Korean big firms' climate commitment betrays public trust: analysis

The Korea Times

The Korea Times

National

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Thu, November 30, 2023 | 01:24

Korean big firms' climate commitment betrays public trust: analysis

Posted : 2022-10-07 01:49

Updated : 2022-10-08 12:43

InfluenceMap's Korea Country Manager Chang Yuna, left, and PRI's Climate Action 100+ Manager Ayako Nomizu, center, co-host a press conference at FKI Tower in Yeouido, Seoul, Tuesday when InfluenceMap launched a website where selective Korean companies' climate policy engagements are assessed and shared by global investors. Courtesy of Climate Media Hub

By Ko Dong-hwan

A global think-tank group on Tuesday launched a website dedicated to publicly sharing which Korean companies and industry associations are against the global movements of decarbonization and switching to renewable energy resources for power production.

The data-based disclosure, largely catering to European investors interested in Korean companies, sheds new light on the double standards of companies who swore to endorse climate-based policies publicly all the while objecting to them behind closed doors.

InfluenceMap, a U.K.-based climate advocacy group with one of its international offices in Seoul, selected 15 companies in Korea that are the biggest and publicly most supportive of climate policies and assessed their organization scores ― using metrics like communication of climate science, supporting the need for regulations and support of the UN Climate Process. The think-tank used the same metrics to calculate the organization scores for 15 industry associations in Korea whose member companies are comprised of the same companies under assessment.

In addition to the organization score, the think-tank assessed relationship scores when evaluating the companies ― a measure of how supportive or obstructive a company's industry associations are towards climate policy aligned with the Paris Agreement. A company's final grade is thus a balanced result that accounts for both scores between A+ (the highest) and F (lowest).

In a press conference hosted by InfluenceMap's Korean representative on Tuesday, the Korean companies were revealed to have scored D+ on average. Chang Yuna, the Korea country manager who hosted the conference, said Korean firms' climate efforts appear to fall short of European companies who scored C on average as well as America's Apple and Tesla, which each scored B in the same assessment.

Among the Korean companies, LG Chem scored the highest with a C+, while GS Energy scored the lowest with a D-.

Industry associations in Korea, compared to the companies, received worse grades in the assessment. Their average grade was D-. The lowest ranked was Korea Automobile Manufacturers Association (KAMA) with E-. Korea New and Renewable Energy Association topped the rank with B+.

A significant finding from the assessment is that many Korean companies showed incoherent stances towards the global environmental movements as an individual company and as a member of an industry association. Hyundai Motor Company and Kia, for example, publicly supported Korea's renewable energy policies. But they also joined KAMA in objecting to the dismissal of fossil fuels and the transition to zero-emission vehicles.

Korea Independent Power Producers Association (IPPA) and Federation of Korean Industries (FKI), two of the lowest-ranked associations in InfluenceMap's assessment, are led by the chairmen, presidents and vice presidents of SK E&S, POSCO, Samsung Electronics and Hyundai Motor Company, which all publicly supported renewable energy policies.

"(Companies') climate policy engagement is important for investors because it can affect investee companies' climate change risks and opportunities," said Ayako Nomizu from Principles for Responsible Investment (PRI), a global initiative that was launched in 2006 by former UN Secretary-General Kofi Annan and now supports some 5,000 global institutional investors.

"Suppose there is a company that has committed to net-zero 2050 decarbonization strategies. If that company engages in climate policies consistent with its ambition, then the company is increasing its chances of succeeding in its strategies. However, if that company engages against these climate policies, then the company is blocking its own success making its decarbonization strategies less credible to investors."

aoshima11@koreatimes.co.kr