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KB pledges to become carbon-free financial group

KB Financial Group Chairman Yoon Jong-kyoo speaks during a panel discussion of the 2021 Korea Times Global ESG Forum at the KCCI building in Seoul, Thursday. Korea Times photo by Shim Hyun-chul
KB Financial Group Chairman Yoon Jong-kyoo speaks during a panel discussion of the 2021 Korea Times Global ESG Forum at the KCCI building in Seoul, Thursday. Korea Times photo by Shim Hyun-chul

By Lee Min-hyung

KB Financial Group Chairman Yoon Jong-kyoo reaffirmed Thursday its grand vision of becoming a carbon-free financial holding firm across the group's whole supply chain.

The message is part of the group's unwavering determination to fulfill environmental, social and corporate governance (ESG) criteria. KB was Korea's first financial holding firm to announce last year its group-wide plan to achieve "anti-coal finance," in a preemptive move to fight against global climate change.

Yoon called for "more prompt and proactive action" against greenhouse gas emissions throughout the entire value chain of financial firms.

According to the Greenhouse Gas Protocol, emissions are divided into three categories: Scope 1, 2 and 3. Yoon highlighted KB's efforts specifically to cut Scope 3 emissions. Scope 3 emissions are considered indirect emissions occurring in a firm's supply chain.

"As the nation's largest financial firm, we are focusing on minimizing Scope 3 emissions, so as to have a more far-reaching ESG impact across society," Yoon said during a panel discussion at the 2021 Korea Times Global ESG Forum, which took place at the KCCI building in Seoul.

Financial firms are less carbon-intensive than manufacturing companies, but the former can play a much more crucial role in controlling nationwide carbon emissions, according to Yoon.

"When offering loans or making investments in other firms, financial firms have a major influence in terms of indirect carbon emissions, so KB is placing top priority on minimizing Scope 3 emissions," he said.

The KB chief also pledged to strengthen its leadership in Korea's green finance field by continuing to step up its support of leading enterprises in ESG management.

Earlier, KB shared its mid-term vision of reducing carbon emissions within its affiliates by 25 percent by 2030, compared to the end of 2017. To back up this push, KB is running an internal eco-friendly campaign to minimize the use of paper, plastic and energy.

The group also plans to inject capital worth 25 trillion won ($22.4 billion) into eco-friendly investments and loans for companies active in the ESG field.

These efforts are being recognized by organizations here and abroad. KB has been listed on the Dow Jones Sustainability Indices (DJSI) for five consecutive years, since 2016. The DJSI are indices that evaluate the sustainability performance of thousands of firms around the world. Of particular note was the fact that KB ranked second on the indices within the banking industry globally in 2020.

To keep boosting the ESG accomplishments of KB, Yoon called for the need to build a more standardized set of ESG assessment criteria.

"We need a more widely accepted set of guidelines to assess the fulfillment of ESG principles," Yoon said. "To boost more ESG investments here and abroad, we should build an institutional environment to enhance the accessibility and credibility of ESG-related information."

The KB leader also picked "transparent disclosure" as the second-most important factor to maintain amidst the ESG-led paradigm shift in the global investment market.

Last but not least, he stressed the need to build strong social consensus, in order to create a virtuous cycle in the ESG field.

"A social mood should be established so that companies willing to dedicate themselves to fulfilling ESG criteria will continuously benefit, and vice versa," he said.

At the forefront of the group's social responsibility principles, the KB leader picked "diversity" as a keyword.

"KB is embracing diversity by including more female employees and people with physical disabilities," he said.

KB is increasing the portion of women in the workforce to 20 percent for the position of divisional chiefs. The group will also keep raising the proportion of female team-level heads to 30 percent.

The KB chief also pledged to keep expanding investments in startups, fintech firms and socially-responsible companies, in order to create more social value. Co-prosperity amongst small firms and the self-employed is the most urgent step for KB to fulfill its post-coronavirus social responsibility goals, according to Yoon.

Lee Min-hyung mhlee@koreatimes.co.kr

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