Under the motto of our ESG slogan “Do the Right Thing for a Wonderful World”, we continue with the ESG journey based on the strategic directions of green, brave, and fair, to create a wonderful world through the positive impact of finance.

Green Finance and Support Shinhan Financial Group

Expanding green finance based on the Zero Carbon Drive strategy

• Set a target of KRW 30 trillion in eco-friendly financial support (offsets) by 2030 under the Zero Carbon Drive
• Enhanced asset carbon emission management system through specific reduction targets using SBTi¹ methodology
• Actively establishing climate funds and investing in funds and companies related to green energy and C-tech
• Recorded KRW 8.19 trillion in cumulative ecofriendly finance performance in 2022

Empower Group Companies with Customized Green Finance

Social Contributions Implementation System Shinhan Financial Group

Local community engagement mid- and long-term goals

• Shinhan Financial Group’s social contribution activities are evolving from an initially charitable business model to a business model that creates social value (SDGs, ESG) and economic value
• Make 2023 the year to prepare for the completion of the Hope Society project by creating concrete results beyond internalization, and set mid- to long-term goals for community engagement by realizing Accelerating Growth from 2024
  - Key ‘Bridge Spot Strategy’ for 2023: Reorganizing business and strengthening Shinhan Financial branding, launching Phase 2 of ‘Square Bridge’, a startup innovation growth ecosystem, and creating a first-class platform for non-profit public benefit projects (focused on youth and families)

Building a sustainable venture ecosystem

Shinhan stands by the side of startups throughout their entire life cycle and provides support that encompasses both finance and non-finance, thereby building a venture ecosystem led by Shinhan. “S² Bridge” and “Shinhan Future’s Lab” are the two major pillars of Shinhan’s startup-fostering programs. As a startup-fostering platform, S² Bridge was set up in Seoul and other major cities starting in 2020, and it is now leading the expansion of the startup ecosystem. As of the end of December 2022, we fostered 479 startups, provided support to attract investments amounting to KRW 299.7 billion, and helped increase corporate value worth KRW 1,116 billion and create/retain jobs for 4,621 people. Through Shinhan Future’s Lab, the first startup accelerator program in the Korean financial industry, we nurtured a total of 333 startups and invested KRW 73.65 billion from the 1st group in 2015 through the 8th group in 2022.
Investing in startups through finance is a distinctive capability of Shinhan that grows together with invested companies. In 2022, we established the KRW 33 billion worth of “S² Bridge ESG Investment Fund No. 1” for the S² Bridge program. As of the end of December, assets under management (AUM) of major venture capital (VC) funds of Shinhan Financial Group reached KRW 2,499.5 billion. Through the digital strategic investment (SI) fund that Shinhan became the first in the Korean financial industry to establish in 2021, we are managing KRW 600 billion as of the end of 2022 and taking the lead in new technology investment. Moving forward, we will continue to provide extensive support, that transcends the boundaries of finance and non-finance, to be with challengers and thus establish a venture ecosystem of innovation and win-win.

Measuring social value and evaluating outcomes

Creating and measuring social value is an important barometer of ESG management. Social value was not adequately reflected in management index because it is difficult to quantify, unlike financial value. Amid recently growing interest in sustainable management, an increasing number of people are voicing the need for quantified value measurement and evaluation to generate more social value with limited resources.
In respond to this demand, in 2019 Shinhan Financial Group developed the “Shinhan ESG Value Index”, which measures the effects of ESG activities in monetary value, in collaboration with the Center for Global ESG and Business Ethics of Yonsei University. It was followed by our continuous efforts to make the measurement system more elaborate by expanding measurement targets and proxy index, and we also have updated the classification system of measured programs from the perspective of joint growth with local communities – an area that investors and evaluating agencies focus on.
The social value measured for 15 Group subsidiaries totaled KRW 2,013.2 billion in 2021 which was created through 244 programs. The current social value identified through the Shinhan ESG Value Index serves as a reference point of improvement for greater value creation in the future.
In addition to continually generating social value, Shinhan will accurately measure and manage created value to enhance the value of social value.

Preventing Financial Fraud Shinhan Financial Group/ Shinhan Bank

Supporting and preventing victims of voice phishing

• In May 2023, Shinhan Financial Group signed a MOU with the Financial Supervisory Service and the Social Welfare Foundation to provide various support and prevent financial damage in response to the rapid increase in vulnerable people who have been victimized by voice phishing
  (telecommunication financial fraud)
• Shinhan Bank plans to donate a total of KRW 30 billion to the Social Welfare Foundation over a three-year period to carry out various support projects

Shinhan Bank

Introducing AI anomaly detection at ATMs

• In March 2022, Shinhan Bank became the first bank in the country to introduce ATMs that detect abnormal behavior using artificial intelligence to protect senior financial assets, a key target of voice phishing
• AI anomaly detection ATM service utilizes cameras installed in automated teller machines (ATMs) to detect anomalous behavior, such as talking on the phone or wearing sunglasses and hats during a transaction, and alerts the user with a cautionary message
• Shinhan Bank’s data experts and external experts analyze transaction types through AI deep learning (machine learning) and introduce them to ATM machines at branches where there is a high risk of voice phishing incidents due to the high number of visits from elderly consumers, and in the second half of 2023, in connection with the Fraud Detection System (FDS), we plan to improve procedures to enable transactions after additional identity verification if abnormal behavior is detected when using an ATM