Climate Change Data

Environmental Metrics

ESG Focus Areas

• Climate Change
• Social Responsibility
• Corporate Governance

Environmental Achievements

• Declared a pledge to move beyond coal, the first in the domestic financial industry.
• Reached ₩22.95 trillion in ESG products, investments, and loans.
• Reduced GHG emissions intensity (tCO2e/₩bn) from 3.35 in 2017 to 2.51 in 2020.

Social Achievements

• Matched 18,650 people with jobs through the KB Good Job program.
• Invested ₩207.3 billion in social contribution activities.
• Included in the Bloomberg Gender Equality Index for three consecutive years (2019-2021).

Governance Achievements

• Established an ESG Committee within the Board of Directors, the first in the industry.
• Selected as the best financial company in corporate governance by the KCGS for three consecutive years (2018-2020).
• Implemented the Stewardship Code.

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic impact on businesses and communities.
• Climate change transition risks, including regulatory changes and market shifts.
• Climate change physical risks, such as extreme weather events.

Mitigation Strategies

• Provided ₩19.388 trillion in new loans and loan repayment deferrals for those affected by COVID-19.
• Issued ESG bonds to finance those affected by COVID-19.
• Developed a mid-to-long-term carbon neutrality strategy (KB Net Zero S.T.A.R.).
• Joined global initiatives such as SBTi and PCAF to set science-based carbon emission reduction targets.
• Performed climate change scenario analysis to identify high-carbon emission industries and set management levels.

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events
• Localized heavy rain
• Natural disasters

Transition Risks

• Regulatory changes
• Market shifts
• Increased environmental costs

Opportunities

• Expansion of green finance and investments
• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI Standards: Core Option, SASB Standards, TCFD Recommendations

Certifications: ISO 14001

Third-party Assurance: Korea Sustainability Investing Forum (Kosif)

Sustainable Products & Innovation

• KB Clear Sky and KB Clear Ocean Package
• KB Kookmin EVO Titanium Card

Awards & Recognition

• Included in DJSI World Index for 5 consecutive years
• Selected as the best ESG company by Korea Corporate Governance Service
• Garnered Carbon Management Sector Honors Award in the finance sector of CDP for 4 consecutive years
• Included in Bloomberg Gender Equality Index for 3 consecutive years
• Included in FTSE4Good index for 11 consecutive years

Environmental Metrics

ESG Focus Areas

• Climate Change

Environmental Achievements

• Reduced Scope 1 & 2 emissions by 42% by 2030 (target); Net-zero by 2040 (target)
• Reduced Scope 3 emissions by 33.3% by 2030 (target); Net-zero by 2050 (target)

Social Achievements

• Developed Incident Prevention Guide for customers to mitigate natural disaster damage
• Developed Natural Disaster Risk Map to preemptively identify risk levels of each region
• Provided various climate-related training to employees

Governance Achievements

• Established Board-level ESG Committee
• Established ESG committees at subsidiary level
• Incorporated climate change in management’s KPI
• Adopted Equator Principles in February 2021

Climate Goals & Targets

Environmental Challenges

• Transition risks (policy and legal, technology, market, reputation risks) from shifting to a low-carbon economy
• Physical risks (acute and chronic risks) from increased frequency and severity of extreme weather events
• Potential carbon risks of investor and lender companies following the transition to a low-carbon economy
• Potential impact of physical risks on loan portfolio and collateral values

Mitigation Strategies

• Developed Environmental and Social Risk Policy Framework
• Conducted scenario analysis to assess potential impacts of climate change
• Strengthened engagement with high-emission industries to support their transition to greener practices
• Incorporated ESG elements including climate change in credit assessment and ratings
• Developed strategies to minimize economic loss from natural disasters

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• Increased frequency and severity of extreme weather events (flooding, typhoons)
• Potential impact on loan portfolio and collateral values

Transition Risks

• Stronger carbon regulation
• Changes in customer behavior and market demand
• Increased climate-related litigation claims
• Weakening competitiveness of high-carbon industries

Opportunities

• Growth of low-carbon industries
• Increased demand for low-carbon products and services
• New business opportunities in green finance

Reporting Standards

Frameworks Used: TCFD

Environmental Metrics

ESG Focus Areas

• Climate Change

Environmental Achievements

• Reduced operational emissions (Scope 1&2) to 128,987 tCO2eq in 2022, a year-on-year decrease of around 3,480 tCO2eq.
• Achieved SBTi approval for its net-zero implementation strategy, "KB Net Zero S.T.A.R."

Social Achievements

• Expanded ESG products, investments, and loans; aiming for KRW 50 trillion by 2030 (KRW 25 trillion in the environment sector).

Governance Achievements

• Established a systematic governance structure for climate change response, involving the Board, Group management, and subsidiaries.
• Established an ESG Committee in 2020, the first in the Korean financial industry.

Climate Goals & Targets

Environmental Challenges

• Transition risks (policy and legal, technology, market, reputational risks) and physical risks (acute and chronic risks) associated with climate change.
• Increased financed emissions in 2021 due to expanded measurement scope and inclusion of new asset groups.

Mitigation Strategies

• Implementation of "KB Net Zero S.T.A.R." strategy to achieve net-zero operational emissions by 2040 and financed emissions by 2050.
• Development of an Environmental and Social Risk Management (ESRM) system and policy framework.
• Conducting climate change stress tests to analyze the impact of climate change on KB Financial Group.
• Declaration of anti-coal financing in 2020.

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• Increased frequency and severity of extreme weather events (typhoons, floods, wildfires)
• Chronic risks from long-term climate shifts (sea-level rise, temperature increase, heatwaves)

Transition Risks

• Policy and legal risks (strengthening carbon regulations, new disclosure standards, lawsuits)
• Technology risks (transition to green technologies, investment failures)
• Market risks (changes in consumer behavior, shifts in demand and supply)
• Reputational risks (changes in customer and investor preference, ESG washing)

Opportunities

• Resource efficiency (energy and water efficiency, waste management)
• Energy resources (renewable energy, carbon market participation)
• Products and services (green products, green business expansion)
• Markets (entry into new climate change response markets)
• Resilience (renewable energy expansion, resource diversification)

Reporting Standards

Frameworks Used: TCFD

Environmental Metrics

ESG Focus Areas

• Climate Change Mitigation
• Financial Health & Inclusion (Win-Win Financing)

Environmental Achievements

• Reduced operational emissions (Scope 1&2) by approximately 3,175 tCO2eq year-on-year in 2023. This is attributable to active energy-saving programs, including increased installation of renewable energy power generation facilities, increased business vehicle conversion to eco-friendly vehicles, and resource circularity and enhanced energy efficiency.
• Declared “anti-coal financing” in 2020, ending new investments in coal-fired power plant construction.

Social Achievements

• Established the “KB Green Wave 2030” strategy, aiming to expand ESG products, investments, and loans to KRW 50 trillion by 2030 (KRW 25 trillion for the environment). As of December 2023, ESG products, investments, and loans totaled KRW 36.4 trillion.
• Provided diverse financial support to small businesses, extending loan end dates or enabling installment payments of deferred interest to reduce burdens.

Governance Achievements

• Established an ESG Committee in 2020, the first in the financial industry, with all directors as members.
• Implemented an ESG Performance Management Framework, reflecting ESG indicators in KPIs of top management and linking them to compensation.

Climate Goals & Targets

Environmental Challenges

• Setting targets
• Customer engagement
• Stakeholder engagement
• Data availability
• Data quality

Mitigation Strategies

• Assessing current interim targets related to climate change and win-win financing, exploring adjustments to align with market conditions.
• Utilizing various communication channels and stakeholder surveys to gather feedback and improve engagement.
• Improving data collection and quality through various assessment techniques and stakeholder surveys.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Standards 2021, IFRS Sustainability Disclosure Standards S1 and S2, SASB, TCFD, UN PRB

Third-party Assurance: Independent assurer (for 2023 Sustainability Report)

Sustainable Products & Innovation

• KB Green Wave_Loans for Outstanding ESG Companies
• ESG bonds