Primary: Environmentally friendly R&D for low-carbon textile and heavy industry products Hyosung invested KRW 14.3 billion in R&D in 2024, of which KRW 17.3 billion was related to environmentally friendly products (note: document states 14.3 billion total R&D with 17.3 billion eco-friendly R&D - this appears to be an error in source). Key eco-R&D includes: recycled polyester/nylon yarn technologies, bio-based spandex from fermented corn, chemical recycling pilot technology for waste fabric, and environmentally friendly high-voltage equipment (ester oil transformers replacing mineral oil, eco-friendly gas insulated switchgear replacing SF6 at 23,900 kgCO2eq/kgSF6 with Novec Mixture gas at ~500 kgCO2eq). In 2025, eco-R&D budget planned at 1.3x 2024 level.
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Primary: Korea ETS compliance and internal carbon pricing Hyosung is subject to Korea ETS (K-ETS) Phase 3 (2021-2025) covering 100% of Scope 1 and 2 emissions. An internal shadow carbon price is set annually in October based on KAU trading market closing prices: KRW 25,700 (2023), KRW 14,000 (2024), KRW 12,150 (2025). The price is applied to capital expenditure, operations, risk management, and opportunity management decisions. In 2024, Hyosung's emissions (29,477 tCO2) were below allocated credits (37,695 tCO2), generating KRW 12.1 million from surplus allowance sales. The company also holds 122,054 KOC credits from CDM projects convertible through 2029.
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Dependent: Supply chain GHG reduction consulting and facility support Hyosung provides energy diagnosis consulting to suppliers to identify energy loss reduction methods. In 2024, 26 suppliers accounting for 95% cumulative production purchase amount were managed for environmental compliance. 18 out of 26 were re-evaluated; Hyosung supported LED lighting replacement for major raw material suppliers expected to reduce annual electricity by 14 MWh and GHG by 6.5 tonnes. Suppliers rated A receive energy reduction facility replacement cost support. ESG management education and consulting is provided to lower-rated suppliers. Supplier code of conduct includes environmental requirements equivalent to ISO 14001 level.
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Dependent: Recycled and bio-based material products to reduce customer Scope 3 emissions Hyosung develops and sells recycled automotive carpets (BCF yarn products) using recycled PET bottles (Recycled Polyester pos), recycled fishing net nylon (Recycled Nylon pos/pre), and bio-based polyester materials. In 2024, recycled product sales reached KRW 5,901 million (40% YoY increase). LCA calculations per ISO 14040/14044 show 0.36 kgCO2/m2 avoided emissions for recycled polyester vs conventional and 2.83 kgCO2/m2 for recycled nylon carpets vs conventional. GRS certification obtained. In 2024, sales of recycled products avoided 22 tCO2 (polyester) + 143 tCO2 (nylon) = 165 tCO2 of customer Scope 3 emissions.
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Dependent: Seagrass blue carbon sequestration project Hyosung collaborates with Korea Fisheries Resources Agency and local governments to create seagrass forests as blue carbon sinks. In 2022-2023, 10,000 seagrass seedlings were transplanted across 0.44 hectares near Dadae-Dapo Port, fixing 1.43 tCO2 annually per activity reports. Starting in 2024, Hyosung and affiliates are planting 40,000 seagrass seedlings and creating marine forest with seaweed across 159 hectares in Wando-gun, scheduled for completion by 2027. This supports Korea's Paris Agreement commitments and the establishment of marine absorption source business.
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Spin-off of HS Hyosung Corporation reduces reporting boundary On July 1, 2024, Hyosung Corporation was divided into surviving company and newly established HS Hyosung Corporation. Hyosung Advanced Materials Corp. and Hyosung Transworld Corp. moved to HS Hyosung boundary. Transworld emissions only included Jan 1 to June 30, 2024 (25 tCO2eq). Reduction of 26 tCO2eq vs 2023 attributed to divestiture.
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Scope 3 emission coefficients updated and boundary changed When calculating Scope 3, emission coefficients were updated compared to the previous year. Also, Hyosung Transworld Corp. was excluded from the organizational boundary from July 1, 2024 onwards, reducing Scope 3 boundary.
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Scope 3 verified at limited assurance; Scope 1&2 at reasonable assurance Scope 1 and 2 emissions verified at reasonable assurance (100%) under Korean GHG and energy target management system by third party. Scope 3 emissions verified at limited assurance under ISO 14064-3. Sustainability management report verified under AA1000AS at limited assurance.
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Photovoltaic power generation, domestic third-party PPA and REC purchasing plan Hyosung currently has 0% renewable energy consumption. For reductions that are challenging to achieve solely through internal energy saving efforts, Hyosung plans a long-term approach through building photovoltaic power generation facilities and purchasing domestic third-party PPAs and RECs produced with new and renewable energy. The company intends to gradually increase the proportion of renewable energy in its operations. Once REC purchases and PPA contracts are implemented, market-based Scope 2 reporting will be adopted. In 2025, plans include target of 20% GHG reduction vs 2019 aligned with Hyundai Motor/Kia Motors goals, partially through renewable energy (solar) generation.
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Primary: Manufacturing energy efficiency improvements at Anyang Plant Hyosung annually devises and executes a facility investment plan for energy reduction with a dedicated budget. In 2024, the Anyang Plant implemented 8 energy efficiency initiatives achieving 790 tCO2eq in reductions, including replacement of air compressor cooling water pump (159 tCO2eq), normalization of 600HP turbo compressor (149 tCO2eq), boiler waste heat recovery system (161 tCO2eq), refrigerated dryer upgrades (189 tCO2eq combined), and process optimization. Electricity from electricity use accounts for ~70% of total emissions (Scope 2 is ~70% of S1+S2). KRW 5 billion planned over 2023-2030.
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