The task force will establish a monitoring system for climate-related financial risks, lead efforts to boost investment in green industries, and promote ESG investing in Korea.
South Korea has kicked off the first meeting of the country’s new green finance task force, presided over by FSC (Financial Services Commission) vice chairman Sohn Byungdoo.
The task force is part of Korea’s so-called ‘Green New Deal’, an initiative aimed at promoting sustainable growth in the country. In mid-June, the initiative was granted a budget of KRW 73.4 trillion (USD 62 billion).
Given the risks to financial system stability that climate change presents, the new task force will work to establish a monitoring system for climate-related financial risks, and lay the foundation for encouraging investors to consider environmental risks when making investment decisions.
Financial institutions are also encouraged to take ESG factors into account in their investment decisions, vice chairman Sohn said at the kick off meeting.
The task force will also work to prevent greenwashing, minimise market confusion by specifying the scope of green industries, and lead public-private efforts to boost investment in green industries. The government will additionally supply liquidity for green investments, Sohn said.
The task force will also review the possibility of Korea joining the NGFS (Network of Central Banks and Supervisors for Greening the Financial System) and the TCFD (Task Force on Climate-related Financial Disclosures).
According to local reports, KB Financial Group has recently unveiled a new management and investment framework under which it will reduce its carbon dioxide emissions by up to 25 percent from its 2017 levels, and expand the volume of its ESG products to KRW 50 trillion (up from KRW 20 trillion) over the next decade. The banking group also pledged to abide by the Equator Principles, a global risk management framework requiring environmental and social risk assessments for financing decisions.
KB Financial has pledged to allocate KRW 9 trillion between digital and green investments over the next three years.
Meanwhile, Shinhan Financial Group has recently underlined ESG management principles in its 2019 social responsibility report, and Woori Financial has vowed to invest KRW 4.5 trillion into Green New Deal projects over the next five years.
Following suit, brokerage firms Samsung Securities and Hanwha Investment & Securities have recently dropped out of their Australian coal investments.