Hana Financial to end financing of coal power plants

Finance

Published: 11 Mar. 2021, 16:14

Hana Financial to end financing of coal power plants

Hana Financial Group Chairman Kim Jung-tai. [HANA FINANCIAL GROUP]

Hana Financial Group announced plans to achieve carbon neutral growth by 2050 in step with the government-led carbon neutrality drive.

According to the financial group on Wednesday, it will halt financing for projects related to building coal-fired power plants at home and abroad.

The group will also establish a system to assess environmental and social risks related to development projects by the first half of this year, to refrain from financing projects that might damage the environment or violate human rights.

Within the year, the group said it will adopt the Equator Principles, a risk management framework developed for financial institutions for determining, assessing and managing environmental and social risks in projects.

The group said it will establish new processes and guidelines to be more transparent about its achievements on environmental, social and governance (ESG) management.

It is developing a so-called Hana-Taxonomy that will help related companies determine which projects or businesses are considered eco-friendly. The taxonomy will first be used by Hana Bank when assessing loan applications this year.

The group will release a report on how it’s tackling climate change, based on a guideline provided by the Task Force on Climate-related Financial Disclosures in June. The task force, chaired by Michael Bloomberg, offers recommendations designed to help companies provide better information on climate-related financial risks and opportunities.

It is not only Hana Financial Group aiming to improve ESG management and achieve carbon neutrality in the local finance sector.

Shinhan Bank also announced Wednesday that it will not finance projects related to building coal-fired power plants at home and abroad.

Earlier in January, six of Hanwha Group's financial companies -- Hanwha Life, Hanwha General Insurance, Hanwha Investment & Securities, Hanwha Asset Management, Hanwha Savings Bank and Carrot General Insurance -- announced they will no longer finance coal projects and instead expand green investments.

BY KIM JEE-HEE [kim.jeehee@joongang.co.kr]