We have expanded the list of climate policies we assess company engagement with to incorporate land-use related policy, referring to legislative or regulatory measures to enhance and protect ecosystems and land where carbon is being stored. Assessments under this category are currently underweighted in terms of their contribution to the overall company metrics. This weighting will be progressively increased over the next 6 months.
We adjusted the terminology used to describe the queries running down the left-hand side of our scoring matrix and added additional explanatory text to the info-boxes. This has no impact on the scores and methodology. It has been done following user feedback to improve clarity.
Climate Policy Engagement Overview: The Federation of Korean Industries (FKI) policy influencing appears to be predominantly negative. FKI does not support binding targets to reach carbon neutrality by 2050 or South Korea’s 2030 GHG emissions reduction target. It has actively opposed the introduction of a carbon tax in South Korea and has advocated for weakened climate ambition of the Korea Emissions Trading Scheme (K-ETS).
Top-line Messaging on Climate Policy:* FKI displays highly negative top-line positions on the need for climate policy. In April 2021 FKI published a press release in response to the South Korean government’s 2050 Carbon Neutrality target, warning that the target would place a “great burden on Korea’s economic vitality and job creation”. In August 2021, the FKI also criticized the South Korean government’s Carbon Neutrality Scenario, stating in a press release that the “reduction target in the industrial sector is too high”. In June 2022, FKI Chairman Huh Chang-soo did not appear to support the need for climate change regulation, requesting in a meeting with the Minister for Environment Han Hwa-jin that climate policies would be implemented “at a pace that companies and people can tolerate.”
Engagement with Climate-Related Regulations: FKI appears to oppose most forms of climate regulation in South Korea. In March 2021, FKI held a conference in Seoul where it presented a report that actively opposed the introduction of a carbon tax, citing negative effects on the economy. In July 2021, FKI Chairman Huh Chang-soo wrote a letter to the President of the European Commission asking for South Korea to be exempt from the EU’s Carbon Border Adjustment Mechanism (EU CBAM), without supporting alternative measures such as corresponding rises in South Korea’s carbon pricing policies. In an April 2022 meeting with the German Ambassador to Korea, FKI Vice Chairman Kwon Tae-shin did not fully support the EU CBAM and other European climate regulations, stating that it would cause “additional burden” on Korean companies and asked for special consideration, without advocating for increased domestic climate ambition. In a June 2022 press release, FKI advocated for a “turn away from the regulatory carbon market” and the K-ETS, instead calling for a “private-led voluntary carbon market.” In the same month, an FKI press release appeared to oppose the principles of a regulated carbon market in Article 6 of the Paris Agreement.
FKI has actively opposed the upward revision of South Korea’s 2030 Nationally Determined Contribution (NDC) emissions reduction target. In August 2021 the FKI also opposed the passing of the Carbon Neutrality Framework Act, which would legislate the raising of South Korea’s 2030 NDC target. When the draft revision of the target was announced by the South Korean ‘Carbon Neutrality Committee’ in August 2021, FKI published a press release that opposed the increased ambition and calling the targets “unreasonable”. In October 2021, following the finalized announcement of the revised target, FKI released an official position statement on its website that argued that the target would “weaken industrial competitiveness” and be a “burden” on the national economy. In a December 2021 press release, FKI advocated for “reviewing the reality” of the target.
*Positioning on Energy Transition: FKI appears to have a mixed position on an energy transition, supporting a greater role for nuclear power generation, but sometimes at the expense of legislation to further develop renewable energy. A June 2021 press release by FKI emphasized the “insufficient” potential for renewable energy generation in Korea and encouraged expanding nuclear power generation policies. In a report published on its website in November 2021, FKI advocated to “consider the reality of increasing coal power generation” in response to the energy crisis, adding that even in the long-term coal power should be reduced “gradually…rather than abruptly”. However, in a ‘Suggestion of policy tasks to revitalize the clean energy industry’ paper submitted to the Presidential Transition Committee in May 2022, it appeared to support increasing the use of renewable fuels in the power sector including solar and wind used with nuclear. However, in the same position paper, it advocated for amending the Hydrogen Act to include hydrogen produced with fossil gas. FKI appears to support policy measures for the electrification of road transport. In a September 2020 press release, the FKI called for government policy to expand charging infrastructure and reinforce support for electric vehicles. As reported by Newscape in June 2022, FKI also advocated for the South Korean government to “strengthen policy support” for companies to produce electric vehicles both domestically and in emerging markets such as China and Indonesia.