ESG Report 2022-2023 - Flipbook - Page 75
HIGHLIGHTS
INTRO
ESG MANAGEMENT SYSTEM
PRIORITY AREA
Hankook Tire & Technology ESG Report 2022/23
APPENDIX
75
Strategy
Disclose the impacts of climate-related risks and opportunities on the organization’s businesses, strategy, and financial planning
Climate-related Opportunities
Duration
Category
Short-term
Energy source
Mid-term
✓
Resource efficiency
Key Opportunity
Potential Opportunity
Potential Financial Impact
- Develop the Carbon Neutral roadmap and GHG emissions reduction strategies
Increasing profit from allowances trading
- Manage allowances and engage in strategic trading
Decreasing direct/indirect costs (operational - Build reduction track records through energy efficiency improvements and energy
expenses)
transition
- Review external reduction business development
Decreasing direct/indirect costs
(raw material purchase, waste treatment
expenses, etc.)
- Review investments in tire pyrolysis equipment and endeavor to reduce waste
- Participate in technology research through the TIP (Tire Industry Project)
- Improve process efficiency and yields
✓
✓
Participation in carbon markets
Use of low-carbon energy
- Creation of profit through the sales of excess allowances
- Profit-making opportunity through external reduction business development
- Decreasing energy costs through the efficient use of process energy
- Participating in renewable energy programs and using governmental subsidies
✓
✓
Efficient use of resources and recycling/
reuse
- Developing resource circulation technology (pyrolysis, end-of-life tire recovery, etc.)
- Improving raw material efficiency
Increasing profits from the rising demand
for eco-friendly/low-carbon products and
services
- Develop and produce EV-exclusive tires and launch brands
- Develop and apply eco-friendly product technology (lightweight, improved rolling
resistance)
- Manage the carbon footprint of products through LCAs
- Continue with efforts for new business investments/discoveries and business
diversification
Increasing return on investment through
securing new technology
- Conduct R&D on bio-based raw materials (silica extracted from rice husks and
materials extracted from dandelions)
- Secure low-carbon raw material technology (preemptively discover sustainable raw
materials)
Opportunity
Markets, products, and
services
✓
✓
Rising demand for low-carbon products and - Facilitating the EV product market through EV transition
services
- Gaining comparative advantages by reducing products’ carbon footprint
Creation of an eco-friendly business
- Discovering new businesses through business diversification
Resiliency
✓
✓
Securing and diversifying alternative
resources
- Developing eco-friendly raw materials and securing technology
Describe the resilience of the organization’s strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario
We assessed Hankook Tire & Technology’s transition risks and physical risks caused by climate change with reference to the IAE’s SDS and RCP8.5.
CDP Mapping ― C3.2a, 3.2b, C3.3, C3.4
IEA SDS (Sustainable Development Scenario)
The Sustainable Development Scenario(SDS) proposed by the IEA adheres to the “Well below 2°C” pathway that represents a gateway to the outcomes targeted by the Paris Agreement. This scenario presumes
that net zero emissions will be achieved by advanced economies by 2050, by China by 2060, and by 2070 for other world economies. This scenario is consistent with limiting the global temperature rise to 1.65°C
with a 50% probability. The SDS sets parameters such as country-specific economic growth rates, changes in the energy mix, fossil fuel prices, and future carbon prices for each scenario and provides policy
assumptions and costs for each core technology to achieve the set scenarios. We focused on examining prospects and policy advice for the energy mix, carbon pricing and transport that are most closely associated
with our business. The analysis results were integrated into the implementation strategy, vision, and reduction target of our Carbon Neutral roadmap. These results revealed that the most direct impact stems from
GHG emissions reduction regulations (e.g. Emissions Trading System). By 2030 and beyond, carbon prices are forecast to be USD 160 per ton in advanced economies and USD 95 in developing nations. If Hankook
Tire & Technology continues our business as usual with our same level of GHG emissions, our expenses will be more than triple or quadruple our current costs. This urged us to prioritize worksites subject to the
emissions trading system (Korea, Hungary) in developing and implementing plans to opt for renewable energy while reducing energy consumption and GHG emissions. We regularly update our Carbon Neutral
roadmap, and its implementation performance is managed through the ESG Strategy Committee and the Climate Change Committee.
CDP Mapping ― C3.2a, 3.2b, C3.3, C3.4
Response and Plan
CDP Mapping
Long-term
C2.4, C2.4a
RCP (Representative Concentration Pathways) 8.5
The Representative Concentration Pathway (RCP) 8.5 was proposed in the IPCC’s 5th Assessment Report under the
assumption that GHG emissions will continue at the current level: this scenario predicts that human activity will cause CO2
concentrations to reach 940ppm by the end of the 21st century (2070 – 2099), with the average global temperature
rising by 4.8ºC and precipitation by 6.0%. If the RCP 8.5 is realized in Korea, Korea’s average temperature will increase
by 6.0ºC and precipitation by 20.4%, indicating Asia’s relative vulnerability to climate change compared to the rest of
the world. Presently, we operate eight plants, five of which are located in Asia. Extreme weather conditions (torrential
downpours, typhoons, heat waves) may damage our production and infrastructure facilities and cause disruptions to the
raw material supply. In particular, natural rubber presents the largest potential risk as it is mostly imported from Southeast
Asia and assumes the highest share of the total tire raw material purchase value. As such, we set our mid/long-term goal
for the sustainable use of raw materials and reflected this goal in our Carbon Neutral roadmap. We engage in R&D to
develop alternative raw materials along with our activities as a member of the GPSNR (Global Platform for Sustainable
Natural Rubber), and key tasks are managed through the Product Environment Committee. We also examine leaks and
conduct repairs regularly each year and strengthen safety training to build emergency preparedness to brace for any
damage that may occur due to torrential downpours or other abnormal weather events.
※ For further details on Hankook Tire & Technology’s Carbon Neutral roadmap, refer to p.4 of the ESG Report 2021/22
CDP Mapping ― C3.2a, 3.2b, C3.3, C3.4