Strengthening Integrated Risk Management

KB Financial Group is working to minimize the negative environmental and social impacts that are generated through our business activities, whether direct or indirect. We are also strengthening control over non-financial risks as well as traditional financial risks to establish a companywide integrated risk management system. With the aim of ensuring a systematic environmental and social risk management, KB Financial Group has buttressed its monitoring and management of ESG issues and established the direction and process for environmental and social risk management to better manage such risks.

Major Risk Types
Financial Risks ESG-related Risks
Risks that may be caused by financial issues such as credit risks, market risks, interest rate risks, and liquidity risks Risks that may be caused by ESG factors such as climate change, environmental impacts, and social issues

Environmental and Social Risk Management

KB Financial Group established the Environmental and Social Risk Policy Framework(ESRM) to ensure sustainable growth and fulfill social responsibilities. Under the ESRM, we are managing the impact of our business on environment and society by categorizing risk management areas(areas for exclusion, areas for support for green industries, areas for attention on climate change), reviewing risks for large-scale projects and advancing our climate risk management system.

※ Areas requiring management of environmental and social risks
Classification Details
Areas for
Exclusion
Activities or sectors to be excluded from financial support due to their profoundly negative implications on the environment and the society
∙ Production or trade of products/activities that are construed to be illegal according to the respective countries’ laws and regulations
∙ Productions exploiting child labor
∙ Transactions related to illegal gambling and pornography industries
∙ Production and education of, and transactions utilizing radioactive substances whose appropriate protection, management and oversight is deemed unfeasible
∙ Support for new coal mining projects or expansion of existing coal mining businesses
∙ Support for building of new coal-fired power plants or extension of existing coal-fired power plants
Areas for
Support for
Green
Industries
Areas eligible for preferential financial support considering the positive impact on overcoming the climate change crisis and the possible support for industries that could serve as new eco-friendly growth engines
(i.e. relevance with carbon neutrality and Green New Deal)

∙ Activities designated by the K-Taxonomy and its application guideline as discussed under the leadership of Ministry of Environment
∙ Activities pertaining to the items designated by the New Deal Fund Investment Guideline that are also included in the scope of K-Taxonomy and its application guideline
Areas for
Attention on
Climate
Change
Businesses or industries whose greenhouse gas emissions worsen global warming and inflict material adverse impacts on nature and the living environment
∙ Coal mining, coal-fired power plant, forestry and other high-emissions industries
∙ Impose tighter monitoring and encourage shift into net-zero economy