A solar panel and a wind turbine (123rf)
Seoul-based investment firm KB Asset Management said Wednesday it had closed a 220 billion won ($200 million) bond-investing private fund in order to embolden its focus on environmental, social and governance factors.
The new private fund -- the largest of its kind in Korea -- will deploy at least 70 percent of its cash to certified South Korean green, social and sustainability bonds or issuers that received integrated ESG rating of “B+” or higher from evaluator Korea Corporate Governance Service.
The latest announcement adds to KB Asset’s ESG investing lineup across diverse asset classes, including Korean stocks, exchange-traded funds and infrastructure, as well as foreign stocks.
This comes as more Korean companies turn to ESG bonds to finance or refinance projects to encourage the use of new and renewable energy sources, to create new jobs or to offer financial aid to small- and medium-sized enterprise partners. Also, credit rating bureaus here are jumping in as assessors of such bonds, which was primarily the role of accounting firms.
According to the Korea Exchange, Korean firms issued a combined 58.9 trillion-won worth of bonds dedicated to socially responsible investing through 2020, double that of the previous year. Korea has issued over 2,000 trillion-won worth of bonds.
“Korea’s ESG bond market is at its nascent stage,” said Lim Kwang-taek, head of fixed income at KB Asset Management. “We will gradually set higher standards for investment decision step by step as the size of the domestic ESG market grows up.”
KB Asset Management is the fourth-largest asset management firm in Korea, overseeing 83.8 trillion-won worth of assets.
By Son Ji-hyoung (firstname.lastname@example.org