Just 10 of South Korea’s largest companies are responsible for almost half of the country’s greenhouse gas emissions since 2011, resulting in an estimated US$119.6 billion in heatwave-related damages, according to new research by a climate advocacy group.
To continue reading, subscribe to Eco‑Business.
There's something for everyone. We offer a range of subscription plans.
- Access our stories and receive our Insights Weekly newsletter with the free EB Member plan.
- Unlock unlimited access to our content and archive with EB Circle.
- Publish your content with EB Premium.
Steelmaker POSCO topped the list, followed by five subsidiaries of state-owned power utility Korea Electric Power Corporation (KEPCO). Other heavy emitters included conglomerates Hyundai Steel, Samsung Electronics, Ssangyong C&E and POSCO International, which is the trading arm of POSCO.
Eco-Business has reached out to all ten firms for comments, but has yet to hear back at the time of going to press.
The losses – equivalent to about 7 per cent of South Korea’s gross domestic product – were calculated using a methodology adapted from a peer-reviewed study that attributes climate damages to corporate emitters.
The findings, which come on the back of a record-breaking summer in South Korea, “[underscore] how a handful of state-backed utilities and industrial giants are driving the country’s climate footprint and its economic losses,” stated non-profit Solutions for Our Climate (SFOC) in the report’s press release.
POSCO and KEPCO’s five subsidiaries were responsible for US$101 billion in heatwave losses from 2011 to 2023. Image: SFOC
According to South Korea’s central bank, this summer’s heatwaves and heavy rains could drive up prices of consumer goods by 0.3 percentage points in the third quarter, with construction, agriculture, forestry and fisheries being the hardest hit sectors.
Rising climate volatility has driven up the prices of many agricultural, livestock and fisheries products. In August, the price of napa cabbage – a key ingredient for traditional staple kimchi – soared 52 per cent in a single month due to heat-related supply disruptions, a local media outlet reported. Livesetock deaths also rose sharply during the record heatwave this year.
Farmers have begun to take legal action for these climate-related damages linked to corporate emitters. Last month, six farmers filed South Korea’s first corporate climate lawsuit to demand 5 million Korean won (US$3,589) each in compensation from KEPCO, which accounted for about 27 per cent of the country’s emissions between 2011 and 2022.
A few months back, SFOC separately lodged a complaint with the Singapore Exchange over KEPCO’s failure to disclose material climate-related risks, including its continued coal reliance until 2050 and exposure to volatile gas prices, in a US$11 billion bond issued earlier this year.
In July, the world’s top court advised that states could be sued if they do not uphold their duties to curb fossil fuel emissions. The landmark case in South Korea therefore “aligns the country with a growing global wave of litigation holding major emitters accountable,” noted SFOC.
“For the first time, [this study] provides a framework for holding corporations accountable for their emissions, not just at the national level but also at the corporate level,” said Jeongho Jo, a policy analyst at SFOC who co-authored the report. “If future analyses expand to include heavy rain, floods, or wildfires, the losses will be even greater.”
The power sector’s outsized role
SFOC highlighted the outsized role of the power sector in determining the carbon intensity of electricity consumption, and thereby the Scope 2 indirect emissions for all other sectors in the country.
“Because KEPCO and its subsidiaries are state-owned, their accountability is different,” stated SFOC in its release. “Emissions are ultimately borne by the public, and the company must act not only as a power supplier but also as a steward of climate-related financial risk.”
Under the current policy trajectory, cumulative heatwave-related damages between 2025 to 2050 could reach US$518.9 billion, warned the report’s co-authors. However, adopting a net-zero pathway would limit damages to US$204.7 billion, avoiding over US$314 billion in losses.
“The implication is clear: net-zero policies are not optional add-ons but an essential cornerstone of South Korea’s climate and economic resilience,” said SFOC.
