Yi Whan-woo is a Korea Times journalist primarily covering finance. He writes in-depth articles on macroeconomy and financial markets and previously covered sports, politics, diplomacy and inter-Korean affairs, among others. Feel free to contact him at yistory@koreatimes.co.kr.
LG Chem issues $1 billion green bonds
The company logo of LG Group is seen at its headquarters on Yeouido in Seoul, in this undated photo. Korea Times file
By Yi Whan-woo
By Yi Whan-woo
LG Chem announced Tuesday that it has issued green bonds worth $1 billion to finance its batteries, plastic recycling, solar energy and eco-friendly materials businesses worldwide.
Green bonds refer to debt securities specifically earmarked to raise money for climate and environmental projects, which have to meet certain requirements to be issued.
The LG Group affiliate said it has been actively linking finance with environmental projects, noting it became the world's first chemical manufacturer to issue green bonds in 2019 by selling $1.56 billion worth.
In February, it floated 800 billion won ($707 million) worth of environment, social and corporate governance (ESG) bonds, which was the largest amount of its kind to be issued by any Korean enterprise.
ESG has emerged as a key business principle for Korean manufacturing and financial firms in their drive to accelerate sustainable growth and joint prosperity with society.
In May, the company unveiled a plan to invest 150 billion won in a fund aimed at better nurturing second battery technologies and ESG-related businesses in Korea.
This was LG Chem's first time participating in a fund that is not linked to LG Group.
“The successful sale of the green bonds shows global investors' positive assessment of LG Chem's sustainable business structure and its future value,” LG Chem Vice President and CEO Cha Dong-seok said. “We will make efforts to boost corporate value and prepare for qualitative growth through massive investments in the ESG sector.”
Regarding the latest green bonds, the company won the lowest spread among local issuers of overseas bonds on the back of stable ratings from global ratings agencies.
Korean companies from a wide range of industries have been issuing green bonds recently. Doing so involves a complex and extra step of receiving an external review from a relevant institution such as an accounting firm or credit rating agency.