Promotion of green finance

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Paris alignmentReasoning
Some progressWhilst not at the forefront of innovation at the international level, KDB is actively promoting and shaping the nascent green capital market in Korea.

Explanation

The Korea Development Bank issued its first green bond in 2017 for USD 300 million (Singapore registered) in line with the Equator Principles, and then in May 2018 listed a green bond for KRW 300 billion on the Korean Stock Exchange. In July 2019, KDB issued another green bond denominated in Euro, worth €500 million. The green bond issuance is aligned with the green financing programme of the Bank, of which one of the four aims is to provide knowledge management and analysis of green industry markets in developed and developing countries. The Bond has won the award for “Best Green Bond ― Bank” at The Asset Triple A Sustainable Capital Markets Regional Awards 2019.

Together with the Korea Electric Power Corporation (KEPCO), the Bank hosts the KDB-KEPCO Climate Finance Forum in 2019, as presented in its 2019 annual report. The forum is organised annually and is meant to bring “two of Korea’s leaders in climate change projects, to come together to share information on overseas projects and look at opportunities for new projects.”

Nevertheless, while KDB’s efforts to establish itself as a leader on green finance in Korea and the region, the bank still shies away from integrating green finance into is strategic client management. Hence, it is insufficient to demonstrate that KDB has been proactively engaging with its clients to support them on the promotion of green finance. There is a lack of publicly available information on actions in this area on the KDB website. 

Furthermore, KDB has yet to endorse the recommendations of the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD). The Bank should evaluate its exposure to climate risks  according to TCFD guidelines and use the TCFD-aligned disclosures to enhance its risk management approach, including via avoidance of high-carbon and climate-vulnerable activities.

KDB has been accredited to receive funds from the Green Climate Fund but has not yet submitted any projects for funding. In December 2019, KDB signed a memorandum of understanding with the Korean International Cooperation Agency (KOICA) and the Korea Environmental Industry & Technology Institute (KEITI) for the joint development of projects. 

Last Update: July 2021