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 Korea Enterprises Federation (KEF) appears to engage negatively on climate change policy and the transition to a low carbon energy mix in South Korea. The association has engaged negatively with a number of specific climate-related regulations, in particular regarding South Korea’s 2030 Nationally Determined Contributions (NDCs), the Korea Emissions Trading Scheme (K-ETS), and the EU Carbon Border Adjustment Mechanism (EU CBAM).
Top-line Messaging on Climate Policy: KEF has taken negative positions in its top-line messaging on climate policy. In the association’s Net-zero Forum document in December 2021, KEF did not support the upward revision of the 2030 NDCs and the 2050 Net-zero Scenario of the South Korean government. As reported by JoongAng Ilbo in November 2021, KEF appeared to not support climate regulations, stating that they could become a barrier to Korean industries.
Engagement with Climate-Related Regulations: KEF engages negatively with specific climate regulations in South Korea, such as the K-ETS and the 2030 NDC, as well as the EU CBAM. As reported by Aju Business Daily in February 2022, the Chairman of KEF, Sohn Kyung-shik, did not support the EU CBAM at a meeting with EU ambassadors in Korea, citing concerns from Korean corporates that it could cause trade contractions between South Korea and the EU. In an article published on its website in July 2020, KEF opposed the K-ETS in its current form, advocating for banking of surplus allowances for re-entry into the system and the maintenance of current levels of free emissions allocations. In addition, the association submitted a policy proposal to the South Korean government in March 2022, suggesting indirect emissions to be excluded from the K-ETS. In August 2021, KEF signed a joint position paper on the Framework Act on Carbon Neutrality and Green Growth with four other major business federations, opposing more ambitious 2030 NDC targets, citing concerns that carbon-intensive Korean industries would lose industrial competitiveness.
Positioning on Energy Transition: KEF has taken negative positions on the transition to a low-carbon energy mix, in particular citing concerns about the feasibility of renewable energy. In October 2021, the Vice President of KEF, Lee Dong-geun, appeared to oppose the renewables-centered energy transition plan, stating that it could cause a national economic depression. In a joint position paper on the Framework Act on Carbon Neutrality and Green Growth that KEF signed with other major business associations in August 2021, KEF did not support an energy mix transition by expanding renewable energy in South Korea, arguing that renewables would be expensive and unstable in supply. The association also advocated for a 0% tariff on crude oil for naphtha production to reduce tax burden on domestic oil and petrochemical industries in April 2022.