Shinhan Financial Group Declares Green Finance
This is the fourth in a six-part series of articles on the nation's vision to become a green economic power in the global community, as well as recent developments in ``green finance'' in Korea aimed at supporting the vision. ― ED.
By Kim Jae-kyoung
On the occasion of its eighth anniversary on Sept. 1, Shinhan Financial Group, one of the nation's leading financial holding companies, declared the group's plans for "green finance" in a move to transform into an environment-friendly company and support the government's "low-carbon, green-growth" policy.
To foster green management, the group unveiled a long-term plan, including three key principles and five action plans. The three key principles are: offering more financial activities supporting "low carbon, green growth"; playing a role in reorganizing the economy into an eco-friendly one; and minimizing anti-environmental activities.
In order to follow the key principles, the group came up with five action plans. First, the group, as a member of the Federation of Korean Banks, plans to develop "non-taxable, long-term green deposit products."
Second, it will give higher grades to environment-friendly businesses in credit evaluation by taking environmental risks into consideration. Third, it plans to introduce a group-wide carbon emission management system.
Fourth, it will make more efforts to reduce carbon emissions by saving energy and replacing illuminators with high-efficient LED (light-emitting diodes) lights. Finally, the group aims to reduce its carbon emissions to zero through the so-called carbon offset-based management philosophy.
A "carbon offset" is an emission reduction credit that results in less carbon dioxide or other greenhouse gases in the atmosphere than would otherwise occur. Carbon offsets are typically measured in tons of CO2-equivalents and are bought and sold through a number of international brokers, online retailers and trading platforms.
To achieve its green finance vision, the group's subsidiaries, including Shinhan Bank and Shinhan Card, have introduced a wide variety of environment-friendly financial products.
Shinhan Bank, the group's flagship, is offering its ``Shinhan Energy Installment Savings,'' to motivate customers to join the energy saving campaign. The product offers prime rates based on transaction records. The outstanding balance of the product stood at 770 billion won at the end of July.
In February, the bank introduced a new loan product, the ``Shinhan Solar Power Loan,'' in order to supply funds for the construction of solar power plants. The product was designed to enable developers to pay off debts in installments. The maturity of the loan is up to 15 years.
The lender is also selling green investment trusts, such as the ``Shinhan BNPP Clean World Investment Trust,'' a product designed to invest in eco-friendly businesses, and the ``Tops Beautiful SRI Investment Trust,'' which was developed to invest in socially responsible companies.
Shinhan Card, the group's card unit, unveiled its "Eco Love Card" as part of efforts to facilitate the environmental protection campaign. The card provides discounts for various eco-friendly events, such as environment concerts, flower exhibitions and art exhibitions.
The credit card issuer is making efforts to expand the use of eco-friendly online bills to reduce the use of paper. It encourages customers to use online bills by offering incentives such as free movie tickets.
It is also conducting a bicycle-riding campaign by forming a business alliance with Infiza, a local manufacturer. With Shinhan cards, customers can buy bicycles at reduced costs at Corex outlets.
"We introduced discount services to help reduce carbon emissions by encouraging more use of bicycles. We will continue to make efforts to develop more eco-friendly products,'' a Shinhan Card executive said.
Shinhan Life plans to launch an eco-friendly green insurance product called "Shinhan Kid Love Insurance" this month. This product insures children against any damages caused by bicycle accidents. It offers a maximum of 120 million won in insurance money.
The insurer plans to contribute part of the profits to eco-friendly businesses to support the government's "low-carbon, green-growth" vision.
In the meantime, the group has decided to set "eco-friendly green activity" as the main theme for its annual volunteer festival to foster a green management culture. Among those activities are the "one-square garden growing campaign" and "tree-planting campaign.''
"We will play a leading role in developing green products and finding new ways to support green growth industries by fostering a green management culture in our group,'' Shinhan Financial President and CEO Shin Sang-hoon said.