Shinhan Financial issues ESG bonds

Shinhan Financial Group Chairman Cho Young-byoung / Courtesy of Shinhan Financial Group

By Kim Bo-eun

Shinhan Financial Group issued $500 million (590.75 billion won) worth of ESG bonds, the group said Tuesday.

An ESG bond is a type of debt offering aimed to finance corporate activities in environmental and social responsibility and governance improvement.

This is the first time a local financial holding company has issued ESG bonds, Shinhan said. The bonds carry a coupon rate of 3.34 percent.

Shinhan said this is part of the group's mid- to long-term plan for eco-friendly management.

As part of such efforts, Chairman Cho Yong-byoung attended a United Nations Environment Program Finance Initiative event in November last year, joining a global movement in setting up “Principles for Responsible Banking,” an international treaty drafted among noted financial institutions to strengthen cooperation toward a sustainable finance system.

Shinhan Group was listed in the Global 100 Most Sustainable Corporations this year, for the seventh consecutive year. The list is compiled by the Toronto-based media and investment advisory firm Corporate Knights, and announced at the World Economic Forum in Davos, Switzerland.

Shinhan also became the first financial group to be listed on the Dow Jones Sustainability Indices World for six straight years.

The group said the issuing of ESG bonds is also notable in that Shinhan was able to procure funds from investors outside of Asia.

Orders amounted to about $4.3 billion, which is 8.6 times the total issued by 200 institutions. By region, the U.S. accounted for 34 percent, Asia 50 percent and Europe 16 percent.

“It is significant in that we have procured funds that will help sustainable growth,” a Shinhan Financial official said.

“We will search for new business opportunities in the ESG sector that could become the group's new engines of growth,” the official said.