Jung Il-mun, president of Korea Investment & Securities, participates in the "GoGo Challenge" campaign to reducing plastic use in daily life. (Photo: Korea Investment & Securities)

Environmental, social, and governance (ESG) management is growing in importance at financial companies.

Korea Investment & Securities plans to strengthen profitability as well as increase reliability through active ESG management.

In the first half of 2021, Korea Investment & Securities racked up a net profit of 583.4 billion won on a consolidated basis.

It was the highest-ever performance on a semi-annual basis and an increase of 260.3 percent from the first half of last year.

Although about 60 billion won in provisions was reflected as a one-time loss following a decision to compensate for the entire amount of insolvent private equity funds, the securities firm yielded results that beat expectations.

One of the main reasons for the company’s solid performance has been its customer-centered management philosophy.

The company decided in June to compensate 100 percent of its principal for insolvent private equity funds.

“The preemptive decision was made to protect financial consumers and restore customer trust even though short-term costs were incurred,” said an official at Korea Investment & Securities.

This means management judged that the company’s growth engine comes from customer and market trust, and that customer-centered management will soon lead to strong performances.

Financial consumer protection is considered the most important factor in financial companies’ ESG management. Korea Investment & Securities is also changing its corporate culture with the decision to compensate for losses from private equity funds.

“All executives and employees are strengthening their resolution to take right actions with right thoughts for customers,” the official said.

“We are taking follow-up measures to prevent other incomplete sales from occurring in the future.”

Korea Investment & Securities strengthened the functions and responsibilities of the Product Selection Committee, established an organization dedicated to the follow-up management of investment products and promoted innovation across sales practices by expanding employee training and audits.

All employees of Korea Investment & Securities now have a greater sense of responsibility for society and the environment.

In the environmental sector, Korea Investment & Securities became the first Korean securities firm to announce the suspension of investment in coal-related businesses and projects in August last year, leading the financial sector’s coal-phase-out trend.

In April, it was selected as a creator of the carbon emission trading market by the Korean Ministry of Environment and since then, has been pushing for various projects related to carbon emission rights through the Carbon Solution Department a new department related to carbon emission rights.

 
Korea Investment & Securities is also actively participating in activities to create a new and renewable energy ecosystem.

In September of 2020, the company formed a consortium with Korea Hydro & Nuclear Power and others to acquire a 49.9 percent stake in four U.S. wind power plants to develop new and renewable energy.

In the meantime, Korea Investment & Securities announced on Oct. 14 that it has launched a mobile application called “VIP Lounge” exclusively for super-rich customers.

Developed by the Global Wealth Management (GWM) Center at Korea Investment & Securities, the application provides optimal financial contents and convenient concierge services.

The GWM Center at Korea Investment & Securities is in charge of comprehensive asset management and family business succession solutions for super-rich people.

In particular, the application was developed to make an improvement to user convenience by providing customer-tailored services and touches on screens.

GWM Center customers can apply for expert consulting in various fields, such as asset allocation, tax, and real estate through the application.

In addition, areas of non-financial interests such as law, art tech, and high jewelry can be consulted through a connection with external experts who forged partnerships with the GWM Center.