Lotte Shopping Co., the retail arm of South Korea's fifth-largest conglomerate Lotte Group, will tap 1 trillion won ($784.4 million) from two of the country’s major commercial lenders to help its contract suppliers stay afloat and to meet its carbon neutrality goal.
The Korean retail giant announced on Friday that it had signed an agreement with Nonghyup Bank and Hana Bank to foster its core environmental, social and governance (ESG) businesses.
Under the agreement, Lotte Shopping will receive 1 trillion won from the two banks over the next five years.
The retailer, which owns Korea’s largest department store operator Lotte Department Store and the hypermarket chain Lotte Mart, will use some of the funds to make early payments to small- and mid-sized (SME) supply partners grappling with liquidity crunches.
It will also set up a fund to lend capital to its SME partners.
Lotte Shopping will use the rest to broaden the use of light-emitting diode (LED) lamps and low-energy consuming heaters and air conditioners to boost energy efficiency, and adopt solar power generation, in line with Lotte Group’s 2040 Net Zero road map.
The company expects its latest agreement with Nonghyup and Hana Bank to accelerate its ESG-centered management push for sustainable growth.
Lotte Shopping's RE:EARTH campaign (Courtesy of Lotte Shopping) In 2021, Lotte Shopping set up an ESG committee under its board of directors and became the first Korean retailer to join the Science Based Targets initiative (SBTi). That global body was launched in 2015 to promote best practices in emissions reduction and net-zero targets based on climate science.
Lotte Shopping kicked off its first green campaign in 2004, according to the company.
Lately, it has been engaging in sustainable growth campaigns under its new environmental campaign brand RE:EARTH.
In its first Sustainability Report in 2021, parent Lotte Group unveiled its official ESG statement of achieving net zero emissions by 2040 and becoming a leader in global ESG management by 2025.
Write to Hun-Hyoung Ha at hhh@hankyung.com Sookyung Seo edited this article.
