[Asia Future Business Forum] In So-young "Sustainable Finance Starts with Establishing Reliable Evaluation Criteria... Also Diligently Managing 'Subcontracted Carbon'"

"Interest in Asia's Subcontracted Carbon Emission Management Capability
Need to Review Carbon Management Data Competency of SMEs"

In So-young, Lead Researcher at the Stanford Sustainable Finance Initiative, is giving a lecture at the '2022 Asia Future Business Forum' hosted by Asia Economy on the 27th at the Western Chosun Hotel in Jung-gu, Seoul. Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Moon Chaeseok] Inso Young, a senior researcher at the Sustainable Finance Initiative (SFI) and Research Director at the Stanford Korea Center, an expert in sustainable finance at Stanford University in the United States, emphasized on the 27th that "to activate sustainable finance, it is essential to have reliable evaluation criteria first." She advised that, especially in Asia, where there is growing interest in the carbon emission management capabilities of not only primary contractors but also subcontractors, it is necessary to have accurate evaluation data.

Senior Researcher In made these remarks as a speaker on "Global Net Zero Transition and Financial Investment" at the 10th 2022 Asia Future Business Forum held at the Westin Chosun Hotel in Sogong-dong, Seoul. The core theme of sustainable finance highlighted by Senior Researcher In was "climate change." She basically viewed that climate change-related investments would inevitably flow mainly toward large-scale capital. Senior Researcher In explained, "'Sustainable investment' is defined as an activity that considers both financial and sustainability factors from the decision-making stage."

The problem lies in the unclear relationship between "environmental performance" and "financial performance," which are necessary for investment decision-making. Due to this uncertainty, companies tend to hesitate in making sustainable investments. Therefore, she emphasized that establishing a trustworthy and proper evaluation system for stakeholders is the most certain way to reduce the "uncertainty" that investors worry about. She stated, "Research to clarify the relationship between the returns and risks of 'low-carbon investments' is actively underway," and stressed, "Active participation from both the private and public sectors is necessary to build sustainability evaluation standards and practices that stakeholders can trust."

Senior Researcher In also reported that global stakeholders, especially centered in Asia, are showing great interest in the carbon emission management capabilities of not only primary contractors but also subcontractors. She said, "An interesting point is that when companies manage global supply chains, they have started to pay attention to carbon emissions from subcontracted facilities as well as primary contractors, and Asia, in particular, has many such facilities and considerable carbon emissions. Korean companies, especially small and medium-sized enterprises, need to examine whether their carbon emission and data management capabilities meet global standards."

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