HMM is a publicly listed company headquartered in the Republic of Korea and founded in 1976. In 2021 its revenue was USD 11.69 billion. Along with container ships and oil tankers, the company operates dry bulk carriers, LNG tankers and multi-purpose vessels. HMM is the world’s eighth-largest shipping company and it moves the majority of South Korea's exports.
HMM implemented several measures to improve energy efficiency, including hull resistance reduction, the use of scrubbers, as well as speed and route optimisation. As a result, the company reduced its scope 1 emissions intensity by about 30% from 2018 to 2021 . This reduction rate exceeded the rate required by the company’s 1.5°C pathway. HMM’s cumulative emissions from 2018 to 2021 are within the company’s past carbon budget. Based on the current trend, the company is projected to remain within its cumulative carbon budget for 2022-2036.
HMM applies IT technologies such as artificial intelligence (AI), big data and blockchain to its entire business data to increase operational efficiency. The company has been developing a learning system that uses AI to analyse optimal routes, which results in the reduction of fuel consumption and operational costs. HMM also operates a system that automatically calculates greenhouse gases (GHGs) generated from the point of departure to the destination of cargo, including inland transportation. Additionally, the company has signed a memorandum of understanding with shipbuilder Samsung Heavy Industries to work on the digitalisation of ships.
HMM is involved in several research projects focused on ship fuel efficiency improvements, smart ship solutions and alternative fuels. The company is in the process of establishing a foundation for the development of key technologies for hydrogen fuel cell propulsion ships. It is also working towards building low-carbon and zero-carbon ships by 2030 through its partnerships with shipbuilders Daewoo Shipbuilding & Marine Engineering (DSME) and Samsung Heavy Industries. The company can improve its reporting by providing a breakdown of its research and development (R&D) investments by technology and disclosing more details on the progress made on each project.
HMM’s ‘Voyage to Net Zero’ plan, published in its 2021 ESG report, shows the company’s significant improvement in addressing climate change issues since 2020. The plan now contains governance and environmental management sections, an analysis of risks related to climate change and response strategies. However, the company should also report its financial commitment to the plan to strengthen its credibility. Additionally, it can benefit from climate change scenario analysis, stress testing, and well-defined intermediate emissions reduction targets at gaps of no more than five years.
HMM actively collaborates with shipbuilders and infrastructure operators and encourages its entire supply chain to reduce emissions by applying sustainable purchasing policies. Moreover, the company has launched a carbon calculator that allows its customers to calculate carbon emissions from various types of ships, including bulk carriers, tankers and container ships. The impact of this tool, however, is not disclosed. To improve customer engagement, the company should develop a dedicated policy for this purpose, together with a strategy to influence customers to reduce their GHG emissions and success metrics.
HMM disclosed the list of trade associations it is a member of along with its activities within each association. However, HMM does not publish a standalone policy on its engagement with trade associations. Nor does the company provide any details on how engagement with trade associations is managed, and which individuals or committees within the company have oversight of this. The company should develop such a process and make it publicly available. To strengthen its performance and public image, the company should also clearly state its position on significant climate policies that could affect the shipping sector.
HMM receives a trend score of =. If the company were reassessed in the near future, its score would likely remain the same. HMM has decreased its emissions intensity between 2018 and 2021 at the rate required by its 1.5°C pathway. It is also projected to remain within its carbon budget for 2022-2036 . The company aims to reach net-zero emissions by 2050. However, it has not set regularly spaced intermediate targets, which could help the company increase near-term action to achieve its longer-term net-zero goal. Moreover, there is no evidence of strong financial commitment by the company towards the goal of decarbonisation.
HMM has set a target to reduce its entire fleet’s emissions intensity by 50% by 2030 compared to 2008 and achieve net-zero emisisons by 2050. The company also aims to reduce its container fleet’s emissions intensity by 70% by 2030 compared to 2008.
HMM promotes the use of alternative fuels such as liquefied natural gas (LNG) and biofuels and participates in the development of next-generation alternative fuels such as hydrogen and ammonia through R&D cooperation. However, HMM also plans to use offsets to achieve its goals.
The company is focusing on efficiency gains by applying energy saving modifications and implementing operational adjustments. In 2021, HMM invested about 1% of its sales in eco-friendly research and technology, including the development of hydrogen fuel cells and technologies to produce biodiesel. The company also uses Alternative Maritime Power, an air quality programme that aims to reduce emissions from docked container ships, at several ports.
The company’s reported emissions intensity decreased by about 30% between 2017 and 2021, reaching 2.6 grams of carbon dioxide equivalent (gCO2e) per tonne-kilometre in 2021. This rate of decrease exceeded the rate required by the company’s 1.5°C pathway.
HMM’s ambition to decarbonise by 2050 is undermined by its lack of a comprehensive transition plan. The company’s plan lacks a detailed breakdown of essential actions, intermediate targets and financial commitment to increase the proportion of low-carbon vehicles in its fleet at the scale required by its net-zero goal.
No evidence was found of the company’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 low-carbon transition planning to mitigate the social impacts of the transition on workers, affected stakeholders and its business relationships. Additionally, no evidence was found to demonstrate the company’s engagement in social dialogue or engagement with stakeholders in its just transition planning.
No public commitment by the company 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 action 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 reskill and upskill workers displaced by the transition to a low-carbon economy. Additionally, no evidence was found that the company reskills and upskills workers in a way that ensures gender balance and inclusion of vulnerable groups.
No relevant disclosure was found to show if the company 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.
The company commits to respecting human rights and the ILO fundamental rights at work. However, no evidence was found within the company’s policy documents stating its expectation for its business relationships to respect all of the ILO fundamental rights at work. Furthermore, no evidence was found of the company’s process to identify, assess and mitigate salient human rights risks in its own operations and supply chain. The company does, however, disclose the stakeholders whose human rights have been affected by its activities. Additionally, it has a grievance mechanism available to workers and external stakeholders to report human rights concerns.
The company commits to respecting the health and safety of its workers and expects the same commitment from its business relationships. However, no evidence was found of the company committing to gender equality and women’s empowerment. The company can strengthen its disclosure on other key topics related to decent work as well, including living wage and working hours practices and collective bargaining and workforce diversity.
The company has a policy prohibiting bribery and corruption, and it includes corresponding clauses in its contracts with business relationships. However, no evidence was found within the company’s policy documents describing its tax strategy, nor its approach to lobbying. Furthermore, the company can strengthen its disclosure on personal data protection globally.