FSC Holds Meeting with Banks on Loan Restrictions for Companies Involved in Serious Industrial Accidents

Discussion on Strengthening Corporate Social Responsibility

Financial authorities are actively pursuing measures to restrict loans and guarantees for companies involved in serious industrial accidents.

According to financial authorities on July 31, the Financial Services Commission (FSC) will hold a closed-door meeting on August 1, chaired by Director Ahn Chang-guk of the Financial Industry Bureau, with relevant institutions, representatives from the banking sector, and loan officers from secondary financial institutions to discuss management measures for companies involved in serious accidents.

At the meeting, the FSC plans to review the internal rules and current practices of corporate lending assessments in the banking sector and collect opinions on ways to improve evaluation criteria for companies involved in serious industrial accidents.

This move follows the report by FSC Chairman Kim Byunghwan at the Cabinet meeting on July 29, where he stated that the government is considering measures to impose disadvantages in ESG (Environmental, Social, and Governance) evaluations when a major accident occurs. In response, President Lee Jaemyung encouraged the initiative, expressing expectations for the effectiveness of the FSC’s measures.

Banks currently incorporate non-financial factors such as ESG scores in corporate credit evaluations in addition to financial factors, but the occurrence of industrial accidents is not explicitly included among the assessment criteria.

The FSC is considering, through discussions with the financial sector, strengthening social responsibility by introducing new penalty items in corporate lending guidelines for companies involved in serious industrial accidents.

There are also discussions about strengthening social responsibility assessments in policy financial institutions’ loan reviews, imposing penalties on companies involved in serious accidents, and offering lower loan interest rates to companies that increase investment in safety.