Climate Change Data

Environmental Metrics

ESG Focus Areas

• Innovation & Digitalization
• Environmental Sustainability
• ESG Management
• Prosperity
• People
• Planet
• Governance

Environmental Achievements

• Reduced office paper used for printing by 36 percent from an average of 1.64 million sheets in the first quarter of 2019 to 1.05 million sheets in the fourth quarter of 2021.
• Issued a total of 7,687 credit cards made from eco-friendly, recycled plastics (R-PVC) by the end of 2021.
• Increased the use of mobile statements, reducing carbon emissions generated in the process of issuing and sending paper statements.
• Created the first ‘walkable forest’ (860m2) in Gonreung-dong, Nowon-gu, Seoul, expected to absorb 1.8 tons of carbon per year and reduce greenhouse gas emissions by 71.355 tCO2 over the next 30 years.
• Replaced 600 fleet vehicles with pollution-free ones in 2021.

Social Achievements

• Launched the ‘My TeenS’ card for youths, issuing 3,072 cards in five months.
• Operated the Allthat Shopping showroom, helping SMEs sell over 2,000 items worth KRW 100 million in sales.
• Launched the small business CUP (Cheer-Up Program), providing market analysis training.
• Introduced the Shinhan Card MyCredit Business Loan to help retail merchants with financial problems.
• Became the first financial services provider to obtain the private business credit rating certification and business license.

Governance Achievements

• Established the ESG Committee within the board of directors (BOD) for the first time in the industry.
• Established a firmwide ESG Council.
• Issued ESG bonds worth KRW 1.4654 trillion.

Climate Goals & Targets

Environmental Challenges

• Climate change
• Supply chain disruptions
• Financial difficulties for SMEs due to the COVID-19 pandemic
• Digital divide
• Voice phishing

Mitigation Strategies

• Introduced the Shinhan Green Index to encourage green consumption.
• Participated in the K-EV100 campaign to transition to EVs and HVs by 2030.
• Developed a paperless process reengineering (PPR) and digital documentation transformation.
• Provided financial support for SMEs and low-income persons.
• Developed the ‘phishing security service’ and upgraded the anti-phishing app Phishing Eyes.
• Developed a specialized credit rating model tailored to the elderly.

Supply Chain Management

Responsible Procurement

• Competitive bidding
• Integrity pledge
• Code of conduct

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Standards, TCFD, SASB

Certifications: ISO 14001, ISMS-P, ISO 27001

Third-party Assurance: Korea Standards Association (KSA)

UN Sustainable Development Goals

• Goal 3: Good Health and Well-being
• Goal 10: Reduced Inequalities
• Goal 12: Responsible Consumption and Production
• Goal 4: Quality Education
• Goal 11: Sustainable Cities and Communities
• Goal 13: Climate Action

Shinhan Card's initiatives contribute to these goals through various programs and activities detailed in the report.

Sustainable Products & Innovation

• Credit cards made from recycled plastics
• Shinhan Green Index
• Shinhan EV Card
• Puzzle Card

Awards & Recognition

• Business Innovation Grand Award (Prime Ministerial Award)
• Korea Digital Management Innovation Awards
• 2021 Korea Social Communication Satisfaction Index Grand Prize
• Consumer-Centered Management certification
• Korean Customer Satisfaction Index (1st place)
• 2021 DX Service Award (World Gran Prix)
• Korean Sustainability Index (1st place)
• Korea Financial Innovation Award
• Korean Standard Contact Service Quality Index (1st place)
• 2021 Korean Consumer Protection Index (excellent enterprise)
• Social Contribution Awards
• National Brand Competitiveness Index (1st place)
• Korean Standards-Service Quality Index (1st place)
• Korean Standard Premium Brand Index (1st place in 4 categories)
• National Industry Awards
• National Service Awards (1st place)
• Korean Service Quality Index (1st place)
• Korean Brand Star (1st place)
• Korea Brand Power Index (1st place in 4 categories)
• KOREA's Most Admired Company (1st place)
• Korea Brand Hall of Fame (1st place in 2 categories)

Environmental Metrics

ESG Focus Areas

• Data Responsibility
• Digital Innovation
• Customer Focused Finance

Environmental Achievements

• Reduced power consumption by over 30% annually using VDI system
• Issued 211,218 cards made from recycled plastics
• Issued green bonds worth KRW 110 billion
• Opened second Shinhan Card Eco Zone in Busan APEC Naru Park
• Partnership with Korea Forest Service for climate change response and biodiversity

Social Achievements

• Launched Arumin Financial Academy for youth in shelters
• Provided financial support to low-income individuals through various programs
• Developed alternative credit-scoring model for financially disadvantaged
• Implemented various family-friendly management policies (flextime, parental leave, etc.)
• Organized the 21st Little Picasso Art Festival

Governance Achievements

• Established ESG Committee within the Board of Directors
• Implemented an ethical management action program
• Operates an internal whistle-blowing program
• Strengthened financial consumer protection measures with a dedicated CCO
• Implemented a comprehensive information protection management system

Climate Goals & Targets

Environmental Challenges

• Climate change risks (financed emissions)
• Digital exclusion among vulnerable groups
• Preventing financial accidents and fraud
• Maintaining ethical and compliant business practices

Mitigation Strategies

• Developed financed emissions calculation system and reduction pathway towards net-zero by 2050
• Provided digital financial education and inclusive financial products
• Utilized AI and machine learning for fraud detection and prevention
• Implemented robust ethics and compliance programs, including whistle-blowing system and leniency plan

Supply Chain Management

Responsible Procurement

• Collaboration with suppliers for eco-friendly materials (recycled plastics)

Climate-Related Risks & Opportunities

Opportunities

• Development of eco-friendly financial products and services

Reporting Standards

Frameworks Used: GRI (Core option), SASB (Consumer Finance), TCFD

Certifications: ISO 14001

Third-party Assurance: LRQA

Sustainable Products & Innovation

• Cards made from recycled plastics
• Eco-friendly loan products

Awards & Recognition

• President's Prize at the 24th Korea Design Awards
• Main prize at 2022 Reddot design Awards
• Main prize at iF Design Awards 2022
• Main prize at IDEA 2022
• Financial Supervisory Service President Award
• Minister of Environment prize at CSR Awards
• Minister of Science and ICT prize at the Korea Bigdata Award
• Communication of the year at the 15th Korea Communication Awards
• Grand prize at the National Industry Awards
• 1st place at the National Service Award
• 1st place in the National Brand Competitiveness Index
• Gran Prix at the DX Service Award
• 1st place in the Korean Sustainability Index
• 1st place in the Korean Standard Premium Brand Index
• 1st place in the Korean Service Quality Index
• 1st place in the Korean Standard Contact Service Quality Index
• 1st place Korea in the Brand Power Index
• 1st place in KOREA's Most Admire Company
• 1st place in the Korean Customer Satisfaction Index

Environmental Metrics

ESG Focus Areas

• Climate change
• Customer satisfaction
• Customer information and data security
• Developing products and services considering environmental and social factors
• Human capital development and training
• Financial inclusion and accessibility
• Ethics and regulatory compliance
• Financial and non-financial risk management
• Financial consumer protection
• Digital finance and technological innovation

Environmental Achievements

• Issued 1.25 million cards made from recycled materials.
• Reduced annual paper usage by 2,160 sheets (A4 standard).
• Achieved certification of its environmental management system (ISO 14001).
• Developed an “eco-friendly initiative and roadmap” with goals of RE100, BP100, and NP50 by 2040.
• Internal carbon emissions reduced to 7,555 tCO2eq (2,835 tCO2eq reflecting REC/green premium purchase performance).

Social Achievements

• Launched ‘MySHOP Together,’ supporting 300,000 small business owners.
• Launched the ‘Next Generation Guardian Project’ with UNICEF.
• Provided KRW 2,675.7 billion in loans for ordinary people.
• Conducted financial literacy program for 17,278 individuals.
• 38.1% ratio of female managers.

Governance Achievements

• Established an ESG Committee under the Board of Directors.
• Implemented a “Responsibilities Map” for internal control management.
• Developed SIGNAL, a customer complaint prediction model.
• Established AI Ethics principles.
• Honored as a leading organization in the prevention of money laundering.

Climate Goals & Targets

Environmental Challenges

• Increased internal greenhouse gas emissions through operation of fleet vehicles.
• Increased financial emissions through consumer use stage emissions and sales of high-carbon financial products and services.
• Greenwashing issues in relation to eco-friendly investments.
• Mis-selling, violations, and lawsuits resulting from the launch and sale of greenwashing products.
• Talent drain due to lack of human capital development plan.
• Market dominance weakened by products and services that do not meet customer needs.
• Rise in consumer complaints due to inadequate customer communication.
• Rise in customer information leaks due to new fraud tactics.
• Establishment of an unhealthy trading environment due to unethical corporate behavior.
• Escalation of risks due to changes in the business environment.
• Decrease in credit rating due to inadequate risk management.
• Harm to financial consumers caused by mis-selling.
• Rise in system failures and malicious attacks attributed to digital transformation.

Mitigation Strategies

• Transitioning to renewable energy (RE100), eco-friendly recycled plastic card production (BP100), and digital cards (NP50).
• Document digitization.
• Installing EV charging facilities.
• Developing alternative credit rating model with Toss.
• Strengthening internal control systems.
• Implementing AI Ethics principles.
• Developing customer complaint prediction model (SIGNAL).
• Implementing a comprehensive risk management system.
• Strengthening information protection management system.
• Implementing a robust privacy breach response system.
• Developing an anonymized and pseudonymized data management system.
• Launching the app “Phishing Eyes” for voice phishing prevention.
• Implementing a Perfect Care Process for customers to combat phishing.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Partnering with local credit card manufacturers using R-PVC.

Climate-Related Risks & Opportunities

Physical Risks

• Damage to assets and infrastructure from natural disasters.

Transition Risks

• Stricter regulations on climate change.
• Increased costs associated with new low-carbon technologies.

Opportunities

• Reducing emissions associated with financing through low-carbon financial products and green investments.
• Promoting a low-carbon economy by issuing green bonds.

Reporting Standards

Frameworks Used: GRI Standards, SASB standards for Consumer Finance, TCFD

Certifications: ISO 14001

Third-party Assurance: LRQA

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Credit cards made from recycled plastics.
• Virtual credit cards.

Awards & Recognition

• Numerous awards listed in the report (see Awards and Memberships section).