Green financing key to energy transformation, says forum
“There has been a huge rise in bonds and loans in a sustainable finance format in Korea, and it’s really come on the back of strong support from the Korean government,” said Nancy Wang, director of sustainable finance at the Australia and New Zealand Banking Group (ANZ), who joined the forum virtually. “[While that movement] will only increase, the market [in Korea] is not as developed as some of the other ones we see in the European region yet […] and we’re hoping to see more in Korea.”
The Korean government announced a green investment plan last July, a national stimulus package of $160 trillion won ($142.7 billion) by 2025 to boost the economy by focusing on job creation in the green and digital sectors.
ANZ played a role in a syndicated green loan for SK Innovation to finance construction and development of electric vehicle battery plants in the United States.
“ANZ is proud to have been the sole underwriter agent as well as a sustainability coordinator for this landmark transaction,” Wang said. “It was important for us not to be [merely] comfortable with the credit worthiness of the group, but to understand SK Innovation’s overall sustainability strategy […] and to ensure that that framework as well as documentation aligns with green principle.”
The forum, Accelerating the Green Energy Transition: Leveraging the Full Spectrum of Green Finance Initiatives, was hosted by the Australian Chamber of Commerce in Korea in partnership with GGGI, to share the experience of Australian banks and public finance institutions that support net-zero emission goals.
Going green in the private sector, with projects ranging from green financing to environmental, social and governance (ESG) management, is a timely topic for discussion in Korea as it looks to hosting the Partnering for Green Growth and the Global Goal 2030 later this month, said Kim Hyo-eun, deputy director-general of GGGI and former director for climate change and environment affairs at the Ministry of Foreign Affairs.
ESG management refers to a company’s commitment to do more than just seek profit, such as actively making efforts to contribute to the environment or social causes and to conduct itself responsibly.
“The P4G Summit to be held at the end of this month in Seoul is presenting an excellent platform and opportunity for the international community to promote and adopt green growth solutions,” Kim said.
“In line with Korea’s green new deal and net zero by 2050 commitment, Korean companies are taking more proactive steps incorporating ESG in their business strategies,” she added. “The National Pension Service will increase its investment in businesses meeting ESG requirements, and many leading companies like Samsung, LG, SK are more active in joining RE100.”
RE100 is an international initiative joined by businesses committed to running all of their operations on renewable electricity.
The forum was also joined by representatives of IFM Investors, an Australian investment management company, and Pepper Savings Bank, the Australia-based savings bank that opened in Korea in 2013, who shared their practices in green financing.
BY ESTHER CHUNG [firstname.lastname@example.org]