Shinhan Financial Group said Tuesday it became the first Asian financial holding firm to join the nonprofit Value Balancing Alliance in Frankfurt, Germany, a cross-industry organization developing a valuation standard for monetizing impacts of ESG management.
ESG refers to the policies of factoring in environmental, social and governance-related issues in business operations.
Founded in June 2019, the VBA is comprised of 18 multinational corporations, including South Korea’s third-largest conglomerate SK Group, German chemical firm BASF and Swiss pharmaceutical giant Novartis.
The firm alliance has been cooperating with leading universities such as Oxford University and Harvard Business School as well as the Organization for Economic Cooperation and Development, in order to create and pilot a model for assessing the impact of ESG-oriented company initiatives on the environment, society and businesses in monetary terms.
As a new member of the VBA, Shinhan Financial will participate in the process for developing an evaluation model for ESG management, while benchmarking the ESG-related strategies of major global firms, especially their methodology for measuring environmental and social contributions.
“(Shinhan Financial) is planning to differentiate its ESG activities by quantifying the group’s contribution to society and environment. We will continue to work with VBA member companies to lay the foundation for measuring the value of ESG businesses across the globe, while reinforcing our own social value measurement model, the Shinhan Social Value Measurement Framework,” a Shinhan Financial official said.
To promote financing to companies committed to the ESG values, the banking giant developed the so-called Shinhan Social Value Measurement Framework last year, the first of its kind in the finance industry, a standard for monetary assessment of corporate activities’ economic, ecological, and social impacts.
By Choi Jae-hee (email@example.com