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Materiality Assessment

Double Materiality Assessment Process

Through the double materiality assessment, HL D&I Halla ultimately identified three key material topics that were assessed as highly material from both impact materiality and financial materiality perspectives. The overall assessment results showed trends similar to those of the previous year, confirming that the materiality of the key sustainability issues continuously managed by the Company remained consistent. The assessment identified worksite safety and health, quality management and customer satisfaction, and climate change response as key material topics with high materiality from both perspectives. These issues are incorporated into the Company’s sustainability strategy development and management decision-making. The Board of Directors and the Sustainability Management Committee also regularly review key risks and opportunities associated with each material topic and continuously monitor responses to major issues, including regulatory and market changes related to climate change, worksite safety management, and the enhancement of customer trust and quality competitiveness.

1) A score exceeding by 10% the average of all scores within each financial materiality and impact materiality assessment category

Double Materiality Assessment Results

Through the double materiality assessment, HL D&I Halla ultimately identified three key material topics that were assessed as highly material from both impact materiality and financial materiality perspectives. The overall assessment results showed trends similar to those of the previous year, confirming that the materiality of the key sustainability issues continuously managed by the Company remained consistent. The assessment identified worksite safety and health, quality management and customer satisfaction, and climate change response as key material topics with high materiality from both perspectives. These issues are incorporated into the Company’s sustainability strategy development and management decision-making. The Board of Directors and the Sustainability Management Committee also regularly review key risks and opportunities associated with each material topic and continuously monitor responses to major issues, including regulatory and market changes related to climate change, worksite safety management, and the enhancement of customer trust and quality competitiveness.

Changes in Material Topics Compared with the Previous Year

Rank Topic Classification hange from Previous Year
1 Worksite Safety and Health Key Material Topic -
2 Quality Management and Customer Satisfaction Key Material Topic -
3 Climate Change Response Key Material Topic -
4 Resource Circulation and Circular Economy Impact Materiality ▲3
5 Fair Trade Financial Materiality -
6 Sustainable Supply Chain Impact Materiality New

2026 Response Strategies for Key Material Topics

Topic Location of Occurrence Type1) Major IRO Response Strategy
Up Own Down
Worksite Safety and Health ● ● R

[External Factors] Stronger punitive measures under the government’s comprehensive occupational safety measures and the Serious Accidents Punishment Act, together with a substantive expansion of prime contractors’ responsibilities

[Financial Impact] Criminal liability for management, restrictions on bidding or contract awards, and increased costs due to project delays resulting from work suspensions following an accident

Centered on the ISO 45001-based safety and health management system and the BASIC strategy—Basic Compliance, Awareness of Risks, Information Sharing, Continuous Improvement, and Commitment to Accountability—the Company strengthens compliance with fundamental procedures, intensive management of high-risk work, regular inspections, and its accident prevention system.

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● ● P

[Business Activities] Identification of safety risks in advance and expansion of a preventive safety culture through systems such as the Smart Risk Assessment System

[Impact] Improvement of worksite safety and protection of the right to life

Through the Smart Risk Assessment System and safety information-sharing platform, the Company identifies and manages high-risk factors in advance and promotes an education- and prevention-centered safety culture.

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Quality Management and Customer Satisfaction ● R

[External Factors] Stronger quality management inspections and expansion of punitive administrative sanctions, including suspension of business operations, for serious defects

[Financial Impact] Reduced eligibility for prequalification and bidding restrictions, resulting in lower backlogs for public and private projects and financing risk

The Company regularly reviews quality management levels by process through company-wide quality audits and MINE quality inspections. It is also strengthening its construction quality management system by expanding Third-Party Inspections (TPI) and operating technical guidelines for quality construction.

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● ● N

[Business Activities] Failure to manage building quality and defects

[Impact] Loss of life and damage to the property and mental well-being of residents

Through EFETE TIME pre-occupancy quality inspections, the operation of inspection and testing management systems, and the introduction of a mobile construction management system, the Company proactively manages quality risks, prevents defects, and enhances customer satisfaction.

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Climate Change Response ● R

[External Factors] Stricter regulations and greater volatility in major construction material markets due to structural changes in the steel industry and increases in electricity rates

[Financial Impact] Increases in presale costs and construction expenses due to rising prices for major construction materials

The Company actively introduces materials made from recycled feedstock, recycled aggregates, recycled asphalt concrete, and recycled-content cement materials. It is also establishing a stable construction material supply system through support for subcontractors and stronger long-term partnerships.

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● ● P

[Business Activities] Implementation of decarbonization strategies, including the touchHL AI House Platform, which autonomously optimizes energy consumption

[Impact] Reduction of carbon emissions during the building-use phase

The Company promotes energy optimization and expands the foundation for household energy self-sufficiency through the introduction of the touchHL smart home service and solar power generation facilities.

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1) R: Risk / O: Opportunity / N: Negative Impact / P: Positive Impact