Shinhan standing at forefront of financial ESG

By Lee Min-hyung

Shinhan Financial Group is at the forefront of the environmental, social and governance (ESG) drive in the financial sector, as part of its group-wide strategy for sustainable growth.

Under the leadership of Chairman Cho Yong-byoung, the nation's top-tier financial holding company is adopting multilateral ESG strategies that focus on eco-friendly management and sustainable co-prosperity in the global community, the company said Thursday.

In 2018, the company announced its green management vision of “eco-transformation 2020,” under which it pledged to invest 20 trillion won in eco-friendly industries, and cut greenhouse gas emissions by 20 percent by 2030.

Since 2017, Shinhan Financial has provided 16 trillion won in financial backing to the nation's eco-friendly industry through loans and direct investment. In particular, Shinhan is on track to strengthen its eco-friendly energy investments.

The company invested 1.08 trillion won in the sector ― including ESG funds and green building projects ― during the third quarter of 2020. In the past two-and-a-half years, the firm has invested about 2.36 trillion won in green industries, and plans to increase that in line with global trends.

The issuance of ESG bonds is one of the firm's ways of showing its efforts for sustainable green growth across society. In 2018, Shinhan Bank issued the first green bonds in the nation's banking history ― worth 200 billion won. The lender said it has issued sustainable financial bonds worth 3.11 trillion won as of the end of September.

In July, Shinhan Financial issued foreign currency social bonds worth $500 million to help support coronavirus-hit economies around the world. Shinhan Bank also succeeded in issuing social bonds worth $50 million to support victims of the COVID-19 pandemic, as part of its ESG drive to fulfill corporate social responsibility (CSR).

“Shinhan will continue making efforts to generate tangible ESG-related outcomes by setting practical goals,” Cho said during the group's management forum early this year. “Building a sustainable future with customers, shareholders and society will become ever-more important for leading companies.”

The group is also joining hands with global financial authorities and companies to raise the awareness of ESG here and abroad.

In 2018, the group signed the Principles for Responsible Banking during the United Nations Environment Program Finance Initiative roundtable. The principal is an international agreement signed by 28 major global financial players ― such as ING, BNP Paribas and Barclays ― all of which voiced the need to establish a global norm for financial sustainability worldwide.

The establishment of a “co-prospering environment” is another crucial ESG role that Shinhan is pursuing.

The group is involved in financial co-prosperity projects by supporting small firms and emerging industries that have growth potential.

In June, the group announced its Financial New Deal policy as part of its Shinhan New Economic Growth Supporting Operations (NEO) project, under which it has pledged to lead digital finance and build a co-prosperity ecosystem by providing financial support for emerging players.

The announcement of the vision came amid growing economic uncertainties here and abroad with the spread of the COVID-19 pandemic. The company has expanded its low- to mid-interest loans for people hit by the coronavirus shock and strengthened financial aid to small and medium enterprises here to fulfill its “inclusive finance.”

Shinhan also remains aggressive in providing financial support for startups and fintech players, helping them expand their global profile.

In 2015, the company launched a startup accelerator program, Shinhan Future's Lab, a first in the nation's financial industry. Shinhan has expanded the program overseas ― including Vietnam and Indonesia ― enhancing exchanges with startups here and abroad and helping local firms tap into emerging markets.

“We have supported 195 companies and made a direct investment of 23.8 billion won into them,” a company official said. “Shinhan will keep widening our investment in them to become the nation's leading financial player fulfilling ESG.”

To enhance its social role, the company is carrying out a variety of CSR activities. The financial holding firm and all Shinhan subsidiaries are taking part in the Hopeful Project to become more socially responsible.

The firm said it has engaged in a series of social campaigns to help neglected classes, the young and regional communities by injecting capital of about 270 billion won over the past three years.