KB Financial Group Inc

RATING

SECTOR

Banking

 

WEBSITE

CONTACT

Jung-gu, Seoul
South Korea

Tel: 822-2073-2844

STOCK EXCHANGE

LISTING

EMPLOYEES

26,000

CHIEF SUSTAINABILITY OFFICER

No sustainability representative.

 

AWARDS

  • Sector Honors Award in the finance sector of CDP for three consecutive years.

CONTENT SOURCE

FURTHER READING

No noteworthy external sources found.

 

Report created by Youmna Abdallah

 

KB Financial Group Inc

SECTIONS :  Sustainability  •  Targets    Evaluation  •  Key Points  •  Overview

 

Company Activity

KB Financial Group, Inc. is a holding company that engages in providing financial services through its subsidiaries. It operates through the following segments: 

  • Corporate Banking, which provides services such as loans, overdrafts, deposits, credit facilities and other foreign currency activities.
  • Retail Banking, which offers services such as private customer current accounts, savings, deposits, consumer loans and mortgage loans.
  • Other Banking Services, which provides services relating to banking business besides corporate banking and retail banking services.
  • Credit Card, which offers services such as domestic as well as overseas credit and debit card operations.
  • Life Insurance, which provides products such as life insurance and wealth management.  
  • Investment and Securities business, which provides services such as investment banking and brokerage

The company was founded in 2008 and is headquartered in Seoul, South Korea.

Company Sustainability Activity

Under their mission, “Financial Service Delivering Changes”, KBFG is committed to integrating ESG aspects across their business activities, preemptively responding to climate change risks and striving to fulfill their social responsibilities.

They established a solid foundation for integrating ESG in their business operations by declaring Guiding Principles on ESG in January 2019, and setting up a board ESG Committee in March where the group’s ESG strategy was discussed and developed. In 2019, they became the first Korean financial holding company to have two female independent directors on board, further advancing gender equality and female empowerment. To achieve their ESG strategic goal, they are going to implement the following:

  • Commit to “Green Leadership” by advancing their climate change strategy for the environment.
    • They will not only accelerate transition to a low carbon economy by focusing on carbon emissions reduction and efficient energy consumption in their own operations, but also lead the green finance ecosystem by increasing investments and lending in renewable energy and green sectors. they will also continue to engage in global initiatives for environmental issues such as implementing the Task Force on Climate-related Financial Disclosures (TCFD) recommendations.
  • Deliver greater value to their society by fulfilling their social responsibilities as corporate citizens.
    • They will strengthen their support for children and youth through their CSR activities living up to their status as a leading financial group, and foster startups and FinTech companies through investments and various support.
      • Furthermore, they will help create a better world by supporting SMEs and small business owners and helping the underprivileged through inclusive finance.
  • Promote transparency in corporate governance to embed ESG management practices throughout the market. they will strive to improve stakeholder trust through transparent disclosure of ESG information and build a strong and sound corporate governance culture.
    • Their efforts for actively exercising the Stewardship Code will lead to increasing the value of investee companies and encouraging long-term and sustainable growth

In 2020, KBFG established the “KB GREEN WAVE 20301” as a strategic goal to integrate ESG factors into conducting its business and further build stakeholder trust. The aim is to pursue carbon neutrality based on KB Net Zero S.T.A.R., KBFG’s mid-to-long-term carbon neutrality strategy. In addition, the group will reduce its internal emissions by 42% by 2030 to achieve carbon neutrality by 2040 and reduce its asset portfolio’s emissions by 33% by 2030 to become carbon neutral by 2050.

Highlights

2020 Highlights

  • ESG products, investments, and loans worth ₩22.95tn.
  • Committed to Anti-coal Financing
  • Declaration of carbon neutrality strategy: NET ZERO S.T.A.R.

2019 Highlights

  • Included in the DJSI World Index for four consecutive years.
  • Made commitment to reduce carbon emissions by 25% by 2030 (compared with 2017) and attain KRW 50 trillion in ESG products, investments, and loans.
  • Reached 790tCO2eq in their reduction of carbon emissions (compared with 2017).
  • Reached 487,272 kWh renewable energy consumption.
  • Reached 260,000 beneficiaries of financial education.
  • Ranked 1st in the NCSI (National Customer Satisfaction Index) for 13 times.
  • Established board-level ESG Committee.
  • Reduced 755 thousand working hours through RPA (Robotic Process Automation) (cumulative, as of the end of 2019), leading to business process improvement and efficient HR management.
  • Hosted 10,712 participants in digital and IT competence enhancement trainings (as of the end of 2019).
    • Cultivated future talents and fostered digital services.
  • Invested KRW 32.6 billion in 76 “KB Starters” and supported 113 collaboration cases by operating the “KB Innovation HUB” to support promising startups.
  • Subsidized KRW 700 million in phone bills to support those affected by the COVID-19 (around 8,800 customers).
  • Offered USIM chips to evacuate around 800 quarantined South Korean evacuees from overseas.

Targets

Environment: Advancing Climate Change Strategy

  • Setting and Managing Carbon Emissions Target.
  • Reduce internal emissions by 42% by 2030 to achieve carbon neutrality by 2040.
  • Reduce its asset portfolio’s emissions by 33% by 2030 to become carbon neutral by 2050.
  • Pursue carbon neutrality based on KB Net Zero S.T.A.R., KBFG’s mid-to-long-term carbon neutrality strategy.
  • Increasing Green Investments and Loans.
  • Leading the Way in Green Finance Ecosystems.

Social Responsibility: Internalizing Responsible Management for Society

  • Expanding Social Contribution.
  • Promoting Shared Growth and Mutual Prosperity.
  • Respecting Human Rights and Diversity.
  • Expanding Financial Inclusion.

Corporate Governance: Spreading the Culture of Transparent Governance

  • Enhancing Transparency in Governance.
  • Strengthening the Stewardship Code.
  • Expanding Investments in Excellent Governance.
  • Building a Comprehensive Evaluation System.

Progress

ENVIRONMENT

Achieving Carbon Neutrality

    • Internal emissions(Scope 1+2): 139,888 tons of CO2.
    • Asset portfolio’s emissions(Scope 3): 26,761,188 tons of CO2 (as of 2019).
  • Consumption of renewable energy: 471,128kWh.
  • KB Green Wave, and Go Green Campaign engaging both employees and customers.

Establishing environmental and social risk management principles and enhancing environmental management systems

  • Implemented coal-fired power plant exclusion policy through the pledge to move beyond coal for the first time among domestic financial groups.
  • Introduced the environmental and social risk management system in relation to large-scale project financing by joining the Equator Principles.
  • Advanced the ESG investment process.

Securing green leadership by expanding eco-friendly investments and loans

  • Reached ₩22.95tn ESG products, investments, and loans.
    • ESG products: ₩6.01tn
    • ESG investments: ₩3.90tn
    • ESG loans: ₩13.03tn

Building leadership through global initiative activities in the field of environment

  • Participated in the working group for the development of EU Taxonomy3-based guidelines for different products.
  • Joined SBT4 to establish and verify carbon emission reduction targets.

SOCIAL

Promoting social contribution to create value for future generations

  • Beneficiaries of the Youth Mentor, KB: 8,691.
  • All-Day Childcare Classes: 894 schools, 1,446 classrooms.

Promoting shared growth through the expansion of social value creation

  • 18,650 people matched with jobs through the KB Good Job.
  • Provided 10,050 cases of consulting services to the self-employed and prospective startups that are facing difficulties in business management.
  • Provided support to medium and small business owners and the underprivileged who are heavily impacted by COVID-19.

Respecting human rights and diversity of stakeholders

  • Included in Bloomberg Gender Equality Index for three consecutive years(2019~2021).
  • Launched WE STAR, female talents development strategy.
  • 4,882 employees returned to work after childcare leave.

Providing financially vulnerable classes with stable financial services

  • Provided loan products for low-credit and low-income people worth ₩2.27tn such as “KB New Hope Spore” and “KB Sunshine Loan”.
  • Provided saving products for low-credit and low-income people worth ₩3.27tn such as “KB Kookmin Property Formation Savings”.

GOVERNANCE

Spreading the culture of healthy governance

  • Selected as the best financial company in corporate governance by the KCGS for three consecutive years(2018~2020).

Increasing the value of investee companies through active execution of the Stewardship Code

  • Established the standards for exercising proxy voting related to ESG to reinforce the evaluation and monitoring of investee companies’ ESG implementation status.
  • Conveyed views through proxy voting 1,136 times for 185 domestic companies.

Building a comprehensive ESG management evaluation system

  • KB Kookmin Bank concluded an MOU with Korea Corporate Governance Service to foster outstanding ESG corporations.
 

Certificates

KB Financial Group does not disclose any sustainability-related certificates.

UN Sustainable Development Goals

UN SDGs Compliance

SDG 1: No Poverty

  • Providing financially vulnerable classes with stable financial services.

SDG 5: Gender Equality

  • Launched WE STAR, female talents development strategy.
  • 4,882 employees returned to work after childcare leave.

SDG 7: Affordable and Clean Energy

  • Achieving Carbon Neutrality.
  • Consumption of renewable energy.

SDG 8: Decent Work and Economic Growth

  • Promoting shared growth through the expansion of social value creation.
  • 18,650 people matched with jobs through the KB Good Job.

SDG 10: Reduced Inequalities

  • Respecting human rights and diversity of stakeholders.

SDG 12: Sustainable Consumption and Production

  • Spreading the culture of healthy governance.
  • Creating greater value through products and investments regarding outstanding companies in a sustainable manner.
  • Building a comprehensive ESG management evaluation system.

SDG 13: Climate Action

  • Establishing environmental and social risk management principles and enhancing environmental management systems.
  • Implemented coal-fired power plant exclusion policy through the pledge to move beyond coal for the first time among domestic financial groups.

SDG 17: Partnerships for the Goals

  • Building leadership through global initiative activities in the field of environment.
  • Participated in the working group for the development of EU Taxonomy3-based guidelines for different products.
  • Joined SBT4 to establish and verify carbon emission reduction targets.

Secondary SDGs: 3, 4

Evaluation

KB Financial Group is committed to sustainability through its holistic approach to ESG management and strategies. The group is committed to creating sustainable value and enhance customer trust by promoting responsible management for environment and society and disseminating healthy corporate governance.

Their high ranking on the Bloomberg GEI as well as their commitment to global initiatives such as the UNEP FI Principles for Responsible Banking and Working Group of Collective Commitment of Climate Action are noteworthy.

KBFG’s commitment to reducing its carbon emissions by 25% by 2030, establishing environmental and social risk management principles and enhancing the environmental management system.

The group publishes regular sustainability reports which include clear targets and goals and complies with eight of the UN Sustainable Development Goals. 

Although the bank does not process any relevant certificates, it has made a couple noteworthy listings. KB Financial also received an award from the CDP.

For these reasons, this company has been rated a B.

Analyst Outlook: Neutral

Whilst KBFG is implementing a clear strategy to achieve sustainability, the group could benefit from receiving more awards and certificates that validate their progress. 

Key Points

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