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S. Korea’s issuance of green bonds more than doubles on-year

Green bond issuance in South Korea has more than doubled so far this year, compared to the cumulative total floated last year, data provided by local companies showed Tuesday.

Green bonds are fixed-income securities that fund eco-friendly projects. The size of the bond market and diversity of its issuers have been increasing in recent years as firms deem it helpful to improve their corporate image and make investors feel environmentally conscious.

According to disclosures issued by the firms, the combined value of green bonds issued by 11 firms from January to end of October came to 6.4 trillion won ($5.7 billion). The figure is nearly 2.5 times higher than the value of green bonds floated throughout the entire 2018, which came to 2.4 trillion won, according to a data provided earlier by the state-run Korea Development Bank.
LG Chem’s petrochemical tech center in Osan, Gyeonggi Province (LG Chem)
LG Chem’s petrochemical tech center in Osan, Gyeonggi Province (LG Chem)

Around 60 percent of the total green bonds issued so far this year were floated by energy and chemical firms.

LG Chem, South Korea’s leading chemical firm sold nearly $1.5 billion in green bonds in April, marking it the first local chemical company to issue such bonds. LG Chem said at the time that it would use the proceeds to support its electric vehicle battery business.

Its industry rivals, including Hanwha Energy, SK Energy and GS Caltex soon followed the suit.

GS Caltex, which was embroiled in controversy over manipulation of air pollutant emission data at its factories earlier this year, issued green bonds worth around 100 billion won last month. It said it will use the proceeds to bolster pollution control systems for its factories.

Around the world, green bond and loan issuance has surpassed $200 billion as of Oct. 22, with the market projected to reach $230 billion to $250 billion by the end of the year, Reuters said last month, citing data by the Climate Bonds Initiative.

By Jung Min-kyung (