Hyundai Engineering and Construction

Hyundai E&C develops zero-emissions building construction technologies, offering low-carbon buildings with energy performance guarantees and providing its tenants and grid operators with renewable energy. The company has also identified the following growth areas: hydrogen production, hybrid power generation, smart grids, next generation nuclear power business, development of carbon capture, utilisation and storage (CCUS) technology, and renewable energy trading. The company does not disclose the profitability of these new business models, but it has evaluated their size and growth potential and disclosed their deployment schedules.

Hyundai E&C’s climate change governance sits with the company’s board of directors and there is evidence of climate change expertise among board members. The company also offers financial incentives linked to emissions reduction targets to the CEO. The company’s transition plan contains detailed descriptions of relevant and achievable long-term actions and milestones. It has been informed by climate change scenario analysis and applies an internal carbon price to energy-related facilities of the construction division. The company also plans to regularly review and update its net-zero strategy. Nevertheless, it can strengthen its plan by quantifying the financial aspects.

Hyundai E&C does not publicly disclose in-use emissions intensity data or floor area for the buildings it constructed between 2016 and 2021. As a result, it is not possible to provide a meaningful assessment of the company’s past emissions intensity trend or projected future performance against its 1.5°C pathway.

Hyundai E&C is aiming to reduce its scope 1 and 2 emissions by 100% by 2045 and its scope 3 emissions by 81% by 2045 compared to 2019. It has also set interim targets for 2030. All these targets have been submitted to the Science Based Targets initiative (SBTi) for validation. However, the company does not publicly disclose sufficient data, such as the floor area or emissions intensity of its constructed buildings. Therefore, its emissions reduction targets could not be assessed for their alignment with the company’s 1.5°C pathway. The company can improve its performance by setting regularly spaced intermediate targets at gaps of no more than five years to incentivise near-term actions.

Hyundai E&C has an engagement strategy that covers all its suppliers and focuses on changing supplier behaviour through an education campaign on environmental management, energy use and emissions reduction. The company aims to reduce supply chain emissions by 2.1% per year by 2030. Its Supplier Code of Conduct requires suppliers to develop programmes to measure energy consumption and emissions. Moreover, the company assesses its suppliers annually and requires corrective actions or terminates its transaction with high-risk suppliers. The company can further improve in this area by setting a requirement for suppliers to publicly report their emissions.

In 2021, Hyundai E&C invested nearly USD 2.9 million in research and development (R&D) in climate change mitigation technologies, including an investment in the R&D of nuclear power plants. The company’s total R&D investment in 2021 was USD 13.8 million. The areas of research included Small Modular Reactor (SMR) design and construction, optimised design technology for solar panel support structures, cooling, heating, hot water supply technology and an air-cleaning ventilation system.

Hyundai E&C aims to eliminate its scope 1 and 2 emissions by 2045 and reduce its scope 3 emissions by 81% by 2045 compared to 2019. The company has also set 2030 targets, aiming to reduce scope 1 and 2 emissions by 46% and scope 3 emissions by nearly 17% compared to 2019 without the use of offsets.

The company’s low-carbon transition plan, called Net Zero by 2045, is informed by climate change scenario analysis. Hyundai E&C plans to scale up the use of renewable energy and zero-energy building (ZEB) construction technologies. The company will expand its hydrogen business and renewable energy trading.

Hyundai E&C has a strong focus on ZEB technologies; provides renewable energy to tenants and grid operators; and invests in smart grids, hybrid energy production and offshore wind power projects. It is preparing to build a blue hydrogen production plant in the city of Boryeong and is expanding its presence in the CCUS technology market.

Hyundai E&C does not publicly disclose its emissions intensity or the floor area of its constructed buildings. Therefore, the trend in the company’s recent emissions intensity cannot be assessed.

Despite acknowledging climate change, Hyundai E&C makes a profit from the construction of oil refineries and oil and gas processing facilities in Iraq, Venezuela and the United Arab Emirates. Furthermore, it is building a coal-fired power plant in Indonesia. Even though Hyundai E&C has published its coal exit declaration, it does not mention its oil and gas projects in its transition plan.

No evidence was found of Hyundai E&C’s commitment to social dialogue or of the categories of stakeholders the company engages with on a just transition. Furthermore, no evidence was found to demonstrate the company’s ongoing social dialogue and meaningful engagement with affected stakeholders.

No evidence was found of the company undertaking just transition planning to mitigate the social impacts of the low-carbon transition on workers, affected stakeholders and its business relationships. Additionally, no evidence was found to demonstrate the company’s engagement in social dialogue and with stakeholders in its just transition planning.

No public commitment by Hyundai E&C was found stating its intention to create and support access to green and decent jobs as part of the low-carbon transition. Moreover, no evidence was found of the company’s actions to promote these jobs in a way that ensures gender balance and inclusion of vulnerable groups. Additionally, no relevant disclosure was found of the company’s assessment of employment dislocation risks.

No public commitment by the company was found stating its intention to re- and up-skill workers displaced by the low-carbon transition. Additionally, no evidence was found that the company re- and up-skills workers in a way that ensures gender balance and inclusion of vulnerable groups.

No relevant disclosure was found to show if Hyundai E&C identifies impacts of the low-carbon transition on social protection for workers and affected stakeholders, nor how it contributes to social protection. Additionally, no evidence was found that the company expects its business relationships to contribute to the social protection of their workers and affected stakeholders.

No relevant disclosure was found to show how the company identifies any misalignment of its lobbying activities with policies and regulations that support the just transition, nor of the measures it takes to address misalignment. Furthermore, no evidence was found that the company lobbies for policies and regulations for green and decent job creation; retention, education and reskilling; and social protection for workers.

Hyundai E&C commits to respecting human rights and the ILO fundamental rights at work, and it expects its business relationships to respect the ILO fundamental rights at work. The company describes the processes it uses to identify human rights risks and discloses the results of human rights risk assessments. Furthermore, the company discloses the categories of stakeholders whose human rights have been or may be affected by its activities. The company also has a grievance mechanism available to workers and external stakeholders to raise human rights concerns.

Hyundai E&C commits to respecting worker health and safety and claims to pay all its employees living wages. Furthermore, the company discloses some information regarding the diversity of its workforce, as well as a target to increase the share of women employees. The company can, however, strengthen its disclosure of these and other decent work practices.

Hyundai E&C discloses its global tax strategy; however, no relevant disclosure was found of the corporate income tax it pays in its individual tax jurisdictions. The company does have a policy prohibiting bribery and corruption and offers a channel to report bribery and corruption issues without fear of reprisal. Furthermore, the company specifies that it does not make political contributions. The company can, however, strengthen its disclosure of these and other ethical business practices.