Posted : 2023-04-26 16:32
Participants from private and public sectors attend the first session of the ReWorld Forum in Seoul, Wednesday. Courtesy of SDX Foundation
ReWorld Forum examines new assignments and opportunities for sustainable financial industry
By Lee Yeon-woo
As international attention focuses on achieving net-zero emissions by 2050, financial firms with the capacity to pursue opportunities in this area are expected to reap sizeable profits in the global market.
By 2030, the scale of "transition finance" ― financial activities that support the transition of industries, companies and economies to low-carbon, sustainable models ― is expected to reach $37 trillion in Asia and $68 trillion globally.
"While domestic financial firms have made international-level of policy commitments to reduce carbon emissions, there is a long way to go when it comes to implementing feasible action plans," said Choi Jung-kiu, a managing director and partner at Boston Consulting Group, Singapore, during his keynote address at the ReWorld Forum.
Choi explained that financial firms should step in more before and after the loan process, such as requesting carbon reductions from corporations as a loan condition, rather than just lending money and finishing the process. The firms could also connect corporations with companies that hold the necessary technology to achieve the goal and monitor whether corporations are making necessary efforts.
Participants from private and public sectors attend the first session of the ReWorld Forum in Seoul, Wednesday. Courtesy of SDX Foundation
Choi Jung-kiu, a managing director and partner at Boston Consulting Group, Singapore, delivers the keynote address at the ReWorld Forum in Seoul, Wednesday. Courtesy of SDX Foundation
Around 300 experts from both the private and public sectors gathered at Seoul Dragon City, Wednesday, to discuss the future focus of Korean financial firms: transition finance. The forum was hosted by the SDX Foundation, a non-profit organization committed to sustainable development through digital transformation.
"If Korean financial firms fail to offer such solutions to domestic corporations, the corporations may have no choice but to transact with overseas firms that offer solutions to achieve net-zero standards to survive in the global market," said Choi. "Moreover, if a majority of loans in Korean financial firms are directed toward industries that emit significant amounts of carbon, overseas financial firms may find it challenging to conduct transactions with them as well."
Throughout the first session, experts expressed regret that the industry as a whole does not seem to recognize the urgency of the issue. "There is a disparity in the level of preparedness among companies. While banks are thoroughly prepared, others still consider transition finance as promotional agenda," said Kim Jin-you, a partner at Samil PwC.
"A certain overseas country is going to establish wind power plants worth trillions of won over the past decade, but only the Industrial Bank of Korea participates in the project," said Kim Seong-ju, the head of the environmental, social and corporate governance (ESG) team at the Financial Supervisory Service. "This demonstrates that many firms lack understanding of these types of projects and the relevant information. To address this issue, we are communicating with overseas embassies to create opportunities for domestic firms."
Experts hoped that domestic financial firms can regard the situation as an opportunity. The transition finance market is still at a nascent stage, and major overseas financial firms are also making efforts to establish a foothold.
"If Korean financial firms partner with major corporations with high global rankings, they have a great opportunity to lead the global market, just like K-pop or K-movie," said Choi.
Head of the Presidential Commission on Carbon Neutrality and Green Growth Kim Sang-hyup echoed the sentiment. "In the market economy, the ultimate drive for change comes from the money flow. In that sense, I believe net-zero finance is like a trigger to cause the green big bang."
Participants from private and public sectors attend the first session of the ReWorld Forum in Seoul, Wednesday. Courtesy of SDX Foundation
SDX Foundation Chairman Jhun Ha-jin speaks during the opening ceremony of ReWorld Forum in Seoul, Wednesday. Courtesy of SDX Foundation
During the follow-up sessions, participants discussed investment strategies related to the climate crisis and the significance of voluntary carbon markets, where corporations can trade carbon reduction credits. The SDX Foundation also introduced a new system, the Green Class Rating (GCR), to recognize corporations that have demonstrated exceptional performance in reducing carbon emissions.
"We have worked hard our entire lives, only to leave behind a barren environment for our children, which was not our intention. In the next decade, we must break free from past norms and develop innovative solutions to save the earth," said SDX Foundation Chairman Jhun Ha-jin.
Jhun pledged that the foundation would keep hosting ReWorld Forum annually to transform social perceptions, and foster an ecosystem among private, public and scholarly communities in response to the global market.
Posted : 2023-04-26 16:32
Participants from private and public sectors attend the first session of the ReWorld Forum in Seoul, Wednesday. Courtesy of SDX Foundation
ReWorld Forum examines new assignments and opportunities for sustainable financial industry
By Lee Yeon-woo
As international attention focuses on achieving net-zero emissions by 2050, financial firms with the capacity to pursue opportunities in this area are expected to reap sizeable profits in the global market.
By 2030, the scale of "transition finance" ― financial activities that support the transition of industries, companies and economies to low-carbon, sustainable models ― is expected to reach $37 trillion in Asia and $68 trillion globally.
"While domestic financial firms have made international-level of policy commitments to reduce carbon emissions, there is a long way to go when it comes to implementing feasible action plans," said Choi Jung-kiu, a managing director and partner at Boston Consulting Group, Singapore, during his keynote address at the ReWorld Forum.
Choi explained that financial firms should step in more before and after the loan process, such as requesting carbon reductions from corporations as a loan condition, rather than just lending money and finishing the process. The firms could also connect corporations with companies that hold the necessary technology to achieve the goal and monitor whether corporations are making necessary efforts.
Participants from private and public sectors attend the first session of the ReWorld Forum in Seoul, Wednesday. Courtesy of SDX Foundation
Choi Jung-kiu, a managing director and partner at Boston Consulting Group, Singapore, delivers the keynote address at the ReWorld Forum in Seoul, Wednesday. Courtesy of SDX Foundation
Around 300 experts from both the private and public sectors gathered at Seoul Dragon City, Wednesday, to discuss the future focus of Korean financial firms: transition finance. The forum was hosted by the SDX Foundation, a non-profit organization committed to sustainable development through digital transformation.
"If Korean financial firms fail to offer such solutions to domestic corporations, the corporations may have no choice but to transact with overseas firms that offer solutions to achieve net-zero standards to survive in the global market," said Choi. "Moreover, if a majority of loans in Korean financial firms are directed toward industries that emit significant amounts of carbon, overseas financial firms may find it challenging to conduct transactions with them as well."
Throughout the first session, experts expressed regret that the industry as a whole does not seem to recognize the urgency of the issue. "There is a disparity in the level of preparedness among companies. While banks are thoroughly prepared, others still consider transition finance as promotional agenda," said Kim Jin-you, a partner at Samil PwC.
"A certain overseas country is going to establish wind power plants worth trillions of won over the past decade, but only the Industrial Bank of Korea participates in the project," said Kim Seong-ju, the head of the environmental, social and corporate governance (ESG) team at the Financial Supervisory Service. "This demonstrates that many firms lack understanding of these types of projects and the relevant information. To address this issue, we are communicating with overseas embassies to create opportunities for domestic firms."
Experts hoped that domestic financial firms can regard the situation as an opportunity. The transition finance market is still at a nascent stage, and major overseas financial firms are also making efforts to establish a foothold.
"If Korean financial firms partner with major corporations with high global rankings, they have a great opportunity to lead the global market, just like K-pop or K-movie," said Choi.
Head of the Presidential Commission on Carbon Neutrality and Green Growth Kim Sang-hyup echoed the sentiment. "In the market economy, the ultimate drive for change comes from the money flow. In that sense, I believe net-zero finance is like a trigger to cause the green big bang."
Participants from private and public sectors attend the first session of the ReWorld Forum in Seoul, Wednesday. Courtesy of SDX Foundation
SDX Foundation Chairman Jhun Ha-jin speaks during the opening ceremony of ReWorld Forum in Seoul, Wednesday. Courtesy of SDX Foundation
During the follow-up sessions, participants discussed investment strategies related to the climate crisis and the significance of voluntary carbon markets, where corporations can trade carbon reduction credits. The SDX Foundation also introduced a new system, the Green Class Rating (GCR), to recognize corporations that have demonstrated exceptional performance in reducing carbon emissions.
"We have worked hard our entire lives, only to leave behind a barren environment for our children, which was not our intention. In the next decade, we must break free from past norms and develop innovative solutions to save the earth," said SDX Foundation Chairman Jhun Ha-jin.
Jhun pledged that the foundation would keep hosting ReWorld Forum annually to transform social perceptions, and foster an ecosystem among private, public and scholarly communities in response to the global market.