Case study: How Hankook Tire & Technology creates economic value for its stakeholders
Hankook Tire & Technology, established as Korea’s first tire maker in 1941, has 8 global production bases located in Korea, China, the US, Hungary and Indonesia, which manufacture 102 million high-quality tires each year to serve more than 180 countries, solidifying its status as a true global tire maker. Hankook Tire & Technology effectively distributes the economic, social and environmental value created throughout its entire value chain Tweet This!, in order to pursue sustainable growth for all.
This case study is based on the 2020/21 ESG Report by Hankook Tire & Technology, prepared in accordance with the GRI Standards, that can be found at this link. Through all case studies we aim to demonstrate what CSR/ ESG/ sustainability reporting done responsibly means. Essentially, it means: a) identifying a company’s most important impacts on the environment, economy and society, and b) measuring, managing and changing.
Abstract
Hankook Tire & Technology seeks to fulfill its social responsibilities based on sustainability, generating sustainable, long-term value for all its stakeholders. In order to create economic value for its stakeholders Hankook Tire & Technology took action to:
- create economic value for employees
- create economic value for raw material suppliers
- create economic value for the government
- create economic value for shareholders
Subscribe for free and read the rest of this case study
Please subscribe to the SustainCase Newsletter to keep up to date with the latest sustainability news and gain access to over 2000 case studies. These case studies demonstrate how companies are dealing responsibly with their most important impacts, building trust with their stakeholders (Identify > Measure > Manage > Change).
With this case study you will see:
- Which are the most important impacts (material issues) Hankook Tire & Technology has identified;
- How Hankook Tire & Technology proceeded with stakeholder engagement, and
- What actions were taken by Hankook Tire & Technology to create economic value for its stakeholders
Already Subscribed? Type your email below and click submit
What are the material issues the company has identified?
In its 2020/21 ESG Report Hankook Tire & Technology identified a range of material issues, such as expanding R&D investments and reinforcing capabilities, developing a sustainability management system and expanding communication, implementing safety accident prevention and health management, developing products and services for customer safety & health, developing eco-friendly products and minimising environmental impact during product use/disposal phase. Among these, creating economic value for its stakeholders stands out as a key material issue for Hankook Tire & Technology.
Stakeholder engagement in accordance with the GRI Standards
The Global Reporting Initiative (GRI) defines the Principle of Stakeholder Inclusiveness when identifying material issues (or a company’s most important impacts) as follows:
Stakeholders must be consulted in the process of identifying a company’s most important impacts and their reasonable expectations and interests must be taken into account. This is an important cornerstone for CSR / sustainability reporting done responsibly.
Key stakeholder groups Hankook Tire & Technology engages with:
| Stakeholder Group | Method of engagement |
| Shareholders & Investors
| · BOD · General shareholder meeting · Overseas conferences · IR |
| Customers (car makers, general customers and dealers)
| · Technology exchanges, exhibitions and fairs · Sustainability assessments · Dealer discussion meetings · Customer satisfaction centres |
| Employees
| · Labour-management council · Discussion meetings and grievance handling mechanisms · Organisational immersion surveys · Intranet · Internal idea suggestion system · Proactive Concert |
| Local Communities
| · Discussion meetings with locals · Discussion meetings with local public offices and NGOs · Compile complaints from local communities |
| Suppliers
| · Regular supplier assessments, quality and ESG training · Partner’s Day · Purchasing portal (HePS) |
How stakeholder engagement was made to identify material issues
To identify and prioritise material topics Hankook Tire & Technology engaged with its stakeholders through a survey and interviews.
What actions were taken by Hankook Tire & Technology to create economic value for its stakeholders?
In its 2020/21 ESG Report Hankook Tire & Technology reports that it took the following actions for creating economic value for its stakeholders:
- Creating economic value for employees
- In 2020, Hankook Tire & Technology paid KRW 493.4 billion for employee wages.
- Creating economic value for raw material suppliers
- In 2020, Hankook Tire & Technology spent KRW 1.9407 trillion in raw material purchases.
- Creating economic value for the government
- In 2020, Hankook Tire & Technology paid KRW 193.1 billion in corporate tax.
- Creating economic value for shareholders
- In 2020, Hankook Tire & Technology paid KRW 79.3 billion in dividends.
Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?
The GRI Standard addressed in this case is: Disclosure 201-1 Direct economic value generated and distributed
Disclosure 201-1 Direct economic value generated and distributed corresponds to:
- Sustainable Development Goal (SDG) 8: Decent Work and Economic Growth
- Targets: 8.1, 8.2
- Sustainable Development Goal (SDG) 9: Industry, Innovation and Infrastructure
- Targets: 9.1, 9.4, 9.5
78% of the world’s 250 largest companies report in accordance with the GRI Standards
SustainCase was primarily created to demonstrate, through case studies, the importance of dealing with a company’s most important impacts in a structured way, with use of the GRI Standards. To show how today’s best-run companies are achieving economic, social and environmental success – and how you can too.
Research by well-recognised institutions is clearly proving that responsible companies can look to the future with optimism.
7 GRI sustainability disclosures get you started
Any size business can start taking sustainability action
GRI, ISEP, CPD Certified Sustainability courses (2-5 days): Live Online or Classroom (venue: London School of Economics)
- Exclusive FBRH template to begin reporting from day one
- Identify your most important impacts on the Environment, Economy and People
- Formulate in group exercises your plan for action. Begin taking solid, focused, all-round sustainability action ASAP.
- Benchmarking methodology to set you on a path of continuous improvement
See upcoming training dates.
References:
This case study is based on published information by Hankook Tire & Technology, located at the link below. For the sake of readability, we did not use brackets or ellipses. However, we made sure that the extra or missing words did not change the report’s meaning. If you would like to quote these written sources from the original please revert to the following link:
Note to Hankook Tire & Technology: With each case study we send out an email requesting a comment on this case study. If you have not received such an email please contact us.