FSC Korea Highlights Increasing ESG Focus in Korean Financial Sector
FSC Korea notified that the Green Finance Task Force held its meeting in August 2020. The task force discussed that it will work to establish a monitoring system for financial risks emanating from climate change, boost investment in green industries, and consider the possibility of joining international networks on green finance. The Vice Chairman of FSC Korea, Sohn Byungdoo, presided over the meeting and shared his remarks on climate change risks and green investment.
Mr. Sohn Byungdoo mentioned that climate change can threaten the stability of the financial system in many different ways and the government will strengthen its efforts to monitor and identify climate change risks to maintain stability in the financial system. He suggested that financial institutions should consider taking into account the environmental, social, and governance factors, alongside the traditional risk factors such as credit or liquidity risks for their asset management. In this regard, the government will work to lay foundations to encourage investors to consider environmental risks when making investment decisions.
Building a sustainable future amid climate change requires efforts of both adaptation and mitigation. Mr. Byungdoo highlighted that the government will lead the public-private joint efforts to boost investment in green industries. The "green new deal" is a part of the Korean new deal initiative introduced on July 14 aimed at laying foundations for a sustainable growth. Finance will play a significant role in this respect. The government will also work to prevent greenwashing and minimize market confusions by specifying the scope of green industries, while providing new investment opportunities through enhanced liquidity in the market. To strengthen international cooperation, the government will review the possibility of joining international networks, such as the Network for Greening the Financial System (NGFS) and the FSB Task Force on Climate-related Financial Disclosures (TCFD).
Related Link: Press Release (PDF)
Keywords: Asia Pacific, Korea, Banking, Securities, Climate Change Risk, ESG, Sustainable Finance, NGFS, FSC
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