Socially responsible investment bonds surpass W200tr in value

The aggregate value of Socially Responsible Investment bonds issued surpassed 200 trillion won for the first time, the Korea Exchange said.

The total value of SRI bonds listed on the market stood at 200.2 trillion won as of June 10, marking a 154-fold increase from 1.3 trillion won in 2018 when an SRI bond was first listed.

Also known as environmental, social and governance bonds, thematic and social contribution bonds or green, social and sustainable bonds, SRI bonds are used to fund eco-friendly or socially beneficial projects.

By type, social bonds accounted for 80 percent of the aggregate value, or 159 trillion won; while green bonds (19.2 trillion won) and sustainable bonds (21.7 trillion won) accounted for about 10 percent each.

The number of listed companies that issued SRI bonds also rose above 200, jumping 41-fold from 2018.

Companies actively issued green bonds in a bid to achieve net zero carbon emissions after the South Korean government announced in 2020 its goal to achieve carbon neutrality by 2050.

Issuance of social bonds and sustainable bonds also increased to support the underprivileged after the World Health Organization declared COVID-19 a pandemic.

Among the stock exchanges worldwide where SRI bonds have been listed, the KRX came 11th in value of listed SRI bonds.

In the Asia Pacific region, the KRX came third after Singapore and Hong Kong exchanges.

By type, the value of green bonds issued on the KRX came 15th among exchanges worldwide; social bonds fifth, and sustainable bonds 10th.

As socially responsible investments are expected to grow further as the world takes steps toward carbon neutrality and seeks to reduce social inequality, the KRS said it will support the government’s sustainable finance policy execution and try to meet market demand for SRI.

By Kim So-hyun (sophie@heraldcorp.com)