Chairman Son Byung-hwan of NonHyup Financial Group announces a campaign to take care of ESG management on April 7. (Photo: NonHyup Financial Group)

NongHyup Financial Group has declared a shift to an ESG management regime and decarbonization of finance in keeping with global ESG management trends.

The move may be construed as NongHyup Financial Group’s aggressive bid to make management ESG-friendly in compliance with its mandate to help farmers’ happiness and development.

Chairman Son Byung-hwan of NongHyup Financial Group said, “NongHyup, which has grown with the farming industry and farming villages, is an organization optimized for ESG by nature, and the value of existence of agricultural financing should be spread so that NongHyup can be recognized as ESG.”

Chairman Son presided over a management strategy meeting on Feb. 3 in which the financial group declared a vision of “ESG Shift 2025,” calling for a full-fledged change to an ESG regime and decarbonization — withholding project financing for coal-fired power plant projects in Korea and abroad, and expanding eco-friendly projects and renewable energy investments.

NongHyup Financial Group inaugurated the Social Values & Green Financing Committee, a kind of ESG-related committee within the group’s board of directors, and the ESG Strategy Consultation Committee under the direct control of the chairman’s office, while upgrading the existing EST Implementation Team to the EST Implementation Group.

NongHyup Financial Group will pursue a two-pronged ESG investment strategy, reflecting the characteristics of agricultural finance: “green impact finance” designed to reflect investments into the renewable energy sector and ”agricultural impact finance,” designed to promote eco-friendly farming.

Impact financing is a combination of “impact investment,” pursing both social values and financial rate of return, and “micro-finance.” Subsidiaries of the financial group are aggressively developing financial products related to ESG.

NongHyup Bank has developed “NH Green Growth Index,” designed to measure each company’s ESG achievement levels to release ESG specialized loans.

One of NongHyup Bank’s representative financial products factoring in the index is “NH Agro-Food Green Growth Loan,” which was released last October.

The loan was designed to target firms such as low-carbon agro-stock certification firms, animal welfare livestock farms, social enterprise/social contribution companies, and HACCP certification firms in keeping with the government’s “Green New Deal” initiatives. It gives a discount of up to 1.5 percentage points off its interest rate, according to each company’s ESG achievements.

Companies using the loan will be given support for opening shops at the on-line NongHyup Mall and free consulting services. Even though each account’s average lending stood at some 200 million own, the financial product saw its total new credit line surpass 500 billion won in four months since its release.

NongHyup Financial Group Chmn. Son Presides Over On-line Overseas Chiefs’ Meeting
Chairman Son of NongHyup Financial Group presided over an online meeting at the group’s headquarters in downtown Seoul on April 1 in which 16 overseas branch chiefs from nine countries participated.

Chairman Son called for participants not to be daunted by hard business conditions such as the COVID-19 pandemic, but to proactively utilize them as opportunities.

He also urged them to look at each overseas branch’s business performance and pending issues.

He called for prioritizing the safety of branch dispatch resident officials and local staff in Myanmar, which is in a turmoil.

NongHyup Financial Group aims to raise the net profit of the global business to 160 billion won and the number of overseas branches to 28 in 13 countries by 2025.

To this end, the financial group’s subsidiaries are bent on expanding their overseas networks and ramping up each branch’s business capabilities.

NongHyup Bank is seeking to open five branches, including ones in Beijing, Hong Kong, and Ho Chi Minh, Vietnam.

NH Investment & Securities is considering ramping up business models of the existing overseas branches and expanding business centers in Europe.