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Sustainability Management Strategy and System

Sustainability Management Governance

HL D&I Halla regards sustainability management as a core value of corporate operations and is strengthening its decision-making system across environmental, social, and governance (ESG) areas. To this end, the Company reorganized the Integrity Management Committee into the Sustainability Management Committee in October 2024 and strengthened its management and oversight functions for major sustainability issues. The Sustainability Management Committee consists of three outside directors. Based on their independence and expertise, the Committee conducts in-depth discussions on the Company’s sustainability issues and approves the strategic direction for major sustainability management matters. The Committee also reviews progress across sustainability management, including environmental and social responsibility and compliance with ethics and fair trade. In addition, it plays a pivotal role in strengthening HL D&I Halla’s management transparency and accountability by overseeing risk management matters, including the prior review of internal transactions among affiliates. Centered on the Sustainability Management Committee, HL D&I Halla will enhance the execution of sustainability management and establish a sustainable growth framework grounded in stakeholder trust.

Sustainability Management Organizational Structure and Key Roles

Sustainability Management Promotion Process

Step 1
  • Identify annual sustainability management goals and action items
Step 2
  • Finalize sustainability management KPIs and report them to the Board of Directors
  • Establish plans by sustainability management area and implement detailed tasks
Step 3
  • Review and monitor the implementation of sustainability management KPIs
    (First half/second half)
Step 4
  • Publish the Sustainability Report for sustainability management (ESG) disclosures
Step 5
  • Review goal achievement by sustainability management area and the implementation status of detailed tasks
Step 6
  • Report annual sustainability management performance to the Board of Directors
  • Award departments with outstanding KPI performance

Sustainability-related Agenda Items Reviewed by the Board of Directors

Meeting Date Agenda Item Status
2025.02.06 Report on the evaluation results of the Board of Directors’ activities in 2024 Reported
Approval of the 2025 safety and health plan Approved
2025.02.24 Report on major environmental performance in 2024, including greenhouse gas emissions, waste, and water usage Reported
Approval of the 2025 sustainability management promotion plan, including climate change response Approved
2025.04.30 Approval of the ESG materiality assessment results and the Consumer and Supplier Policies Approved
2025.08.08 Report on the publication of the Sustainability Report and ESG performance Reported
Report on the EFETE Customer Service Reported
2025.10.30 Report on environmental performance in 2025, including greenhouse gas emissions Reported
2026.02.25 Report on the ESG materiality assessment and opportunity and risk factors Reported

ESG Approach: Strengthening the Board’s Sustainability Leadership

  • HL D&I Halla incorporates a management review procedure into the process of selecting impacts, risks, and opportunities (IROs) for each material topic to strengthen the Board of Directors’ sustainability leadership and enhance the connection between sustainability strategies and business activities. Through this process, the Company has established a framework that enables management strategies and sustainability strategies to be organically integrated at the company-wide level. Identified material opportunities and risk factors are reported to the Board, allowing the final IROs reflecting the characteristics of HL D&I Halla’s business to be selected. Based on the results of the materiality assessment, the Board directly reviews sustainability strategy implementation plans and monitors the level of execution. In this way, HL D&I Halla ensures that the results of materiality assessments are substantively reflected in the formulation and implementation of sustainability strategies. Going forward, HL D&I Halla will continue to strengthen Board-centered sustainability governance and advance an integrated sustainability management system encompassing not only issue identification but also strategic execution and performance management.

Sustainability Management Organizational Structure and Operational Process

HL D&I Halla operates a dedicated sustainability management organization directly under the Chief Safety Officer (CSO) to promote sustainability management systematically. Centered on the Green Management Team, which is responsible for sustainability management operations, the Company has established an ESG Working Council. Relevant departments closely discuss major sustainability issues, including climate change response, safety and health, supply chain management, labor and human rights, and consumer protection, and develop implementation measures.

Management Responsibilities by Department within the ESG Working Council

Sustainability Area Department in Charge Key Management Issues
Environment Green Management Team
  • Climate change
  • Environmental performance management
  • Environmental management
Eco-friendly Technology Tech Lab
  • Development of new construction technologies and construction methods
  • Development of eco-friendly green technologies
Safety & Health Safety & Health Team
  • Safety and health policies
  • Safety and health performance management
  • Accident investigation and recurrence prevention measures
Supply Chain Shared Growth Team
  • Win-win partnerships with subcontractors
Outsourcing Procurement Team
  • Procurement managemen
Labor/Human Rights/Social Contribution HR Team
  • Labor and human rights management
  • Talent development
  • Community development
Consumer Marketing Team
  • Customer satisfaction
  • Quality management
  • Marketing and labeling/provision of information
  • Damage compensation
Information Security Digital Innovation Team
  • Information protection
Integrity Management Internal Control
  • Ethics and anti-corruption
  • Operation of the corruption prevention system
Governance Management Strategy Team
  • Board of Directors
  • Shareholder management
  • Non-financial risk management
  • Business performance and innovation
  • Stakeholder communication

Sustainability Management Promotion Strategy

HL D&I Halla has linked the Group’s core values of Integrity, Frontier, and Together with material sustainability topics to establish nine sustainability management promotion strategies. Across the organization, HL D&I Halla shares two goals: achieving sustainable growth throughout business operations and fulfilling its social responsibilities. The Company strives to realize its vision of “STRIDE for Higher Life.”

HL D&I Halla Core Values and Goals and Performance by ESG Action Item

Vision : STRIDE for Higher Life

Slogan : Valuable Movement for a Better World

Core Values Sustainability Management Promotion Strategies Long-term Goals KPI 2025 Performance 2030 Goals
FRONTIER
FRONTIER 		Climate Change Response Advanced management and reduction of greenhouse gas emissions based on SBTi criteria compared to the base year Greenhouse gas reduction rate - 42%
Eco-friendly Worksite Management Zero environmental accidents to minimize environmental impact at all worksites Number of environmental accidents 0 cases 0 cases
Achievement of a 99% waste recycling rate Waste recycling rate 100% 100%
Expansion of Low-carbon, Eco-friendly Portfolio Continuous expansion of eco-friendly products and technologies, including eco-friendly buildings and technologies Number of eco-friendly products and technologies, cumulative 5 cases 5 cases
TOGETHER
TOGETHER 		Strengthening Safety Management Achievement of a zero employee industrial accident rate Industrial accident rate 0.40% 0%
Achievement of zero workplace fatalities Number of fatalities 0 persons 0 persons
Achievement of a zero lost-time injury rate Lost-time injury rate 0.85% 0%
Expansion of Human Rights Management Expansion of the scope of continuous human rights impact assessments by more than 90% Scope of Human Rights Impact Assessment 8 worksites All worksites
Strengthening the Sustainable Value Chain and Stakeholder Communication On-site due diligence on sustainable supply chain management On-site inspection 4 worksites 50% of subcontractors
Implementation of socially responsible management through sustainable social contribution activities Participation time in social contribution activities 743 hours 650 hours
Implementation of socially responsible management through biodiversity-related social contribution activities Biodiversity-related social contribution activities 1 case 2 case
INTEGRITY
INTEGRITY 		Sustainable Activities of the Board of Directors Strengthen ESG operations through effective Board communication Number of ESG agenda items reported to the Board 5 cases 4 cases
Integrated Risk Management Establish and embed an enterprise-wide risk management system for sustainable growth Establishment of an integrated ESG information system - System established
Strengthening Ethics and Compliance Management Achieve 100% internal control monitoring for transparent management Inspection completion rate - 100%

2025 Sustainability Management Special Highlights

CDP Water Security

Achieved an A- Leadership rating

Waste Recycling Rate

Maintained 100% for three consecutive years

Maintained Zero Workplace Fatalities¹) and Strengthened Safety Management

Korea Fair Trade Commission Agreement Implementation Evaluation

Received the Highest Rating

Sustainability Management Committee Meetings

Held six meetings

Introduction of an Electronic Voting System

1) Number of work-related fatalities among HL D&I Halla employees