Analysis
In general, Korean financial institutions fall behind the global standard in terms of coal-exit policies.
Best practices
Korean financial institutions compatible with global standards are Samsung Fire & Marine Insurance, Standard Chartered Bank Korea, and Mirae Asset Securities. Best practice at national level yet insufficient in global standard.
Samsung Group Financial Subsidiaries
Samsung group financial subsidiaries (Samsung Fire & Marine Insurance, Samsung Life Insurance, Samsung Active Asset Management, Samsung Asset Management, Samsung Securities) have excluded companies with more than 30% of their revenue from coal power production and mining from investment. Samsung established the most proactive policy with criteria for the coal industry and coal companies among Korean financial institutions. Still, there is room for improvement since the company has limited its exclusion policy to coal power generation and mining. The firm also describes the policy as an ESG investment guideline, lacking a sufficient level of transparency.
Standard Chartered Bank Korea
Standard Chartered Bank Korea follows the same climate policy adopted by its parent company, Standard Chartered. Under its climate policy, the company is expected to stop financing customers with the coal share of revenue of over 5% by 2030 and exclude companies with plans to expand coal-power generation projects. The bank is spearheading coal-free initiatives in the Korean financial industry, but it lacks clear-cut criteria for immediate implementation. Another area of improvement is reduction goals in asset portfolios since the bank has only set carbon intensity reduction targets for certain industries, such as energy (85%), steelmaking (33%), oil and gas (30%) by 2030.
Mirae Asset Securities
Mirae Asset Securities mentioned that it would pay attention to companies with more than 30% of their revenue from coal power production and those with more than 25% of their revenue from coal mining. It is also set out to review oil and natural gas projects by developing relevant criteria, taking steps towards their phase out ahead of other financial institutions. Still, it is regrettable that the asset manager has not clearly announced to stop making investments in fossil fuels altogether.
Worst Practice
Surveyed 29 out of 100 financial institutions did not meet all the coal phase-out criteria. Overall, Korean financial institutions’ climate change policies are highly insufficient to make a comparison of the worst practices, therefore, this section will be updated afterward.