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2022 Korea ESG Finance White Paper
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The "2022 Korea ESG Finance White Paper," which analyzes and reports on the current state of ESG (Environmental · Social · Governance) finance in both public and private financial institutions in South Korea, has been published.
This is the third edition following its initial release in December 2021, comprehensively investigates and analyzes the overall status of ESG finance across all 82 public financial institutions and 89 private financial institutions.
According to the white paper, as of the end of 2022, the size of ESG finance in South Korea exceeded 1,000 trillion won, reaching 1,098 trillion won. This represents a 39.7% increase (312 trillion won) compared to the previous year, but the majority of this increase is analyzed to be from the entrusted management assets of the National Pension Service, which came under scrutiny for ESG washing during the recent regular National Assembly audit.
Meanwhile, the increase in ESG investment (responsible investments) by the National Pension Service amounted to 254 trillion won, accounting for 91% of the total domestic growth.
Table of Contents
Preface
Youngho Kim Chairman, KoSIF
Yongwoo Lee Member of the National Assembly, Democratic Party of Korea
Executive Summary
Overall Status of ESG Finance in Korea
Detailed Analysis by ESG Finance Type
- ESG Investment
- ESG Loan
- ESG Bond Issuance
- ESG Financial Instrument
ESG Financial Issues Report
- ESG Investment of the NPS
- Classification System and Sustainable Disclosure
- Status of ESG Finance Target
Appendix
- Survey and Analysis Methodology
- Institutions’ Responses to ESG Finance
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Main contents of the report
- As of the end of 2022, the size of ESG finance in Korea exceeded 1,000 trillion won, reaching 1,098 trillion won, marking a growth of 39.7% (312 trillion won) compared to the previous year.
- 81% (254 trillion won) of the increase is attributed to entrusted management assets of the National Pension Service.
- Public financial institutions' ESG finance amounted to 701 trillion won, nearly double that of the private sector. The influence of the National Pension Service is significant.
- Private financial institutions' ESG finance totaled 390 trillion won, accounting for 35.5% of Korean ESG finance. Among these, banks accounted for 72%.
- ESG investment amounted to 558 trillion won, ESG loan totaled 393 trillion won, ESG bond issuance reached 76.3 trillion won, and ESG financial instrument amounted to 70.6 trillion won.
- Among the types of ESG finance, ESG loan have been the largest in scale over the past four years; however, in 2022, ESG investment became the largest in scale, influenced by the National Pension Service.
- Standards and regulations to prevent ESG washing are still inadequate. There is a need for further development, strengthening, and expansion of taxonomy, as well as its application.
- It is urgent to introduce ESG financial disclosure and corporate disclosure.
Inquiries: Namyoung Park Senior Researcher (nypark@kosif.org), Minah Kim researcher (mina0219@kosif.org)
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