[Climate Tech Battle⑪] Korea Social Investment Fosters 106 Climate Tech Companies "Important from the Perspective of Solving Global Warming"

Interview with Lee Jong-ik, CEO of Korea Social Investment
One Attraction of Climate Tech Is the Lack of Market Barriers
Also Urging Active Actions from Large Corporations

‘We support the growth of businesses that create a better world.’ Founded in 2012, the accelerator Korea Social Investment has set this as its mission. At first glance, the work of creating a better world and business growth may seem different, but the point where these two intersect is ESG (Environmental, Social, and Governance) and impact investing. Impact investing refers to investments that seek financial returns while also generating positive social or environmental effects. Lee Jong-ik, CEO of Korea Social Investment, who worked in risk management and management consulting at Deloitte Anjin Accounting Corporation for 16 years, became interested in social banks and impact investing while providing management consulting to various organizations to solve social issues. Among impact investing areas, the one receiving the most attention recently is solving climate issues.

Interview with Lee Jong-ik, CEO of Korea Social Investment. Photo by Jo Yong-jun

On the 26th, CEO Lee stated, “Social issues change with the times, and in the 2020s, climate change such as global warming has become a major problem,” adding, “From the perspective of actively fostering and investing in businesses that solve this, climate tech is a very important factor now.” Looking at Korea Social Investment’s portfolio, climate tech accounts for as much as 30% of all companies. They have nurtured 106 companies across all climate tech sectors so far. These companies have attracted an additional investment of 13.6 billion KRW based on this.

The investment criteria include the impact a company can generate, the feasibility of achieving ‘net zero (0),’ and growth potential. CEO Lee explained, “We invest in companies that do not just produce an impact proportional to the input but have a multiplier effect where one input generates ten impacts,” adding, “Next, we examine whether the business model is more based on carbon neutrality and whether it falls under the K-Taxonomy classification standards.”

One of the major attractions of climate tech, according to CEO Lee, is the lack of barriers to the global market. He said, “Domestic climate tech companies can take their technology to Europe or the U.S. anytime. Almost none of the companies we invested in focus solely on the Korean market,” emphasizing, “The most important thing is how differentiated their technology is and how much they can lower costs to secure global competitiveness.”

CEO Lee strongly voiced the need for regulatory improvements for domestic climate tech companies to secure global competitiveness. He also saw the need for research and development (R&D) support. He said, “Compared to the U.S. and Europe, regulations in the climate tech sector are relatively strict here, so it is right to ease them,” adding, “It is also necessary to match many industry-academia-research programs, and after the difficult development, technology verification (PoC) must be done, but unfortunately, there are no PoC targets domestically.”

Along with this, he urged large corporations to take active steps toward climate tech. CEO Lee said, “The best model is for large corporations to focus on nurturing startups with ideas or technology as subsidiaries and connect them with corporate PoCs,” adding, “If climate tech startups collaborate with large corporations through open innovation, entering the global market will become much easier.”

He also argued that government support such as tax benefits is necessary for investment firms investing in the climate tech sector. CEO Lee said, “Climate tech requires a lot of time for R&D, and the investment recovery period is relatively long, about 3 to 5 years,” adding, “Because of this, most investments tend to go to companies that can make money immediately, so the government should encourage investment in climate tech through various benefits.”

Interview with Lee Jong-ik, CEO of Korea Social Investment. Photo by Yongjun Cho