Accelerates ESG management through the Social Responsibility Management Committee
Chairman Cho Yong-byoung of Shinhan Financial Group. (Photo: Shinhan Financial Group)
Shinhan Financial Group announced on Feb. 5 that the group posted 3,414.6 billion won in net profit in 2020, and 464.4 billion won in the fourth quarter.
The former climbed 0.3 percent compared to 3,403.5 billion in the previous year, and the latter dropped 59.4 percent from 1,144.7 billion won a year earlier.
Shinhan continued its solid performance for the fourth consecutive quarter, considering non-current expense factors in the period.
By affiliates, Shinhan Bank and Shinhan Financial Investment saw their net profits decline in the aftermath of loan-loss provisions. Shinhan Bank’s net profit fell 10.8 percent year-on-year to 2,077.8 billion won last year.
During the same period, Shinhan Financial Investment Corp. saw its net income fall 29.9 percent to 154.8 billion won. Shinhan Card racked up 606.5 billion won in net income, up 19.2 percent from a year before.
Shinhan Life Insurance and Orange Life Insurance, the two insurance subsidiaries of Shinhan Financial Group, enjoyed increases of 43.6 percent and 118.7 percent in net profit by chalking up 177.8 billion won and 297.3 billion won in net profit, respectively.
Shinhan Bank posted 248,800 billion won in loans in 2020, up 10.6 percent from a year before. It is the first time Shinhan Bank recorded double-digit growth of loans according to Shinhan Financial Group’s 2020 earnings report released on Feb. 5.
Shinhan Bank’s won-currency loan growth rate stood at 5.9 percent in 2017, 7.2 percent in 2018 and 7.4 percent in 2019, staying below 8 percent.
“Shinhan Bank racked up an annual growth rate of 10.6 percent while enjoying balanced growth in home loans and corporate loans,” said an official at Shinhan Financial Group.
“By sector, household loans grew 9.0 percent and corporate loans grew 12.3 percent, especially loans to small and medium-sized companies swelled 14.1 percent annually, leading to overall asset growth.”
“We plan to stabilize our profit base this year by expanding selective loans considering risks as a result of active financial support programs along with demand for funds from small and medium-sized companies due to the spread of COVID-19,” the official added.
Meanwhile, Shinhan Financial Group became the first financial holding company to make major decisions on the group’s ESG management through the Social Responsibility Management Committee under the board of directors.
It also actively implements social responsibility management in line with international trends by appointing chief strategy sustainability officers (CSSOs) to discuss the group’s ESG strategy and implementation direction.
To accelerate ESG management, it will establish the ESG Planning Team under the group’s strategic and sustainable sectors to strengthen its overall ESG strategy, strengthen sustainable financial execution capabilities, and lead new financial trends.
Shinhan Financial Group declared “Zero Carbon Drive” for the first time as an East Asian financial group in a meeting of the Social Responsibility Management Committee under the board of directors in November 2020.
In order to actively participate in international cooperation due to climate change, the government has put forward an eco-friendly strategy.
Shinhan’s unique eco-friendly financial strategy in line with international carbon neutrality policies will contribute to revving up the low-carbon economy by expanding eco-friendly financial support in the industry, as well as managing loans and investments in companies and industries with high carbon emissions.
The group has set a goal for net zero carbon emissions in the group’s asset portfolio by 2050 by expanding eco-friendly financial support, such as giving loans to eco-friendly technology companies, making capital investment in renewable energy businesses and giving support to a conversion to eco-friendly facilities.
Since before the establishment of global standards on carbon emission measurement, Shinhan Financial Group built a database that calculates and manages carbon emissions from 1,042 domestic carbon emission allocation companies and greenhouse gas and energy target management companies in consideration of the group’s asset portfolio.
Shinhan Financial Group will use the “Science Based Target Initiative (SBTi)” methodology in line with the Paris Climate Convention to reduce the group’s own carbon emissions by 46 percent in 2030 and 88 percent in 2040.
The group’s asset portfolio aims to cut carbon emissions by 38 percent by 2030 and 69 percent by 2040.