I think this is a positive move by the state-run bank, and much needed. It is the first time a Korean organization has introduced the concept of socially responsible finance, according to the KDB. It helps extend the definition of ‘CSR’ beyond the Korean-market conception of mere philantropy and cause marketing. The fund will invest or provide loans to companies undertaking the following four criteria, of which 275 Korean companies have been identified:
- Social Welfare projects
- Energy Saving projects
- Recognized for good labour-management relations
- Employing physically or mentally challenged people
However, I’d argue that it’s about time. It’s been long shown that socially responsible companies outperform sustainability laggards by as much as 23%. Companies that embrace CSR stakeholder activities are more attractive to invest in. Being ‘good’ does benefit the bottom line!
I think this could be a good catalyst for Korea and help focus C-Suite execs to think about the issue more and the obvious benefits.