The environmental, social and governance (ESG) investment market of South Korea has grown to a size of approximately seven trillion won. Especially, the ESG investment entrusted by the National Pension Service (NPS) soared from 400 billion won in 2007 to 6.2 trillion won in July 2018.
In South Korea, ESG investment started in the mid-2000s. At present, the NPS, the Teachers Pension and the Government Employees Pension Service, which are the three largest public pension funds in the country, are increasing their ESG investment.
As of July 2017, the NPS ran 638 trillion won, including 6.2 trillion won in the ESG investment market. The latter amount, which stood at 400 billion won, jumped to 5.4 trillion won in 2012 and 6.2 trillion won in July 2017. Likewise, the Teachers Pension’s investment in the market increased from 10.5 billion won to 132.9 billion won from 2009 to 2018, when its financial assets totaled 19,256.5 billion won.
In the meantime, Hyundai Capital issued 300 billion won and 200 billion won of won-denominated green bonds with maturity of five to 10 years in April and December this year, respectively. The bonds issued to institutional investors are used for installment finance services applied to Hyundai Motor Group’s green cars. Korea Investment Corp. recently established an integrated ESG investment system to apply ESG assessments to its investment activities.
The global ESG investment market reached US$30,683 billion in 2018, growing 34.4 percent in two years. That year, the European ESG investment market recorded a size of US$12.04 trillion, followed by the U.S. market (US$8,723 billion), the Canadian market (US$1,086 billion), the Australian and New Zealand markets (US$516 billion) and the Japanese market (US$474 billion).