HD Hyundai Shipbuilding Division to Collaborate on Supply Chain ESG Management

HD Hyundai Shipbuilding 4 Companies and Jungjin Gonggong
Sign Joint Agreement for Supply Chain ESG Collaborative Response

Sea trial of the 174K LNG carrier built by HD Hyundai Heavy Industries and delivered last year. Photo by HD Hyundai Heavy Industries

HD Hyundai's shipbuilding affiliates are joining forces with the Small and Medium Business Corporation (SBC) to strengthen the ESG (Environmental, Social, and Governance) competitiveness of their partner companies.

On the 25th, four HD Hyundai shipbuilding affiliates?HD Hyundai Heavy Industries, Hyundai Mipo Dockyard, Hyundai Samho Heavy Industries, and HD Hyundai Global Service?signed a "Business Agreement for Joint Response to ESG Supply Chain of Small and Medium Enterprises in the Shipbuilding Industry" with SBC at the HD Hyundai Pangyo Global R&D Center (GRC) in Seongnam, Gyeonggi Province.

The signing ceremony was attended by each company's Chief ESG Officers, including Ryu Hee-jin, ESG Executive of HD Hyundai Heavy Industries; Seo Heung-won, Head of Production at Hyundai Mipo Dockyard; Han Jeong-dong, Head of Safety and Management Support at Hyundai Samho Heavy Industries; Kim Jeong-hyuk, Head of Management Support at HD Hyundai Global Service; as well as Kim Moon-hwan, Head of Innovation Growth at SBC.

This agreement was established to enhance the ESG capabilities of small and medium enterprises operating in the shipbuilding industry amid the increasing importance of ESG management in supply chains, following the enforcement of the EU's so-called "Supply Chain Due Diligence Act," officially known as the EU Corporate Sustainability Due Diligence Directive (EU CSDDD).

As the importance of ESG management in supply chains has become prominent, many large domestic companies are actively conducting ESG evaluations of their partner companies and preparing support measures to mitigate risks. However, small and medium enterprises face significant challenges in practicing ESG management and responding to large companies' ESG evaluations due to limited personnel and budget constraints.

In this context, the four HD Hyundai shipbuilding affiliates plan to jointly select overlapping partner companies as a priority to conduct ESG evaluations and provide support for improvements, thereby reducing the burden on partner companies and minimizing inefficiencies within the group. The HD Hyundai shipbuilding division intends to continue collaborating in areas where joint responses are possible to maximize synergy among group affiliates.

Following this agreement, SBC will support ESG level assessments for about 100 partner companies of HD Hyundai's shipbuilding division and provide professional consulting based on the assessment results to help improve any deficiencies. Additionally, the four HD Hyundai shipbuilding affiliates plan to design and operate various partner support programs, such as offering low-interest loans through a co-growth fund and supporting the replacement of high-efficiency equipment for ESG-excellent partner companies.

An HD Hyundai representative stated, "As supply chain ESG management enters the realm of regulation, more systematic management has become necessary. We will prepare in a way that minimizes the burden on partner companies while maximizing the expertise and efficiency of shipbuilders to enhance the overall ESG competitiveness of the shipbuilding industry."

This content was produced with the assistance of AI translation services.