Exchange in Focus: Korea Exchange launches a sustainability bond segment

22 June 2020

The Korea Exchange launched a dedicated to SRI bonds segment on June 15. The issuing proceeds of  SRI (Socially Responsible Investment) bonds are used for projects that are eco-friendly or generate social benefits, and they can be green, social, and sustainable bonds. They are also referred to as ESG, thematic, and social contribution bonds. Up until now, there was no institution that provided information and statistics on the SRI bonds, so it was difficult for investors to get such information at once as each SRI bond issuer disclosed SRI bond information separately. In order to provide confident and transparent information on the SRI bonds, the Korea Exchange also opened a public information portal. Meanwhile, to boost up the SRI bond market in line with the opening of the SRI bonds dedicated segment, the Korea Exchange signed MOUs with external evaluation institutions and provides financial supports for SRI bond issuers. SRI bond issuers must establish a bond management framework and be reviewed by external professional institutions whether they comply with the principles established by international organizations including the International Capital Market Association (ICMA), the Climate Bonds Initiative(CBI), etc. The SRI bond issuers are exempt from listing fees and annual dues over the following three years to reduce their funding expenses. The Korea Exchange hopes that the opening of the SRI Bonds dedicated segment will serve as an opportunity to revitalize the domestic SRI bond market. By registering SRI bonds with the SRI bond dedicated segment, those bonds are officially recognized as qualified SRI bonds and can secure credibility that allows SRI bond issuers to make stable financing through the domestic bond market. In addition, costs and time that investors spend to search for the information on the SRI bonds are greatly reduced since standardized information on the SRI bonds is provided, contributing to boosting investment.  

SSE and Green Finance

The KRX is an SSE Official Supporter and has been an SSE Partner Exchange since 2015. SSE campaign on the growth of green finance depends on both promoting green finance products as well as greening mainstream financial markets. In alignment with the SSE’s Voluntary Action Plan, the SSE tracks a number of sustainability activities that can help stock exchanges to grow green finance in their market. This includes the presence of products such as sustainability bond segments or ESG indices and mainstreaming green through the inclusion of ESG requirements into listing requirements. To know more check the SSE Stock Exchange Database.

About the SSE

​The SSE initiative is a UN Partnership Programme organised by UNCTAD, the UN Global Compact, UNEP FI and the PRI. The SSE’s mission is to provide a global platform for exploring how exchanges, in collaboration with investors, companies (issuers), regulators, policymakers and relevant international organizations, can enhance performance on ESG (environmental, social and corporate governance) issues and encourage sustainable investment, including the financing of the UN Sustainable Development Goals. The SSE seeks to achieve this mission through an integrated programme of conducting evidence-based policy analysis, facilitating a network and forum for multi-stakeholder consensus-building, and providing technical assistance and advisory services.