South Korea’s top automaker Hyundai Motor Group is working on new standards that will require stricter ESG compliance from its partners. The new contract for subcontractors will be applied from 2025 under which the partners will be required to comply with strengthened ESG rules, including a higher renewable energy use rate, workforce diversity, the protection of local residents’ rights and specific timelines to meet greenhouse gas reduction goals.
The new contract will initially apply to the primary partners and will gradually be extended to second and third-tier contractors. As per sources, two car-making units of the group, Hyundai Motor Co. and Kia Corp., have recently notified their partners of the conglomerate’s decision.
Hyundai Motor Group has around 5,000 partners, including 300 primary contractors. One of Hyundai’s suppliers informed that their contract may not be renewed next year if their ESG score goes below 70 out of 100.