Choi Tae-won: "Climate Change Response Requires Proper Compensation and Cooperation"

2021 P4G Seoul Summit Business Forum Keynote Speech
'Measurement, Incentives, and Global Cooperation' Mechanism Proposal

At the P4G Seoul Summit Business Forum held on the 27th, Choi Tae-won, Chairman of the Korea Chamber of Commerce and Industry, is delivering the keynote speech. Photo by Korea Chamber of Commerce and Industry

[Asia Economy Reporter Choi Dae-yeol] Chey Tae-won, Chairman of the Korea Chamber of Commerce and Industry, said on the 27th, "(Companies) must act with a serious sense of duty to solve environmental issues," adding, "This will become the new entrepreneurial spirit in the new era."

Chairman Chey emphasized this during his keynote speech at the 2021 P4G Seoul Summit Business Forum held that day. He stated, "Companies cannot just sit back and wait until solutions to environmental problems emerge." P4G is a global partnership involving governments and private sectors such as companies, aiming to address climate change and achieve sustainable development goals. This Seoul Summit will be held over two days starting from the 30th. Chairman Chey delivered his speech online on the theme of ‘Business Paradigm Shift in the Era of ESG (Environment, Social, Governance) and Green Technology.’

Chairman Chey stressed that companies can and must play their role in solving global environmental problems. He said, "As companies have long focused their management activities on maximizing profits, they have caused environmental problems such as global warming," adding, "At the same time, companies possess the technology and resources for eco-friendly transitions and must take a leading role as agents of problem-solving."

He proposed the keywords ‘Measurement-Incentives-Cooperation’ as a mechanism to drive actual behavioral change rather than just declarations. First, it is necessary for companies to properly measure environmental externalities. Chairman Chey said, "Without measuring externalities, it is impossible to advance discussions on environmental issues," and emphasized, "Companies must quantify the broad and economic impacts they have on the environment in monetary terms."

At the P4G Seoul Summit Business Forum held on the 27th, Choi Tae-won, Chairman of the Korea Chamber of Commerce and Industry, is delivering the keynote speech. Photo by Korea Chamber of Commerce and Industry

He pointed out that "the price of electricity produced by coal power is 5 cents per kWh, but the social cost of environmental destruction and health damage caused by global warming during electricity production, which amounts to 8 cents, is not included in this price," criticizing companies for ignoring the social costs of their economic activities. He noted that private and public sectors, including the environmental private measurement alliance VBA formed by 20 global companies and the Big Four international accounting firms, as well as the UN and the European Union, are attempting methods to measure the external effects of corporate activities, making it achievable. Chairman Chey said, "The future goal of the measurement mechanism is to reflect the measurement results in corporate accounting standards and corporate disclosure systems."

He also saw the need for incentives. He said, "Even if externalities are quantified through measurement, without incentives to internalize them, companies will ignore them," adding, "The incentive system is a method of retrospectively rewarding companies in proportion to their investment performance based on how much they have solved environmental problems." He predicted that this would act as a catalyst to view environmental issues from the perspective of investment and profit, enabling a virtuous cycle ecosystem of eco-friendly businesses by encouraging innovative projects or technology development.

At the P4G Seoul Summit Business Forum held on the 27th, Choi Tae-won, Chairman of the Korea Chamber of Commerce and Industry, is delivering the keynote speech. Photo by Korea Chamber of Commerce and Industry

Along with this, he emphasized global cooperation as a way to secure incentive funding. He proposed that incentives for corporate environmental performance should not be limited to each region but rather ‘marketized’ through cooperation among governments, companies, and civil society worldwide. Chairman Chey said, "If the funding for incentive introduction is made globally tradable as digital credits through inter-country cooperation, the environmental protection achievements of each actor can be monetized and traded," adding, "For this, P4G, a global platform involving multiple stakeholders, can play a decisive role."

Following the keynote speech, thematic presentations were given by Huubensio Maestchu, Vice Chairman of IKEA; Sarah Chandler, Head of Environmental and Supply Chain Innovation at Apple; Choi Jung-woo, Chairman of POSCO; and Jakob Paulson, Chairman of CIP, covering topics such as climate-safe companies, carbon neutrality, hydrogen as a new energy source gaining attention, and green technology. A panel discussion was also held with representatives from MSCI, Samsung Electronics, Citibank Korea, and Vietnam’s Vingroup.

This content was produced with the assistance of AI translation services.