The chief of South Korea’s KB Financial Group said Thursday that the adoption of environmental, social and governance values is gaining traction, and asked for cooperation between the Korean public and the private sector to make headway in the global race.

“ESG values are growing around the world with irreversible speed,” KB Financial Group Chairman Yoon Jong-kyoo said in a special luncheon talk hosted by the National Assembly.

“The manufacturing sector accounts for a large part of the Korean economy, yet we are behind the EU, the US and Japan in setting carbon reduction goals -– our public and private sector must join heads and make headway with great speed to boost our national competitiveness,” he added.

But Yoon pointed to the current high debt-to-gross domestic product ratio as a hurdle to Korea’s ESG growth. Korea had the highest ratio of household debt to GDP among 37 major economies in the world as of end-June last year, according to the Institute of International Finance‘s data. The country’s household debt stood at 104.2 percent of its GDP, and the ratio was up 6 percentage points on-year, which was also the fastest growth rate.

“The debt-to-GDP ratio remains globally high, and new facility investments for net-zero transition is projected to push up the ratio,” Yoon said.

“Which is why we need support for corporate restructuring and tax benefits for investments.”

As a support measure for businesses, KB is currently preparing to launch a special consulting team that would help small- and medium-sized enterprises adjust to ESG data disclosures and setting net-zero goals, according to Yoon.

Of the ESG values, Yoon said the global assessment of Korean businesses’ adoption of governance values remain “low.” Benefits of both controlling and minority shareholders must be considered, he explained.

Yoon said that the global finance sector has been taking ESG values into account with decisions tied to loans and investments.

Yoon has been a trailblazer in the finance sector in adopting ESG values faster than any of his peers.

In October, KB was officially endorsed by the Science Based Targets initiative, becoming the first financial institution in Asia to receive the green stamp from the global body. The SBTi is an organization that assesses corporate green goals based on science. In recent years, its endorsement has become a key certificate for businesses seeking to validate their emissions targets.

KB said Tuesday that its net profits hit a record high last year on the back of increased interest and commission income. Net profits of the country‘s No.1 banking group gained 27.6 percent on-year to 4.41 trillion won ($3.68 billion) in 2021, the group said in a regulatory filing.