KakaoBank Publishes 2023 Sustainability Management Report

KakaoBank announced on the 30th that it has published its ‘Sustainability Management Report,’ which details its ESG (Environmental, Social, and Governance) management efforts from last year and future plans.

This report includes, for the first time, content on ‘AI Governance Establishment’ to ensure the safety of AI (Artificial Intelligence) technology and the ‘Green Value Report,’ which quantifies the amount of carbon emission reductions.

Based on the Double Materiality Assessment, seven major ESG material topics were selected. The ‘Double Materiality’ assessment is an evaluation method that comprehensively analyzes ESG-related issues by considering not only the impact of social and environmental factors on a company’s financial status but also the impact of the company’s business activities on society and the environment.

Specifically, the report explains the reasons for selecting material topics such as creating economic and social value through inclusive finance, information protection and customer information management, financial consumer protection, sound governance, establishment and internalization of environmental management systems, ESG management implementation, and safety and health management of members, along with management plans and progress made so far.

The report also highlights specific achievements in ESG management practiced by KakaoBank. KakaoBank has established ‘AI Governance’ for the safe use of AI technology. Based on six elements?clarification of the roles and responsibilities of the AI organization, establishment of AI ethical principles, building AI leadership, setting and managing AI governance goals, AI risk level assessment, and evaluation of compliance items throughout the AI lifecycle?a system was created to minimize risks and side effects that may arise from AI utilization.

The Green Value Report content is also included. The main focus is the quantitative calculation of the amount of carbon reduced through non-face-to-face digital banking services. By quantifying carbon emissions saved in specific areas such as non-operation of branch facilities and replacing paper passbooks with mobile passbooks, it is expected to serve as a basis for reducing and managing carbon emissions.

There is also an introduction to inclusive finance. KakaoBank is actively supplying not only mid-to-low credit loans but also ‘Haetsal Loan 15,’ small business credit loans, and guarantee loans. It is analyzed that socially vulnerable groups suffering from high interest rates are reducing their interest burdens through KakaoBank loans. KakaoBank estimates that the social value of loan interest reduced through the supply of ‘Haetsal Loan 15’ and ‘mid-to-low credit loans’ last year is approximately KRW 307 billion, which is about a 75% increase compared to KRW 175.3 billion in 2022.

A KakaoBank official said, “We have laid the foundation to strengthen ESG management activities through the establishment of governance to secure AI ethics and the acquisition of quantitative data to reduce carbon emissions,” adding, “We will continue to strive for sustainable growth through the expansion of inclusive finance, advancement of environmental management system operations, and establishment of sound governance.”

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