Issues 110 billion won in green bonds for the first time as a Korean financial holding company
Chairman Yoon Jong-kyu of KB Financial Group. (Photos: KB Financial Group)
KB Financial Group declared the group’s mid- to long-term carbon neutral strategy, dubbed “KB Net Zero S.T.A.R.,” to lead the transition to a low-carbon economy through its original role in finance in an ESG Committee meeting on June 24.
KB Financial Group’s “KB Net Zero S.T.A.R.” aims to accelerate the transformation to a low-carbon economy by fostering and supporting eco-friendly companies, and restoring the environment through the active implementation of the Paris Climate Agreement.
KB Financial applied the methodologies of the Partnership for Carbon Accounting Financials (PCAF) and Science Based Targets Initiative (SBTi) to present global standards for the purpose of measuring carbon emissions.
It disclosed that the amount of financed emissions produced by PCAF and SBTi were about 26.76 million tons (tCO2eq).
A total of 36 financial companies, including ABNAMRO and APG, have disclosed financed emissions around the world.
It was quite meaningful for KB Financial Group to transparently disclose its financed emissions generated through its investments in, and its loans to, companies for the first time in Korea.
KB Financial Group set a target of reducing financed emissions based on a 2.0 degrees Celsius scenario in accordance with SBTi and aims to achieve carbon neutrality by 2050 by reducing 33.3 percent by 2030 and 61.0 percent by 2040.
Furthermore, the group set a goal of reaching carbon neutrality in 2040 in line with the 1.5℃ scenario.
KB Financial Group will receive approval for the goal through SBTi's official verification process, and plans to respond flexibly to changes in global standards and continue to keep pace with advanced financial institutions in overseas countries by carrying out regular target reestablishment procedures in accordance with future initiative recommendations.
In addition, KB Financial Group will expand ESG products, investments and loans to 50 trillion won by 2030 and invest 25 trillion won in eco-friendly areas such as new and renewable energy.
“Through the KB Net Zero S.T.A.R. strategy, we will provide solutions to cope with climate change so that many Korean companies can participate in ESG management and play our original roles in finance by expanding investment,” said Oh Kyu-taek, chairman of the ESG Committee.
“We will do our best to actively support our customers and companies to walk a path toward carbon neutrality for future generations with our customers including corporate customers,” KB Financial Group Chairman Yoon Jong-kyu said.
KB Financial Group declares KB Net Zero S.T.A.R. its mid- to long-term carbon neutrality strategy to take the lead in a shift to a low-carbon economy.
Meanwhile, KB Financial Group issued green bonds in the form of contingent convertible bonds worth 110 billion won in late May to expand its role as an ESG leading financial group.
The bonds are the first green bonds issued by a Korean financial holding company and are used to give financial support to eco-friendly projects.
Despite recent tightening in the contingent convertible market due to a rising interest rate, KB Financial Group succeeded in issuing green bonds with a 10-year call option of 110 billion won and an interest rate of 3.6 percent.
KB Financial Group is actively playing a leading role as an eco-friendly financial group by issuing 110 billion won worth of green bonds after KB Kookmin Bank issued 100 billion won in green bonds and KB Securities 110 billion won in green bonds in March.
“The issuance of green bonds is significant in that funds raised through green bonds are used in the eco-friendly sector that the government focuses on,” a KB Financial official said. “We will continue to take the lead in practicing ESG management including the green sector in line with our status as an ESG leading financial group.”
KB Financial Group has issued a total of 276 billion won in contingent convertible bonds including 166 billion won of a five-year call option, in addition to 110 billion won in green bonds and will strengthen its capital adequacy through the issuance of the convertible bonds.
KB Financial Group is stepping up its efforts to reduce carbon emissions by 25 percent and expand the amount of its ESG products, investments and loans to 50 trillion won by 2030 based on a mid- to long-term roadmap for ESG management.