Moody's Rates Korea ESG as Top Grade 1... US Grade 2, Japan Grade 3

South Korea Included Among Top 11 Countries Worldwide

[Sejong=Asia Economy Reporter Kim Hyunjung] The international credit rating agency Moody's has rated South Korea as the highest grade, Grade 1, in its Environmental, Social, and Governance (ESG) country evaluation. The United States and Japan received Grades 2 and 3, respectively.

According to the Ministry of Economy and Finance on the 19th, Moody's released an ESG evaluation report covering 144 countries worldwide the previous day (local time). Moody's evaluates each country's ESG scores (IPS) based on detailed subcategories in each field, using a five-grade scale: ▲Grade 1 (Positive) ▲Grade 2 (Neutral) ▲Grade 3 (Somewhat Negative) ▲Grade 4 (Negative) ▲Grade 5 (Very Negative).

Besides South Korea, 11 countries including New Zealand, Denmark, Germany, Luxembourg, Sweden, Switzerland, Singapore, Ireland, the Isle of Man, and Austria were rated as overall Grade 1. Grade 2 was given to 30 countries including advanced nations such as the United States, the United Kingdom, Australia, and France, as well as emerging countries like Malaysia and Mauritius. Japan, China, Greece, and 38 other countries received Grade 3, while South Africa, Vietnam, and 45 other countries were rated Grade 4. Laos, Lebanon, Venezuela, Suriname, and 20 other countries were rated the lowest, Grade 5.

The Environmental (E) subcategories include ▲carbon transition ▲climate change ▲water resource management ▲waste and pollution ▲natural capital (land, forests, biodiversity). South Korea received Grade 2 in the environmental field. The Social (S) field was evaluated based on ▲population ▲labor and income ▲education ▲housing ▲health and safety ▲accessibility to basic services, with South Korea receiving Grade 2. Regarding Governance, Moody's reviewed ▲institutional structure ▲policy reliability and effectiveness ▲transparency and disclosure ▲budget management, rating South Korea as Grade 1.

A Ministry of Economy and Finance official explained, "As global interest in ESG rises and ESG is likely to become a major factor in future national credit rating evaluations, the government plans to continue policy efforts for eco-friendly initiatives, social responsibility, and governance improvements, such as the Korean New Deal."