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| Korea Exchange's office building in Seoul / Courtesy of Korea Exchange |
By Lee Min-hyung
The Korea Exchange has decided to exempt commission fees for the listing of socially responsible investment (SRI) bonds for another two years until June 2025, in a move to foster environmental, social and corporate governance (ESG) investment here, the exchange operator said.
SRI bonds are bonds used for projects involving environmental and social purposes. Starting June 15, 2020, the exchange launched the fee waiver program to operate over three years, exempting commissions and annual fees. This has helped some 200 companies reduce their costs worth around 2 billion won ($1.5 million) while listing their SRI bonds for the past three years.
"The extension of the program is expected to help activate the issuance and listing of SRI bonds," a spokesperson at the exchange said.
The exchange's latest decision allows any company considering issuing the SRI bonds to save the initial cost until June 14, 2025.
The Korea Exchange operates a website dedicated to SRI bonds that meet guidelines from the International Capital Market Association, Climate Bonds Initiative and Korea's Ministry of Environment.
The balance of SRI bonds listed here is on a sharp rise, according to data from the exchange. The figure reached 82.1 trillion won as of the end of 2020. It has since grown rapidly in size, standing at 198.6 trillion won as of the end of 2022.
SRI bonds include green, social and sustainability-linked bonds. The term SRI bonds are often used to reference ESG bonds by investors and market players.
The exchange operator started its ESG activities for the first time in 2010 by adopting ESG disclosure of listed companies. It also joined the Sustainable Stock Exchanges (SSE) Initiative in 2015. This is a partnership program initiated by the United Nations to promote ESG management on the corporate side.
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