Hana to raise W60 trillion for ESG investments

Hana Financial Group Chairman Kim Jung-tai, third from right in the front row, poses with leaders of its major affiliates and the group's in-house YouTubers at its culture lounge in Seoul, Thursday. Courtesy of Hana Financial Group

By Lee Min-hyung

Hana Financial Group said Thursday it plans to raise 60 trillion won ($53.76 billion) by 2030 to invest in financial projects related to environmental, social and corporate governance (ESG) policies.

Under the “2030 & 60” vision, the financial holding firm plans to raise the money by issuing bonds, providing loans and managing funds to become more socially conscious and eco-friendly. It also shared a pledge to achieve carbon neutrality by 2050.

The group and its affiliates will raise 25 trillion won by issuing ESG bonds over the next 10 years, and the same amount of capital will also be injected to offer ESG loans. Hana also promised to invest 10 trillion won to operate ESG funds either directly or through other firms.

Hana Financial Group Chairman Kim Jung-tai and leaders of key subsidiaries made the declaration in Seoul, and set 2021 as the start of the lender's long-term ESG growth.

The group also shared its eco-friendly “Zero & Zero” goal under which all of the lender's offices will achieve zero carbon emission in the next three decades. By 2050, Hana Financial and its affiliates will stop providing capital to any coal project financing, the company said.

For the group's swift and agile transformation into a more ESG-friendly financial company, Hana established a sustainable management committee under its board of directors. The committee will play a pivotal role in setting ESG strategies and policies and preemptively dealing with any global ESG issues, according to the company.

“We are taking a step forward to achieve a sustainable society with the ESG declaration,” Kim said.

The latest move by Hana is in line with a virus-sparked paradigm shift in the financial industry, with major global investment institutions calling for more financial players to join the ESG drive.

Hana Financial Group Chairman Kim Jung-tai, center, poses while riding an eco-friendly bicycle, at its culture lounge in Seoul, Thursday. Courtesy of Hana Financial Group

Hana hopes to stand at the forefront of helping the economy tackle post-pandemic uncertainty by fulfilling its ESG pledges.

The Hana leader, who recently had his term extended for another year, picked ESG management as one of the group's top three growth strategies for 2021.

In a New Year message, he urged employees to keep making concerted efforts in embracing the ESG-driven new paradigm in the financial industry.

“Demand for companies to be more socially responsible is continuing to grow,” he said. “Overseas pension funds and institutional investors urge companies to play a more proactive role in fulfilling ESG. The issue of ESG is being institutionalized as a global standard at a rapid pace.”

He also underlined that the company is standing at a “critical juncture” amid the pandemic uncertainty, and it can survive only by embracing fundamental changes induced by the coronavirus.

BlackRock, one of the world's most influential investment firms, keeps advising institutional investors to consider ESG factors before making any investment into companies, as part of their efforts to reduce risks.

The National Pension Service (NPS) is also introducing tighter ESG criteria when selecting companies that the pension fund seeks to invest in.

In 2020, the nation's largest pension fund shared its plans to invest half of its assets in ESG-active firms by 2022. The NPS is one of Hana's major shareholders, holding a 9.88 percent stake in the company.

The decision was in line with that of other overseas pension funds. Many of them use a so-called investment blacklist of companies that ignore the society and environment.

Data also showed that more and more investors favor ESG funds. The value of socially responsible investment funds in Korea soared to 1.51 trillion won as of Feb. 5, a fivefold growth from the end of 2019, according to data from market tracker FnGuide.

“Hana will do its utmost to create sincere social values for the next generation by pursuing the ESG management,” Kim said.