금융기관을 위한 ESG 경영의 과제와 주도권 -한국과 일본의 사례 비교를 중심으로-

Abstract

ESG finance is an approach that emphasizes the long-term perspective and requires investment and financing actions for companies that take environmental, social, and governance information into consideration. By implementing management that considers ESG, companies enjoy direct and indirect benefits such as securing stable investments, improving corporate value, strengthening competition through differentiation from other companies in the same industry, and appealing to consumers. New promotion of ESG finance and the ‘E’ of ESG investment to promote domestic companies’ response to securing sustainability in business activities/consideration for biodiversity and the use of domestic natural resources and conservation of biodiversity through business activities. Promoting the incorporation of diversity elements is important. Decarbonization, ESG investment, SDGs... These terms related to the environment and society appear so commonly that it can be said that they are not missed every single day. In fact, financial institutions are affected much more than ordinary companies by the international trends of decarbonization and SDGs. The key to steering the management required of a financial institution is to identify areas to work on and ensure execution. Factors (non-financial factors) that were not revealed in corporate finance, such as global warming, environmental pollution, the gap between rich and poor, racial discrimination, and gender discrimination, have an impact on corporate management and corporate value that cannot be ignored in a situation where awareness of the environment and human rights has increased. I’m starting to go crazy. We learned about the environment surrounding financial institutions. ESG investment and SDGs financing initiatives are not new. In the private sector, a series of environmentally and socially conscious financial institutions were established around the 1970s, such as Shore Bank in the United States and Triodos Bank in the Netherlands. In 1992, the United Nations Environment Program (UNEP) launched the UNEP Finance Initiative in conjunction with the Earth Summit. One of the main factors that accelerated the movement of financial institutions was the Paris Agreement and the United Nations Framework Convention on Climate Change (UNFCCC) held at the 21st Conference of the Parties to the United Nations Framework Convention on Climate Change (COP21) held in November 2015. The biggest feature of the Paris Agreement is that all 196 member countries of the United Nations Framework Convention on Climate Change agreed to it. It has opened up a great horizon for moving beyond the boundaries between developed and developing countries and moving toward reducing carbon emissions for all of humanity. The number of signatories to the Principles for Responsible Investment (PRI), proposed by the UN in 2006 as an investment guideline for investors considering ESG, has only increased moderately since its launch, but has increased rapidly since the Paris Agreement, reaching 3,826 institutions and assets under management as of the end of March 2021. amounts to $121.3 trillion. Also, recently, there has been a noticeable movement to withdraw investments in companies that do not comply with ESG and vote against them at general shareholders' meetings. In response to these investor movements, financial institutions must not only be influenced by ESG in their investment and lending decisions, but also respond to investor pressure as companies. In this environment, ESG investment and SDGs have become management themes that financial institutions must address whether they want to or not, and a delay in response may result in criticism from society, customers may leave, and management may be shaken. ESG investment and SDGs finance can be said to create new business opportunities for financial institutions. Meanwhile, it should be noted that ESG investment and SDGs finance initiatives narrow the business scope of business, investment, and financing. For example, when it comes to lending to coal-fired power plants with high carbon dioxide emissions, all three megabanks have announced that they will not finance new coal-fired power plants. Therefore, financial institutions must respond to society's needs as much as possible while maximizing profits, including expanding business opportunities, while minimizing opportunity loss and resource depletion due to the implementation of initiatives. The key is to identify areas to work on and ensure execution. ESG investment and SDGs finance are affected by global situations and economic fluctuations, so it is difficult to know how far to go. For example, energy resource prices have soared in response to the recent Russian invasion of Ukraine. European countries have decided to restart coal-fired power generation, and OPEC Plus has also decided to increase fossil fuel production. Warren Buffett’s Berkshire Hathaway is also facing headwinds in sustainable finance, including an increase in oil-related stocks. In the above situation, and because the concept may change as times change, it will be difficult to operate ESG investment and SDGs financing arbitrarily. So, what kind of effort is needed to lead to efficient steering? It can be said that accurately understanding the concepts required by the Financial Services Commission and other organizations and implementing them without being excessive or insufficient is an efficient way to deal with ESG investment and SDGs finance. It may be reluctant, but I think it is wise to wait and see while responding to the authorities’ requests until ESG investment and SDGs finance are established as financial products.