"‘If Climate Response Fails, Sustainable Management Impossible’ [Climate Risks Hitting Companies]"

Increase in Climate Risk Proportion in Sustainability Reports
Manufacturing and Transportation Companies Pay Special Attention
Kumho Petrochemical Analyzes Risks by Disaster and Workplace
HMM CEO Directly Manages Climate Risks

Kumho Petrochemical recently attracted attention by including detailed climate change-related risks for each business site in its sustainability management report. It is unusual to evaluate the impact on individual business sites by assuming temperature increases due to carbon emissions under different scenarios.

On the 24th, Asia Economy analyzed sustainability management reports recently released by major domestic conglomerates and found that content related to climate risks has increased.

In its report, Kumho Petrochemical presented risk scenarios that could occur if the global average temperature rises within 2℃ and above 4℃, respectively, and assuming greenhouse gases continue to be emitted at the current rate, it evaluated that the current risk and level of change at the Yeosu Rubber Plant 2 are the highest. In addition to temperature, it also disclosed more detailed risks for disasters such as heavy rain, typhoons, heatwaves, floods, and droughts.

HMM, the only domestic national shipping company, launched an internal risk management council last year chaired by the CEO to respond to climate risks. Due to the nature of maritime transport, which is greatly affected by weather phenomena, HMM anticipates increases in both the intensity and frequency of abnormal weather events and has begun analyzing and managing their impact on key assets.

Companies are becoming more proactive in managing climate risks because it is closely related to their survival. Companies that struggle to respond to risks are not chosen by their customers. Hyundai Mobis mentioned the European Union (EU) carbon border tax in its sustainability management report, stating, "The business impact is even greater as it is included in the order requirements from global customers located in regulated countries."

Hyundai Mobis has set performance indicators such as renewable energy transition rates and greenhouse gas reduction as key performance indicators (KPIs) for each division and plans to link them to evaluations of individual organizations and executives. HL Mando, an automotive parts company, plans to reflect environmental performance such as greenhouse gas reduction in executive compensation.

An industry official said, "In a situation where the risk of natural disasters has increased, climate response is a matter of survival," adding, "We are closely analyzing and responding to climate issues that are feasible around our business sites."