Korea Development Bank

Metric	Summary
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.

 Top recommendations

• 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. 

Leadership area

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.