ESG Competitiveness of the Three Major Telecom Companies Higher Compared to Global Competitors

[Asia Economy Reporter Oh Su-yeon] The ESG (Environmental, Social, and Governance) competitiveness of the three major domestic mobile carriers was found to be higher compared to global telecom companies.

According to the industry on the 4th, financial information firm Refinitiv rated SK Telecom as A-, KT as A-, and LG Uplus as B+ in the overall ESG rating.

This score is higher than that of overseas telecom companies. In the U.S., AT&T received a C, Verizon a C+, and T-Mobile a B-. In Japan, NTT scored B-, KDDI C, and SoftBank B+. In China, China Mobile was rated B+, China Telecom B-, and China Unicom B-.

Choi Gwan-soon, a researcher at SK Securities, stated in the report "Global ESG Competitiveness of Domestic Telecom Companies," "The three domestic telecom companies are continuously making efforts to reduce carbon emissions, such as introducing eco-friendly technologies in data centers, declaring net zero carbon emissions by 2050, and joining RE100. Additionally, the three companies are jointly working to enhance ESG management and social value by establishing a joint venture with SGI Seoul Guarantee Insurance and Korea Credit Bureau to support financially vulnerable groups, including lowering loan interest rates and expanding financial opportunities."

He added, "SK Telecom's issuance of ESG bonds, KT's fostering of social enterprises, and LG Uplus's opening of a safety experience center for the 3 Nos (No Accidents, No Disasters, No Defects) are examples of diverse ESG activities, which are expected to maintain a higher level of ESG ratings compared to global telecom companies in the future."

SK Telecom was the first domestic company to join RE100 in 2020, along with major affiliates of SK Group. It was the first among the three telecom companies to do so. KT announced its RE100 membership in June. LG Uplus has established a greenhouse gas reduction roadmap to convert 100% of its electricity consumption to renewable energy by 2050 and plans to join the Korean version of RE100 (K-RE100).

RE100 stands for "Renewable Electricity 100%." It is a campaign launched in 2014 by the global nonprofit organization The Climate Group and the global environmental management certification body Carbon Disclosure Project (CDP), aiming for companies to source 100% of their electricity consumption from renewable energy by 2050.

Additionally, last month, the three telecom companies signed a joint investment agreement with SGI Seoul Guarantee Insurance and Korea Credit Bureau (KCB) to enter the specialized personal credit evaluation business together. The joint venture will utilize non-financial credit evaluation services based on telecom information from the three companies. It is expected to provide benefits such as increasing loan limits and lowering interest rates for financially vulnerable groups like students and housewives who face restrictions in using financial services due to lack of financial transaction information.

Earlier in March, aiming to expand ESG management, they established an "ESG Fund." The ESG Fund, with each of the three telecom companies and fund manager KB Investment contributing 10 billion KRW, totals 40 billion KRW and plans to invest in nurturing startups in the ESG sector.

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