Shinhan pledges to develop 'financial ESG' measurements

Shinhan Financial Group Deputy President Park Sung-hyun speaks during the 2021 Korea Times Global ESG Forum at the Korea Chamber of Commerce and Industry (KCCI) building in Seoul, Friday. Korea Times photo by Shim Hyun-chul

By Lee Min-hyung

Shinhan Financial Group has pledged to keep developing its measurement system for environmental, social and corporate governance (ESG) management to maximize its financial impact across society.

Back in November 2019, the nation's top-tier financial holding firm developed what it called the Social Value Measurement Framework (SVMF) in partnership with Yonsei University.

The company said it would continue to systemize the SVMF, so its affiliates can design their business strategies not just for reaping profits, but also for maximizing social value.

“We have triple bottom lines when pursuing ESG, including eco-friendliness, co-prosperity and trust,” Shinhan Financial Group Deputy President Park Sung-hyun said during the 2021 Korea Times Global ESG Forum at the KCCI building in downtown Seoul, Friday.

Under the three pillars, the company runs nine ESG activities, including finance education, social donations and financial customer protection, according to the Shinhan executive.

SK Group Vice President Kwon Key-joon, center, speaks during the 2021 Korea Times Global ESG Forum at the Korea Chamber of Commerce and Industry (KCCI) building in Seoul, Friday. From left are Korea Times President-Publisher Oh Young-jin, Kwon and Shinhan Financial Group Deputy President Park Sung-hyun. Korea Times photo by Shim Hyun-chul

“Shinhan pays close attention to social value measurement activities, as all of our activities need to be measured for us to manage them in a proper and accurate manner,” he said.

Shinhan Financial Group ran 192 ESG programs last year, creating a total social value worth more than 1.2 trillion won ($1.02 billion) under the calculation of the group's SVMF.

The company plans to widen the programs to create more social value and help fulfill its financial ESG, which Shinhan believes will cast wider-than-expected impacts across society. Shinhan Bank, for instance, can play a part in reducing carbon emissions here by providing loans to ESG-fulfilling companies, according to the Shinhan executive.

This is part of the group's Zero Carbon Drive initiative declared last November. Under the drive, Shinhan plans to expand its support for companies fulfilling eco-friendly projects. The group will not offer loans to companies or industries with high carbon emissions.

“Shinhan is developing more and more social value-focused business models to better embrace ESG, and a group-wide change is being made under the drive,” Park said. “In other words, we can say that we are getting more and more motivated for financial ESG.”

Shinhan is expanding its global foothold in ESG by joining hands with global authorities and organizations. In 2018, the group signed the Principles for Responsible Banking at the United Nations Environment Program Finance Initiative roundtable. This is an agreement signed by 28 global financial firms, including Barclays and BNP Paribas. Shinhan along with the global financial giants joined hands to raise global awareness of financial sustainability.

In March 2021, the group also joined the Value Balancing Alliance, a non-profit organization dedicated to developing standardized valuation measurements for companies here and abroad, for the first time among Asian financial firms.