Shinhan chairman represents Asian financial firms at COP26
Shinhan Financial Group Chairman Cho Yong-byoung, second from right, talks with representatives from BlackRock, APG Asset Management and Legal & General Investment Management, during the Finance Day event of the 2021 U.N. Climate Change Conference in Glasgow, Wednesday (local time). Courtesy of Shinhan Financial Group
Strategies to reach carbon neutrality discussed with BlackRock, APG, LGIM
By Park Jae-hyuk
Shinhan Financial Group Chairman Cho Yong-byoung became Asia's first private sector financial leader to deliver a speech at the U.N. Climate Change Conference.
The chairman spoke in a session about the financial sector's low-carbon transition, alongside representatives from BlackRock, APG Asset Management and Legal & General Investment Management, during the Finance Day event of the COP26 in Glasgow, Wednesday (local time).
He introduced Shinhan's “Zero Carbon Drive,” the first declaration on carbon neutrality by an East Asian financial company, to the attendees, including U.N. envoys and top executives from Allianz, HSBC and AXA.
“I'm happy to say we motivated other major financial companies in Korea to follow suit this year,” he said. “We will communicate through existing channels in countries where Shinhan has a presence, like Vietnam, Indonesia, Kazakhstan, India, Japan and China, so that we may serve as an Asian benchmark in the finance industry.”
Cho explained that his company applied the Partnership for Carbon Accounting Financials' (PCAF) methods to determine that its six assets worth $21 billion have emitted 42 million tons of carbon a year and used the Science Based Target initiative's (SBTi) methods to reduce the emissions by 38.6 percent by 2030 and 69.7 percent by 2040.
He mentioned power generation, iron, steel, oil, chemicals and cement as sectors Shinhan should focus on for its reduction efforts.
“Shinhan plans to concentrate on the top 100 companies with high carbon intensity and emission levels for our engagement strategy which involves revealing information and establishing reduction goals,” he said. “While it won't be easy to change from a high-emission, manufacturing-based economy to a low-carbon one, companies like POSCO, Samsung, SK, LG and Hyundai are already competing to get an early lead.”
Based on his belief that the role of finance is to help such companies' transition to eco-friendly operations, the chairman unveiled Shinhan's plan to provide $30 billion in green finance by 2030.
He also emphasized that Shinhan's corporate governance led by its board of directors and CEOs of its affiliates has provided momentum for its net-zero strategies.
“I firmly believe that we can make the great transition to net-zero carbon sooner than expected,” he said.
Cho will also introduce the Korean financial sector's carbon neutrality efforts to stakeholders worldwide by delivering a separate speech at another session of the conference, which will be held next Tuesday by the Global Green Growth Institute (GGGI), a Seoul-headquartered intergovernmental organization dedicated to promoting sustainable economic growth.
“We will send our Deputy President Park Sung-hyun to an event held by the Net-Zero Banking Alliance (NZBA) on Thursday (local time),” a Shinhan official said.
Shinhan Financial Group Chairman Cho Yong-byoung promotes the group's “Zero Carbon, Zero Fuel” project, after holding an online meeting with CEOs of the group's affiliates at Shinhan headquarters in Seoul in this May 20 file photo. Courtesy of Shinhan Financial Group
This is not the first time for Shinhan to support the U.N.'s efforts to make a greener world.
In April, the financial group became one of the founding signatories to the U.N.-led establishment of the NZBA, with an aim of achieving net-zero emissions by 2050. For this goal, Shinhan launched the “Zero Carbon, Zero Fuel” project in May, which features a plan to switch 62,843 vehicles owned by the group to electric or hydrogen fuel cell vehicles.
The Shinhan chairman also previously announced the principles for responsible banking, during the U.N. Environment Program Finance Initiative's global roundtable event in Paris in November 2018.
Shinhan Financial Group Chairman Cho Yong-byoung, fourth from left, speaks at the U.N. Environment Program Finance Initiative's global roundtable event in Paris in this November 2018 file photo. Courtesy of Shinhan Financial Group
According to the group, these are part of its efforts to internalize sustainable management considering environmental, social and corporate governance (ESG) factors.
“ESG is similar to vaccines, as it enables us to brace for uncertainties about business environments and improve resilience,” the Shinhan chairman said in his meeting with CEOs of the group's affiliates in February.
Industry sources said that these efforts were recognized by the U.K.'s High-level Champion for Climate Action for COP26 Nigel Topping, one of the Finance Day event organizers, prompting him to invite Cho to the Glasgow conference when they met in Seoul in September.