The Republic of Korea’s industrial prowess has helped its economy grow at an average of 7.06% per year since 1960. In 2021 it ranked seventh in global exports, according to the World Trade Organisation.
In a bid to play its role in tackling the global shift to a low-carbon economy, the country has pledged to reach net zero emissions by 2050. What does this mean for heavy industry and manufacturing? What are the roadmaps for private sector leaders transforming their business strategies towards ESG?
At the BNP Paribas Sustainable Future Forum in Seoul, five multinationals explained how they are harnessing the same ingenuity and influence responsible for their global success stories to take leadership on decarbonisation.
Sustainability as a differentiator
Sustainability as a competitive differentiator emerged as a key theme at the event. Hyundai Motor Company, one of Korea’s most recognised brands, is targeting carbon neutrality by 2045. This includes the full electrification of its global Genesis range by 2030 and the phasing out of combustion engine models in European markets by 2035. It is also exploring hydrogen to power its commercial vehicle range, alongside plans to leverage related technology to achieve success in other sectors.
“As an automobile manufacturer, we have been working to secure future market competitiveness, and providing greener products will help us gain markets share overseas,” said Dong Woon Jung, Senior Manager, Sustainability Management at Hyundai.
As an automobile manufacturer, we have been working to secure future market competitiveness, and providing greener products will help us gain markets share overseas.Dong Woon Jung, Senior Manager, Sustainability Management, Hyundai
For POSCO, the world’s sixth-largest steel producer, the future also depends on decarbonising production. Today, these efforts are focused on recycling scrap metal, but the steelmaker is also developing a proprietary hydrogen reduction process and working with other companies on hydrogen-powered production.
“Whether or not to produce green steel will provide a new competitive edge,” said Jung Seok Park, Senior Manager in POSCO’s Corporate Citizenship Office. “This is a long-term project, so bridging technologies will be developed and expanded in the interim. For example, we will continue to improve energy efficiency by applying AI.”
Transforming aluminium production
Like POSCO, aluminium producer Novelis is tackling emissions through increased recycling in the short term while developing the production processes of the future.
To achieve its aim of becoming the world’s number one supplier of sustainable, low-carbon aluminium solutions – including 2026 targets to reduce carbon footprint by 30%, energy and water consumption by 10%, and landfill waste by 20% – it is ramping up its recycling operations and sourcing aluminium scrap to reduce Scope 3 emissions derived from mining and transporting raw ore.
“We will decarbonise the re-melting process using renewable and self-produced energy, and expand the use of low-carbon logistics and coating materials,” said Hag Jin Kim, Asia and Middle East Regional Treasurer at Novelis.
A culture of sustainability
For engineering, construction and energy conglomerate SK Ecoplant – previously SK Engineering & Construction – a change of name and shift in focus to the environment reflects its commitment to decarbonisation.
“We want to become a green developer, providing optimal solutions to customers’ sustainability needs by linking our environmental and energy businesses,” said its Head of ESG, Seong Nyeoh Lee.
“Companies producing environmental solutions should set clear goals for their own environmental solutions, embedding them in the overall business strategy and execution,” Lee adds. “Ultimately, our goal is to create products and services that also generate economic value and social value alongside the environment.”
We want to become a green developer, providing optimal solutions to customers’ sustainability needs by linking our environmental and energy businesses.Seong Nyeoh Lee, Head of ESG, SK Ecoplant
Consumer electronics giant LG Corporation also ensures sustainability leadership permeates its corporate culture, by embedding sustainability into its business strategy. The company has established an ESG committee and defined an ESG management strategy alongside consistent standards and standardised ESG data.
“We summarise our strategic direction as follows: first, enhancing the fundamentals for balanced performance; second, building an ecosystem for collective impact; and third, reshaping the business for future value,” said Seung Hwan Lee, Head of ESG at LG Corporation.
Decarbonisation not only underpins LG’s corporate strategy, but also its investments in six affiliates with specific carbon neutrality objectives.
We summarise our strategic direction as follows: first, enhancing the fundamentals for balanced performance; second, building an ecosystem for collective impact; and third, reshaping the business for future value.Seung Hwan Lee, Head of ESG, LG Corporation
“We monitor each roadmap, how much investment and cost are involved, what standards will be used, and whether emissions calculations are made using appropriate standards,” Lee added. “But ultimately, implementation is more important.”
Rounding off the discussion, Jong Gab Seo, Co-Head of Corporate Coverage Group, BNP Paribas South Korea, underlined the role of finance in helping such companies advance their sustainability journeys: “Harnessing innovative financing strategies will be key to accelerating corporate transition journeys. BNP Paribas has established a leading franchise sustainable finance, and we’re proud to work with some of Korea’s leading corporations on their advanced ESG strategies and innovative green transactions.”