KCCI Holds P4G Business Forum; Chairman Tae-won Chey Presents Mechanisms to Respond to Climate Change: Measure, Incentivize, Collaborate

2021 P4G Seoul Business Forum wad held online on May 27
Chairman Chey emphasizes the roles of companies to respond to climate change in his keynote speech “Mechanisms to Accelerate Green Growth”
POSCO, Samsung Electronics, Apple, IKEA, Danish CIP and global companies shared ‘Inclusive Green Transition’ strategies

May 28, 2021 08:00 KST

SEOUL--(Korea Newswire) May 28, 2021 -- The Korea Chamber of Commerce and Industry (Chairman Tae-won Chey, KCCI) announced that it held ‘2021 P4G Seoul Business Forum’ on May 27. The forum was held online under the theme of ‘Paradigm Shift to ESG Management and Directions for Companies.’

*P4G: Abbreviation for ‘Partnering for Green Growth and the Global Goals 2030,’ a global initiative and a network of global leaders and innovators seeking breakthrough solutions for green and sustainable economic growth and climate change

In the keynote speech, KCCI Chairman Tae-won Chey said, “Companies should not remain idle until solutions for environmental issues are created. They must act to address environmental issues with a strong sense of mission. That will be the new entrepreneurship demanded by the new era.”

◇Chairman Chey proposed ‘Mechanisms to accelerate Green Growth’: 1) Measure 2) Incentivize 3) Collaborate

He diagnosed that environmental issues such as global warming were caused by ‘companies pursuing the objective of profit maximization and remaining faithful to maximization of profits’ and emphasized, “Companies should take the lead in solving the problems by securing green technologies and resources.”

In addition, he highlighted, “Responses to environmental issues should not become an empty declaration, and it should lead to practical behavioral changes. ‘Measure’, ‘Incentivize’, and ‘Collaborate’, the three mechanisms are necessary to shift to more environmentally-friendly mindset and behaviors, and effectively internalize externalities.”

1) Measure: Quantify the wide-reaching economic impact on the environment… reflect the results in corporate accounting standards and disclosure systems

Firstly, Chairman Tae-won Chey emphasized ‘measurement of the environmental externalities of companies’. He pointed out, “Without measuring the externalities, advancing discussion on environmental issues is impossible.” He also added, “Companies’ wide-reaching economic impact on the environment must be quantified in monetary terms.”

Chairman Chey alluded to how companies have been ignoring the social costs of their business activities and said, “The price of electricity generated by fossil fuels is around 5 cents per 1 KW, but that does not include the social cost of 8 cents for environmental destruction due to global warming and damages to health.”

Regarding the measurement of the externalities of business activities, Chairman Chey said it is not impossible to achieve it since attempts are being made at both public and private levels such as by the VBA (Value Balancing Alliance), the UN and the EU. He stated, “By measuring the environmental externalities, environmental problems caused by companies can be managed and improved,” and added that his ultimate goal of such measurement mechanism is “reflecting the results of the measurement in the corporate accounting standards and disclosure systems.”

*VBA (Value Balancing Alliance): Private non-profit organization founded by 20 global companies and 4 international accounting firms for a global impact measurement and valuation standard to monetize and disclose impacts of corporate activity

2) Incentivize: Provide incentives after reviewing corporate efforts and performance of environmental improvement and in proportion to such performance

Chairman Chey proposed ‘incentivize’ as the second mechanism to shift to more environmentally-friendly behaviors because companies could simply look away even after quantifying the externalities if there are no incentives for internalization.

“This system is paying the incentives afterward in proportion to the actual investment performance,” Chairman Chey explained. “Such incentives will serve as a catalyst that enables companies to view environmental issues as investment and profitable opportunities, and create a green corporate ecosystem where innovative business development and acceleration of technology developments translate to increased corporate value.”

3) Collaborate: Develop incentive payment to become an internationally-recognized credit

Lastly, Chairman Chey underlined ‘international collaboration’ for financing the incentives. He shared his plan of “implementing the incentive system internationally through collaboration between governments, companies and civil societies across the world.”

Chairman Chey argued, “The efforts of environmental protection of each actor can be monetized if converted and used in the form of digital credits through collaboration between countries and the financing for the introduction of incentives can be made this way,” and forecasted that “P4G, which is the global platform in which different stakeholders participate, can play an important role in this.”

◇Global companies such as POSCO, Samsung Electronics, Apple, IKEA and Danish CIP shared ‘Inclusive Green Growth’ strategies

During the first session following the keynote speech that was held under the theme of ‘Paradigm Shift to ESG Management and Directions for Companies,’ Deputy CEO Juvencio Maeztu of IKEA presented on ‘Climate Positive: What Does it Take?’

Deputy CEO Maeztu introduced, “IKEA pursues a ‘climate positive company’ that pursues both corporate growth and response to climate change,” and disclosed that IKEA realized 13.7% growth rate during 2016-2020 while reducing 14% of greenhouse gas emissions. He added, “In order to become a climate positive company, clear goals; comprehensive performance measurement; sustainable business execution; overcoming the dilemma of sustainability and growth; active collaboration are important.”

Senior Director Sarah Chandler of Apple’s Environment and Supply Chain Innovation announced ‘Apple’s carbon neutrality plans and cooperation methods.’ She introduced, “Apple aims to achieve carbon neutrality in the entire manufacturing supply chain and product cycles,” and emphasized, “We can address climate change by manufacturing products using renewables and recyclable materials and retrieving end-of-life products to be put back into the supply chain.”

For the second session ‘Green Technology and Sustainable Development,’ the first speaker was CEO Jeong-woo Choi of POSCO. Under the theme of ‘H2 Economy Future & H2 Business Strategy,’ he presented the roles of the hydrogen economy and the core elements necessary to spread hydrogen economy in order to prevent climate change.

CEO Choi mentioned, “Most of the greenhouse gas emitted internationally are from manufacturing, transportation and power generation,” and stressed, “Energy used in the manufacturing industry must shift from carbon-based to hydrogen-based energy; the internal combustion engine for the transportation sector must be replaced by fuel cells; the existing fossil fuel and gas-based thermal power generation must be converted to hydrogen turbine generation.”

CIP Jakob Poulsen of the world’s largest energy investment company, Copenhagen Infrastructure Partners (CIP) made a presentation under the theme of ‘Cooperation and Future of Developing Countries Using Green Technology.’ CIP Jakob Poulsen said, “Developing countries will be accountable for 70% of the international energy demand by 2050 and therefore, it is important to find solutions to induce green growth of developing countries,” and added, “The offshore wind energy development currently underway in Vietnam could serve as the starting point.”

The presentations were accompanied by panel discussions between domestic and international ESG·Green technology·sustainable development experts. Morgan Stanley Capital International (MSCI), Samsung Electronics, Citibank Korea, Vingroup of Vietnam, Clean Energy Council of Australia engaged in the discussions and shared opinions as a government, a government agency and a private organization.

Managing Director and Head Chitra Hepburn from MSCI, a global ESG rating company, pleaded, “ESG and climate factors will have a huge impact on the pricing of financial assets, return on investment and risks,” and added, “A company’s response capacity translates to its market value.”

Executive Vice President Won-kyoung Kim from Samsung Electronics, which recently strengthened its sustainable management division mentioned, “Samsung Electronics fulfilled its promise of using 100% renewable electricity in its branches in the US, China and Europe by the end of 2020,” and forecasted, “ESG management is a task that cannot be ignored, and it will have a huge influence on companies’ decision-making moving forward.”

CEO Myung-soon Yoo of Citibank Korea, which is concentrating on strategies to expand ESG in finance said, “Efforts to go green should be considered not as a cost but a long-term investment. There will be more costs that a company should pay if it does not engage in environmental initiatives.”

Vice Chairwoman Le Thi Thu Thuy of Vingroup Vietnam said, “Vingroup is supporting scientific technology innovation, invention, solution to environmental and sustainable development issues by establishing the Vinfuture Award,” and emphasized, “Companies must share their objectives and collaborate with governments, consumers and non-governmental organizations to address environmental issues.”

Chief Executive Kane Thornton of Clean Energy Council, Australia, which represents the leading companies of green energy in Australia said, “Australia faced difficulties during the course of renewable energy development especially in terms of setting clear goals and policies,” and stressed, “Confidence of political leaders, the establishment of consistent policies, the roles of regulatory authorities, new investment regulations, fairness of power grid connection are important.”

Executive Vice Chairman Taehee Woo of KCCI highlighted, “The business forum is the only private sector-led event held during the P4G Summit, the multilateral environmental summit hosted by Korea for the first time,” and said, “We hope this forum serves as an opportunity for Korean companies to pursue green management that is on par with that of the advanced countries and promote it as a platform to share achievements with the developing countries.”

About KCCI

KCCI is the nation‘s largest private economic organization that encompasses a total of 73 regional chambers and approximately 180,000 members from all parts of the Korean economy. Since its establishment in 1884, KCCI has been contributing significantly to the growth and development of the national economy, and also to the enhancement of Korea’s status in the international community.

Files:
P4G Seoul Summit Business Forum_KCCI.hwp

2021 P4G Seoul Summit Program: https://virtual.2021p4g-seoulsummit.kr/home/eng/pr

Website: http://www.korcham.net

Contact

The Korea Chamber of Commerce and Industry
PR Team
+82-2-6050-3602~5
 
Asia-Pacific Team
Lee Seong Woo, Director
+82-2-6050-3558

Wonjune Lee, Assistant Manager
+82-2-6050-3567

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