(17 August 2020 – Korea) South Korea has sold the most ESG (Environmental, social and corporate governance) bonds in Asia so far this year, surpassing China which was the region’s biggest issuer of such debt from 2016 to 2019.
The sales of socially responsible bonds have reached $11.9 billion in Korea, significantly ahead of Japan at $9.5 billion and China ($9 billion).
“Issuers prefer to sell bonds labelled ‘ESG’ due to growing investor demand for them in Korea,” said NH Investment & Securities credit analyst Han Gwangyeol. “The ESG debt market will continue to expand globally, and that boom will help improve the performance of the notes in the mid- to long-term.”
Korean policy makers have introduced steps that may fuel more interest in sustainable debt, with President Moon Jae-in’s government announcing “green New Deal” projects last month to cut carbon emissions and foster environmentally friendly industries. The National Pension Service, which oversees 749 trillion won ($631 billion), said it will boost socially responsible investment, prompting other investors to follow the trend.
Korea SMEs and Startups Agency, a government-funded organization to support smaller businesses, has led ESG bond sales in the nation this year, while Korea Housing Finance Corp. and Kookmin Bank have also been active issuers.