KOREA
- Guideline on Issue of SRI Bonds
- The issuance structure of Socially Responsible Investment (SRI) bonds is in the following diagram. SRI bonds are the same as other bonds from a financial perspective, such as bond issuance and repayment of principal. One of the differences is that, unlike other bonds, SRI bonds formulate an SRI bond framework, which an external institution will review to examine if the framework is aligned with the principles. Another difference is that, once the bonds are issued, SRI bonds are required to perform regular reporting at least once a year. In terms of Green/Social/Sustainability bonds, the reporting should include current proceeds used and environmental/social improvements they have achieved. In terms of Sustainability-Linked bond, the reporting should include the SPT achievements.
- SRI Bond Management Framework
- The framework elements
- Green, Social, Sustainability Bonds : 1) Use of Proceeds, 2) Process for Project Evaluation & Selection, 3) Management of Proceeds, and 4) Reporting
- Sustainability-Linked Bond : 1) KPI, 2) SPT, 3) Characteristics of Bond, 4) Reporting, and 5) Verification
- External Review
- This is to ensure that the SRI bond management framework is aligned with the applicable principles or standards such as the GBP, CBS, SBP, Sustainability Bond Guidelines, SLBP, etc.
- Reporting
- Regular reporting elements
- Green, Social, Sustainability Bonds : the use of proceeds and environmental & social impact of bond issuance
- Sustainability-Linked Bond : determination of SPT achievements
- Structure of a SRI Bond Issue(Green bond, Social bond and Sustainability bond)
<Comparison between Issue of SRI bonds and Ordinary (Non-SRI) Bonds>
<K-Green Bond Issuance Structure>
- Process to register bonds in the SRI dedicated segment of the KRX
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- Check if the following eligibility criteria set by the KRX are met:
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※ Criteria for the SRI dedicated segment of KRX (Article 4 of「Guidelines for operation of Segment dedicated to SRI Bonds」)
- 1. The debt securities must be listed on the securities market operated by KRX.
- 2. The debt securities must be in line with the following SRI bond principles.
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- Green bond : FSC & ME 「Korea - Green Bond Guidelines」, ICMA 「Green Bond Principles」, CBI 「Climate Bond Standard」 or Other Principles acceptable to KRX
- Social bond : ICMA 「Social Bond Principles」 or Other Principles acceptable to KRX
- Sustainability bond : ICMA 「Sustainability Bond Guidelines」 or Other Principles acceptable to KRX
- Sustainability-Linked bond : ICMA 「Sustainability-Linked Bond Principles」 or Other Principles acceptable to KRX
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- Submit application forms and other required documents
- KRX reviews the eligibility and decides whether to accept the application or not
- KRX notifies the decision
- Examples of a Bond Issue
