Financial Services Commission Holds 2nd ESG Finance Promotion Team Meeting

The Financial Services Commission announced on the 27th that it held the '2nd Meeting of the ESG Finance Promotion Task Force.'

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The 'ESG Finance Promotion Task Force' is a meeting body formed last February to systematically promote various policy tasks related to ESG disclosure, evaluation, and investment across companies, investors, academia, experts, and related organizations. This meeting, the second since February, discussed various topics including △ESG disclosure regulations in major overseas countries, △the ESG evaluation market, △climate risk and the financial sector's response, and △the emissions trading market.

Kim So-young, Vice Chairman of the Financial Services Commission, explained three directions in ESG disclosure, evaluation, and investment related to the meeting topics during her opening remarks. Regarding ESG disclosure, Vice Chairman Kim stated, "Recently, major countries such as the EU and the United States have strengthened mandatory ESG disclosures, so domestic companies may be directly or indirectly affected," adding, "We will focus on translating overseas disclosure standards, providing management consulting for small and medium-sized enterprises, and establishing disclosure standards with global consistency."

Regarding ESG evaluation, she announced plans to establish regulatory measures for ESG evaluation agencies to enhance the transparency and reliability of the evaluation system. Specifically, evaluation agencies will be required to establish internal control standards themselves and disclose information about the entire evaluation process, among other regulatory measures. Concerning ESG investment and risk management, she said the Financial Services Commission will support financial companies in systematically controlling and managing climate change risks. Additionally, regarding the carbon emissions trading market, she emphasized that the carbon emissions trading system is an important means to induce companies' greenhouse gas reduction efforts and achieve carbon neutrality goals, and pledged to support sufficient liquidity supply to the market to ensure proper price functioning.

On the same day, the Financial Supervisory Service gave a presentation on 'Climate Risk Management and Supervision Measures in the Financial Sector.' The FSS explained that to expand awareness and improve response capabilities regarding climate risks in the financial sector, it has prepared guidelines for financial companies on climate risk management, supported the development of climate risk management models, and is conducting pilot climate stress tests.

Following this, the Korea Exchange made a presentation related to the carbon emissions trading market. The Exchange explained that since emissions prices serve as a basis for investment decisions in greenhouse gas reduction facilities, it is important to form an appropriate equilibrium price based on sufficient liquidity, and currently, the introduction of brokerage trading through securities firms is necessary. Brokerage trading refers to entrusting orders to securities firms and submitting orders through the securities firms' systems.

Finally, the Financial Services Commission stated that it will continue to discuss ESG finance issues with experts and various related organizations through the 'ESG Finance Promotion Task Force' meetings and actively seek policy directions. A Financial Services Commission official explained, "To collect public opinions from stakeholders regarding ESG disclosure policies, a public seminar (the 3rd Capital Market Relay Seminar) is scheduled to be held in May."

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