[한국대학신문 이원지 기자] Ewha Womans University (President Eun-mi Kim) signed an industry-government-academic cooperation business agreement with the Financial Supervisory Service, major domestic companies, and the British embassy in Korea to promote the development of the international climate risk management model ‘Frontier-1.5D’.
Climate risk is broadly divided into physical risk of material damage due to abnormal climate and transition risk, which means financial loss that occurs in the process of transitioning to a low-carbon society. ‘Frontier-1.5D’, jointly developed by Ewha Womans University, the Financial Supervisory Service, major domestic companies, and the British embassy in Korea, leads the achievement of an international agreement to limit the global average temperature rise to within 1.5℃ compared to pre-industrial times (1850). It has the meaning of actively engaging in risk management.
At the business agreement signing ceremony held at the British Embassy in Korea on the 13th, Ewha Womans University President Kim Eun-mi, Financial Supervisory Service President Jeong Eun-bo, British Ambassador to Korea Simon Smith, British Government COP26 Senior Climate Response Ambassador Nigel Topping, and Kim Jun SK Innovation CEO Eun-seok Choi, CEO of CJ CheilJedang, John Lim, CEO of Samsung Biologics, Jong-gyu Yoon, Chairman of KB Financial Group, and Cho Yong-byeong, Chairman of Shinhan Financial Group attended the event.
This MOU is the world’s first attempt to cooperate with financial supervisory authorities and businesses, academia, and foreign authorities to respond to climate risks. It is expected that it will serve as a good precedent for the development of international climate risk models in the future.
The goal of participating organizations is to manage uncertainty due to climate risk by developing a climate environment risk management model, estimating the cost range according to climate risk, predicting the loss of corporate and financial companies due to climate change response policies such as greenhouse gas reduction and abnormal climate am. Once the model is developed, it will be used for alleviating management uncertainty, preparing sustainable management (ESG) measures, and attracting foreign investors.
Specifically, the climate risk management model can reduce uncertainty in management decision-making by converting and presenting uncertainties caused by carbon reduction policies and raw material price fluctuations due to climate risks into expected costs. The estimated cost estimated by the model can be used as a benchmark index for green technology development investment and green finance procurement (ESG bond, etc.) And it is expected to help build governance (governance). In addition, it has the effect of enhancing the corporate image by informing foreign investors sensitive to climate risks to make active investments and preparations in the environmental field.
Through this agreement, Ewha Womans University will support research methodology and researchers for climate risk management model development in the climate and energy system engineering major of Eltek College of Engineering, and participating companies plan to support the provision and analysis of climate risk-related data for each business. The British Embassy is in charge of advising on the development of climate risk models, and the FSS is responsible for sharing know-how and coordinating overall collaboration as a coordinator.
This industry-government-academic cooperation is based on the role of financial authorities in the Bank for International Settlements (BIS) in responding to the ‘Green Swan’, which refers to the unpredictable risks and threats posed by the climate change crisis. It is expected to contribute to the enhancement of climate risk management capabilities by aligning the needs and capabilities of various stakeholders.