Supply Chain ESG | Policy | Win-Win Growth

Supply Chain ESG Policy

Supply Chain Management Strategy: Improving and enhancing partners' ESG performance is based on their voluntary participation and is reflected in Hyundai Steel's purchasing policies.
ESG-Based Procurement Strategy: ① Hyundai Steel's procurement policies are operated in conjunction with the Supplier Code of Conduct and are continuously reviewed to prevent potential conflicts with ESG requirements.
② Suppliers may be excluded from contracts if they fail to achieve the minimum ESG requirements within the specified period.
③ The evaluation of suppliers' operations takes into account their ESG performance, providing an opportunity for superior-performing companies to be selected preferentially.
④ Hyundai Steel regularly conducts training for internal purchasers and/or internal stakeholders to implement the ESG-based procurement strategy.

Guidelines: Based on the business impact of the purchased items and the regular evaluation results of suppliers, Hyundai Steel determines the group (core/cooperation/maintenance/improvement) of each supplier.
In addition, during the regular supplier evaluation, additional points are given to suppliers with the highest ESG evaluation scores for the year, and incentives are provided when selecting excellent suppliers.

※ Regular Supplier Evaluation Items
Category	Evluation Item
Business Environment	Credit Rating, Debt Ratio
Competence	Outsourcing Dependency, Construciton Permit. Distribution Capability etc.
Performance	Delivery Performance, Material Savings Rate, Delivery Delay Rate etc.
ESG	ESG Evaluation Score(Extra Points), Safety Violations (Deductions) etc.

Guidelines: Hyundai Steel categorically rejects goods and services that are provided in unethical, environmentally harmful, and socially detrimental ways.
① Hyundai Steel conducts ESG evaluations for all its partners.
② Hyundai Steel provides consulting and support to improve partners' ESG performance.
③ Hyundai Steel differentiates its business relationships based on partners' ESG performance.

Process
Diagnostic Program (Supplier Assessment): ① A systematic evidence verification process is conducted for the written evaluation of suppliers during the ESG level diagnosis of partners.
② Concurrent field evaluation of suppliers by contracted consultants is carried out during the ESG level diagnosis of partners.
③ Supplier evaluation (either written or on-site) is conducted using the standards and methodologies of recognized industry or multi-stakeholder initiatives.
(OECD Multinational MNE Guidelines, ILO Fundamental Conventions, ISO26000, UNGPs, TCFD etc.)
Development Program (Supplier Development): ① Hyundai Steel conducts training for partners on supplier ESG programs, processes, and requirements.
② When providing information on the results of the partner's ESG level diagnosis, relevant information is provided so that it can be compared with the same industry group.
③ Hyundai Steel supports professional consultation through contracted consultants for the implementation of partners' ESG corrective actions.
④ Hyundai Steel operates and supports professional programs for the enhancement of partners' ESG capabilities.

EEnvironmental
Improvement
· Environmental improvement consulting · Environmental facility support
SSocial
Improvement
· Safety level check · Safety facility support
GFinancial
Improvement
· Loan support · Financial cost support

Supply chain ESG evaluation