In assessing Hyundai Motor Company’s climate governance framework, this report examines the composition and operation of the Board’s Sustainability Management Committee and evaluates the effectiveness of its oversight of climate-related risks and transition strategy. 

The analysis finds that while the Committee’s size and formal structure have expanded, Board-level climate competency remains limited. Climate risk has not been consistently addressed as a standalone strategic agenda item, and the Board currently lacks independent directors with dedicated climate expertise. When assessed against global investor benchmarks, particularly Climate Action 100+ (CA100+), Hyundai Motor meets only two of six climate governance indicators, suggesting meaningful gaps in its climate oversight framework.

Climate risk carries strategic and financial implications beyond Hyundai Motor’s direct operations. Although the company has announced a 2045 carbon neutrality target, its key affiliate and primary steel supplier, Hyundai Steel, has set a 2050 target, creating potential misalignment in transition investment and low-carbon procurement strategies, particularly given steel’s significant Scope 3 impact. At the same time, the European Union’s Carbon Border Adjustment Mechanism (CBAM) is expected to expand from upstream materials to downstream products, increasing regulatory exposure across automotive value chains. 

Taken together, these factors elevate climate governance from a sustainability issue to a core strategic and financial oversight matter. Strengthened Board-level expertise and structured oversight mechanisms will be critical to mitigating transition risk, protecting long-term shareholder value, and maintaining global competitiveness. 

Solutions for Our Climate proposes the following recommendations for improvement:

• Appoint independent directors with demonstrated climate and transition strategy expertise to strengthen Board competency.

• Institutionalize regular Board review of climate transition strategy, including capital allocation alignment and supply chain decarbonization progress.

• Implement structured climate training programs for independent directors to enhance informed oversight.

• Enhance disclosure regarding the Sustainability Management Committee’s deliberations, decisions, and integration of climate risk into corporate strategy.