South Korea’s financial behemoth Shinhan Financial Group has pledged to promote carbon neutrality in Korea and the rest of East Asia by adopting environmentally friendly standards for its investment portfolios and intra-group management.

By announcing its “zero carbon drive,” at a board meeting for social responsibility on Friday in Seoul, the nation’s No.1 banking group by total assets vowed to adopt eco-friendly lending and investment rules for firms and industries responsible for high carbon emissions.

Its eco-friendly financial support programs, which are expected to benefit firms with carbon neutral goals, would be applied to a wider range of companies down the road.

Shinhan said it is the first financial firms in the East Asian market to gauge the amount of carbon emissions of its clients and their assets, and work with the corporate customers to achieve carbon neutrality.

To be more specific, Shinhan aims to reduce its own carbon emissions by 46 percent in 2030, and 88 percent in 2040 in line with the landmark 2016 Paris Agreement. It will also try to reduce its investment portfolio’s carbon emissions by 38 percent and 69 percent within 10 and 20 years, respectively.

In addition, the Korean financial giant plans to join the Science Based Targets initiative and Platform Carbon Accounting Financials to prove the amount of carbon emissions reduction by international organizations.

The SBTI is a joint initiative among global organizations to help corporations set greenhouse gas emission reduction targets consistent with the level of de-carbonization required scientifically. The PCAF is a global initiative supporting banks and investors to assess and disclose the greenhouse gas emissions of their portfolios. The PCAF is now reportedly made up of some 80 financial members with over $13 trillion in assets.

Shinhan’s goal, in a nutshell, is to be carbon neutral by 2050 by bolstering its loan programs targeting eco-friendly tech firms and investment in renewable energy while helping local firms adopt eco-friendly technologies.

“The development and expansion of eco-friendly finance is a crucial task that the nation’s financial sector must tackle,” Shinhan Financial Group Chairman Cho Yong-byoung said in a statement.

“Shinhan will spare no efforts to have good influence on our society,” he added.

Asia’s fourth-largest economy’s finance sector has been trying to keep up with the global trend to uphold environmental, social and governance standards in recent years through issuance of ESG-related and green bonds. Its efforts have been further accelerated by the government’s announcement of the 12.9 trillion-won Green New Deal policy earlier this year, centered on fostering low-carbon and eco-friendly energy use.

By Jung Min-kyung (mkjung@heraldcorp.com)