MSCI ESG rates Kumho Tire ‘AA’

Kumho Tire is ranked among the top 12 per cent of the automotive parts industry in Morgan Stanley Capital International’s (MSCI) recent environmental, social, and governance (ESG) evaluation. The tyre maker has improved its evaluation score has been steadily rising year-on-year, having received a BBB grade in 2019, an A grade in 2021, and an AA grade this year.

MSCI developed its ESG ratings to build and manage investment portfolios. Companies are rated on a scale of AAA (leader) to CCC (laggard) according to their exposure to industry specific ESG risks and risk management capabilities relative to their peers. According to the MSCI report, Kumho received excellent reviews for ‘environmental impact management’, such as ‘eco-friendly technology’ – for example reducing toxic emissions and developing products for electric vehicles. In addition, it was recognised for its competency in the customised talent development programme, while in terms of quality and safety it was deemed to show an industry-leading management case.

Last year, Kumho established a new division specifically to speed up the establishment and internalisation of its ESG management system. Chief executive officer Jung Il-Taik comments: “We will improve the future value of our business and increase trust in it by responding to social requirements.”

Meanwhile, Kumho obtained a B+ grade in a corporate sustainability management evaluation conducted last year by the Korea Corporate Governance Service – an improvement on the previous year’s results. The company is also pursuing clean mobility and increasing its sustainable credentials by supplying tyres for the EV6, Kia’s first battery electric vehicle. Furthermore, it is actively researching natural raw materials and improving tyre recycling technologies so as to replace 100 per cent of raw materials with sustainable ones by 2050.