Hyundai and Kia score low on supply chain decarbonization and due diligence, according to the second annual “Lead the Charge” leaderboard.
While South Korean automakers are focused on the EV market in the U.S., competing for the top spot with Tesla and having taken the lead over GM and Ford in 2023, Hyundai and Kia find themselves languishing near the bottom of the list of 18 global automakers in the Second Annual Lead the Charge Industry Leaderboard released this week.
The Leaderboard analyzes publicly available reporting from 18 of the leading automotive manufacturers in the world. It ranks their efforts to eliminate emissions, environmental harms, and human rights violations from their supply chains.
The results show that South Korean automakers are trailing behind industry frontrunners Ford, Mercedes, and Tesla in critical sustainability metrics, including greenhouse gas emissions reductions, environmental protection, and the eradication of supply chain human rights violations.
Ford topped this year’s ranking due to its industry-leading responsible minerals policy and due diligence processes, surpassing last year’s winner, Mercedes. Meanwhile, Tesla received the largest overall score increase, moving from ninth to third in the leaderboard, due to it being the first automaker to disclose disaggregated Scope 3 supply chain emissions, as well as its work strengthening performance on battery recycling, and improving human rights due diligence and responsible transition mineral sourcing processes.
Hyundai moved from 11th in 2023 to 10th position this year. This tepid progress is a result of its disclosure of workers’ rights risks by location, a step in the right direction but overshadowed by a lack of substantial improvements in critical areas.
Despite an increase in EV production, Hyundai’s overall standing is marred by its failure to address emissions and environmental impacts from its steel, aluminum, and battery supply chains. The company’s lack of improvement in responsible sourcing of transition minerals and Indigenous rights is particularly glaring.
“Hyundai and Kia are quickly catching up in the global EV race. But their failure to strengthen the due diligence processes for their supply chains may soon pose a major roadblock. Their competitors in the US and Europe are increasingly adopting policies for more sustainable and equitable manufacturing of EVs. This includes transitioning to green steel, which will become a crucial factor in industrial competitiveness as climate regulations become more stringent,” said Heather Lee, Steel Lead at Solutions for Our Climate (SFOC).
While touting sustainable materials innovation with its EV9, Kia’s performance in the ranking paints a bleaker picture, with a meager 2% score increase in 2023, placing the company near the bottom of the leaderboard once again in 2024. Last year they were in 11th position, this year they dropped to 13th.
This lack of substantial improvement underscores Kia’s weak commitment to vital sustainability categories, receiving a dismal 0% score in fossil-free and environmentally responsible aluminum and Indigenous Peoples’ rights. Scores below 10% in steel, batteries, and responsible sourcing of transition minerals further highlight the company’s struggle to align with global sustainability standards.
As Hyundai and Kia grapple with their disappointing standings, it is evident that both companies must undertake substantial efforts to rectify their shortcomings in environmental responsibility, human rights, and sustainable practices. The 2024 Leaderboard serves as a stark reminder of the pressing need for these automakers to recalibrate their priorities and demonstrate a genuine commitment to a more sustainable and responsible automotive future.
“Ford taking the top spot, partially by leading on workers’ rights, shows us that companies and unions can and must be partners in cleaning up their supply chain. There is already a race to the top that is leaving some automakers behind such as Toyota and other East Asian automakers behind, who yet again have come out as laggards when it comes to building a clean and equitable supply chain,” said Erika Thi Patterson, Auto Supply Chain Campaign Director of Public Citizen.
Solutions for Our Climate (SFOC) is an independent non-profit organization that works to accelerate global greenhouse gas emissions reduction and energy transition. SFOC leverages research, litigation, community organizing, and strategic communications to deliver practical climate solutions and build movements for change.
Lead the Charge is a diverse network of local, national, and global advocacy partners working for an equitable, sustainable, and fossil-free auto supply chain. Network members work across multiple geographies and issues, with expertise in climate, environmental justice, human rights, Indigenous rights, heavy industry, ESG and more.
For media inquiries, please reach out to:
Korean: Euijin Kim, Solutions for Our Climate, euijin.kim@forourclimate.org
English: William Fitzgerald, Lead the Charge, william@theworkeragency.com