|KB Financial Group Chairman Yoon Jong-kyoo|
KB Financial Group has officially renounced its carbon-heavy investment plans, in a group-wide directive toward taking the initiative to tackle climate change, it said Sunday.
The move is part of a last-ditch effort to win a four-year contract to handle a state fund of 10 trillion won managed by Seoul Metropolitan Office of Education.
In the neck-and-neck race are KB Kookmin Bank, the group's bank subsidiary, and NongHyup Bank, which has been the handler of the education office's fund since 1964.
The education office said the two will be evaluated on their degree of corporate social responsibility (CSR) contributions to education as well as anti-coal campaigning efforts. The winner will be announced soon.
The move is also part of the environmental, social and corporate governance (ESG) drive, defined by the three central factors in measuring the sustainability and societal impact of an investment in a company or business.
An ESG committee under the holding firm of Kookmin Bank convened Sept. 25 decided to forgo new investment projects related to coal-powered business models financed via project financing or corporate bond purchases.
The committee said investments will instead be directed to finance low-carbon and renewables initiatives, to better comply with the Paris Agreement, signed in 2016 to reduce greenhouse gas emissions, known best by its long-term temperature goal of keeping the increase in global average temperature to well below 2 degrees Celsius.
The group will factor in green drives in identifying new business investment plans, while rearranging its current investment portfolio to put greater weight on eco-friendly shipbuilding and carmaking. Efforts will continue to issue a greater volume of ESG bonds.
"KB has become the first financial firm in Korea to publicly renounce the coal-powered energy industry, in line with the group's commitment to fulfill corporate responsibility on environmental and social issues," a KB official said.