Woori, NongHyup outrun Hana in race to adopt Equator Principles

Seen are the promotional images from Woori and NongHyup banks, which show their adoption of the Equator Principles. Courtesy of each company

By Park Jae-hyuk

Woori and NongHyup banks joined the Equator Principles Association this week, leaving Hana Bank behind as the only major commercial bank here that has yet to adopt the risk management framework intended to prevent financing for large-scale projects that can cause environmental damage or human rights abuses.

The banking unit of Woori Financial Group became a new member of the association, last week, with an aim of bolstering environmental, social and corporate governance (ESG) factors in its management. It organized a taskforce earlier to set up a process to follow the principles.

“The adoption of the Equator Principles has enabled us to have an ESG management system satisfying global standards and to strengthen our competitiveness in sustainable management,” Woori Bank CEO Kwon Kwang-seok said. “As a global financial institution, we will enhance our ESG management with sincerity by fulfilling our responsibility for the environment and society.”

The banking unit of NongHyup Financial Group also became a member. It announced that it will nurture experts in assessing environmental and social risks in projects during the first-year grace period for new members as well as reform its bylaws to avoid any possible participation in projects that can have significant negative impacts on the climate or human rights.

“Based on our recent decision to adopt the Equator Principles, we will make ESG management prioritizing the environment and society take root in the financial investment sector so that the name of NongHyup reminds the public of the ESG,” NongHyup Bank CEO Kwon Jun-hak said.

Shinhan and KB Kookmin banks, both of which are the nation's leading commercial banks, adopted the Equator Principles in September 2020 and February 2021, respectively.

Korea Development Bank (KDB), which joined the association in 2017 as its first Korean member, was appointed last month as the new representative of Asia, which will start its two-year term from the annual general meeting in October, replacing its predecessor, Japan's Mizuho Bank.

In contrast, the banking unit of Hana Financial Group did not join the association, despite the group's declaration in March that it would adopt the Equator Principles by the end of this year as part of its efforts to achieve carbon neutrality.

The bank's spokesman refused to disclose the specific timeline for this goal, although he emphasized that the group's plan to join the association has remained unchanged.

“We are trying to prepare more thoroughly before our joining,” he said. “It is just a matter of timing, and we will definitely join the association.”

Among the country's state-run banks, the Industrial Bank of Korea (IBK) said in April that it seeks to become a member of the association by the end of next year.