Park Jae-hyuk is a seasoned journalist who has provided comprehensive coverage of South Korea's corporate dynamics, economic policies, industry challenges and the global positioning of Korean companies. Based on the articles he has written since joining The Korea Times in 2016, his investigative approach has helped readers understand corporate governance, economic trends and business strategies shaping South Korea’s economy.
INTERVIEW Shinhan to adopt Equator Principles in H2
Shinhan Financial Group Chief Sustainability Officer Park Sung-hyun
By Park Jae-hyuk
Chief sustainability officer vows efforts for 'climate finance'
By Park Jae-hyuk
Shinhan Bank aims to become the nation's first commercial bank to join the Equator Principles Association within the second half of this year, as part of efforts to fight climate change, according the chief sustainability officer of Shinhan Financial Group.
Park Sung-hyun, who also serves as the group's chief strategy officer, told The Korea Times that the banking unit will reduce its investment in the coal industry and adopt the risk management framework of other financial institutions for determining, assessing and managing environmental risks in project finance.
Shinhan Bank announced in May 2019 it kicked off procedures for the voluntary guidelines to fulfill the social responsibility of financial institutions.
Park confirmed the bank has continued its efforts, despite difficulties from the COVID-19 pandemic.
“We will enhance our climate-related risk management system, reviewing the impact of large-scale development projects on the environment and society,” he said. “We will manage the financial impact of climate change, so we expect our investments in the coal industry will decline gradually.”
The executive has directed Shinhan's management regarding environmental, social and governance (ESG) factors since December last year when the banking group declared the principles to counteract climate change.
Back then, Shinhan appointed the group chief sustainability officer and executives who would play the role in each of its subsidiaries.
Unlike other financial holding companies that ordered their PR departments to take charge of ESG strategies, Shinhan assigned the duty to its strategy department.
“This indicates sustainable management is one of important pillars of our group's strategy,” Park said. “Given that our strategy department directs the group's overall businesses, direct communications are available when the group pursues sustainable management.”
Amid the growing concerns over the impact of climate change on the financial sector, the executive noted Shinhan has made efforts for the “climate finance,” which refers to financial institutions' lending, investments and products that can contribute to the transformation into the low-carbon economy.
“During the first quarter of 2020, our group newly handled eco-friendly lending and investments collectively worth 449.4 billion won ($366 million),” he said. “After we became the first Korean financial group to support the Task Force on Climate-related Financial Disclosures (TCFD) in 2018, we've analyzed how the climate change scenarios will affect our group's portfolio.”
According to the chief sustainability officer, such efforts helped Shinhan continue its sustainable management amid the COVID-19 pandemic.
“We have explained our achievements in ESG strategies to asset management companies, rating agencies and international organizations via teleconferences, monitoring the global trends in ESG,” he said. “We also started disclosing our performances in ESG from our first-quarter regulatory filing to satisfy the needs of our investors.”