Lee Bok-hyun "Carbon Reduction Will Boost Economic Growth Rate"

FSS and Bank of Korea Jointly Host Climate Finance Conference
Governor Lee Bok-hyun:
"Active Response to Climate Change Increases Long-term Economic Growth and Reduces Financial Sector Losses"
Emphasizes Need for Local Government and Financial Institution Attention in High-Emission Regions
FSS to Prepare Transition Finance Guidelines and Expand Support for SMEs' Carbon Reduction Efforts

Lee Bok-hyun, Governor of the Financial Supervisory Service. Photo by Jo Yong-jun

Lee Bok-hyun, Governor of the Financial Supervisory Service (FSS), stated that if we respond more actively to climate change, the long-term economic growth rate will increase, and losses in the financial sector can be reduced.

On the 18th, Governor Lee attended the 'FSS-Bank of Korea Joint Climate Finance Conference' held at the Bank of Korea in Jung-gu, Seoul, and explained, "The FSS conducted a climate stress test to analyze the effects on economic growth and financial sector losses when actively responding to carbon reduction versus not responding."

He said, "The analysis showed that active investment for carbon neutrality leads to higher long-term economic growth rates and reduced financial sector losses compared to no response. Since the effects of carbon reduction investments appear over the long term, it is necessary to respond with a long-term perspective."

He particularly emphasized, "As economic damage and financial company losses increase in regions densely populated with high carbon-emitting manufacturing companies, attention from local governments and financial institutions located in those areas is required."

Governor Lee stated, "The FSS will promote low-carbon transition finance to supervise climate risks in the future," and added, "We will ensure that companies striving to reduce carbon emissions receive sufficient support for low-carbon transition funds." To this end, although the carbon reduction effect has been proven, the current green standards only partially satisfy some investments, so the FSS plans to prepare transition finance guidelines in consultation with the Financial Services Commission and the Ministry of Environment within this year.

He also said, "We will strengthen cooperation with financial institutions and local governments located in regional areas," and added, "We will expand consulting services necessary for small and medium-sized enterprises in the region to reduce carbon emissions at manufacturing sites and support the smooth supply of investment funds for low-carbon transition facilities."

He continued, "We will encourage the establishment of an enterprise-wide climate risk management system," and said, "Financial company executives need to proactively respond with a long-term perspective on low-carbon transition, and we will support close communication with the financial sector to ensure that climate risk management guidelines are implemented in financial field operations."