Korea Exchange provides information on ESG
Amid growing interest in environmental, social and corporate governance (ESG) and sustainability among participants in the Korean capital market, the Korea Exchange (KRX) said it has made various efforts to provide investors with useful information about ESG to offer them better opportunities.
“We will do our best to create an environment for ESG investments which have become a core paradigm in the capital market,” KRX Chairman Sohn Byung-doo said in a press conference in March.
The Seoul bourse operator organized an ESG advisory committee including outside experts last November to establish policies and systems for ESG investments.
Given that all companies listed on the benchmark KOSPI market will be obliged to disclose their governance structures starting 2026, the KRX also plans to establish an ESG information portal and open lectures on ESG for listed firms, so as to raise awareness about the necessity of disclosures regarding ESG standards.
In January, a guidance on ESG disclosure was announced to induce listed companies to disclose information regarding their sustainability standards more actively. This was also intended to introduce best practices to domestic firms that are not familiar with them.
In order to draw up the guidance, the KRX formed a working group comprised of listed companies, securities firms, asset management companies and ESG advisory firms, conducting a five-month study on the best practices used overseas.
It has also been announcing ESG-related indices, since coming up with its Socially Responsible Investment (SRI) Index in 2009. Including the KRX ESG Social Responsible Management, KOSPI 200 ESG and KRX/S&P Carbon Efficient Green New Deal indices, the institution has come up with seven ESG-related indices.
The KRX is also considering developing additional ESG-related indices for the low-carbon economy.
Based on those indices, several types of exchange-traded funds (ETFs) and exchange-traded notes (ETNs) are listed on the market to satisfy the demand for ESG investments. The KRX has sought to introduce various ESG-related investment products, including the FOCUS ESG Leaders ETF, KB KRX ESG Eco ETN and Carbon Efficient Green New Deal ETF.
In June last year, the bourse operator opened a website providing all information on SRI bonds in both Korean and English.
An SRI bond means a bond in which issuing proceeds are used for projects that are eco-friendly or generate social benefits. Issuers of such bonds must establish a bond management framework and be reviewed by external institutions to verify their compliance with the principles established by international organizations including the International Capital Market Association and the Climate Bonds Initiative.
In the past, Korea lacked an appropriate institution providing information and statistics on SRI bonds. Because each bond issuer disclosed their information separately, it has been difficult for investors to gather all needed information.
The KRX said it decided to open a public information portal regarding SRI bonds in order to provide transparent information on the bonds and to help investors save time and money. An English portal is also available for foreign investors.