Three Major Telecoms Establish 40 Billion Won Joint Fund... Aiming to Expand ESG Management

The First Case of a Joint Fund by Leading Companies in a Specific Industry
Fund Supports 100% ESG Sector Outstanding Ventures

Hwang Hyun-sik, CEO of LG Uplus (from left), Yoo Young-sang, CEO of SKT, and Park Jong-wook, President of KT, are posing for a commemorative photo at the "Telecom 3 Companies ESG Fund Formation Agreement Ceremony" held at Heyground in Seongsu-dong, Seongdong-gu, Seoul.

[Asia Economy Reporter Lim Hye-seon] The three major mobile carriers will collaborate to expand the Information and Communication Technology (ICT) sector within the ESG management ecosystem.

SK Telecom, KT, and LG Uplus announced on the 29th that they will jointly establish an ‘ESG Fund’ aimed at promoting ESG management. This is the first case where leading companies in a single sector have joined forces to create an ESG fund.

The ESG fund will be created with each company contributing 10 billion KRW, totaling 40 billion KRW. The entire fund will be invested in nurturing promising startups that possess technologies in ESG fields such as carbon neutrality. Carbon neutrality refers to achieving a net zero balance between the amount of greenhouse gases (carbon) emitted and removed by companies or individuals, also known as Net Zero.

Focusing the entire contribution on the ESG sector is due to the accelerating transition to an eco-friendly, low-carbon, and fair economy, which increases the need to discover and apply innovative related technologies in the ICT field as well.

The three companies plan to connect the ESG fund with their respective incubation programs to establish a virtuous cycle nurturing system that recommends promising innovative ventures and links them with the ICT businesses of the three companies.

To achieve tangible results amid continuous growth, the three companies will form an advisory committee to discuss support measures. The advisory committee will include not only ESG officers but also the CEOs of the three companies to ensure practical support plans and swift decision-making.

KB Investment was selected as the fund manager. It was highly evaluated for its long experience and strong capabilities in investment management, as well as its deep understanding and expertise in ESG. KB Investment will also contribute 10 billion KRW to the ESG fund for its successful operation.

SKT has supported ICT startups for over 10 years. Last year, it formed the ‘ESG Korea Alliance’ with domestic and international companies and institutions, selecting 14 ESG startups that achieved 23 major contest awards, attracted investments worth 10 billion KRW from six companies, and linked businesses with three companies (with nine companies under review). This year, SKT plans to select 15 promising ESG startups through ‘ESG Korea 2022’ and start a six-month startup acceleration program from May.

KT is nurturing promising companies in the environment and safety sectors through a large-scale ‘Warm Technology Plus Challenge’ contest as part of its social economy enterprise development project. Additionally, the ‘Smart Korea KT Next Investment Association,’ formed with KT’s contribution from the Korea Fund of Funds, operates with 22 billion KRW to invest in promising healthcare ventures. KT has also been running ‘Biz Collaboration’ for six years, a program that discovers business items that can collaborate with excellent startups and matches them with internal business departments for joint commercialization.

LG Uplus has focused on solving social issues and service innovation using ICT technology. Recently, it invested in edutech startups such as Enuma and Hodoo Labs to reduce educational gaps and has supported about 20,000 educational tablets for underprivileged groups since 2020 to assist remote learning during the COVID-19 pandemic.

LG Uplus plans to continuously invest in startups to secure competitive Idleulnara content and promote social contribution activities using educational content.

The three companies stated, "We have jointly established the ESG fund with the goal of actively supporting companies practicing ESG management in the ICT sector while growing together. We hope that the ESG fund, formed with shared intentions, will serve as good fertilizer for creating a high quality of life and industrial environment, contributing to the development of the Republic of Korea."

Meanwhile, the three companies held the ‘Three Telecom Companies ESG Fund Establishment Agreement Ceremony’ at Heyground in Seongsu-dong, attended by key executives including SKT CEO Yoo Young-sang, LG Uplus CEO Hwang Hyun-sik, and KT President Park Jong-wook.

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