Industrial Bank of Korea, First External Verification of 1.2 Trillion KRW ESG Bond Post-Report

San-eun, Leading Domestic KRW ESG Bond Issuer Bank
Enhancing Status and Contributing to Increased Investor Trust

[Asia Economy Reporter Kangwook Cho] The Korea Development Bank announced on the 31st that it has completed the first-ever external verification of post-reporting for the KRW 1.2 trillion worth of won-denominated ESG bonds issued this year among domestic banks.

The bank explained that this aims to enhance investor confidence and to prevent ESG washing, where funds raised through ESG bonds are not actually used for their intended purposes.

External verification of post-reporting involves preparing an investor guidance document after the issuance of ESG bonds, detailing the use of funds and the measurement results of social and environmental improvement contributions, and having an external professional institution review (verify) whether this content complies with external guidelines and the issuer’s management system.

The Korea Development Bank specified quantitative figures of social and environmental improvement contributions in the ESG bond investor guidance document related to the allocation of proceeds from social bonds (KRW 1 trillion) and green bonds (KRW 200 billion) issued this year to COVID-19 affected companies (low credit rating companies), job-creating companies, and greenhouse gas reduction projects.

Deloitte Anjin, the post-reporting verification agency, conducted document reviews and on-site inspections, and provided a final opinion that the fund allocation details, contribution measurement methods, and figures presented by the Korea Development Bank comply with the International Capital Market Association (ICMA) guidelines and the bank’s management system.

A Korea Development Bank official said, "In March, we established a standard management system applicable to green, social, and sustainable bonds and completed prior verification by an external agency to ensure appropriateness. By completing this external verification of post-reporting as well, we have solidified our status as a leading institution in the won-denominated ESG bond market."

Meanwhile, the total issuance volume of won-denominated ESG bonds by domestic banks recorded KRW 800 billion in 2018, KRW 2.2 trillion last year, and KRW 2.5 trillion this year. The Korea Development Bank, the largest issuer of won-denominated ESG bonds among domestic banks, started issuing the country’s first won-denominated green bonds (KRW 300 billion) and social bonds (KRW 300 billion) in 2018, and has increased its ESG bond issuance volume annually with KRW 800 billion last year and KRW 1.2 trillion this year.

This content was produced with the assistance of AI translation services.