Investing assets entrusted by the government, Bank of Korea and public funds in the global financial market
KIC is committed to improving sustainability through ESG-integrated investments that
take into account environmental, social and governance factors in the pursuit of
long-term and stable returns.
In particular, along with our participation in the Korean government’s green and sustainability
bond issuance, KIC actively invests the entrusted funds in environmentally friendly and
socially beneficial green and social projects.
ESG integration represents an investment approach that incorporates ESG factors in all investment decision-making processes. KIC has developed and is implementing ESG-appropriate approaches for all types of investments, including traditional and alternative assets, as well as direct investments, co-investments, and indirect investments. ESG integration is applied through three main channels:
1. ESG investing: Investment strategies and portfolios are centered around ESG factors. KIC invests in ESG strategy public equity funds and green and social projects as well as Green, Social and Sustainability (GSS) bonds and quantitative ESG sub strategies.
2. ESG review: KIC reviews all external managers and every alternative investment, including direct, indirect, and co-investment arrangements, from an ESG perspective.
3. ESG Program: KIC operates the ESG Special Companies Program, which restricts investment allocations to companies with lower ESG performance, and the KIC Exclusion Strategy, which is applied to specific themes and industries with ESG concerns.
Through the ESG integration process, we thoroughly evaluate and identify ESG factors that have the potential to substantially affect the value of target companies. Our primary goal is to enhance long-term asset value and maximize returns, and we take the necessary measures to achieve this objective.
In June 2019, the Korean government issued a five-year green and sustainability bond worth USD 500 million, followed by an additional EUR 700 million green bond in October 2021. The EUR Green Bond drew strong demand from European investors, as it was the first Asian sovereign green bond issued in EUR and Korea was able to price the notes at an all-time low premium of MS+13bps.
KIC is entrusted with the proceeds of the government’s Green and Sustainability Bond to invest in eligible green and social projects to enhance environmental and social values. KIC examines and discloses the environmental and social impact of each investment, including reductions in carbon dioxide and greenhouse gas emissions, renewable energy generation capacity, job creation and number of beneficiaries (i.e., patients in the event of a medical investment). The aim is to increase investors’ trust in the government-issued Green and Sustainability Bond, contribute to growing the global ESG market and achieve the UN Sustainable Development Goals (SDGs) in the long-term.