Korea Issues 14.1 Trillion Won in ESG Bonds This Year, Surpassing China to Become Asia's No.1

[Asia Economy Reporter Jeong Hyunjin] Bloomberg reported on the 14th that South Korea has issued $11.9 billion (approximately 14.1 trillion KRW) in ESG (Environmental, Social, and Corporate Governance) bonds this year, surpassing China to record the largest volume in Asia.

According to Bloomberg, South Korea's ESG bond issuance this year reached $11.9 billion, exceeding China’s $9 billion. China was the largest issuer of ESG bonds in Asia from 2016 to 2019, but this year it was surpassed by South Korea and Japan ($9.5 billion).

ESG bonds are bonds issued for socially responsible investment purposes, including green bonds, social bonds, and sustainability bonds. The country that issued the most ESG bonds worldwide this year was the United States ($27.8 billion), followed by France ($26.5 billion), a consortium of several countries ($21.7 billion), and Germany ($14.5 billion).

Bloomberg forecasted that interest in ESG bonds in South Korea will grow further as the Korean government plans to promote the 'Green New Deal' policy. Han Kwang-yeol, a researcher at NH Investment & Securities, said, "Demand for ESG bonds is steadily increasing." Bloomberg also reported that as the National Pension Service expands socially responsible investments, other investors are following this trend.

Global ESG bond issuance has also increased, reaching $191.7 billion this year, a 27% rise compared to last year. In Asia, the issuance volume of social bonds has significantly increased from $3.6 billion a year ago to $17.6 billion this year. Social bonds are a type of ESG bond issued to support small and medium-sized enterprises, create jobs, and assist vulnerable groups.

Bloomberg attributed the surge in social bond issuance in Asia to policy efforts responding to the novel coronavirus infection (COVID-19).