Leading the way with ESG trust

The introduction of a net zero carbon emissions initiative in South Korea meant that organizations across all business sectors had to shift towards a low carbon approach. In the South Korean financial sector, Environmental, Social, and Governance (ESG) risk is a relatively new area of focus. Consequently, for this bank, responding swiftly to ESG issues became imperative, despite the lack of established precedents to follow. As an emerging initiative, the bank faced the challenge of not only navigating uncharted territory but also fostering trust in its approach across the organization, its value chain, and among stakeholders.

With the new environmental regulations presenting new challenges, the bank needed an adviser that had deep expertise in formulating an ESG framework and aligned risk management. Based on past project experience, KPMG in Korea was selected to support the transformation. With KPMG’s support, the bank was able to develop an ESG risk measurement and management framework which enables the bank to review its ESG position clearly, and address ESG-related issues proactively. The framework also enables the bank to encourage its lenders to take a sustainable business approach. 

The most important issue that KPMG in Korea faced in the engagement was ensuring the reliability of ESG data used in the framework. Therefore, the team worked with credit rating agencies that could provide the most accurate carbon data. With trust as the main driver in KPMG’s approach, the bank and its stakeholders can rely on this framework as a foundation for future ESG-related issues. This trust can help the bank pursue responsible growth.