045) | ●●●○○ | |||
Improving Water Withdrawals Intensity (Compared to 2021)* | 9.0% Reduction | 9.3% Reduction | 10% Reduction | ●●●●◐ | |||
Improving Waste Recycling Rate (Compared to 2021)* | 86.2% | 87.3% | 90% | ●●●●◐ | |||
| People & Culture | Proportion of Business Sites Conducting Human Rights Impact Assessments | 50% | 100% | 100%(Maintained) | ●●◐○○ | · Establishment of Core Talent · Revision and Distribution of Human Rights Policy to Overseas Sites and Training · Stipulation of Grievance Process· Implementation of Employee Satisfaction Survey · Participation in Ministry of Employment and Labor’s Work- Life Balance Campaign · Management and Monitoring of Global Industrial AccidentIndicators | · Expansion of Human Rights Management and Trends Education · Expansion of Human Rights Impact Assessment at Business Sites · Expansion of Organizational Culture Campaigns |
| Accident Rate* | 6.37% | 4.6% | 3.9% | ●●●◐○ | |||
Responsible Supply Chain | ESG Evaluation Completion Rate of Core Supplier Companies | 80% | 100% | 100% Maintained | ●●●●○ | · Conducting ESG Evaluations and Supporting ESG Management of Suppliers · Expansion of Code of Conduct Application for Suppliers · Support and Participation of Suppliers in Climate Change and Carbon Emission Management · Establishment and Monitoring of Conflict Minerals Policy · Revision of Sustainable Natural Rubber Policy | · Establishment of Supply Chain Management Guidelines Policy · Incorporation of Supplier ESG Evaluation Metrics in Procurement Processes· Conducting ESG Evaluations for Domestic Conducting In-depth ESG Evaluations and International Suppliers |
| Conducting In-depth ESG Evaluations and Planning of Mitigation Measures | In Progress | Bottom 5% | Bottom 10% | ○○○○○ | |||
| Ethical Management | Pledge to complying with Code of Ethics | 1,601 | Over 70% | 100% of Domestic | ●●○○○ | · Acquisition of ISO 37301 (Compliance Management System) and ISO 37001 (Anti-Bribery Management System) Integrated Certification · Development of Continuous Monitoring System for Corruption and Awareness Training· Establishment of Fair Trade Policy · Implementation of Fair Competition and Trade Training for Employees · Acquisition of TISAX Certification | · Management and Monitoring of Risks Related to Corruption, Unfair Trade, and Information Security · Implementation of Annual EthicalManagement Campaigns · Expansion of Ethical Awareness and Fair Training on Code of Ethics Trade Training |
| Training on Code of Ethics | 1,601 Employees | Over 60% | Over 80% | ●●◐○○ | |||
| Governance | Building governance system meeting Code of Best Practices | B+ grade | Improvement of | ●●●○○ | · Provision of Professional Education for Board Directors · Review of ESG Materiality by the BOD · Disclosure of Attendance Rates and Individual Votes by Committees · Introduction of Electronic Voting to Expand ShareholderRights | · Enhancement of Enterprise-wide Integrated Risk (Financial, Non-Financial) Management System and Board Reporting · Establishment of Indicators for Board Evaluation System (Scope, Targets, Metrics,Entity, Method, etc.) | |
Building a company-wide global ESG governance system | Completed** | Continuous Self-Assessment and Monitoring of ESG Management at Overseas Sites | ●●●●● | ||||
*Based on Domestic Business Sites **As of May 2024
Initiatives and Key Achievements
Participation in Global Initiatives
Kumho Tire participates in major industry initiatives and corporate actions, as well as climate-related initiatives, to promote ESG management that meets global standards. Through global initiative activities, Kumho Tire enhances its ability to address environmental, social issues, etc. that may arise during business operations and fulfills its social responsibility for sustainable development.
Efforts to Internalize ESG
Operation of ESG KPIs for Employees
Kumho Tire incorporates ESG-related KPIs into its performance management system to achieve its ESG management goals. The ESG Management Committee oversees management indicators and performance for each ESG issue, integrating a 5% ESG KPI proportion into the KPIs of the committee members and 14 related departments to drive ESG performance. In particular, the SHE Planning Team, responsible for safety and health tasks, reflects a 15% KPI proportion to ensure momentum in managing safety issues and achieving results. We will continue to expand the scope of ESG-related KPIs to fully integrate ESG management throughout the company.
Raising Employee Awareness
Kumho Tire shares information in various ways to raise employee awareness of ESG management. The weekly ‘ESG Pick’ is shared via email with the ESG Management Committee members and Working Group representatives, with key content also posted on the groupware. Additionally, ESG trends and major issues are communicated through card news, company newsletters, etc.
External Communication and Promotion
Kumho Tire strives to communicate the process of promoting ESG management to stakeholders through various methods. We have produced YouTube content showcasing our ESG management achievements and the work of the ESG team, which is available on ‘ECSTA TV.’
