Shinhan Financial Group, South Korea’s second-largest financial company by market capitalization, is the first financial services firm in East Asia to have openly committed to carbon neutrality by 2050 -- a bold step in the global race to expand environmental, social and governance investment.

“ESG investment poses an opportunity, not a risk, which means we should be able to take advantage of it,” Shinhan Chairman Cho Yong-byoung said, describing ESG investment as a vaccine that boosts the resilience of financial institutions facing growing uncertainty.

In November 2020, the group revealed what it calls the “Zero Carbon Drive,” an initiative to achieve carbon neutrality or net-zero emissions by 2050, in line with the government’s carbon-cutting commitment.

“But ours is an independent initiative. This isn’t just some one-off declaration we’ll use to pad our resume. Everyone at the group is behind the drive,” a Shinhan Financial Group official said, adding key subsidiaries are running their own campaigns to aid green growth.

Shinhan Bank adopted the Equator Principles, a global framework that encourages financial institutions to look at environmental and social risks in their project financing so it does not hurt the environment or violate the rights of those affected by development.

ShinhanCard has also started using “green credit cards” made with upcycled plastic. The effect is the same as annually recycling up to 310,000 plastic bottles that can hold up to 1.5 liters of water, according to the company.

Shinhan Life Insurance is following suit, making efforts to reduce paperwork to a minimum. Shinhan is the first local insurance company to join the Net-Zero Insurance Alliance, a UN-led coalition of 15 global insurers and reinsurers committed to reducing carbon emissions.

Meanwhile, Shinhan Asset Management has launched what it calls “ESG funds” to expand investment in firms that have a positive impact and to keep up with increasing consumer demand for responsible investing.

“One other thing that sets us apart from the rest is that we have senior management in charge of the initiative, so everything we plan to do won’t just be said out loud but will really be done,” another Shinhan Financial Group official said, referring to its ESG committee within the board of directors.

Compliance with the group’s ESG principles is administered at the highest level and across all subsidiaries, the official added, saying the ESG committee, along with the chief strategy and sustainability officer and working-level committees, will ensure a coherent system for optimal ESG investment.

In September, the group revealed the slogan “Do the Right Thing for a Wonderful World” to raise awareness of its green initiative, describing ESG investment as the “right thing” for a better future.