Case study: How Hyundai promotes effective environmental, health and safety management among its suppliers
As a leading global automaker, pioneering the development of the automobile industry in Korea, Hyundai seeks to achieve win-win growth with its suppliers Tweet This!, as it believes that their competitiveness provides the basis for Hyundai’s own competitiveness. Promoting the sustainability of its supply chain is, thus, a key priority.
This case study is based on the 2017 Sustainability Report by Hyundai published on the Global Reporting Initiative Sustainability Disclosure Database that can be found at this link. Through all case studies we aim to demonstrate what CSR/ 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
Abstract
In the automotive industry, suppliers provide an automaker with 95 per cent of parts used in building finished cars. Promoting social and environmental sustainability among its suppliers is, thus, highly important for Hyundai in achieving sustainable growth in partnership with its stakeholders. In order to promote effective environmental, health and safety management among its suppliers Hyundai took action to:
- help suppliers achieve operational safety
- provide support and training to suppliers on environmental, health and safety management
- promote energy efficiency among suppliers
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With this case study you will see:
- Which are the most important impacts (material issues) Hyundai has identified;
- How Hyundai proceeded with stakeholder engagement, and
- What actions were taken by Hyundai to promote effective environmental, health and safety management among its suppliers
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What are the material issues the company has identified?
In its 2017 Sustainability Report Hyundai identified a range of material issues, such as product and service quality, improving financial stability, labour-management relations, ethics/compliance management, developing eco-friendly products. Among these, promoting effective environmental, health and safety management among its suppliers stands out as a key material issue for Hyundai.
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 s 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 Hyundai engages with:
To identify and prioritise material topics Hyundai engages with its stakeholders through the following channels:
| Stakeholder Group | Method of engagement |
| Customers/Dealers
| · Motor show and new car launching ceremony · Test driving · Sports sponsorship · Customer service · Customer satisfaction survey · Car club · Before Service · Website · On-line communication · Dealer seminar/conventions/events · Agent conventions · My Car Story 2.0 · Stakeholder interviews · Reports (financial reports, sustainability reports, etc.) |
| Employees
| · Labor-Management Council · Occupational Safety and Health Committee · Internal publications · Newsletters · Employee satisfaction surveys · WorkSMART assessments · Health & safety systems · Websites · Stakeholder interviews · Sustainability reports · Roundtable meetings · Management workshops · Lunch meetings · Grievance counseling · Suggestion Box · Home correspondence · Events with employee families · Sports events |
| Suppliers | · Win-win growth and fair trade agreement · Foundation of Korea Automotive Parts Industry Promotion · Seminar and training for suppliers · Stakeholder interview · Energy-Saving Technology · Exchange Meeting · R&D Tech Day · R&D symposium · R&D Motor Show · Purchasing portal · Reports |
| Shareholders/Investors | · Annual general meeting · Corporate Governance & Communication Committee · Company briefing · IR meetings · Website · Reports |
| Society | · Communication with local communities near worksite · Youth support program · Website · Stakeholder interview · Reports |
| Government | · Participation in policy-making public hearings · Participation in policy discussions and briefings · Website · Stakeholder interview · Reports |
What actions were taken by Hyundai to promote effective environmental, health and safety management among its suppliers?
In its 2017 Sustainability Report Hyundai reports that it took the following actions for promoting effective environmental, health and safety management among its suppliers:
- Helping suppliers achieve operational safety
- Hyundai recommends its suppliers to achieve the OHSAS (Occupational Health and Safety Management System) 18001 certification to prevent or manage risks related to production operations, and apply a voluntary safety and health management system. Additionally, Hyundai encourages suppliers to achieve ISO (International Organization for Standardization) 22301 certification, so as to respond to accidents and disasters in a systematic way, and, also, to nominate a disaster management officer.
- Providing support and training to suppliers on environmental, health and safety management
- Hyundai’s Ulsan Plant implements an education support program for tier 1 suppliers in the Youngnam region regarding the environment, safety and health. In 2016, 57 people from 47 companies voluntarily participated in the program. The program provided information on, among others, how to respond to safety accidents, on-site accident investigation techniques, and chemicals management at Hyundai. In addition, the Asan Plant offers its suppliers technical support in the environment, health and safety areas. In 2016, it also provided technical guidance to 20 external suppliers on regulatory issues, facility management, legal compliance and chemicals management.
- Promoting energy efficiency among suppliers
- Hyundai has been implementing, since 2012, the ‘Energy-Saving Technology Exchange Meeting’. This program helps suppliers better manage energy use, grow sustainably and become self-reliant. In 2016, 33 suppliers participated in the program. They shared their energy-saving success stories and related technological information.
Which GRI Standards and corresponding Sustainable Development Goals (SDGs) have been addressed?
The GRI Standards addressed in this case are:
1) Disclosure 308-2 Negative environmental impacts in the supply chain and actions taken
2) Disclosure 414-2 Negative social impacts in the supply chain and actions taken
Disclosure 308-2 Negative environmental impacts in the supply chain and actions taken does not correspond to any SDG.
Disclosure 414-2 Negative social impacts in the supply chain and actions taken corresponds to:
- Sustainable Development Goal (SDG) 5: Achieve gender equality and empower all women and girls
- Business theme: Workplace violence and harassment
- Sustainable Development Goal (SDG) 8: Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all
- Business theme: Labor practices in the supply chain
- Sustainable Development Goal (SDG) 16: Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels
- Business theme: Workplace violence and harassment
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References:
1) This case study is based on published information by Hyundai, 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 original on the Global Reporting Initiative’s Sustainability Disclosure Database at the link:
http://database.globalreporting.org/
2) http://www.fbrh.co.uk/en/global-reporting-initiative-gri-g4-guidelines-download-page
3) https://g4.globalreporting.org/Pages/default.aspx
4) https://www.globalreporting.org/standards/gri-standards-download-center/
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