"ESG as an Asset Value Variable"... IGIS Asset Management Rewrites Investment Formulas [fn Market Watch]

[Financial News] Environmental, Social, and Governance (ESG) is moving beyond the social responsibility of asset managers to become a variable that separates asset value from investment returns. IGIS Asset Management, a leading domestic real estate asset manager, has also taken action by incorporating ESG into its investment decisions and risk management.
According to the investment banking (IB) industry on the 15th, IGIS Asset Management held its first Sustainable Finance Conference at the Korea Chamber of Commerce and Industry (KCCI) in Seoul on the 14th.
The focus of this event was placed on the actual impact of ESG on asset profitability and risk, rather than on mere social contribution. It covered issues in the investment field, ranging from institutional changes such as sustainability disclosure and transition finance to power infrastructure for AI data centers and risk management in alternative investments.
Cho Gap-joo, CEO of IGIS Asset Management, stated, "We have moved beyond the stage of discussing why we must do something and are now at a point where we must discuss what we will do," adding that "sustainability is becoming a factor that determines investment decisions, risk management, and asset value itself."
In particular, securing power was cited as a key variable in data center investments in the AI era. Oh Tae-seok, Head of the Infrastructure Division, pointed out, "The essence of data center competition is shifting to securing stable power." He presented an investment strategy that links renewable energy with battery energy storage systems (BESS).
Risk management for alternative investments is also being strengthened. Ban Jae-hwan, CRO of the Risk Management Office, disclosed a case study of building an in-house system to quantify the risks of alternative investment funds, such as those in real estate and infrastructure. This is an attempt to manage the risks of alternative assets, which previously relied heavily on qualitative judgment, by quantifying them.
Seong Mun, a partner attorney at Yulchon LLC, and Jung Seung-tae, a center director at the Daishin Economic Research Institute, addressed ESG regulations for financial companies and Korean-style transition finance guidelines, respectively. Environmental risks that will impact the future investment market, such as biodiversity and the Taskforce on Nature-related Financial Disclosures (TNFD), were also discussed.
In the asset management industry, investors' perspectives on ESG are also changing.
The assessment is that the focus is shifting beyond the stage of evaluating whether an investment is eco-friendly to assessing the impact of energy costs and regulatory changes on asset profitability and future sale value.
An asset management industry official stated, "Because real estate and infrastructure have long holding periods, energy costs and environmental regulations are eventually reflected in rental competitiveness and asset prices," adding, "This represents a trend where ESG is moving from marketing into the realm of investment screening and valuation."


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