Steel Industry 'Eldest Brother' POSCO Establishes 150 Billion KRW ESG Fund to Support SMEs

Hyundai Steel, Steel Association, and Industrial Bank Collaboration

Up to 2 Billion KRW and Maximum 2-Year Loans for SMEs

1.43%p Lower than Market Interest Rates
"4.2 Billion KRW Interest Savings Over 2 Years"

Choi Jung-woo, Chairman of POSCO. (Photo by POSCO)

[Asia Economy Reporter Moon Chaeseok] POSCO has stepped forward as a savior for small and medium-sized steel companies struggling with ESG (Environmental, Social, and Governance) management difficulties due to rising raw material prices. They have established a 150 billion KRW-scale 'Steel ESG Win-Win Fund' to provide loans of up to 2 billion KRW per company.

On the 9th, POSCO announced that it signed a business agreement to establish the fund together with Hyundai Steel, the Korea Iron & Steel Association, and IBK Industrial Bank at the 23rd Steel Day commemorative event held at the Art Hall on the 4th floor of the POSCO Center West Building. Steel Day commemorates June 9, 1973, when the first molten iron was produced at POSCO Pohang Steelworks, Korea's first blast furnace, and has been celebrated since 2000. Attendees at the signing ceremony included Jang Young-jin, 1st Vice Minister of the Ministry of Trade, Industry and Energy; Choi Jeong-woo, Chairman of POSCO and President of the Steel Association; Kim Hak-dong, Vice Chairman of POSCO; Ahn Dong-il, President of Hyundai Steel; and Kim Sung-tae, Senior Vice President of IBK Industrial Bank.

Chairman Choi said, "ESG is a challenge faced not only by large corporations but by the entire industry. We will actively support small steel companies struggling to secure funds for ESG management and do our best to establish an ESG ecosystem in the industry." Vice Minister Jang said, "This agreement is an excellent example of cooperation between large and small enterprises, and we hope the fund will strengthen the ESG capabilities of small steel companies."

The fund was established to support ESG management funds for domestic steel companies. The loan period is up to two years, with a maximum limit of 2 billion KRW per company. Loans will be provided at a preferential interest rate 1.43 percentage points lower than market rates. This will save up to approximately 420 million KRW in interest over two years.

Applications will be accepted starting from the 20th. POSCO and Hyundai Steel partner companies can apply through the two companies, while non-partner companies can apply through the association. However, funding will only be provided to companies recognized for practicing ESG management. Eligible companies among medium and small steel firms must hold ESG-related certifications such as eco-friendly companies, social enterprises, or companies with excellent governance, or submit an 'ESG Fund Utilization Plan.' Based on the submitted information, POSCO, Hyundai Steel, and the association will recommend companies to IBK Industrial Bank, which will decide on loan approval through a comprehensive loan review.

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