[Asia Economy Reporter Hwang Yoon-joo] Hyundai Steel's green bonds, one of the ESG (Environmental, Social, Governance) bonds issued as part of its eco-friendly management, have succeeded in attracting strong demand from investors.
On the 18th, Hyundai Steel announced that in a demand forecast for institutional investors regarding the issuance of green bonds worth a total of 250 billion KRW, orders totaling 2.07 trillion KRW?8 times the planned amount?were received, prompting the company to consider increasing the bond issuance size to 500 billion KRW. This ESG bond issuance is the first among Hyundai Motor Group affiliates excluding financial companies.
Green bonds are a type of ESG bond issued for socially responsible investments related to environmental, social, and governance factors. They are limited to use for green industries such as carbon reduction, building energy efficiency, renewable energy, electric vehicles, and funding renewable energy projects.
Hyundai Steel plans to invest the entire amount raised through these bonds into environmental (Green) projects by maturity, reflecting the company’s strong commitment to environmental investment.
The significance of this bond issuance is further enhanced by the fact that the ESG certification was conducted by a credit rating agency, and the bonds received the highest rating of GB1 (E1/M1) among the evaluation criteria. Certification by a credit rating agency involves a rigorous process and regular post-evaluations, which help increase investor confidence.
Korea Ratings, which conducted the green bond certification evaluation for Hyundai Steel, stated, "Hyundai Steel’s management and operational systems are clearly organized and highly transparent," and added, "The company’s project evaluation and selection procedures, fund management, post-reporting and disclosure, and handling of environmental and social controversies all comply with ICMA principles for green bond management."
Currently, Hyundai Steel has established large-scale investment and technology development plans to reduce greenhouse gas emissions. As part of this plan, the company intends to use the raised funds for the introduction of coke dry quenching (CDQ) facilities and for flue gas desulfurization, denitrification, and quality improvement work.
CDQ is a facility that cools coke produced from coal raw materials during the steelmaking process. Until now, Hyundai Steel has used wet quenching facilities (CSQ) that utilize cooling water, but these have the disadvantage of not being able to recover waste heat generated during the cooling process.
By replacing this with dry quenching facilities (CDQ) that circulate cooling gas to suppress steam emissions and recover waste heat, Hyundai Steel expects to reduce environmental risks as well as improve energy efficiency.
A Hyundai Steel official said, "Hyundai Steel is striving to implement eco-friendly management at the company-wide level," adding, "The issuance of ESG bonds reflects this commitment, and we will continue to practice environmentally responsible management by prioritizing environmental factors in business decision-making going forward."
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