Korea Development Bank
This page is part of the E3G Public Bank Climate Tracker Matrix, our tool to help you assess the Paris alignment of public banks, MDBs and DFIs.
|Promotion of green finance||Some progress – Whilst not at the forefront of innovation at the international level, KDB is actively promoting and shaping the nascent green capital market in Korea.
|Fossil to non-fossil energy finance ratio and scaling up climate finance||Unaligned – Between 2016-18 for every $1 the KDB provided to fossil fuels, $0.35 went to renewables. This is one of the highest ratios in favour of fossil fuels amongst the public banks included in this analysis.|
|Nature based solutions||Unaligned – No information can be found for a targeted investment programme in biodiversity, nature-based solution or sustainable agriculture.|
|Climate risk, resilience, and adaptation||Unaligned – No processes to screen or manage climate risks at project level, no disclosure of adaptation finance.|
|Overarching climate strategy||Unaligned – KDB does not have a standalone climate
strategy, but recognises climate change as a “challenge”
in its overarching strategy.
|Integration of climate mitigation and resilience in key sectoral strategies||Unaligned – There is no information or evidence of sector-specific strategies. KDB does state its intention to finance projects related to hydrogen/electric charging stations, electric vehicles and public transport.|
|Institutional leadership||Some progress – KDB is the leading institution for green finance in South Korea. Internationally, the bank does not belong to the leading development finance institution.|
|Energy access and fuel poverty||Not applicable – KDB does not have a dedicated strategy nor targets to promote energy access. It mostly operates in countries where energy access is not an issue.|
|Energy efficiency strategy, standards and investment||Unaligned – While KDB has no institution-wide energy efficiency policy, its Sustainability Bond Framework sets out standards for energy efficiency. However, the share of its issued Sustainability Bonds equals only 0.1% of its entire portfolio.|
|Fossil fuel exclusion policies||Unaligned – KBD has no coal, oil or gas exclusions and there are examples of KDB loans for coal, oil extraction and gas projects. However, due to a domestic ban of new coal-fired power generation and a government announcement to stop funding coal projects internationally, KDB has effectively stopped funding coal.|
|Greenhouse gas accounting and reduction||Unaligned – There is no GHG accounting at project or portfolio level (with the exception of renewables projects financed by green bonds). This is despite being a signatory of the Equator Principles and accredited to the Green Climate Fund.|
|Shadow carbon pricing||Unaligned – No information on the application of an internal carbon price can be found.|
|Country level work||Unaligned – Despite signs of taking some initiative to promote cleaner technologies in partner countries, KDB lacks a coherent approach to integrate climate into its partner country engagement.|
|Technical assistance for implementing Paris goals||Not applicable – Almost no information could be located
on KDB technical assistance.
|Transparency of climate finance data||Unaligned – No project level information is available and there is no disclosure of financial intermediary sub-projects.|
- KDB should put in place a standalone climate strategy, in addition to its implementation of Korea government policy in this area.
- KDB should put in place a fossil fuel exclusion for coal, and then extend that to oil and gas projects. It is noted however that as the Korean government has no current plans for coal-fired power stations, KDB in turn has no plans to finance any coal power stations in Korea.
- KDB should start providing project-level and portfolio data, including GHG emissions, to increase its transparency. Publishing GHG data would bring it into line with the Equator Principles to which it has committed.
- KDB should include climate risk assessments within its project appraisal process.
KDB is a leader within the Korean financial market. It has signed up to the Equator Principles, which are based on the IFC’s environmental, social and human rights performance standards, and represents a minimum starting point for financial institutions. It was also accredited to the Green Climate Fund in 2016 as the first and only Korean institution, which is a significant achievement. To date, it has not submitted a project to the GCF. However, it has signed a Memorandum of Understanding (MoU) with the Korea International Cooperation Agency (KOICA) and the Korea Environmental Industry & Technology Institute (KEITI) for the joint development of GC projects. KDB has also estblished a Sustainable Bond Framework in 2019 to establish a standardised framework for ESG (Environment, Social and Governance) bonds. KDB and the Korena Electric Power Corporation (KEPCO) host.
Last updated: June 2020.