Six Financial Divisions Announce Coal-Free Commitment

On the morning of January 5th, 2021, following a practical review, the CEOs of Hanwha Life, Hanwha General Insurance, Hanwha Investment & Securities, Hanwha Asset Management, Hanwha Savings Bank, and the digital non-life insurance firm Carrot jointly announced their companies’ commitment to supporting carbon-free power. In compliance with the Korean government’s guidelines to help curb the spread of COVID-19, the announcement was made online during a video conference call (pictured above).

In accordance with this commitment, the financial divisions will not fund the construction of any coal-fired power plants, nor will they underwrite bonds issued by special purpose companies (SPCs) that have been established to build coal-powered plants locally or abroad. They will also not underwrite general bonds that would finance the construction of coal-fired plants, but will vow to expand investments in environmentally friendly assets such as renewable energy sources.

The commitment from the six divisions represents the first step in their plan to help Hanwha achieve its goal of advancing sustainable management efforts that will ultimately have tremendous socioeconomic value.

“Many global companies have set Environmental, Social, and Governance (ESG) standards for their operations as part of their corporate behavior,” said Hanwha Group Chairman Seung Youn Kim in his 2021 New Year’s message. “And as a global leader in renewable energy, we have to proactively tackle climate change and lead the environmental efforts that will take us into a zero-carbon era.”

In a message commemorating Hanwha Group’s 68th anniversary last October, Kim discussed the importance of ESG management, declaring that “In the future, companies will be evaluated for their economic, social and environmental sustainability in all areas of management,” and emphasizing that these factors had already become key indicators of a company’s future prospects.

The coal-free commitment is an agreement among Hanwha Group’s financial divisions to help address climate change by not financing or investing in coal-fired power plants or related projects. The vow is strongly supported by stakeholders including local governments, education offices, NGOs, and environmental groups.

Hanwha Group’s financial divisions have made great strides in strengthening their ESG management practices with robust solutions designed to foster sustainable growth in various areas of their operations while addressing social and environmental issues at the same time.

As part of an effort to address climate change, Hanwha Life has implemented a ‘green office’ policy at each of its workplaces. The company has selected low-carbon business practices such as greenhouse gas reduction and energy efficiency as key tasks in creating low-carbon, eco-friendly and safe work environments. It systematically manages all kinds of data including energy use and greenhouse gas emissions at each of its workplaces, and continually explores ways to reduce emissions even further.

To help promote sustainable energy use, Hanwha Life installed solar panels at its Yongin, Korea-based training center, LifePark. The panels, which are featured on the training center’s buildings and signposts, contribute to LifePark’s energy needs. The company has also reduced its carbon footprint and minimized the use of paper at its offices by introducing an electronic subscription system known as Smart Planner.

With the aim and commitment of fulfilling its duty as a corporate citizen, Hanwha Life has been increasing its investment in sustainable management. As of November of 2020, the company has invested a total of USD 7.7 billion in renewable energy assets and infrastructure, which was USD 906 million more than 2018’s total. Going forward, the company plans to continue increasing its investments in this area.

Like Hanwha Life, Hanwha General Insurance is determined not to finance nor invest in coal-powered plants, and will not invest in corporate bonds that are intended to fund the construction of such plants.

Hanwha General Insurance’s interest in infrastructure and renewables, which dates back to 2010, amounted to USD 3.3 billion in investments as of 2019. That figure accounts for more than 20 percent of the company’s investment portfolio, and represents an increase of USD 453 million compared to 2018. The company’s net investment in the sector in 2020 was USD 91 million more than the previous year, underlining its ongoing commitment to socially responsible investment.

As part of its pledge to be an active part of the coal-free commitment, Hanwha General Insurance has specifically decided not to finance, invest in, or underwrite insurance for new coal-fired power plants or related projects. Like Hanwha Life, the company has installed solar panels on its Life Campus training center in Suanbo, Korea, and has strived to reduce paper consumption by promoting the use of an electronic subscription system.

Hanwha Investment & Securities has yet to make any direct investments in coal-powered plants. However, the company has decided not to refinance midstream port assets in Australia as they are intended for coal exports and may undermine its coal-free commitment. Instead, the company plans to invest in more renewable energy projects, including solar power.

In 2018, having recognized the importance of ESG and corporate sustainability, Hanwha Asset Management became the first firm in the industry to hire an expert in these fields. By 2020, the company had established a dedicated team of ESG and corporate sustainability experts tasked with laying the groundwork for future investments. The team has focused on developing a variety of ESG products, including the ARIRANG ESG Leading Company ETF, the bond-focused ESG Hero, and the Korea Legend ESG, which focuses on responsible investment.

Hanwha Asset Management offers investment finance solutions as a member of the Asia Investor Group for Climate Change (AIGCC). Last year, the company introduced the Hanwha Green Hero fund and became the first Korean company to launch a fund dedicated specifically to climate change. The Hanwha Green Hero fund officially hit the market in October of 2020, and it invests in global stocks related to industries that promote climate change mitigation and adaptation. The fund has proven to be incredibly popular, attracting more than USD 9 million in assets in its first month alone.