Korea floats W12.9tr ESG bonds in first 2 months

South Korean companies have issued a combined 12.9 trillion won ($11.3 billion) worth of green, social and sustainability bonds from January to February, data showed Tuesday.

In the first two months of 2021, social bonds accounted for nearly two-thirds of the total issuance of bonds aligned with ESG factors, followed by green bonds and sustainability bonds -- a hybrid of green and social -- according to data by the Korea Financial Investment Association.

In February alone, Korean firms floated 52 fixed-income instruments worth 7.74 trillion won to fund projects or technologies that have a positive environmental or social impact, according to Kofia. The figure rose 2.6 trillion won on-month.

State-run Korea Housing Finance Corp. in February floated a total of 2.4 trillion won mortgage-backed securities in the form of social bonds, while Industrial Bank of Korea issued 1 trillion won social bonds, in the largest batch by a Korean bank, to provide financial support to small- and mid-sized enterprises. LG Chem also issued 820 billion won worth of sustainability bonds.

Korea has witnessed an explosive growth of green, social and sustainability bond market. In 2020, Korea issued 58.8 billion won worth of such bonds, up 230 percent on-year, according to data by the Korea Exchange.

By Son Ji-hyoung (consnow@heraldcorp.com)