Shinhan Bank, First Commercial Bank to Publish 'Equator Principles Annual Report'

[Asia Economy Reporter Kwangho Lee] Shinhan Bank announced on the 7th that it has published the Equator Principles Annual Report for the first time among commercial banks since adopting the Equator Principles on September 9 last year.

The Equator Principles are a set of guidelines for project financing, representing a voluntary commitment by financial institutions not to provide funding for large-scale development projects that cause environmental destruction or violate the human rights of local residents or socially vulnerable groups.

As of September this year, 124 financial institutions in 38 countries have adopted the Equator Principles. According to the phrase in the preamble of the Equator Principles stating, "No loans shall be made to project sponsors who do not comply with our environmental or social policies," financial institutions that have adopted the Equator Principles have established and operate strict loan screening processes.

Although a grace period is applied to financial institutions within one year of joining regarding reporting obligations to the association, Shinhan Bank, as the first commercial bank to join the Equator Principles, published the report to actively communicate with external stakeholders about its efforts to practice ESG (Environmental, Social, and Governance) management.

For transactions subject to the Equator Principles, the bank reviewed compliance with the Equator Principles requirements overall through materials such as environmental impact assessments, including ▲identifying the environmental and social status of the project site and surrounding areas before project implementation ▲compliance with applicable environmental and social standards ▲establishment of management systems and plans ▲engagement with local community stakeholders ▲and establishment of grievance mechanisms.

Through the review and assessment of the Equator Principles, Shinhan Bank aimed to make responsible decisions in the credit and investment decision-making process and thoroughly manage potential environmental and social risks, thereby minimizing negative impacts arising from projects supported financially by Shinhan Bank.

Additionally, by reflecting environmental compliance requirements in financial agreements, continuous monitoring and follow-up management during the project implementation period were made possible. From September last year to August this year, a total of 36 financial supports subject to the Equator Principles underwent such review and assessment, confirming compliance with the Equator Principles requirements.

Detailed information can be found in the Shinhan Bank Equator Principles Implementation Report posted on Shinhan Bank’s website.

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