Materiality Assessment
Advancement of Materiality Assessment in Alignment with ESG Strategy
The concept of socially responsible management expanded from social contribution to Creating Shared Value (CSV), and has recently been expanding to sustainability management, which maximizes social value based on the essence of business. Shinhan Financial Group advanced its sustainability management system to go beyond the step of examining ESG as a risk factor and move onto the step of recognizing and using ESG as an area of new opportunity creation. We redefined sustainability management as “sustainable finance¹”, changing the future for the world through the positive impact of finance, the essence of our business, and derived three major strategic directions – green, win-win, and trust – based on issues presented by global evaluation organizations and standards, benchmarking, media analysis, and in alignment with the UN SDGs.
Materiality Assessment Process
Shinhan Financial Group conducts materiality assessments in accordance with the “Materiality” principle of the Global Reporting Initiative (GRI) Standards – global sustainability management report guidelines. In particular, we identify industry-specific ESG issues by reflecting important topics in the industry recommended by SASB. We disclose activities regarding key topics and performance in our ESG Report every year for transparent communication with stakeholders.
Materiality Assessment Results
Shinhan Financial Group has been reporting the implementation status of key topics in alignment with its mid- to long-term sustainability management strategy. In 2020, we established a new ESG strategy and reported activities and outcomes by aligning key topics that were chosen through the materiality assessment with the three major strategic directions of green, win-win, and trust management for “Finance for IMPACT” – positive impact of finance changing the future for the world. As a result of the materiality assessment, ten issues were chosen as key topics, including establishing a customer protection-centered product/service management system and building a system for responding to climate change. We report these issues with greater importance throughout our ESG reports, including the 2020 ESG Highlight. We plan to continually report the implementation status of performance indicators based on the mid- to long-term goal of each key topic in alignment with our new strategic directions.
| Strategic Direction | Key Topic | Management Measure | Reporting Locations | GRI Index | |
|---|---|---|---|---|---|
| Green | ② | Build a system for responding to climate change | We declared carbon neutrality, and will achieve zero carbon emissions by reducing and offsetting carbon emissions. | Zero Carbon Drive, TCFD Report | 305-1 |
| ⑨ | Expand eco-friendly investments | We will provide KRW 30 trillion for green financing by 2030 to fulfill roles as a financial institution for future generations. | Environmental | Green Finance | 201-2, FS8 | |
| Win-win | ① | Establish a customer protection-centered product/service management system | We reorganized our product governance based on checks and balances, and are overhauling product development, launch, sales, and follow-up monitoring in a customer-centered way. | Financial Consumer Protection, Governance | Customer Protection | 418-1 |
| ⑥ | Strengthen customer services | N/A | |||
| ③ | Expand inclusive finance | We chose “Start up, Financial literacy, and Group of community” as key areas for SFG’s inclusive finance, with an aim to help companies grow into sustainable consumers, enable the underprivileged to be financially stable, and solve social problems that local community faces. | Hope Together SFG, Social | Inclusive Finance | 203-1, FS14 | |
| ④ | Establish a corporate culture of a great workplace | We respect diversity, and thus strive to foster female leaders and expand programs for the disabled and multicultural families. We are also improving work environment as a way to improve employee engagement and work efficiently. | Respect for Diversity, Diversity Report, Social | Human Resources Development |
401-3 | |
| ⑤ | Strengthen joint growth with partner companies | We are implementing the “Triple-K Project” through which we aim to take the lead in establishing an innovative growth ecosystem in Korea in partnership with various stakeholders and to foster ten unicorn companies by discovering and nurturing innovative companies. | Triple-K, Social | Innovative Finance |
203-1 | |
| Trust | ⑩ | Establish fair and ethical governance | We provide cyber training on ethics and compliance to all employees of the Group subsidiaries. Also, all employees make a pledge to practice ethics every year, thus solidifying their commitment to business ethics. | Governance | Ethics & Compliance | 102-26 |
| ⑦ | Establish an integrated management system for financial and non-financial risks | We established the ESG Implementation Committee, run by the Group CEO and participated by all Group subsidiary CEOs, to upgrade our ESG driving system. | ESG Governance | 102-30 | |
| ⑧ | Discover future new growth drivers | We set four major strategies – optimal growth, global consolidation and expansion, digital transformation, sustainability management – and are systematically implementing them. | Business Results, Mid-to Long-term Plan, Governance | Digital Finance |
206-1 | |