Kim Jong-hwa, KOREA's Monetary Policy Committee Member, "Financial Sector Also Needs to Participate in Carbon Reduction"

The 41st Plenary Meeting of the KCCI Financial Industry Committee
Invitation of Kim Jong-hwa, BOK Monetary Policy Board Member
"Financial Companies Must Also Participate in Carbon Reduction"

Kim Jong-hwa, a member of the Monetary Policy Committee of the Bank of Korea, argued on the 19th that the financial sector must also participate in carbon reduction to effectively respond to climate change.

On the same day, Kim attended the 41st plenary meeting of the Korea Chamber of Commerce and Industry (KCCI) Financial Industry Committee (Chairman Jin Ok-dong, Chairman of Shinhan Financial Group) held at the KCCI building in Jung-gu, Seoul, where he made this statement during a lecture titled "Economic Environmental Changes and the Future of Our Finance."

He said, "The future financial environment will be influenced by climate change, digital transformation, demographic changes, and the financial sector must proactively respond to these," emphasizing, "To effectively address climate change, financial companies must also participate in carbon reduction."

He continued, "Financial authorities also need to support corporate green transition by analyzing climate risks and preparing guidelines for green loan screening and management," urging action.

Kim warned, "Since Korea has a large manufacturing sector with high greenhouse gas emissions, the costs and risks of transitioning to a low-carbon economy are considerable," adding, "According to some studies, if responses to greenhouse gas reduction are insufficient or delayed, Korea's economic growth rate could decrease by 0.3 percentage points annually until 2100, resulting in a total decline of about 21 percentage points over approximately 70 years."

Regarding central bank digital currency (CBDC), deposit tokens, and other digital currencies, he explained, "Following the pandemic, the digital transformation of the economy and finance has accelerated, and central banks are conducting various research and development to reflect how these changing conditions affect financial market participants and the financial service usage patterns of the public in their operations."

Meanwhile, the Financial Industry Committee meeting held for the first time since Chairman Jin Ok-dong's inauguration was attended by about 30 committee members and related personnel, including Park Il-jun, Executive Vice Chairman of KCCI, Kim Shin, Vice Chairman of SKS PE, Lee Sung-jae, CEO of Hyundai Marine & Fire Insurance, Pyeon Jeong-beom, Special Management Advisor of Kyobo Life Insurance, Oh Tae-gyun, President of Korea Investment Holdings, and Kim Woo-seok, President of Hanwha.

In his opening remarks, Chairman Jin emphasized, "Professional managers focus on performance and market share to maximize efficiency with given resources and time, but entrepreneurs focus on sustainability and growth to continue their businesses and consider innovation," adding, "This aligns with the new entrepreneurial spirit that KCCI has consistently emphasized."

Meanwhile, during the meeting, questions and suggestions were exchanged regarding the economic outlook for 2025 and the mid- to long-term financial policy directions of financial authorities.