Hyundai Rotem earns A+ ESG rating for 3rd consecutive year, conducts on-site audits of 56 suppliers

Hyundai Rotem said Thursday it received an integrated A+ (very excellent) rating in the Korea Institute of Corporate Governance and Sustainability's "2026 ESG Evaluation and Rating Disclosure Results for Listed Companies."

The company first received the integrated A+ rating in 2024 and has maintained it for three consecutive years. Hyundai Rotem said it had faced challenges in the environmental and social categories given its business structure, which includes defense, but had achieved improvements in both areas.

On the environmental front, the company cited in-house renewable energy production and the introduction of an internal carbon pricing system as key achievements. Hyundai Rotem completed the installation of a 640-kilowatt solar power facility at its Changwon factory — a core production site — in December last year.

The internal carbon pricing system, introduced at the same time, requires that carbon costs be factored into reviews of new investments of 500 million won ($372,000) or more. Under the system, the carbon emissions a given investment may generate are calculated as a cost and incorporated into decision-making. Hyundai Rotem codified the system by revising its investment budget management policy.

Water pollutant discharges at the Changwon factory also declined. Last year, biochemical oxygen demand fell 11 percent from the previous year, total organic carbon dropped 14 percent, and suspended solids decreased 39 percent.

In the social category, the company focused on supply chain management. Since last year, Hyundai Rotem has operated a supply chain sustainability management policy to address ESG risks across its supply chain, including those of its partner companies. The policy covers risk prevention and monitoring, as well as ESG education for suppliers.

Under the policy, Hyundai Rotem conducted ESG assessments of 150 major suppliers last year. For the 56 that required improvement, the company carried out on-site audits, collected remediation plans and is monitoring whether those plans are being carried out.

The company also revised its standard overseas procurement contracts, adding clauses on human rights, labor, environmental and ethical compliance to agreements that had previously focused on price, delivery and quality — formalizing ESG standards for overseas suppliers. In the area of social contribution, the company publicly disclosed its targets through 2030.

In the governance category, the establishment of an independent board and the enactment of a sustainability disclosure policy were highlighted as achievements. Hyundai Rotem established an independent board through a board resolution in November last year. In December last year, it enacted a sustainability disclosure policy to manage ESG-related management strategies, targets and performance. The board regularly reviews agenda items related to climate change and environmental management.

In June, Hyundai Rotem also received a Silver Medal rating for the first time from EcoVadis, a global ESG rating agency.

"We will continue to fulfill our responsibilities in building a sustainable industrial ecosystem with our suppliers and all other stakeholders," a Hyundai Rotem official said.

Meanwhile, Hyundai Rotem held its "2026 Hyundai Rotem Partners Day" at Haevichi Hotel & Resort in Seogwipo, Jeju, on Friday and Saturday. Partners Day is an event Hyundai Rotem holds to strengthen trust with key suppliers by exchanging ideas on mutual cooperation and shared growth. The event has been held annually since 2005, and this year drew representatives from 100 supplier companies along with the company's top executives, including President and Chief Executive Officer Lee Yong-bae.