Suspension of New Project Financing and Bond Underwriting for Coal-Fired Power Plant Construction
Expanding Role as an ESG Leading Group
The ESG Committee meeting held on the 25th at the Yeouido Main Branch. (From left) Heo In, Bank President; Kim Kyung-ho, Director; Yoon Jong-kyu, Chairman; Oh Kyu-taek, ESG Committee Chairman; Sunwoo Seok-ho, Director; Choi Myung-hee, Director; Jung Goo-hwan, Director.
[Asia Economy Reporter Park Sun-mi] KB Financial Group has declared 'coal phase-out finance,' becoming the first domestic financial group to proactively respond to the climate change crisis by involving all affiliates, including KB Kookmin Bank.
On the 27th, KB Financial announced that at the ESG (Environmental, Social, and Governance) Committee meeting held on the 25th, it decided to completely halt participation in new project financing and bond underwriting for domestic and international coal-fired power plant construction, a prerequisite task to curb global warming.
Through the 'coal phase-out finance declaration,' KB Financial plans to support and actively participate in global efforts such as the Paris Agreement, which aims to limit the average global temperature rise to below 1.5℃. By providing responsible financial services that prioritize the environment, the group intends to lead the transition to a low-carbon economy and continuously expand investments and financing related to eco-friendly sectors such as renewable energy.
To this end, KB Financial will actively seek investment opportunities in new business areas considering environmental factors and expand investments in private environmental projects, renewable energy, and eco-friendly ships and automobiles. The issuance of ESG bonds will also be continuously promoted.
Amid accelerating internal and external environmental changes such as a surge in natural disasters at a catastrophic level due to global warming, increasing stakeholder demands related to coal phase-out, and strengthened policies and regulations, KB Financial Group is taking the lead in fulfilling environmental and social responsibilities as a pioneering ESG financial group.
Currently, coal-fired power plants, one of the factors causing the climate change crisis, are identified as the largest cause of climate change and air pollution due to coal's inherently high carbon intensity, accounting for 30% of the nation's carbon dioxide emissions and 11% of fine dust emissions.
Pursuing Three ESG Strategic Directions under ‘KB Green Way 2030’
Meanwhile, KB Financial Group established its ESG strategic direction last September based on professional consulting.
Subsequently, in March this year, to accelerate ESG management strategy, the group significantly strengthened ESG management execution by establishing an 'ESG Committee' composed of all directors, including Chairman Yoon Jong-kyu, two inside directors, and seven outside directors. In August, it announced ‘KB Green Way 2030,’ aiming to reduce the group’s carbon emissions by 25% compared to 2017 by 2030 and expand ‘ESG products, investments, and loans,’ currently about 20 trillion KRW, to 50 trillion KRW.
‘KB Green Way 2030’ is being pursued around three ESG strategic directions: ▲Advancing climate change strategies for the environment ▲Internalizing responsible management for society ▲Spreading transparent corporate governance. In particular, to promote ‘advancing climate change strategies for the environment,’ KB Financial declared its accession to the ‘Equator Principles’ last August and is establishing the ‘Equator Principles process’ at KB Kookmin Bank. The recent ‘coal phase-out finance declaration’ will serve as a catalyst to accelerate these efforts.
A KB Financial official said, “Based on the strong commitment of the ‘ESG Committee’ to practicing corporate environmental and social responsibility, proactive climate change response, and eco-friendly finance promotion, we have announced the first domestic financial group’s ‘coal phase-out finance declaration.’” He added, “Going forward, KB Financial will continue to take the lead in practical ESG management as a leading ESG financial group.”
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