2014-2015 Hyundai Engineering Sustainability Report About This Report About this Report This report is Hyundai Engineering’s fourth sustainability report that includes the company’s performance in the economic, social, and environmental responsibilities. While maintaining the framework of the previ- ous report, the key issues reflecting the construction industry trends and stakeholder opinions are reported in depth through case studies. In particular, it contains the company’s activities and performances of sustainability strategy and action plans. Reporting Scope and Boundary The reporting covers the Seoul Head Office and domestic and overseas project sites, and it is separately noted if the scope or boundary of the data of overseas subsidiaries and projects sites is different. The eco- nomic data may be different from that of the previous report due to the merger and changes in measuring standard. Some environmental data have been confined to those of some domestic and overseas project sites. There may be some differences from the figures contained in previous reports as a result of correc- tions or revisions made after year-end closure. Reporting Period The report covers the company’s management performance for the two years from 1 January 2014 to 31 December 2015. For quantitative performance, track records of the past three years have been disclosed for readers to identify the changing trends. Information associated with 2016 is also reported for some key agenda or significant activities and performances. Reporting Preparation and Verification Criteria Hyundai Engineering prepared this report in accordance with the Core Option provided under the GRI G4 Guidelines reflecting the GRI supplementary indicators given in the construction and real estate section, ISO 26000, the UNGC 10 Principles and UN SDGs. Financial information in this report was prepared through the accounting audit of PwC, an independent auditing agency. Non-financials were verified by Deloitte Anjin LLC, an independent assurance agency, and the statement of verification is available on p.70~71. Cover Story ‘Steering On Values’ is Hyundai Engineering’s slogan that embraces its will to drive its sustain- ability management based on the values that are significant to its key stakeholders. The graphics of the cover describes Hyundai Engineering’s commitment to lead a better future infinitely. Contents Intro Highlights & History 4 CEO Message 6 Sustainability Overview About Hyundai Engineering 10 Hyundai Engineering’s Vision 12 Strategies for Sustainability Management 14 Governance 16 Ethics Management 18 Sophistication of Risk Management 21 Sustainability Issues Value Creating Future Growth Engines 27 Management Strengthening Quality Management 31 Expansion of Customer Satisfaction Management 33 HSE Upgrading the HSE Management System 35 Management Spread of Environmental Management 36 Enhancement of Safety and Health Management 40 Talent Strengthening Global Talent Competency 43 Management Spread of the Talent-oriented Corporate Culture 45 Win-Win Implementation of Shared Growth 49 Management Fair Trades by Establishing a Fair Trade Order 52 Sharing Strategic Implementation of Social Contribution 55 Management Expansion of Global Social Contribution 58 Sustainability Review Economic Performance 62 Social Performance 63 Environmental Performance 66 Stakeholder Engagement and Materiality Testing 68 The 3rd Party Assurance Statement 70 GRI G4 Index 72 Key Awards & Membership in Associations 76 2014 - 2015 Hyundai Engineering Sustainability Report Highlights HSE Management •Established the GHG inventory system in 2015 •Achieved 15 million man-hours of zero accidents in the Ustyurt Gas Chemical Complex (UGCC) in Uzbekistan Value Management Talent Management •Ranked 7th in 2016 Appraisal of Execution Capacity/ Credit Rating of AA- • Acquired the Family-friendly Corporation Cer- • Ranked 21st in ‘The 2016 Top 225 International De- tification from the Ministry of Gender Equality sign Firms’ by the Engineering News-Record (ENR) and Family • Became the only major domestic construction company to be nominated as one of the ‘Top 100 Companies with Best Performance in Job Creation of 2015’ History 1970s~80s 1990s 2000s “ Technological Independence and Do- “ Growth into Total Engineering Company” “ System Establishment and Management mestic and Overseas Market Expansion” Advancement” 1974 •Founded (Feb. 11) 1994 •Selected as the ‘Most Excellent Company’ 2000 •Acquired the Iran South Pars Phase 1980 •Merged with Halla Engineering and won the ‘Best CEO Award’ (KMA) 1 and 2 Project (design and engineering 1985 •Executed the first overseas consulting 1994 •Received ISO 9001 (Quality Management of world’s largest gas plant) project among Korean private companies System) certification 2001 •Received the New Environmental (5th and 6th power projects in Nepal, 1996 •Won the Prime Minister’s Award at the 2nd technology Certificate for the HANT etc.) Environmental Technology Award (HAF (Hyudai Advanced Nutrients Treatment) 1988 •Merged with the Engineering Center of Process Technology) process for the first time in Korea Hyundai Heavy Industries Co., Ltd. •Received ISO 14001 (Environmental 2008 •Won the grand prize in construction engi- Management System) certification neering in Korea Technological Innovation 1998 •Developed the first Sludge Composter in Management Award Korea, named Hyundai Sludge Composter 2009 •Received OHSAS 18001 (Safety and Health (HSC) Management System) certification •Opened the e-procurement system 4 Sharing Management • Honored in the Shared Growth Sector of the ‘2nd Porter Prize for Excellence in CSV’ • Opened the Welding Training Center in Turk- menistan Ethics Management Win-Win Management • Conducted the first company-wide ethics diagno- sis and tailored ethics training • Rated ‘Excellent’ in the 2015 Win-Win • Initiated the establishment of the Compliance Index System in 2016 • Held the regular Partner CEOs Seminars 2010s 2015s 2016s “ Continuous Challenge based on a 40-year-long “ Steps Towards Becoming A Sustainable “Aim for the World’s Best Company” Success” Company” 2010 •Ranked first in the Korean Sustainability Index (KSI) 2015 •Ranked first in order acquisitions 2016 •Ranked 21st in The Top 225 2011 •Acquired the certification of Korea Electric Power abroad (USD 5.76 billion/according International Design Firms by the Industry Code (KEPIC) to the International Contractors Engineering News-Record (ENR) of 2012 •Won the grand prize at the U.S. Spotlight Awards Association of Korea) the U.S. with the HEC Sustainability Report •Ranked Industry No.1 in the ‘Best •Ranked 7th in the Appraisal of 2013 •Won the presidential commendation of the govern- Companies to Work for’ Execution Capacity (The Ministry of ment decoration for the merit of job creation •Won the second Porter for Excellence Land, Infrastructure and Transport) 2014 •Acquired the Corporate Credit Rating of AA- in CSV •Launched an integrated company (merged with •Joined the Korean Association for Hyundai AMCO) Supporting UN SDGs 5 2014 - 2015 Hyundai Engineering Sustainability Report CEO Message July 2016 CEO & President of Hyundai Engineering Kim, Wee Chul 6 Dear distinguished stakeholders, I would like to extend my gratitude to you for your continued interest in and support for Hyundai Engineering. Hyundai Engineering is making strides as a global engineering company by creating excellent performance both socially and economically driven by its unique corporate culture and differ- entiated management strategies since its foundation. Under the strategy of creating new economic values by fulfilling corporate social responsibil- ity, we have been making all-out efforts to establish a system for sustainability management based on the motto, ‘Steering on Values’, since 2014. We are promoting our sustainability management strategy in five core aspects for the val- ues that our key stakeholders consider important. In addition, we are striving to enhance the internalization of sustainability management through such organizations as the Steering Committee and Value Facilitators. Hyundai Engineering will provide better values to customers by strengthening its inherent competitiveness and securing future growth engines, and create a sustainable future through differ- entiated growth strategies. Accordingly, Hyundai Engineering achieved excellent outcomes in each core area of sus- tainability management: the green certification for carbon reducing manufacturing technol- ogy, one of the Top 100 Excellent Companies with Best Performance in Job Creation, Fami- ly-friendly Certified Corporation, and the Shared Growth Sector of the ‘2nd Porter Prize for Excellence in CSV’, in 2015. Furthermore, we are making more vigorous efforts to become both a flexible and strong company befitting the global standard by redefining and sharing our unique corporate culture through the establishment of the “New Corporate Culture”. By doing so, Hyundai Engineering set the three aims, ‘Pioneer, Professional and Humanist’ as cultural forces to continue sustainable future growth, and strives to create a future-ori- ented corporate culture. Hyundai Engineering will provide better values to customers by strengthening its inherent competitiveness and securing growth engines for the future. The company will also make ef- forts to establish differentiated growth strategies and bring out a sustainable future growth. Despite the difficult business environment due to the continuous domestic and international economic downturn,