Social Value Initiatives

Status of Social Value Initiatives

Shinhan Financial Group joined the UN Global Compact (UNGC), which encourages corporate sustainability and social responsibility as corporate policies, and the Value Balancing Alliance (VBA), which develops a currency-based social value measurement standard. We also strive to become a financial group that creates social value through indicators of Sustainability Accounting Standards Board (SASB), which refers to sustainability accounting principles.

UN Global Compact

The UNGC is an initiative that mainstreams the Ten Principles in the areas of human rights, labour, environment and anti-corruption in business activities and that supports the achievement of comprehensive goals set by the UN, such as the UN Sustainable Development Goals (SDGs). Shinhan Financial Group joined the UNGC in May 2008, and has been disclosing relevant activities by issuing its CSR Report every year since 2014.

Value Balancing Alliance

The goal of the VBA is to develop a method that measures and compares value that a company contributed to society, economy, and the environment and that is not reflected in financial statements. The VBA seeks to convert environmental and social impact into comparable financial data. Shinhan Financial Group became the first in the Asian financial industry to join the VBA in March 2021 and is participating in the development of a global standard model on ESG measurement. We will also begin to develop a measurement standard for financial industry in collaboration with Deutsche Bank and BNP Paribas in the second half of 2022.

Sustainability Accounting Standards Board

The SASB provides a sustainability material map by industry to enable comparisons of financial impact on ESG issues among companies, and establishes and develops standard public notice criteria. Shinhan Financial Group first disclosed SASB matters through the 2019 CSR Report.

Ten Principles

Ten Principles
Human Rights	Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights; and Principle 2: make sure that they are not complicit in human rights abuses.
Labour	Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining; Principle 4: the elimination of all forms of forced and compulsory labour; Principle 5: the effective abolition of child labour; and Principle 6: the elimination of discrimination in respect of employment and occupation.
Environment	Principle 7: Businesses should support a precautionary approach to environmental challenges; Principle 8: undertake initiatives to promote greater environmental responsibility; and Principle 9: encourage the development and diffusion of environmentally friendly technologies.
Anti-Corruption	Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery

Scope of Indicators for Impact Statement Method

Scope of Indicators for Impact Statement Method
Economic	Gross Value Added (GDP contribution): taxes, wages, profits, etc.
Human and Social	Occupational health and safety Training
Environmental	GHG/climate change Air emissions Water consumption Water pollution Land use (biodiversity) Waste

Materiality Map

Materiality Map
Environment	GHG emissions, air quality, energy management, water & wastewater management, waste & hazardous materials management, ecological impacts, etc.
Social Capital	Human rights, data security, product quality & safety, customer welfare, selling practices & product labeling, etc.
Human Capital	Labor practices, employee health & safety, employee engagement, diversity & inclusion, etc.
Business Model & Innovation	Product lifecycle management, business model resilience, supply chain management, materials sourcing, physical impacts of climate change, etc.
Leadership & Governance	Business ethics, management of the legal & regulatory environment, systemic risk management, etc.