Hana, KAIST sign MOU for cooperation on carbon neutrality, ESG drive

Hana Financial Group Chairman Kim Jung-tai, fifth from left, and KAIST President Lee Kwang-hyung, center, pose with other officials from the two sides during a signing ceremony of the memorandum of understanding (MOU) at the group's headquarters in downtown Seoul, Wednesday. The MOU is aimed at jointly achieving the goal of carbon neutrality in accordance with environmental, social and corporate governance (ESG) values. Courtesy of Hana Financial Group

By Yi Whan-woo

Hana Financial Group has signed a memorandum of understanding (MOU) with Korea Advanced Institute of Science and Technology (KAIST) to tackle climate change and reach the U.N. goal of carbon neutrality by 2050 jointly, the banking group announced Thursday.

The MOU is line with the environmental, social and corporate governance (ESG) principles that have been embraced by the corporate and financial sectors worldwide after they were first formally introduced in 2004 in a U.N. Environment Program known as “The Global Compact Leaders Summit” report.

The areas of cooperation under the MOU center on challenges associated with climate change, the transition to low-carbon energy sources and expanding the use of renewable energy.

Hana Financial Group will therefore, provide 10 billion won ($8.31 million) to KAIST, to sponsor the country's top-ranked engineering university in a wide range of academic research, including in basic science and conversion technology, as well as in ESG management.

The group's flagship affiliate, Hana Bank, will separately spend about 10 billion won to jointly set up a lab with KAIST Holdings, the holding firm of KAIST, to develop artificial photosynthesis.

This term refers to a solar-to-chemical energy-conversion process that mimics the natural process of photosynthesis to convert sunlight, water and carbon dioxide into carbohydrates and oxygen.

Launched in January, KAIST Holdings will be responsible for providing relevant knowhow and expertise.

Artificial photosynthesis is critical as the amount of solar and other sources of energy that can be obtained from nature vary depending on the weather and other variables.

In the case of Hana Financial Group and KAIST, they will focus on an environmentally-friendly technology called CCUS, an acronym for “carbon, capture, utilization, storage,” to speed up the artificial photosynthesis process.

“The commercialization of carbon-negative energy is becoming urgent, with carbon neutrality being a hot topic in the international community,” Hana Financial Group Chairman Kim Jung-tai said during the signing ceremony of the MOU at the firm's headquarters in central Seoul, Wednesday.

“I believe that Hana and KAIST, with this MOU, can emerge as game changers on the path toward the commercialization of next-generation technology and solutions to climate change.”

KAIST President Lee Kwang-hyung expressed hope that the MOU will “create synergy toward the goal of carbon neutrality, by bringing together the school's vision and technology with Hana's ESG drive.”

Lee noted that, although in its nascent stages, KAIST Holdings hopefully can “set an example in nurturing prospective industries and creating an ecosystem for the low-carbon energy sector.”

In 2021, Hana Financial Group declared that it would embark on practicing ESG management and has begun to materialize corresponding strategies since then.

One of its mid- to long-term strategies is “2030&60,” aimed at providing financial assistance worth 60 trillion won to every possible sector concerning the environment and sustainability through 2030.

Another strategy is “ZERO&ZERO,” which pursues the lowering to zero by 2050 of both the level of greenhouse gas emissions and the use of coal as a source of energy in the workplaces of the group and its affiliates.