Hanon Systems has unveiled an ambitious sustainability roadmap built around Science Based Targets initiative (SBTi)-validated climate goals, renewable energy expansion, supply chain decarbonization, and next-generation thermal management technologies. According to the company’s ESG Report 2025/26, the global automotive thermal management leader aims to achieve carbon neutrality by 2040 and net-zero greenhouse gas emissions across its value chain by 2050, while accelerating investments in clean manufacturing, renewable energy, and sustainable mobility solutions.
SBTi-Validated Climate Targets Drive Net-Zero Strategy
Hanon Systems has established one of the industry’s most comprehensive climate transition plans. The company has committed to reducing absolute Scope 1, Scope 2 and Scope 3 greenhouse gas emissions by 90 percent to achieve carbon neutrality by 2040, followed by net-zero emissions across its entire value chain by 2050.
Using 2019 as the baseline year, Hanon Systems has also set measurable 2030 milestones, including a 50 percent reduction in combined Scope 1 and Scope 2 emissions and a 55 percent reduction in Scope 3 emissions from purchased goods and services per ton of purchased raw material.
The company’s climate roadmap is fully aligned with the Science Based Targets initiative (SBTi), with weekly cross-functional reviews monitoring progress toward its long-term decarbonization objectives.
Renewable Energy Expansion Supports Carbon Neutrality
Renewable energy has become a key pillar of Hanon Systems’ decarbonization strategy. The company is expanding renewable electricity across manufacturing operations through onsite solar installations, green Power Purchase Agreements (PPAs), Renewable Energy Certificates (RECs), and other clean energy initiatives.
Manufacturing facilities are implementing energy-efficiency measures including waste-heat recovery systems for furnaces, automatic double-door logistics systems to reduce energy losses, lighting upgrades, and rainwater harvesting projects to improve overall resource efficiency.
Global operations are also executing energy-efficiency projects, expanding renewable electricity adoption, implementing Life Cycle Assessments (LCA), and preparing additional facilities for ISO 50001 Energy Management System certification. Climate-related physical risk assessments are also being extended across more manufacturing sites.
Scope 3 Decarbonization Extends Across the Supply Chain
Recognizing that value-chain emissions represent a significant portion of its climate footprint, Hanon Systems is strengthening supplier collaboration through a structured three-step engagement model.
The program begins with supplier carbon emissions inventories, followed by support for low-carbon manufacturing and sustainable sourcing practices, and concludes with environmental compliance audits and supplier performance assessments.
Alongside supplier engagement, the company continues implementing energy and material procurement strategies to reduce Scope 2 and Scope 3 emissions, supported by environmental data management, biodiversity programs, and strengthened greenhouse gas monitoring across the supply chain.
Eco-Friendly Products Account for 31 Percent of Revenue
Sustainable innovation remains central to Hanon Systems’ business strategy. The company develops advanced thermal management systems for battery electric vehicles (BEVs), hybrid electric vehicles (HEVs), plug-in hybrid electric vehicles (PHEVs), and fuel-cell electric vehicles (FCEVs).
These environmentally focused products generated 31 percent of total corporate revenue, highlighting the growing commercial importance of sustainable mobility technologies.
Hanon Systems is also advancing Software-Defined Vehicle thermal management systems while developing PFAS-free refrigerant technologies based on R744 (carbon dioxide) and R290 (propane) to reduce environmental impact.
The company recently surpassed 1 million cumulative units of eco-friendly R744 electric compressors, doubling production in approximately 1.5 years after reaching 500,000 units in January 2024, demonstrating rapid market adoption of lower-impact refrigeration technologies.
ESG Governance Strengthens Sustainability Execution
Hanon Systems has built its ESG framework around the internationally recognized ISO 26000 social responsibility standard, focusing on four strategic pillars: Marketplace, Workplace, Environment, and Community.
The sustainability strategy is guided by eight principles, including accountability, transparency, continuous improvement, ethical conduct, legal compliance, stakeholder engagement, materiality, human rights protection, and corporate citizenship.
Overall sustainability oversight is led by Vice Chairman and Chief Executive Officer Soo-Il Lee, with implementation coordinated through the Carbon Neutral Office and cross-functional task force teams.
To further strengthen governance, Hanon Systems plans to establish an ESG Steering Committee during the second half of 2026, providing enhanced strategic oversight of sustainability initiatives.
Environmental Programs Continue to Expand
The company has implemented SBTi-aligned climate action plans, strengthened environmental data management, expanded Life Cycle Assessment programs, established biodiversity management processes, and participated in CDP Climate Change assessments.
Hanon Systems maintained a CDP Climate Change rating of B in 2023, 2024, and 2025, while future priorities include supplier GHG emissions monitoring, biodiversity risk management, pollutant management, and river clean-up initiatives.
Safety Targets Support Sustainable Manufacturing
Workplace safety remains an integral part of Hanon Systems’ ESG strategy. The company has established global goals of zero work-related fatalities, zero permanent disabilities, and zero major business-interruption fire incidents.
Additional safety targets include maintaining a Lost Time Case Rate below 0.19, a Severity Rate below 6.06, and a Proactive Action Rate above 30, reinforcing its commitment to employee well-being and operational excellence.
Global ESG Recognition
Hanon Systems’ sustainability performance continues to receive international recognition. The company has been included in the S&P Global Sustainability Yearbook for consecutive years and ranks among the top 15 percent of companies in the global automotive components industry, reflecting continued progress in climate action, environmental stewardship, governance, and sustainable innovation.
SHAFANA FAZAL
