Member of the National Assembly Wonyoung YangYi

Tracing 12 Years of Korea’s Coal Finance Addiction Whitepaper on Coal Finance by Korean Financial Institution Korea Sustainability Investing Forum www.kosif.org Korea Sustainability Investing Forum is a non-profit organization founded in 2007 for the purpose of contributing to building a sustainable society through the promotion of socially responsible investments (SRIs), and it has been carrying out various activities to this end. The Forum has also organized and operated the CDP Korea Committee to promote environmental response among domestic financial institutions and companies.

Wonyoung YangYi, Member, National Assembly Republic of Korea www.yangyi.kr Wonyoung YangYi is a proportional representative of the 21st National Assembly and is currently a member of Member of the National Assembly the Environmental Labor Committee and the Budget and Accounts Committee of the National Assembly. She is Wonyoung YangYi also serving as Chairman of the Democratic Party’s Special Environment Committee and a research fellow of the National Assembly’s Climate Crisis Green New Deal Research Group. In preparation for this report, the Office of National Assemblywoman Wonyoung YangYi secured data and materials concerning public financial institutions through the National Assembly’s. For private financial institutions, the office collected data by requesting cooperation from associations and individual financial companies. Consequently, the information on the investments made in domestic and foreign coal-fired power generation projects of 162 public and private financial institutions in Korea was secured, and this data was provided to Korea Sustainability Investing Forum.

Greenpeace www.greenpeace.org Greenpeace raises environmental issues through peaceful protests and creative communication while presenting solutions for a clean and peaceful future. It operates 40 offices across the globe. Greenpeace also strives to protect marine and tropical rainforests, remove toxic substances, respond to climate change, overhaul nuclear power plants, and oppose genetically modified food, among other environmental work. Since 1971, they have led environmental movements against political forces and businesses that threaten the planet Earth. The Greenpeace organization consists of scientists, lawyers, activists, policy, and communications experts. Based on this, they carry out various campaigns such as research, policy advocacy, civic education, lobbying activities, and legal work. For more information, please visit www.greenpeace.org/korea.

Disclaimer © 2020 KoSIF, Greenpeace All rights reserved. The content of this white paper is prepared based on the data provided by the Member of the National Assembly Wonyoung YangYi. Please be advised that this material does not guarantee nor promise any profit. The information contained herein is prepared based on that which was acquired from sources trusted by Korea Sustainability Investing Forum (KoSIF). However, its accuracy and completeness are not entirely guaranteed. The information, data, analysis reports, and opinions provided are the proprietary data of KoSIF and Greenpeace. Any reproduction and distribution is strictly prohibited. The content of this white paper is intended for informational use only and is subject to change without prior notice. Contents

PREFACE KIM YOUNG-HO CHAIRMAN OF KOREA SUSTAINABILITY INVESTING FORUM 02 WONYOUNG YANGYI MEMBER, NATIONAL ASSEMBLY REPUBLIC OF KOREA 03 GREENPEACE OFFICE FOR EAST 04

MAIN TEXT SUMMARY 05 CLIMATE FINANCE AND TRENDS OF COAL FINANCE OVERSEAS COAL EXIT POLICY AND INSTITUTIONALIZATION OF CLIMATE FINANCE 07 COAL EXIT OF OVERSEAS FINANCIAL INSTITUTIONS 09 DOMESTIC COAL-FIRED POWER GENERATION POLICY AND CLIMATE FINANCE 10 COAL EXIT OF DOMESTIC FINANCIAL INSTITUTIONS 11 ANALYSIS OVERVIEW: COAL FINANCE OF KOREAN FINANCIAL INSTITUTIONS 12 COAL FINANCE RANKING PUBLIC AND PRIVATE COAL FINANCE RANKING 16 DOMESTIC AND OVERSEAS COAL FINANCE RANKING 17 RANKING BY GOVERNMENT MINISTRIES(PUBLIC) AND FINANCIAL SECTOR(PRIVATE) 18 RANKING BY PRIVATE FINANCIAL GROUPS 19 DETAILED ANALYSIS OF COAL FINANCE BY FINANCIAL INSTITUTION PUBLIC FINANCIAL INSTITUTION 20 PRIVATE FINANCIAL INSTITUTION 24 PRIVATE FINANCIAL INSTITUTIONS BY GROUP 36 COAL FINANCE PHASE-OUT PLAN OF FINANCIAL INSTITUTIONS 42 CONCLUSION 44

SPECIAL CHAPTER I. ANALYSIS OF COAL ASSET EXPOSURE BY FINANCIAL INSTITUTIONS 46 II. RENEWABLE ENERGY INVESTMENT STATUS AND PLAN OF FINANCIAL INSTITUTIONS 47 III. LOCAL GOVERNMENTS' ANTI-COAL FINANCE POLICY IN CUSTODY SELECTION PROCESS 49

Appendix I. Survey and Analytical Methodology 54 II. Coal Finance Status by Financial Institution 55 III. Project Details of Public Financial Institutions 60 IV. Status of Local Governments and Offices of Education Using Coal Phase-out Criteria for Bank Selection Process 62 V. Status of Selected by Local Governments 64 Kim Young-ho Chairman of Korea Sustainability Investing Forum

The world faces sustainability challenges. Various crises such as poverty, unemployment, inequality, and polarization are threatening human sustainability, but none of them are as serious as climate change. This is not coming from an ecologist or environmentalist.

The term “climate change,” which lacks gravity, However, coal exit finance in Korea has only begun. is suddenly replaced by “climate crisis,” “climate At this point, the Seoul Office of Greenpeace, Office emergency,” and going further, “climate catastrophe.” of National Assemblywoman Wonyoung YangYi, and The world is presently concerned about the Great Korea Sustainability Investing Forum cooperated Depression caused by COVID-19. Yet compared to and published “The 2020 white paper on Korea’s climate catastrophe, COVID-19 is merely a preview, Coal Finance” for the first time in Korea, providing a and climate catastrophe may cause incredible death comprehensive understanding of the scale and status tolls among humankind. The temperature change of of Korea’s coal finance. The scale of coal finance to 1.5℃ is the Maginot Line proposed by IPCC to help this day has been fragmentarily estimated through prevent the extinction of humankind. The prompt the reports targeting only some of the major public overhaul of coal-fired power plants, which are the financial institutions or through press reports on some primary cause of greenhouse gases, is a key measure of the private financial institutions, among others. to this end. According to Climate Analytics, in order to limit the temperature change to below 1.5°C, the This white paper, however, analyzes how and in what OECD countries and 28 EU countries must overhaul manner the public and private financial institutions plans by 2030, and the rest of the countries by 2050. have supported coal finance from 2009 through Coal finance is the Many countries around the globe have either devised the end of June 2020 via a “complete survey.” quintessence of capital “ or are devising roadmaps for their coal-fired power Naturally, this white paper has limitations in that many from which social exit before or after 2030. organizations have refused to submit data and those responsibility has been that did cooperate only submitted inadequate or eliminated. I hope that Korea, however, has gone against this trend and inaccurate data. There is a long way to go. However, this white paper will has also become a target of domestic and foreign this white paper is meaningful in that an approach has serve as an impetus criticism. Recently, it has decided to invest in overseas been made towards the truth, such as by uncovering for accelerating coal coal-fired power generation, including ’s the fact that Korea’s coal finance amounted to KRW exit discussions and Jawa Units 9 and 10, and ’s Vung Ang Unit 2. 60 trillion over 12 years and that the scale of private implementation in Korean In Korea, seven units of new coal-fired power plants financial institutions exceeded KRW 37 trillion. society and be actively are undergoing construction. This is inconsistent with used by the government the world’s efforts to fight against the climate crisis Coal finance is an example of capital lacking social to devise coal exit and is also a policy that clearly contradicts the current responsibility. I hope that this white paper will serve policies, by investors to administration’s Green New Deal. as an impetus for accelerating coal exit discussions manage climate risks, and implementation in Korean society and be actively and by civic society A large amount of public finance and private capital used by the government to devise coal exit policies, to engage in coal exit are invested in the construction of coal-fired power by investors to manage climate risks, and by civic financing activities. plants. This capital for this so-called “coal finance” is society to engage in coal exit financing activities. fueling the climate crisis. This coal finance is an anti- environmental and anti-climate investment, and is also a financially risky investment, given the concerns ” about the accumulation of stranded assets. The production cost of new and renewable energies has fallen by 45 to 85% over the past decade, and it is predicted to fall by 50% over the next decade. Hence, using new and renewable energies has become rather more economic and an energy industrial revolution through the combination of AI and bio is anticipated. For this reason, the world’s leading public and private financial institutions are joining together in “coal exit finance.” Holding onto coal will make them villains of the climate crisis and fools in the upcoming energy revolution.

02 Wonyoung YangYi Member, National Assembly Republic of Korea

Countries are increasingly setting the goal of achieving zero net greenhouse gas emissions by 2050. Accordingly, the movement to overhaul coal fired power plants is visibly gaining momentum worldwide.

The European Union excluded the coal fired power As this white paper has comprehensively identified plant projects from the green financial investment the current status of coal finance in Korea, it will be targets, and 34 countries from around the globe are helpful for the government’s policy development and participating in the Powering Past Coal Alliance, or investment decision making of financial institutions. the PPCA, which aims to achieve coal exit by 2030. 1,244 financial institutions globally, including pension In particular, I hope that it will be used by the Ministry funds, have also chosen coal exit finance. of Economy and Finance and the Ministry of Trade, Industry, and Energy, among other ministries that will Our National Assembly has also recently adopted a lead the mid to long-term fiscal stability and industrial “resolution calling for the emergency response to the competitiveness enhancement of Korea. The fact climate crisis” with an overwhelming vote. According that the financial institutions operating under the to this resolution, the government must raise the jurisdiction of the Ministry of Economy and Finance national greenhouse gas reduction target for 2030 and the Ministry of Trade, Industry and Energy are and also devise a long-term, low-carbon power investing KRW 10 trillion of public funds into the coal- generation strategy equivalent to zero net greenhouse fired power generation projects causes concern over gas emissions by 2050. whether these ministries of economy are properly The National Assembly assessing the risks of coal-fired power generation has also recently adopted “ Through the 3rd emissions trading system, which projects, and whether they have blueprints appropriate a “resolution calling for will commence in 2021, the so-called environmental for the stability and national competitiveness of the emergency response demand response, for which carbon emissions costs Korean financial institutions. to the climate crisis” are reflected in the order of demand response, will with an overwhelming commence, and the coal-fired power plants will be This white paper may also be used as a reference for vote. According to this allocated emissions quota on a much stricter basis. the protection of shareholders’ interest in investing in resolution, the government The power produced by coal-fired power plants financial institutions. Above all, I hope that this white must raise the national will be difficult to sell. Coal-fired power generation paper will be useful for our financial institutions to greenhouse gas reduction business operators will face a situation where a lot withdraw from coal finance before it is too late and target for 2030 and also more must be paid to purchase the greenhouse gas also expand investments in the future economy, devise a long-term, low- emissions right. including renewable energy. carbon power generation strategy equivalent to The signals have become increasingly clear that the Lastly, I would like to thank Korea Sustainability zero net greenhouse gas coal-fired power generation business is not attractive Investing Forum and Greenpeace for their hard work emissions by 2050. I hope for investment. Rather, financial institutions investing and support for the publication of this white paper. that this white paper will in the coal-fired power generation business are also be useful for our financial exposed to the risk of investment loss due to the institutions to withdraw stranded assets of the coal-fired power generation from coal finance before plants. In fact, the Korean Financial Supervisory it is too late and also Service has also warned that, if Korean banks fail expand investments in the to respond to climate change properly, the capital future economy, including adequacy ratio might fall to as low as 4.7%. renewable energy. Under such circumstances, it is very timely to publish this white paper on the coal finance’s overall investigation. In particular, it is very encouraging ” that the coal finance’s status data spanning PF loans, corporate bonds, and underwriting for asset classes targeting 162 public and private financial institutions were secured for the first time in Korea.

03 Greenpeace Seoul Office for East Asia

Each of the countries around the globe is accelerating the overhaul of coal-fired power plants, which are the primary cause of global warming, in order to achieve the 1.5℃ growth limit proposed by the IPCC, the inter-governmental council on climate change. Meanwhile, the Korean government has recently made outdated decisions to take over the equity interest of the coal-fired power generation projects in Vietnam at a premium, just three months after approving the coal-fired power generation projects in Indonesia.

In 2020, the climate crisis is deeply involved in our carbon dioxide. According to the IEA in 2014, coal- daily lives. Scientists are warning that pandemics such fired power generation accounted for only 29% of all At this point where the as COVID-19 will be prevalent globally each year. This the energy sources, yet the carbon dioxide emitted “Korean government is because wild animals’ contact is increasing as their accounts for 46%, which is far greater than oil and is actively going habitats are declining due to climate change. gas. against the world’s coal exit movement, a At the time COVID-19 broke out, billions of grass- For this reason, each country is accelerating the comprehensive report hoppers were witnessed in Somalia and Ethiopia overhaul of coal-fired power plants, which are the has been published due to climate change. This affected 23 countries as primary cause of global warming, in order to achieve encompassing the they flew across the Middle East towards Pakistan. the 1.5℃ growth limit proposed by the IPCC, the status of investments The Food and Agriculture Organization of the United inter-governmental council on climate change. The in overseas coal-fired Nations (FAO) forecasts that this will cause a food UK, Spain, Portugal, and Sweden are going beyond power generation by crisis for one-tenth of humankind. ’s forests, their target of 2030 by endeavoring to achieve coal Korean public and private which are greater than the territories of the Republic exit one to nine years ahead of this plan. financial institutions. of Korea, have been burned down by forest fires Greenpeace will actively for six months, and large-scaled forest fires are still In light of this global coal exit, it has been evaluated use this report to warn devastating all parts of the world, such as California that coal-fired power generation will not only about Korea’s climate of the U.S. and Kilimanjaro of Africa due to high adversely affect the environment but will also result policies and financial temperatures and dry climate. in economically stranded assets. Poland pursued a industry while inducing plan of building a 1-gigawatt coal-fired power plant in positive changes. Meanwhile, the Republic of Korea has suffered 2016, yet it was permanently suspended in February hundreds of billions of won of property damage after of this year since attracting investments failed. In the typhoons Bobby, Maysak, and High Sun sequentially Netherlands, three power plants built in or after 2015 struck the peninsula for ten days since the end of were determined to be closed by 2029 at a loss of August. The temperatures of the sea around the 4 billion euros. It was decided that coal-fired power ” peninsula has risen, and consequently, there were generation is no lon8ger economically viable and will three consecutive typhoons. Prior to this, over 8,000 only be a liability. Meanwhile, the Korean government people were victimized in the central region due to has recently made outdated decisions to take over the longest rainy season of 54 days. In regard to this the equity interest of the coal-fired power generation rainy season, President Moon Jae-in also mentioned projects in Vietnam at a premium, just three months that “The world’s abnormal climates due to global after approving the coal-fired power generation warming will further deteriorate, going forward.” projects in Indonesia.

Now, it has become common knowledge that the At this point where the Korean government is actively climate crisis is caused by global warming and the going against the world’s coal exit movement, greenhouse gases emitted by humankind. The energy a comprehensive report has been published sector makes up a significant share of greenhouse encompassing the status of investments in overseas gas emissions. According to the International Energy coal-fired power generation by Korean public and Agency (IEA) in 2016, the energy sector accounts private financial institutions. Greenpeace will actively for 68% of the global greenhouse gas emissions. use this report to warn about Korea’s climate policies Arguably, it may be said that the climate crisis is an and financial industry while inducing positive changes. energy issue, and conversely, it may be said that the climate crisis cannot be resolved without resolving the We would like to thank Korea Sustainability Investing energy issue. Forum and the Office of Wonyoung YangYi for their support in publishing the report. 90% of the greenhouse gases emitted by the energy sector, which accounts for such a large share, is

04 Summary

The overall size of coal finance for Korean financial institutions • From 2009 to the end of June 2020, the total amount of finance provided by Korean financial institutions Trillion KRW for coal-fired power generation was approximately 60 KRW 60 trillion. • Private financial institutions accounted for KRW Coal finance by Public and Private Fls 37.4 trillion, or 63% of the total, while public financial institutions provided KRW 22.2 trillion.

• Timing of investment is revealed for KRW 37 trillion Public Private of the total 60 trillion. Among the data available, approximately KRW 12.8 trillion, or 35%, was 37% 63% concentrated in 2018 and 2019. • Among the loan commitments, the amount which has not yet been executed is KRW 9.1 trillion. The amount of financing for coal-fired power generation by Korean financial institutions is expected to continually rise. • By asset class, the PF loans are KRW 16 trillion, corporate bonds are KRW 25.3 trillion, and insurance underwriting is KRW 18.2 trillion.

Domestic and overseas coal finance of Korean financial institutions Size of coal finance by year and unexecuted • Of the total financing, the amounts provided to loan commitments (in KRW 100 millions) domestic and overseas projects were KRW 45 Private Public trillion and KRW 10.7 trillion each (excluding the undisclosed amounts for the investment target Unexecuted 56,589 Loan areas). Commitments 34,621 • Considering the amount of commitments for 22,918 2020 Indonesia’s Jawa 9 and 10, and Vietnam’s Vung 5,658 Ang 2 projects, for which commitment agreements 34,844 2019 were signed yet funds have not been executed, the 17,089 overseas projects are expected to further grow in 69,788 size. 2018 6,036 • For domestic projects, private financial institutions 11,371 2017 account for 73% of the total. 2,881 • For overseas projects, 92% of the total amount is 27,315 2016 provided by public financial institutions. 12,543 24,633 2015 12,714 [ Survey Overview ] 11,319 2014 • Sample: A total of 162 financial institutions (73 public, 89 private) 6,558 • Period: 2009 until June 2020 28,770 • Asset class: PF loans, corporate bonds, and insurance underwriting (general 2013 loans and equity investments are excluded) 11,923 12,408 2012 [ Use of Terms ] 11,944 • Project financing, or PF: Provision of funds through loans based on the business 8,603 feasibility and future cash flows of the coal fired power plants 2011 3,584 • Acquisition of corporate bonds: Acquisition of corporate bonds issued by special purpose companies founded for the construction and operation of power 9,222 2010 generation company or coal fired power plants 14,265 • Insurance underwriting: All export credits required to finance power plant 2,851 constructions or general required for power plant operations are all 2009 2,215 included

05 Details of Overseas Coal Finance • The Export-Import Bank of Korea and the Korea Trade Insurance Corporation have provided the largest amount of finance for overseas projects with loans or guarantees of KRW 4.8585 trillion and Trillion KRW KRW 4.668 trillion, respectively. 10.7 • Korea Development Bank’s overseas project loans ranked 4th with KRW 269.6 billion (including KRW Size of Overseas Coal Finance Provided 11 billion of corporate bonds for the overseas power by Korean Financial Institutions generation companies), and ranked 3rd if the loan commitments for Indonesia’s Jawa 9 and 10 (KRW 480 billion) are included. • Korea Development Bank and the Export- Trillion KRW Import Bank of Korea have also made financial 3.4 arrangements for two and one overseas projects, respectively. Unexecuted Loan Commitments • Among private financial institutions, Life for Overseas Projects Insurance has provided the largest overseas coal finance, all of which is invested in the corporate bonds of overseas coal fired power generation companies. • As for domestic coal finance, the National Pension Service, Samsung Fire and Marine Insurance, and Overseas Coal Finance Ranking (in KRW 100 millions) have provided the largest Rank Financial Institution Investment overseas coal finance. Size • As the authorization of new coal fired power 1 The Export-Import Bank of Korea (KEXIM) 48,585 generation in Korea has been suspended, coal finance is expected to take place abroad going 2 Korea Trade Insurance Corporation (K-SURE) 46,680 forward. 3 Samsung Life Insurance 4,249 • Concerns are raised that public financial institutions 4 Korea Development Bank 2,696 might provide a springboard for the private financial institutions to enter into overseas coal-fired power 5 Seoul Guarantee Insurance 1,832 generation projects under the pretext of “Team Korea.”1 1. In fact, , a private bank, participated in the recent- • A responsible attitude is required of the public Domestic Coal Finance Ranking (in KRW 100 millions) ly approved Indonesia’s Jawa 9 financial institutions that lead overseas coal finance and 10 and ’ Vung Ang Rank Financial Institution Investment 2 projects. and the government agencies that have the 2. Since Korea Investment and Size Securities responded to this obligation to supervise them. survey by saying that it will not 1 National Pension Service (NPS) 98,339 invest in any new coal fired power generation projects in Coal Exit Declarations and Plans 2 Samsung Fire & Marine Insurance 77,073 the future, it was included on • Beginning in 2018, a total of 18 financial institutions the page allotted for “Plan for 3 Samsung Life Insurance 67,116 Declaring Cessation of Coal (including 13 affiliates of KB Financial Group) have Finance.” However, the details made declarations on ceasing new coal finance. 4 KB Insurance 54,723 of the declaration could not be 2 verified, and hence, it was not • Additionally, 9 financial institutions announced their 5 Hyundai Marine & Fire Insurance 21,538 included in the page allotted for plans to declare exit from coal finance in the future, the “Current Status of the Korean Coal Exit Financial Institutions.” and one institution expressed its intention to with- 3. Balance as of June 2020 for the draw its existing coal investments. assets invested by Korean finan- Overseas Projects with Largest Finance Provided by cial institutions in the form of loans Korean FIs (unit: MW / KRW 100 million) (PF and general loans), corporate Korean Financial Institutions’ Exposure to Coal bonds, and equity interest in the 3 untry Power Station Capacity Investment domestic and foreign mining and Risk Size4 coal fired power generation pro- • The Korean financial institutions’ total coal related jects and companies. 4. The sum of insurance under-writ- asset exposure is KRW 67 trillion. Vietnam Mong Duong Power 1,200 20,017 ing is included. 5. Only the amount of insurance Vietnam Vinh Tan Power 1,200 14,103 provided by the Korea Trade In- Local Governments’ and the Offices of Education’s surance Corporation is reflected. Vietnam Song Hau Thermal Power 1,200 9,542 The amount of commitments that Declaration on Coal Phase-out have not yet been withdrawn by • 56 local governments and offices of education Indonesia Banten Suralaya Power 2,000 8,4005 the Export-Import Bank of Korea (Jawa 9&10) (KRW 816 billion), Korea Develop- nationwide (the size of coal exit financial institution: ment Bank (KRW 480 billion), and KRW 149 trillion) have committed to reflecting coal Hana Bank (size of commitments Indonesia Tabalong Power 200 7,254 has not been provided) is not re- finance related criteria in selecting entrustee banks flected. of their annual budget. 06 Climate Finance And Trends of Coal Finance Domestic and Abroad Overseas Coal Exit Policy and Institutionalization of Climate Finance

The industries related to coal and coal-fired power generation are most affected by the policy changes caused by climate change. In particular, as countries are announcing coal exit policies and witnessing early closure of coal plants and strengthened GHG regulations, the profits from coal-fired power plants are projected to significantly decline. This signifies an additional decline in the asset value of the coal-related industries and an increased risk in investment.

Top 5 countries providing According to Energy Post's analysis, if the price per how economics, not political ideology, is causing the finance for overseas coal- ton of CO2 rises by $1, the return on investment in the decline of coal-fired power plants. The closures of the fired power generation coal-fired power generation falls to 0.1% (assuming plants in the US may even further accelerate, following via public financial an average annual return on investment of 4.3% with the result of the presidential election in November. institutions (2016 - 2017)1 no risk). If the CO2 price rises by $3 per ton, then Presidential candidate Joe Biden announced pledges the return on investment falls to -12.8%. Furthermore, on climate change, including one to achieve zero if the power plant's lifespan becomes shorter than GHG emissions from electrical power generation by 1. (USD 9,503 million) expected due to early closure, then the average return 2035. If Biden is elected, then coal-fired power plants, 2. (USD 5,125 million) from 4.3% may fall to as low as 1.3%. noted as the primary cause for GHG emissions, would inevitably be closed early. 3. Korea (USD 1,057 million) Governments’ coal exit policies will likely continue to 4. (USD 800 million) accelerate. In fact, the number of the countries and Strengthened Regulation of Overseas Coal Finance local governments that have joined the Powering Past Major countries overseas are strengthening their 5. South Africa Coal Alliance(PPCA), founded in 2017, has risen to 67. regulations on financing of overseas coal power plants (USD 200 million) In 2019, , the largest consumer of coal-fired constructions, as well as early closure of domestic energy in Europe, also enacted a law to close down plants. The UK and Germany, among others, have all coal-fired power plants by 2038. Accordingly, even banned their national development banks (NDBs) the 5-years-old Moorburg plant known to be the most from financing coal-fired power generation, and have efficient in Germany has recently applied for an early also ceased aid provided through the multilateral closure to the government over economic concerns. development banks (MDBs). As for the US, if Joe Biden is elected, public financial institutions are likely Even during the Trump administration, holding a favor- to be completely banned from providing coal finance able position towards coal-fired power generation, a overseas. total of 37GW of plants were closed due to declining profitability. This is equivalent to 77% of 48 GW Meanwhile, Asian countries are continuing to finance closed over the span of eight years during the Obama overseas coal-fired power plants through public administration, and is even higher than 33 GW closed financial institutions. Recently, however, some changes during its second term. This is a primary example of have been observed.

Expected Return on Coal-Fired Power Generation by Scenario2 Annual Comparison of the U.S. Coal-Fired Power Generation Capacity Shutdown3 Risk Free CO2 Price Increase Early Retirement of Plants ($/ton per year) 44.6 GW 41.3 GW 1 USD 2 USD 3 USD 40 years 30 years 20 years 15,000 12,000

% % % 9,000 4.3 4.0 3.3 % 0.1% 1.3 6,000 3,000

-6.2% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 -12.8% Obama Administration Trump Administration

Coal-Fired Power Generation Shutdown Policies and Financial Regulations of Major Countries4 1. Source: Overseas Development Institute (2020). coal Country Year of Power Plants Power Plants Closed after The Ratio of Coal-Fired Financial Regulation5 subsidies 2. Source: Energypost (2020). A Coal Exit Remaining Coal Exit Announcement Power in Electricity Supply MDB NDB ECA detailed real world cashflow analysis The UK 2025 4 units / 6,328 MW 8 units / 14,428 MW 8% ◯ ◯ 3. Source: Energy Information Administration Germany 2038 68 units / 47,430 MW 14 units / 6,218 MW 36% ◯ ◯ 4. Source: EUROPE Beyond Coal 5. MDB: Multilateral Development France 2021 6 units / 3,240 MW 0 unit / 0 MW 2% ◯ ◯ Bank, NDB: National Development Bank, ECA: Export Canada 2030 14 units / 8,695 MW 1 unit / 326MW 8% ◯ Credit Agency

07 Japan announced the “New Strategy for Overseas has been implemented for companies with 500 or Deployment of Infrastructural Systems,” which more employees since 2018. Other countries including in principle bans financing from public financial the UK and Japan are following suit. 1,440 institutions to coal-fired power plants, while China also declared carbon neutrality by 2060. Although In line with this, the most notable development in Number of institutions questions linger over the effectiveness of such strategy the financial sector is the launch of the Network for signing support for TCFD and declaration along with the implementation Greening the Financial System(NGFS), consisting of plan, international pressure on Korea is expected to 85 central banks and financial regulatory bodies. In mount as the two largest coal financing countries 2019, the NGFS published recommendations with 6 have announced their strategies. In particular, U.S. key agendas, including the reflection of the climate- presidential candidate Joe Biden's pledges include related risks of financial institutions in the financial strengthening international leadership on climate supervision system and the strengthening of the change and urging other countries to follow suit. If climate change disclosure systems based on the realized, this may result in turning existing investment TCFD, among others. into stranded assets. Legislation of the Climate Change Financial Risk Management Climate Change Risks Reflected in the Financial Legislating and regulating financial management of Supervisory System climate-related risks have become more prominent. As abnormal climates caused by climate change The UK has founded a climate change risk forum including heavy rains, heatwaves, and increased rainy around the Prudential Regulation Authority(PRA) and seasons have become more prevalent, governments' the Financial Conduct Authority(FCA) and published a efforts to prevent the acceleration of climate change climate change risk management guideline including are also growing. Many advanced economies, such scenario analysis and financial information disclosure. as the UK and Germany, have declared net-zero GHG Furthermore, climate change risks are reflected in the emissions and have also announced their coal exit soundness assessment of insurance companies and policy. Accordingly, the value of assets related to the banks. France has also enacted Article 173 of the coal industry and coal-fired power plants is steeply Energy Conversion Act and reflected climate change declining. Changes in the physical environment due to risks in the banks’ soundness assessment. climate change and the introduction of related policies bring a significant impact on the financial stability of financial institutions. For instance, the increased Global Climate Changes and Coal Exit Finance Milestones physical damages caused by abnormal climates 2013 World Bank stops financial aid to coal-fired power affect the financial stability of insurance companies plants. with increased frequency and size of insurance claims. Task Force on Climate-related Financial Furthermore, the introduction of related policies such 2015 Disclosures (TCFD) launched as the regulation of GHG emissions and the increase of the price of emissions rights, along with changes OECD announces guidelines on coal fired power in consumer preferences, affect the competitiveness generation in the export credit agreement of companies. Ultimately, the collateral value of banks 2017 Network for Greening the Financial System and the value of investment assets are affected. (NGFS) launched Eight European countries, including France, Full Fledged Reflection of the Climate Change Risks on regulates coal fired power investments of their Financial Supervision own development banks As the impact of climate change on finance has 2019 Coalition of Finance Ministers for Climate Action become clearer, reflecting climate-related risks in (CMFCA) launched financial supervision is also gaining momentum. International Finance Corporation (IFC) The G20 commissioned the Financial Stability enacts rules on disclosing coal investment risk for Board(FSB) in 2015 to prevent climate change from partnering financial institutions leading to the insolvency of financial institutions. 2020 Bank for International Settlements (BIS) The FSB formed the Task Force on Climate-related publishes “Green Swan” report analyzing climate Financial Disclosures(TCFD). Established in 2017, the changes’ impact on financial stability TCFD published recommendations urging financial IM warns global investors on financial risks of institutions to establish strategies to respond to climate changes climate change risks and disclose the climate-related information of the companies they are invested in. Inter-American Development Bank (IDB) includes coal in the exclusion list for investment As of September 2020, 1,440 governmental bodies, financial institutions, and companies around the globe UK’s Prudential Regulation Authority and have supported TCFD recommendations. The EU has Financial Conduct Authority publishes financial already reflected the recommendations in the obligatory management guidelines on climate change risks non-financial information disclosure directive, which 08 Climate Finance And Trends of Coal Finance Domestic and Abroad Coal Exit of Overseas Financial Institutions

Declaration to Cease Coal Finance by Public Financial Changes in Investment Amount of Top 10 Global Banks Institutions for Coal-fired Power Generation1 (in USD 1 billion) As the coal exit policy is expanding around the globe, from 1,244 public financial institutions to multilateral development 2,850 banks, national development banks to development 2,440 2,440 Number of coal exit financial institutions, export credit institutions to pension 2,300 institutions funds, coal investment regulation by public financial institutions is expanding. Major financial institutions declaring coal exit The multilateral development banks’ coal exit movement 2016 2017 2018 2019 was launched when the World Bank and the European World Bank Investment Bank announced in 2013 that they would • stop supporting coal financing except under special Declaration to Cease Coal Finance by Private Financial •International conditions. Thereafter, in 2018, the Asian Development Institutions Bank, which has been under a great deal of criticism by Even in the private financial sector, coal exit is gaining Finance the international community for providing coal financing, pace. In 2015, and Morgan Stanley of the Corporation determined coal investment as one having low growth announced their decision to cease making potential and ceased providing finance for coal-fired coal investments, while French agricultural banks Crédit •European power generation. Recently, the International Finance Agricole and , among others, also joined the coal Investment Bank Corporation (IFC) also participated in the coal exit trend exit movement. In fact, Morgan Stanley is known to have by enacting regulations recommending that partnering reduced its coal-related exposure by 84% since its coal •Allianz financial companies transparently disclose the risks related exit announcement of 2015. It has been reported that 39 to coal and cooperate to stop investing in that industry. In financial institutions worldwide with over $1 billion of assets •Morgan Stanley 2 particular, considering the size of the IFC, which supports under management have announced coal exit policies. •Citibank over 3,000 financial companies across 140 countries, such regulation is likely to bring significant impact. Additionally, the total amount of investment in the coal- fired power generation by the top 10 global banks, which Development financial institutions, or DFIs, are also are known to have made the most investments in the coal- increasingly ceasing their investment in coal. Currently, fired power generation to date, is consistently declining nine development financial institutions, including those each year from $28 billion in 2016. of the United States, Finland, Norway, the European The insurance companies’ coal exit is also continuing. As Development Bank, and the German Development Bank, of 2020, 20 global companies (AUM: $6 trillion) introduced are restricting coal financing. France and Canada have coal divestment policies. The combined AUM accounts prohibited the provision of export credits related to coal for 20% of all global insurance assets under management. among the countries’ export credit agencies. Some insurance companies, such as AXA and Allianz, have also announced stronger policies to exclude Following the 2015 coal exit of the Norwegian sovereign investments in companies investing more than a certain wealth fund, which manages $1 trillion of assets, the amount of funds in any new coal projects. coal exit of sovereign wealth funds and pension funds managing tremendous assets, such as the California Reinsurance companies, which account for approximately Public Employees’ Pension and Swedish Public Pensions one-third of the total reinsurance market, including Munich (AP1, 2, 4), is also expanding around the globe. In Re and Swiss Re, the first and second largest in the fact, the official aid for coal financing by the multilateral reinsurance industry, announced their policies to refuse development banks of Europe and the United States has insurance contracts related to coal-fired power generation. declined steeply since 2013, given the trend of coal exit by In Asia, Japan’s Sumitomo Mitsui Trust Bank and DB public financial institutions. Insurance, and KB Insurance of Korea have announced their decision to cease making coal-related investments.

Global Public Finance for Coal-fired Power Plants3 (in percentage, %)

Europe US유럽 MDBs미국 다자개발은행 China Japan중국 일본 Others기타 Korea한국 2013 5% 2014 12% 1. Source: Ran (2020). Banking on Climate Change 2015 2. Source: IEEFA (2019). Over 100 Global Financial 2016 12% Institutions Are Exiting Coal, With More to Come 2017 7% 3. Source: NDRC (2018). The Questionable Future of 0 20 40 60 80 100 Overseas Coal Investments

09 Climate Finance and Coal Finance Domestic and Abroad Domestic Coal-fired Power Generation Policy and Climate Finance

Suspended Authorization of New Coal-Fired Power Plants The Moon Jae-in administration announced that it will Government’s Shutdown Policy for Coal-Fired Power Plants in principle cease authorizing new coal-fired power Shutdown of 4 units by 2020 Shutdown of 10 units by 2022 plants as it came into power. However, as for the Shutdown of 30 units by 3034 Construction of 7 new units nine units that were previously authorized, it decided to convert two units to LNG power generation and decided to build the remaining seven units as scheduled. Accordingly, it is unlikely that additional coal-fired power plants will be introduced in Korea in the future, except for the seven units currently undergoing construction. 37 units after 2034 Shutting Down 30 Old Coal-Fired Power Plants by 2034 Currently, there are a total of 60 coal-fired power plants operating in Korea. The government announced in September this year that it will shut down 30 old coal-fired power plants on a phased basis by 2034. Domestic Climate Changes and Coal Exit Financial (4 units by 2020, and 10 units by 2022.) However, Milestones considering the 7 units currently undergoing Financial Supervisory Service hosts construction, 37 coal-fired power plants will remain in 2019 sustainability study group 2034. Considering the need for carbon neutrality by Bank of Korea joins the NGFS 2050 to respond to climate change, and the fact that advanced economies have introduced their policies 2020 Ministry of Environment announces support for the CFD to shut down their coal-fired power plants before or after 2030, Korea’s conservative policies are likely to The government announces Korean Green New Deal Policy face even stronger pressures from the international society. National Assembly proposes 4 laws banning overseas coal fired power generation National Assembly Passes Resolutions Calling for Financial Services Commission launches task force for promoting green finance Response to Climate Crisis and Proposes 4 Laws to Ban Overseas Coal-Fired Power Generation City of Seoul and Gyeonggi-do join Powering Past Coal Alliance. The Green New Deal, which was announced this year, proposes the goal of achieving a “Net Zero Society,” 56 local governments and offices of education adds availability of coal exit policies in the bank yet the timing was not specified. Recently, the National selection criteria for entrusting their annual Assembly has passed during the plenary session of budget. the joint submission of the “Climate Crisis Response Additional shutdown policy announced for coal Resolution,” which promotes the goal of achieving fired power plants net-zero by 2050, urging the government to respond more drastically to climate change. Furthermore, the National Assembly has proposed a pending bill to ban and also announced relevant policies such as building KEPCO and other public financial institutions from a monitoring system to manage and supervise the participating in or financing coal projects overseas. risks.

Institutionalization of the Climate Change Risk In particular, the financing from private financial Management by Financial Institutions institutions for coal-fired power plants, which has There is an active movement to institutionalize climate been noted as the primary cause for greenhouse change risk management by financial institutions in gas emissions, will likely decline, as it is specified Korea as well as overseas. The Financial Services that financing greenhouse gas-emitting companies Commission launched a task force dedicated to may have implications for the financial stability of the promoting green finance to help manage climate risks, institutions.

Key Details of the Four Laws Banning Overseas Coal Finance and Business

Proposed Bills Proposed by Details

Trade Insurance Act Lee So-Young The amendments explicitly ban participation or financing Korea Development Bank Act Min Hyung-Bae of overseas coal projects by excluding them from the business scope of the Korea Electric Power Corporation, Export-Import Bank Act Woo Won-Sik Export-Import Bank of Korea, Korea Development Bank, Korea Electric Power Corporation Act Kim Sung-Hwan and the Korea Trade Insurance Corporation.

10 Climate Finance And Trends of Coal Finance Domestic and Abroad Coal Exit of Korean Financial Institutions

Beginning with the Government Employees Pension Service and Teachers’ Pension in 2018, financial institutions declaring coal exit finance have emerged in Korea. As of September 2020, a total of 18 institutions (including 13 affiliates of KB Financial Group) are participating in the coal exit, and the total assets under management of these institutions is KRW 694.8 trillion.

Principles of Coal Exit of Korean Financial Institutions in KB Financial Group, including KB Kookmin Bank, The Korean financial institutions that have declared have joined in the implementation of this coal exit coal exit are focused on ceasing making new invest- financing principle. The sum of the assets under 694 ment in coal-fired power generation. They have management of the 13 companies included in KB Trillion KRW decided not to finance projects and take over bonds Financial Group amount to KRW 569 trillion. related to the construction of any new coal-fired power Combined AUM of Coal plants. Regionally speaking, both domestic and Exit Financial Institutions foreign projects are included. As for the bonds, not List of Coal Exit Financial Institutions in Korea of Korea only the bonds issued by special purpose companies founded for coal-fired power plants but also those • Government Employees Pension issued for the purposes of constructing coal-fired power plants are included, even if they are general Service corporate bonds. • Teachers’ Pension Government Employees Pension System and Teachers’ • Public Officials Benefit Association Pension in 2018 Two of the country’s three largest pension funds, • Korean Teachers’ Credit Union the Government Employees Pension Service and • DB Insurance Teachers’ Pension, announced their decision to cease making coal investment in 2018 for the first time in • KB Financial Group (13 subsidiaries) Korea. As of June 2020, the assets under management of these two institutions amounted to KRW 21.9 • KB Kookmin Bank trillion for Teachers’ Pension and KRW 8.7 trillion for • KB Securities the Government Employees Pension Service. • KB Insurance DB Insurance, Korean Teachers’ Credit Union, and Public Officials Benefit Association in 2019 • KB Kookmin Card In 2019, DB Insurance, Korean Teachers’ Credit • Prudential Life Insurance Union, and the Public Officials Benefit Association participated in the declaration of ceasing coal • KB Asset Management investment. In particular, DB Insurance participated in the coal exit for the first time among the private • KB Capital financial institutions in Korea. The assets under the management of these three institutions are KRW 41.3 • KB Life trillion for the Korean Teachers’ Credit Union, KRW • KB Real Estate Trust 38.4 trillion for DB Life, and KRW 14.7 trillion for the Public Officials Benefit Association. • KB Savings Bank

KB Financial Group in 2020 • KB Investment In September 2020, KB Financial Group joined the • KB Data System ranks of coal exit finance among the Korean financial groups. It is significant in that all 13 affiliates included • KB Credit Information

Korean Financial Institutions’ Coal Exit Declaration • We will not participate in project financing for the construction of any coal-fired power plants, domestic and abroad, in the future. • We will not take over any bonds issued by a special purpose company for the construction of any coal-fired power plants, domestic and abroad, in the future. • We will not take over any other bonds issued for the purposes of constructing any coal-fired power plants, domestic and abroad, in the future.

11 Analysis Overview: Coal Finance of Korean Financial Institutions

From 2009 until the end of June 2020, the total amount of finance provided by Korean financial institutions for coal-fired power generation amounted to KRW 60 trillion. A total of 162 financial institutions (73 public and 89 private) have responded to this survey, and the following analysis was conducted for the institutions that responded by admitting they have provided finance related to coal-fired power generation.

Korean financial institutions have mainly provided Size of Coal Finance by Financing Methods financing for the construction or operation of coal-fired 60 power plants through the following four types. Insurance PF Underwriting Trillion KRW • Project Financing, or PF: Financing through loans 159,988 based on the business feasibility and future cash-flows 181,938 Total Coal Finance by of coal-fired power plants Korean Financial • Acquisition of corporate bonds: Acquisition of Institutions the corporate bonds issued by a special purpose Corporate Bond corporation founded for the construction and the 253,215 operation of power generation company or coal-fired power plants1 • Insurance underwriting: All export credits required to finance power plant constructions or general insurance Starting in 2018, the Size of Coal Finance Has Steeply Grown required for power plant operations are included. As a result of analyzing the size of finance provided • Equity investment: Acquisition of equity interest of the by year, the amount of finance provided in connection companies related to coal-fired power generation with coal increased steeply from 2009 until 2017 after repeating increases and decreases, then steeply For this study, an analysis of only the PFs, corporate increased starting 2018. It has been reasoned that bond acquisitions, and the insurance underwritings, this occurred because the financing for the seven new which are directly related to the construction of coal-fired coal-fired power plants that were previously authorized power plants, was conducted. As for equity investment, and the financing of overseas coal-fired power plants shares are often held for purposes other than financing focused on Southeast Asia took place at the same time. coal-fired power generation, such as for maintaining the This analysis does not reflect the funds to be extended management rights of public enterprises. Hence, equity to Indonesia’s Jawa 9 and 10, which has not yet been investment was not reflected in this analysis.2 executed, and Vietnam’s Vung Ang 2, which has recently been approved by KEPCO’s board of directors. Hence, if Over the past 12 years, Korean financial institutions' the amount of commitments and the amount of growing financing for coal-fired power plants amounted to certainty for investment are added, then the size of coal approximately KRW 60 trillion. By type, corporate bond finance will likely further increase after 2018. acquisitions were the largest at approximately KRW 25 trillion, followed by the insurance underwriting and project Considering the impact of climate change, such as financing. However, in the case of corporate bonds, the large-scale forest fires and the increased intensity and National Pension Service, which is among the world's frequency of abnormal weather, has intensified, and as three largest pension funds and which manages assets major advanced economies are announcing their early of KRW 750 trillion, accounts for approximately KRW shutdown policies for coal-fired power plants, the steep 10 trillion. Hence, all types were similar except for the increase in the amount of coal finance provided by amount of the corporate bonds acquired by the National Korean financial institutions over the past three years may 1. At the time of the survey, the Pension Service. be said to be retrogressing. Moreover, given the reality request was made by classifying the cases in which the purpose of the construction of the coal-fired power plant can be 3 (in KRW 100 millions) specified and cannot be specified Coal Finance by Year Given the reliability issue of the 80,000 Underwriting Corporate Bond Project Financing response data, the sum of the 70,000 two data was used for analysis. 60,000 2. The amount of finance provided by type, including the amount of 50,000 equity investment, can be verified 40,000 in Appendix Ⅱ. 30,000 3. The amount of acquisition of 20,000 general corporate bonds for 10,000 which the purpose and time of 0 acquisition were not specified 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 was excluded.

12 Coal Finance by Public where climate change risks are reflected in the financial Size of Finance Provided for Coal-Fired Power vs. Private regulatory system to prevent financial crisis caused by Generation, Domestic and Abroad (in KRW 100 millions) climate change, the trend of increasing coal investments by Korean financial institutions poses a significant risk to the financial stability of financial institutions. Coal Finance for Overseas Projects (Public vs Private) Public Public Public 37% Significant Size of Coal Investment by Private FIs Corporate Bond Private As a result of analyzing the size of coal finance provided 4,729 63% by dividing it into those provided by public financial PF institutions and private financial institutions, public 2,565 financing accounted for approximately KRW 22.1 trillion, Underwriting Underwriting or 37% of the total, and private financing, approximately PF 51,171 46,680 1,832 KRW 37.4 trillion, or 63%. As for private financial Coal Finance for Domestic Projects (Public vs Private) institutions, the total amount of coal investment had Public Private never been calculated. The survey revealed that private

financial institutions are investing a significantly large Underwriting amount of funds in coal-fired power generation related 117,957 assets. Underwriting Corporate Bond 112,202 Public Finance Heavily Invests in Overseas Projects and 137,015 PF 74,033 Private Finance in Korean Projects The projects involving public and private financial power plants moving forward. Accordingly, it is unlikely institutions demonstrated clear differences by region. that Korean projects in which private financial institutions Excluding the National Pension Service1, which invests can invest will be found in the future. In contrast, Korean over 40% of all assets in Korean bonds (amount of companies’ overseas coal-fired power generation acquisition of the corporate bonds related to coal-fired projects are still progressing focused on Southeast Asia, power generation: KRW 9.8 trillion), most projects including KEPCO. Hence, the role of public finance provided by public financial institutions are concentrated providing finance for overseas projects will likely continue overseas. Private financial institutions have mainly as long as this trend does not come to halt. provided financing for Korean projects. Concerns Growing Over “Privatization of Earnings and Coal Finance Will Likely be Led by Public Financial Socialization of Losses” Following the Public Financial Institutions in the Future Institutions’ Justification While the amount of the private financial institutions’ Korean private financial institutions do not have many financing in the past was approximately twice that of the experts for infrastructure finance, and they often lack public financial institutions, Korean financial institutions' experience in overseas projects. Hence, it is unlikely coal financing is likely to be made mainly by the public that they will independently participate in overseas financial institutions in the future. This is because coal-fired power generation projects without external the current government has not only announced assistance. What is worrisome, however, is that private the suspension of new authorization for coal-fired financial institutions ought to also find investments to power plants, but also considering the international replace domestic coal-fired power generation, and 1. The proportion of total assets under management by asset community's efforts towards climate change and the the government has recently begun to emphasize class was determined via the level of public awareness concerning fine dust, it will Team Korea in connection with overseas coal-fired resolution of the Fund Steering Committee practically be unfeasible to authorize new coal-fired power generation. Being aware of various criticisms

Coal Finance by Year, Public vs. Private (in KRW 100 millions) Public Private 80,000

70,000

60,000

50,000

40,000

30,000

20,000

10,000

0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Unexecuted Loan Cmmitements

13 Major Financial Institutions on overseas projects, KEPCO and public financial Vietnam’s and Indonesia's National Greenhouse Gas Providing Finance for institutions leading the projects seem to have sufficient Reduction Goals Overseas Coal-Fired motive to intentionally involve private financial institutions Country Target Type Target Level Power Generation under the pretext of Team Korea. It has been verified that Hana Bank will also participate in Indonesia’s Jawa 9 Vietnam Unconditional 9% Reduction by 2030 from BAU and 10 and Vietnam’s Vung Ang 2 projects, which were 1 Conditional 27% Reduction by 2030 from BAU KEXIM confirmed this year. In this event, structurally speaking, Indonesia Unconditional 29% Reduction by 2030 from BAU (Export-Import Bank of there is a high possibility that public financial institutions, Korea) including the Korea Trade Insurance Corporation, will Conditional 41% Reduction by 2030 from BAU take on the risks for these projects. Hence, there is a concern growing over the “privatization of earnings and policies, and the fall of renewable energy generation 4.85 socialization of losses.” cost, it would be naïve to think that the same system will Trillion KRW be maintained under the new political, economic, and Overseas Projects Questioned Over Whether Sufficient social environment expected due to climate change. K-SURE Consideration was Given for the Mid to Long-term Financial (Korea Trade Insurance Risks Caused by Climate Changes As for Vietnam and Indonesia, for instance, two types of Corporation) Overseas coal-fired power generation projects involve greenhouse gas reduction goals have been submitted Korean construction companies and equipment business to the United Nations. One of which is when there is operators participating in a consortium consisting of no support from the international community and the 4.66 other is when there is support from the international KEPCO and power generation subsidiaries, and the Trillion KRW financing required for project progress is made through community. Combining this with the current situations export credit agencies. The financing provided by the of the United States and China, which are the two Samsung Life Export-Import Bank of Korea and the Korea Trade pillars of the international community and which Insurance Insurance Corporation is large in scale, given the manner have maintained a lukewarm attitude in responding in which these projects proceed. Business operators to climate change, new risks may easily be found. 424.9 generally execute long-term purchase agreements Achieving the 1.5℃ target is practically impossible Billion KRW with local state power supply companies for the power without the efforts of developing countries. Recently, generated, and the export credit agencies provide China has presented its goal of achieving net-zero by KDB guarantees or funds based on them. This is why KEPCO 2060, while U.S. Presidential Candidate Joe Biden of (Korea Development Bank) emphasizes the profitability and stability of the overseas the Democratic Party is pledging to strengthen climate coal-fired power generation projects. change leadership for the international community and induce the international community to participate. If the 269.6 However, it is still questionable as to whether a sufficient pressure of the international community leads to the Billion KRW review was made over the rapidly evolving global situation early shutdown of coal-fired power plants in Southeast and the resulting mid to long-term financial risks, not only Asian countries, worst case scenarios cannot be ruled Seoul by the subject proceeding with the project but also by out, as Korea would have to bear the resulting economic Guarantee the public financial institutions providing the funds. The burdens. Furthermore, the losses incurred by the public Insurance power generation business is a long-term business institutions of KEPCO and the Export-Import Bank of spanning a minimum of 30 years. Even aside from Korea may in turn cause burdens for the public. issues such as the accuracy of the local government's 183.2 power demand forecasts, renewable energy expansion Billion KRW Major Overseas Coal-Fired Power Generation Projects Involving Korean Financial Institutions

Country Power Plant Coal finance provided Capacity Size of Coal Finance Financial Institutions in (first year) (MW) (in KRW 100 millions) Involved Vietnam Mong Duong 2011 1,200 20,017 KEXIM, K-SURE Vietnam Vinh Tan 2015 1,200 14,103 KEXIM, K-SURE Vietnam Song Hau Thermal 2018 1,200 9,542 KEXIM, K-SURE Indonesia Banten Suralaya(Jawa 9 & 10) - 2,000 8,400 KDB, KEXIM, K-SURE Indonesia Tabalong 2017 200 7,254 KDB, K-SURE Turkey Tufanbeyli - 4,000 6,936 K-SURE Indonesia Cirebon 2010 1,000 6,622 KEXIM, India Mundra Ultra Mega 2008 1,000 6,387 KEXIM 1. The Export-Import Bank Vietnam Thai Binh 2014 1,200 5,543 KEXIM responded with the data running from 2007 until the end of June Morocco Jorf Lasfar 2013 851 3,779 KEXIM 2020.

14 Vietnam \ 5,274.1 Billion Institution Committed Executed KEXIM 4,031.7 2,800.7 K-SURE* 2,368.8 The US Woori Bank 79.2 79.1 Hana Bank 25.5 25.5 \ 35.8 Billion Institution Committed Executed KB Life Insurance 6.6 6.6 Turkey Bank 72.2 29.2 \ 693.6 Billion Institution Committed Executed K-SURE* 693.6 The \ 280.5 Billion Institution Committed Executed KEXIM 291.4 280.1 Seoul Guarantee 0.4 Morocco India Insurance* \ 377.9 Billion \ 813.1 Billion Institution Committed Executed Institution Committed Executed KEXIM 376.5 377.9 KEXIM 772.8 638.7 Seoul Guarantee 174.4 Insurance*

Chile Indonesia \ 422.3 Billion \ 2,227.6 Billion Institution Committed Executed Institution Committed Executed KEXIM 151.8 115.1 KEXIM 1,677.4 646 Australia \ 99.9 Billion Seoul Guarantee Insurance* 8.4 KDB 753.5 258.6 Institution Committed Executed K-SURE* 298.8 Woori Bank 26.4 16.2 Hana Bank 55.1 55.1 K-SURE* 1,306.8 31.4 31.4 Shinhanlife 18.4 13.4

15 * Figures for K-SURE and Seoul Guarantee Insurance denominate underwriting sum Coal Finance Ranking Public And Private Coal Finance Ranking

Top 10 Public Financial Institutions PF Corporate Bond Underwriting (in KRW 100 millions) 99,955 1(4) 1,716 98,239 NPS (National Pension Service) (1,716)1 KEXIM 2(1) 48,585 48,585 (The Export-Import Bank of Korea) (Korea Trade Insurance 3(2) K-SURE 46,680 46,680 Corporation) 11,578 4(6) 478 11,100 Korea Post (478) 5,740 5(3) 4,967 773 KDB (Korea Development Bank) (4,967)

6(3) KFCC (Korean Federation of 5,356 5,356 Community Credit Cooperatives)

7(6) IBK () 1,208 1,208

8(8) TP (Teachers’ Pension) 1,000(0) 1,000

9(8) KTCU 700(0) 700 (Korean Teachers' Credit Union) 10(8) GEPS (Government Employees 500(0) 500 Pension System)

Top 10 Private Financial Institutions PF Corporate Bond Underwriting (in KRW 100 millions)

Samsung Fire & Marine 77,073 5,321 11,844 59,908 1 Insurance

2 Samsung Life Insurance 74,115 9,319 64,796

3 KB Insurance 54,723 5,392 5,194 44,136

Hyundai Marine & Fire 37,006 3,217 6,635 27,154 4 Insurance 5 Nonghyup Life Insurance 26,910 14,052 12,858

6 Kyobo Life Insurance 15,435 5,419 10,016 1. The figures within the parentheses mean the ranking or amount when only the corporate bonds for the purpose 7 11,683 11,683 of constructing coal-fired power plants is specified are included. In this study, in addition to the 8,500 corporate bonds for which the 8 Hi Investment & Securities 8,500 purpose of constructing coal- fired power plants was specified, given the reliability issue of the 1,886 6,254 data provided in responses as 9 Shinhan Life Insurance 8,140 mentioned earlier, the amount of acquisition of the bonds issued by the companies conducting 1,361 5,408 the thermal power generation 10 Nonghyup Bank 6,769 business was included for the analysis.

16 Coal Finance Ranking Domestic And Overseas Coal Finance Ranking

Top 10 Overseas Project Financiers PF Corporate Bond Underwriting (in KRW 100 millions)

1 KEXIM 48,585 48,585

2 K-SURE 46,680 46,680

3 Samsung Life Insurance 4,249 4,249

4 KDB 2,696 2,696 110

5 Seoul Guarantee Insurance 1,832 1,832

6 Woori Bank 953 953

7 Hana Bank 807 807

8 Nonghyup Life Insurance 404 404

9 Shinhan Bank 314 314

10 292 292

Top 10 Domestic Project Financiers PF Corporate Bond Underwriting (in KRW 100 millions)

1 NPS 98,239 98,239 Samsung Fire & Marine 2 77,073 5,321 11,844 59,908 Insurance 3 Samsung Life Insurance 67,116 9,319 57,798

4 KB Insurance 54,723 5,392 5,194 44,136 Hyundai Marine & Fire 5 21,538 3,217 6,635 11,685 Insurance 6 Nonghyup Life Insurance 15,906 3,452 12,454

7 Kyobo Life Insurance 14,954 5,014 9,940

8 Korea Post 11,578 478 11,100

9 Hi Investment & Securities 8,500 8,500

10 Shinhan Life Insurance 8,006 1,753 6,254

17 Coal Finance Ranking Ranking by Government Ministries(Public) and Financial Sector(Private)

Coal Finance Ranking By Government Ministries (in KRW 100 millions) Ranking Ministry Number of Coal Institution(s) Size by Responding Finance Supervised by Institution Institutions Total the Ministry 1 (5) Ministry of Health and Welfare 2 99,955 (1,716) NPS 99,955 (1,716) 2 (1) Ministry of Economy and Finance 4 48,585 KEXIM 48,585 3 (2) Ministry of Trade, Industry and Energy 5 46,680 K-SURE 46,680 4 (6) Ministry of Science and ICT 2 11,578 (478) Korea Post 11,578 (478) 5 (3) Financial Services Commission 2 6,948 (6,175) KDB 5,740 (4,967) IBK 1,208 6 (4) Ministry of the Interior and Safety 1 5,356 KFCC 5,356 7 (7) Ministry of Education 3 1,700 (0) Teachers’ Pension 1,000 (0) KTCU 700 (0) 8 (7) Ministry of Personnel Management 1 500 (0) GEPS 500 (0)

[ Ministries that responded Coal Finance Ranking by Private Financial Sector (in KRW 100 millions) as “Not Applicable” ] • Ministry of Employment Ranking Name of Institution Coal Finance Total and Labor Banks 1 Nonghyup Bank 6,769 (7,805)1 • Ministry of Patriots and Veterans Affairs 2 Shinhan Bank 3,667 • Ministry of Defense 3 Kookmin Bank 3,333 • Ministry of Land, 4 Hana Bank 2,465 Infrastructure, and Transport 5 Woori Bank 2,241 • Ministry of Science and Technology • Ministry of Food, Ranking Name of Institution Coal Finance Total Agriculture, Forestry, and Life Insurers 1 Samsung Life Insurance 74,115 Livestock • Supreme Court 2 Nonghyup Life Insurance 26,910 • Ministry of Culture, Sports 3 Kyobo Life Insurance 15,435 and Tourism 4 Hanwha Life Insurance 11,683 • Korea Communications Commission 5 Shinhan Life Insurance 8,140 • Ministry of Gender Equality and Family Ranking Name of Institution Coal Finance Total • Ministry of Oceans and Fisheries Non-Life Insurers 1 Samsung Fire & Marine Insurance 77,073 • Ministry of Environment 2 KB Insurance 54,723 3 Hyundai Marine & Fire Insurance 37,006 [ Ministries that did not respond ] 4 Hanwha General Insurance 6,656 • Ministry of Culture, Sports 5 Seoul Guarantee Insurance 4,120 and Tourism • Ministry of Foreign Affairs • Ministry of SMEs and Ranking Name of Institution Coal Finance Total Startups Security Companies 1 Hi Investment & Securities 8,500 2 KB Securities 3,831 3 IBK Securities 400 1. The figures within the parentheses are the sum of the coal finance of the National Agricultural Cooperative Federation.

18 Ranking by Private Financial Groups (in KRW 100 millions)

Ranking Group Name Total Coal Subsidiary Name Total Coal Finance Finance by by Individual Group Company

1 Samsung Group 151,302 Samsung Fire & Marine Insurance 77,073

Samsung Life Insurance 74,115

2 KB Financial Group 63,521 KB Insurance 54,723

KB Securities 3,831

Kookmin Bank 3,333

KB Life Insurance 1,128

3 Hyundai Marine & Fire Insurance 37,006 Hyundai Marine & Fire Insurance 37,006

4 Nonghyup Financial Group 35,498 Nonghyup Life Insurance 26,910

Nonghyup Bank 6,769

National Agricultural Cooperative Federation 1,036

Nonghyup Property & Casualty Insurance 783

5 18,339 Hanwha Life Insurance 11,683

Hanwha General Insurance 6,656

6 Kyobo Group 15,447 Kyobo Life Insurance 15,435

7 12,047 Shinhan Life Insurance 8,140

Shinhan Bank 3,667

Shinhan BNP Paribas Asset Management 240

8 DGB Financial Group 8,518 Hi Investment & Securities 8,500

DGB Life Insurance 18

9 Taekwang Group 8,196 Heungkuk Life Insurance 4,567

Heungkuk Fire & Marine Insurance 1,929

Heungkuk Asset Management 1,700

10 Mirae Asset 4,384 Mirae Asset Life Insurance 4,384

19 Detailed Analysis of Coal Finance by Financial Institution Public Financial Institution

A total of 73 public financial institutions have responded to this survey, of which 10 have financed coal-fired power generation. Over the past 12 years, the amount of finance provided by the public financial institutions to companies or projects related to coal-fired power generation was found to be approximately KRW 22 trillion.

Total Public Coal Finance The Ministry of Health and Welfare(MoHW), responsible for overseeing the National Pension Service, was the Overseas Coal Finance by Government Ministries largest financier of coal finance with approximately \10 trillion, followed by the Ministry of Economy and Financial Services 22.13 Commission Trillion KRW Finance(MOEF) with KEXIM’s \4.8585 trillion. The Ministry of Trade, Industry, and Energy(MOTIE) ranked 3% third with K-SURE’s \4.668 trillion. Ministry Ministry Lack of Coal Exit Roadmap for the National Pension of Trade, of Economy Industry and and Finance Service, One of the World's Three Largest Pension Funds Energy On the surface, the basic policies for the asset 49% 48% management of the National Pension Service is made by a decision-making body called the Fund Steering Committee, while the individual asset management is carried out independently by the Investment Management. However, the fact that the MoHW chairs the Fund Steering Committee and that many members of the government are participating in the Committee overseas projects. ex officio, there is no denying the influence of the government on large-scale policy decision making. That is, although on the surface KEPCO seems to The MoHW needs to review the establishing climate- carry out overseas projects independently, such related and coal exit policies to stand up to its name. decisions cannot be made without the approval and support from government ministries such as the MOEF MOEF, MOTIE, and Financial Services Commission(FSC) and MOTIE. This is even more regrettable in that the Must be More Responsible for Overseas Coal-Fired Power MOEF is responsible for leading Korea’s mid to long- Generation Exports term financial stability and determining the direction of Governmental ministries have a direct and indirect industries. Developed countries are already preparing influence on the internal decision-making process of for a low carbon economy by reflecting carbon costs public institutions they oversee. In particular, MOEF, in budgets and industrial policies. It is now the time to MOTIE and Financial Services Commission(FSC), move away from the short-sightedness of neglecting which supervise the KEXIM, K-SURE, and the the mid to long-term future of the country, a result of KDB respectively, are either major shareholders or indulging in short-term interests, and instead revisit supervisors of KEPCO, a key public enterprise for the original purpose of each ministry.

Coal Financing by Public Financial Institution (in KRW 100 millions)

Institution Ministry Coal Overseas Projects Domestic Projects Finance PF Corporate Under- PF Corporate Under- Bond writing Bond writing NPS1 Ministry of Health and Welfare 99,955 - - - - 98,239 - KEXIM2 Ministry of Economy and Finance 48,585 48,585 - - - - - K-SURE Ministry of Trade, Industry and Energy 46,680 - - 46,680 - - - Korea Post Ministry of Science and ICT 11,578 - - - 478 11,100 - KDB Financial Services Commission 5,740 2,586 110 - 2,381 663 - 1. The National Pension Service has not provided details on the KRW KFCC Ministry of the Interior and Safety 5,356 - - - 5,356 - - 171.6 billion it has extended in PFs. Hence, it is impossible to IBK Financial Services Commission 1,208 - - - 1,208 - - classify them as domestic and overseas. TP Ministry of Education 1,000 - - - - 1,000 - 2. The Export-Import Bank of Korea KTCU Ministry of Education 700 - - - - 700 - has responded with the size of coal finance between 2007 and GEPS Ministry of Personnel Management 500 - - - - 500 - the end of June 2020.

20 NPS % of Total Coal Finance Figures by PF Loans by Year / Unexecuted Loan Commitments1 (National Pension Service) by Korean Financial Financing Methods (in KRW 100 millions) Institutions 617 Project Financing 9.99 171.6 Billion KRW 376 Trillion KRW Corporate Bond 278 Total Coal Finance % 190 17 9.82 Trillion KRW 127 105 79 49 Underwriting - - - - -

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Assets Under Management 0 KRW Unexecuted Loan (as of June 2020) Commitments 752.76 Trillion KRW The National Pension Service’s Fund is organized based of the relevant companies. In addition to the acquisition on the insurance money paid by the pension subscribers of corporate bonds, the National Pension Service’s and is also one of the world's three largest pension Fund has provided KRW 171.6 billion in PFs for two funds. As of the end of June 2020, the amount of the power plants, and the PF type support was found to be assets under management is approximately KRW 752 concentrated in or before 2015. While it has not been trillion, and the assets are managed in three major ways: included in this analysis, it was found that the National equities, bonds, real estate, and alternative investments Pension Service holds KRW 1.702 trillion of equities of the such as infrastructure. As for the proportion of asset class, domestic coal-fired power generation related companies, domestic bonds account for 42% of the total, followed including KEPCO, through equity investment on top by overseas equities (22.8%), domestic equities (18.2%), of the PFs and the acquisition of corporate bonds. The alternative investments (11.8%), and overseas bonds National Pension Service announced the principle of the (4.9%). The National Pension Service’s Fund has the trustee’s responsibilities to reflect environmental, social, largest number of coal and coal-fired power generation and governance (ESG) issues on investment decisions, related assets among Korean financial institutions. All and the policies for expanding socially responsible of the National Pension Service’s Fund's coal financing investments. However, the policy on climate change and is targeting domestic projects, while 98% of the total coal-fired power generation, which is one of the most has been executed by acquiring the corporate bonds important ESG issues, turned out to be very inadequate.

KEXIM % of Total Coal Finance Figures by PF Loans by Year / Unexecuted Loan Commitments (Export-Import Bank of Korea) by Korean Financial Financing Methods (in KRW 100 millions) Institutions 24,571 Project Financing 4.85 4.85 Trillion KRW Trillion KRW Corporate Bond 6,213 6,243 6,030 5,552 Total Coal Finance 4,571 4,414 8.2% 0 KRW 3,461 3,672 2,452 933 Underwriting - 1,250

2020 Assets Under Management 0 KRW 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Unexecuted Loan (as of June 2020) Commitments 104.9 Trillion KRW The Export-Import Bank of Korea is an export credit agency acquisition of general corporate bonds for the purposes founded to provide the financing required for import, of seeking return on investment, the Export-Import export, and overseas investment, among others. As for Bank of Korea has provided loans directly to individual overseas coal-fired power generation projects, which are overseas coal-fired power generation projects. Hence, primarily conducted in developing countries of high political it may be evaluated to have the greatest responsibility and social risks, the reality is that proceeding with projects for the construction of coal-fired power plants overseas without the financial provision of the Export-Import Bank along with the Korea Trade Insurance Corporation. By of Korea and the Korea Trade Insurance Corporation is country, it has provided Vietnam with KRW 2.8 trillion for unfeasible. Since 2009, the Export-Import Bank of Korea 6 projects, accounting for more than half of the total. The has provided a total of KRW 4.85 trillion in loans for 14 Export-Import Bank of Korea has recently executed a loan projects across 6 countries overseas. As for the size of the agreement of KRW 816 billion for Indonesia's Jawa Units 9 1. Unexecuted loan commitments financial provision, it is the second-largest public financing and 10, and the amount not withdrawn out of the total loan are the amount remaining without executed following the National Pension Service. However, agreement is KRW 2.45 trillion. Hence, additional funds will being lent from the amount of commitments. while the National Pension Service is concentrated on the likely be provided, moving forward.

21 K-SURE % of Total Coal Finance Figures by Reserves Underwritten by Year (Korea Trade Insurance Corporation) by Korean Financial Financing Methods (in KRW 100 millions) Institutions 9,924 Project Financing 8,628 8,052 8,400 4.66 0 KRW Trillion KRW 6,216 Corporate Bond 5,460

Total Coal Finance 7.8% 0 KRW Underwriting ------

Assets Under Management 4.66 Trillion KRW 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 (as of June 2020) 4.14 Trillion KRW The Korea Trade Insurance Corporation is a public has also been reported that it has decided to provide export credit agency founded to provide insurance for insurance of KRW 840 billion for Indonesia’s Jawa the risks arising out of trades and foreign investments, Units 9 and 10, which were recently announced. The among others. In general, the overseas coal-fired Korea Trade Insurance Corporation is also managing power generation projects in which Korean companies the Trade Insurance Fund. It has been reported that participate are financed based on the insurance of the none of the funds invested in the coal-fired power Korea Trade Insurance Corporation. Hence, it may be generation are drawn from those managed by the said that the Corporation is playing an essential role Korea Trade Insurance Corporation. in promoting overseas projects along with the Export- Import Bank of Korea. Since 2009, the Korea Trade Insurance Corporation has provided insurance for a total of 4.67 trillion for 3 projects across 5 countries overseas. As with the Export-Import Bank of Korea, the Corporation has provided the largest financing of KRW 2.3688 trillion for 4 projects in Vietnam, and it

% of Total Coal Finance Figures by PF Loans by Year / Unexecuted Loan Commitments Korea Post by Korean Financial Financing Methods (in KRW 100 millions) Institutions 286 Project Financing 1.15 47.8 Billion KRW 132 Trillion KRW Corporate Bond

Total Coal Finance 2% 1.11 Trillion KRW 60 23 Underwriting ------

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Assets Under Management 0 KRW Unexecuted Loan (as of June 2020) Commitments 138.555 Trillion KRW In addition to postal service work, the Korea Post KRW 1.1 trillion for the acquisition of corporate bonds is also engaged in the deposit-taking and insurance of coal-related companies. businesses. Its total financial assets are KRW 138 trillion, and the ratios of deposit assets and insurance fund assets are approximately 57% and 43%. The deposit assets are used for extending loans, as with ordinary banks, and insurance funds are invested in alternative assets such as equities, bonds, real estates, and infrastructures. Since 2009, the Korea Post has provided financing in the form of investments or loans to domestic coal-fired power generation related assets for a total of KRW 1.1578 trillion. By type, it has provided KRW 47.8 billion of financing for two projects in project financing, and has invested

22 1 KDB % of Total Coal Finance Figures by PF Loans by Year / Unexecuted Loan Commitments (Korea Development Bank) by Korean Financial Financing Methods (in KRW 100 millions) Institutions 6,877 Project Financing 886.1 Billion KRW 808.8 Billion KRW Corporate Bond 2,310 Total Coal Finance 1,909 1.5% 77.3 Billion KRW 1,083 695 506 488 228 369 294 Underwriting - - 207

Assets Under Management 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 0 KRW (as of June 2020) Unexecuted Loan Commitments 277.12 Trillion KRW The Korea Development Bank is a public financial mining and power generation companies is \1.1031 institution in which the government has 100% trillion. Compared to the KEXIM and the K-SURE, the ownership, including the MOEF. The KDB and its KDB’s coal finance in absolute terms is comparatively financial subsidiaries have provided a total of\ 5.868 small, and the amount of its investment in renewable billion since 2009 for coal-fired power generation energy relatively high. However, it is very worrisome construction and related companies. They have that the size of financing for coal-fired power generation provided and planned to provide financing for 7 has steeply grown since 2017. Furthermore, as the domestic projects and 2 Indonesian projects. They largest shareholder (32.9%) of KEPCO (approximately have commited \480 billion in loan agreements to \16.9211 trillion), a member of the Equator Principles, Indonesia’s recently announced Jawa Units 9 and 10. an accredited implementation entity of GCF, and as a In addition to project financing and corporate bond state-owned financial institution that has expressed the acquisitions, the KDB has extended general loans to importance of sustainable management via the issuance coal-related companies in significant sum. As of June of sustainable bonds, the KDB needs to demonstrate a 1. Displays combined figures from KDB and KDB Life Insurance. 2020, the outstanding balance of loans provided to responsible and consistent climate-related policies.

IBK2 Proportion to Total Coal Figures by PF Loans by Year / Unexecuted Loan Commitments (Industrial Bank of Korea) Finance Financing Methods (in KRW 100 millions) 661 Project Financing 518 189.8 494 Billion KRW 137.8 Billion KRW Corporate Bond 281 Total Coal Finance 0.3% 162 Billion KRW 52 100 16 79 45 59 Underwriting - - -

Assets Under Management 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 0 KRW (as of June 2020) Unexecuted Loan Commitments Trillion KRW 332.77 The Industrial Bank of Korea is a specialized bank projects. IBK Securities and IBK Insurance are subsidiaries organized to support small and medium-sized enter- of the IBK. IBK Securities has provided \40 billion, and prises. The IBK has provided a total of \120.8 billion IBK Life has provided \47 billion. (excluding IBK Securities’ and IBK Life’s underwriting) in project finance for coal-fired power plant construction The Korean Federation of Community Credit since 2009. An additional \28.8 billion will be provided in Cooperatives(KFCC) has provided a total of \535.6 coal finance, as an outstanding committed loans waiting billion, all of which were extended in PF loans. to be executed. While the absolute sum is lower than Unexecuted loans amount to \209.4 billion. The that of other public financial institutions, it is considered KFCC is one of the institutions operating under contradictory that a bank with a cause to support small the oversight of the Ministry of the Interior and and medium-sized enterprises is financing coal-fired Safety(MOIS), which needs to supervise coal power generation projects which is run by large companies financing in order to protect the public from coal and public enterprises. Furthermore, the IBK was found to risks. (However, the KFCC was not included in the have raked in \1.9 billion in fees from making financial 2. As for the Industrial Bank of analysis of this report due to late submission of Korea, the figure combines those arrangements for the Coal-Fired Power Plant requested data) of the Industrial Bank of Korea, and the Kimcheon Cogeneration Thermal Power Plant IBK Life, and IBK Securities.

23 Detailed Analysis of Coal Finance by Financial Institution Private Financial Institutions - Overview

Over the past 12 years from 2009 to 2020, private financial institutions have financed\ 37 trillion to coal-fired power generation. In this study, private financial institutions were classified and analysed into the four sectors(bank, life insurance, general(non-life) insurance, and securities). For reference, the National Agricultural Cooperative Federation and its financial affiliates have been classified as private sector although carrying on some characteristics of public financial institutions due to the fact that they have been engaging in business in almost the same manner as private financial institutions.

Insurance Industry's Overwhelming Investment in the bonds, and project financing loans increased significantly. Coal Fired Power Generation 37.38 Among private financial institutions, the sector with the Domestic Project Centric Investments Trillion KRW largest asset size are the banks. Contrary to general Private financial institutions were investing primarily in expectations, however, this research has revealed that domestic projects across all sectors. This has been Total Private Coal Finance the insurance industry provides the largest amount for inferred since the private financial institutions lack expertise coal-fired power generation. In a breakdown by sector, and experience in overseas infrastructure investment. non-life insurance accounts for 50% of the total and Loans and bonds related to domestic coal-fired power life insurance accounts for 41%, while the banks and generation projects have also been recognized by private securities firms accounted for a relatively low 5% and financial institutions as products with high stability and 4%, respectively. As for the asset management sector, profitability, following the government policies. 22 respondent management firms said that they had not invested in coal-fired power generation. Insurance Underwriting for Non-life Insurance, and Asset Management for Life Insurance Financing Coal-Fired Power Generation Continues to As for non-life insurance, over two-thirds of the total Grow Across All Sectors financing was insured through coverage, and the amount Analyzing by time series, the size of financing for coal-fired invested for the asset management purposes such as power generation across all sectors turned out to be on a corporate bonds and loans was relatively smaller at trend of increase. In particular, since 2018, the insurance KRW 5 trillion. Meanwhile, in the life insurance industry, industry's provision of insurance in connection with the all investments consisted of loans and corporate bonds coal-fired power generation, acquisition of corporate for asset management purposes.

60,000Trends in Coal Financing by Sector of Private Financial Institutions (in KRW 100 millions) Non-life Insurers Life Insurers Banks Security Companies 50,000

40,000

30,000

20,000

10,000

0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Types of Coal Finance by Sector of Private Financial Institutions (in KRW 100 millions) Non-life Insurers Life Insurers Banks

PF 15,067 Corporate Bond Corporate Bond 30,930 5,408 Security Companies Corporate Bond 9,175 Underwriting 135,258 PF 21,023 Corporate Bond 95,390 PF 56,093 PF 3,556

24 Detailed Analysis of Coal Finance by Financial Institution Private Financial Institutions - Banks

Over the past 12 years, financing for coal-fired power generation by the banking sector amounted to KRW 2.4 trillion, accounting for approximately 4% of the total financing made by domestic financial institutions during the same period. This was relatively low compared to the combined AUM(asset under management) of the banking sector, and most of the funds were extended in PF loans.

Approximately KRW 1.5 trillion was extended in PF loans Total Amount and Proportion by Financing Method of for coal-fired power generation projects, and KRW 540.8 Banking Sector 2.47 billion was invested in corporate bonds of companies Project Financing Trillion KRW related to coal-fired power generation. All investments in corporate bonds within the banking sector were 15,067 159,988 Total Coal Finance made through NH Nonghyup Bank. NJ Nonghyup Bank by Banking Sector has extended the largest amount for coal-fired power Corporate Bond generation among the banks, and KRW 676.9 billion was 5,408 253,215 extended by NH Nonghup Bank alone. If the National Top 3 Coal Financiers Agricultural Cooperative Federation is included, then Underwriting the total would increase to KRW 780.5 billion. This is 0 181,938 •NH Nonghyup twice that of Shinhan Bank (KRW 366.7 billion), which Bank extended the second-largest amount. •Shinhan Bank 5 Largest Commercial Banks All Participated in Goseong Coal Finance by Geographic Destination High Thermal Power Plant •KB Kookmin Bank By region, 84% of the total funds were extended to domestic projects and related companies, and 16% erea was invested in overseas projects. Among the domestic 16% projects, Goseong High Thermal Power was the project for which the banking sector provided the most funds. All five domestic commercial banks participated in the Goseong High Thermal Power Plant, and KB Kookmin Bank and Shinhan Bank loaned KRW 228 billion and oetic KRW 290 billion respectively, while NH Nonghyup Bank, 84% Hana Bank, and Woori Bank loaned KRW 76 billion, KRW 76 billion, and KRW 15 billion respectively.

Hana Bank is the Most Active in Overseas Coal-Fired Power Generation Investments figure is missing the recently announced Indonesia’s Among private banks, Hana Bank has been the most Jawa Units 9 and 10. If those are included, then the size active in overseas project participation. Hana Bank of the overseas project financing will further increase. In reported that it has provided KRW 80.7 billion for a total addition to Hana Bank, Woori Bank and Busan Bank also of three overseas projects during the survey period. This participated in overseas projects.

Trends in the Banking Sector’s Coal Financing by Year (in KRW 100 millions) Banks Tota Korean Financial Institutions Total 75,825

51,933 40,593 39,859 4,518 35,647 3,833 28,576 14,253 23,487 24,265 17,877 2,218 12,134 1,775 986 5,066 731 626 246 112 22 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

25 % of Total Coal Finance Company vs. Sector Total Major Projects Financed1 NH Bank (in KRW 100 millions) (in KRW 100 millions) (Nonghyup Bank)

Project Financing Power Plant Finance Method 676.9 Billion KRW 1,361 15,076 Size Goseong High 760 PF Coal Finance Size Corporate Bond Cogeneration 373 PF 5,408 1.1% Saemangeum Cogeneration 95 PF Assets Under Management Underwriting (As of June 2020) Samcheok Coal-Fired Power 82 PF - 326.105 Trillion KRW

% of Total Coal Finance Company vs. Sector Total Major Projects Financed NACF (in KRW 100 millions) (in KRW 100 millions) (National Agricultural Cooperative Federation)

Project Financing Power Plant Finance Method 103.6 Billion KRW 1,036 15,076 Size Anin 1,000 PF Coal Finance Size Corporate Bond Pospower Samcheok 36 PF 0.2% 5,408 Assets Under Management Underwriting (As of June 2020) - 115.237 Trillion KRW

% of Total Coal Finance Company vs. Sector Total Major Projects Financed Shinhan Bank (in KRW 100 millions) (in KRW 100 millions)

Project Financing Power Plant Finance Method 366.7 Billion KRW 3,667 15,076 Size oseong Green 2,090 PF Coal Finance Size Corporate Bond Gunjang Energy 800 PF 5,408 0.6% Saemangeum Cogeneration 354 PF Assets Under Management Underwriting (As of June 2020) Australia Cogeneration 314 PF 0 Goseong Green 109 PF 378.4631 Trillion KRW

% of Total Coal Finance Company vs. Sector Total Major Projects Financed Kookmin Bank (in KRW 100 millions) (in KRW 100 millions)

Project Financing Power Plant Finance Method 333.3 Billion KRW 3,333 15,076 Size Goseong Green 2,280 PF Coal Finance Size Corporate Bond Anin Power Station 1,052 PF 0.6% 5,408 Assets Under Management Underwriting (As of June 2020) - 413.9296 Trillion KRW

1. The name of the operating company is stated in case the name of the power plant is undisclosed. 26 % of Total Coal Finance Company vs. Sector Total Major Projects Financed Hana Bank (in KRW 100 millions) (in KRW 100 millions)

Project Financing Power Plant Finance Method 246.5 Billion KRW 3,333 15,076 Size Bukpyung 788 PF Coal Finance Size Corporate Bond Goseong Green 760 PF 5,408 0.4% Millmerran Power 291 PF Assets Under Management Underwriting (As of June 2020) Loy Yang Power 260 PF - Mong Duong Power 255 PF 361.67 Trillion KRW

% of Total Coal Finance Company vs. Sector Total Major Projects Financed Woori Bank (in KRW 100 millions) (in KRW 100 millions)

Project Financing Power Plant Finance Method 224.1 Billion KRW 2,241 15,076 Size Nghi Son Power 791 PF Coal Finance Size Corporate Bond Bukpyung 773 PF 5,408 0.4% Cogeneration 179 PF Assets Under Management Underwriting (As of June 2020) Cirebon Power 162 PF - Goseong Green 150 PF 349.4989 Trillion KRW

% of Total Coal Finance Company vs. Sector Total Major Projects Financed Busan Bank (in KRW 100 millions) (in KRW 100 millions)

Project Financing Power Plant Finance Method 78.6 Billion KRW 786 15,076 Size Bukpyung 300 PF Coal Finance Size Corporate Bond Pocheon 194 PF 5,408 0.1% Guernsey Power 159 PF Assets Under Management Underwriting (As of June 2020) Niles 133 PF - 59.4698 Trillion KRW

% of Total Coal Finance Company vs. Sector Total Major Projects Financed Kwangju Bank (in KRW 100 millions) (in KRW 100 millions)

PF 대출 Power Plant Finance Method 17.9 Billion KRW 786 15,076 Size Yeosu Cogeneration 179 PF Coal Finance Size 회사채 인수 0.03% 5,408 Assets Under Management (As of June 2020) 보험지원 - 26.1097 Trillion KRW

27 Detailed Analysis of Coal Finance by Financial Institution Private Financial Institutions - Life Insurance

Insurance companies generate profits largely in two ways. One is the insurance fee income obtained from adding margins to the cost invested in designing and operating insurance products, and the other is the asset management income obtained from managing the insurance premiums paid by the customers. Life insurance companies, which primarily sell insurance products for individuals, do not sell any products related to the construction and operation of the coal-fired power plants. However, in the process of asset management, they do lend considerable funds to coal-fired power generation- related projects or companies, or are investing in the corporate bonds of related companies.

It was discovered that life insurance companies have invested a total of \16.3 trillion in loans for Total Amount and Proportion by Financing Method in 15.14 coal-fired power generation projects or acquiring Life Insurance Sector Trillion KRW corporate bonds of related companies over the past (in KRW 100 millions) 12 years. Excluding the non-life insurance sector, Project Financing Total Coal Finance which reflects the amount of insurance coverage, 56,093 159,988 by Banking Sector which means the amount of insurance that must be paid in the event of a case or an accident, the Corporate Bond largest amount of money is actually being invested in 95,390 253,215 Top 3 Coal Financiers the coal-fired power generation. Of the total amount, \6.79 trillion was invested in loans and \9.5397 Underwriting •Samsung Life trillion was invested in corporate bonds. By region, over 99% were concentrated in domestic projects. In 0 181,938 Insurance general, insurance companies tend to prefer assets •NongHyup Life with higher asset management stability than other asset owners or asset managers. That is, it may be •Kyobo Life interpreted that insurance companies classify the Coal Finance by Geographic Destination coal-fired power generation related assets as highly stable assets, which has been inferred due to the government's power cost compensation system. By erea time series, there was no investment or its amount 0.4% was insignificant, from 2009 to 2012. Yet the trend has shown steady increases since 2013. In particular, it turned out that a large amount of funds amounting to \6 trillion was invested from 2018 to 2020. oetic By life insurance company, Samsung Life was by 99.6% far the largest, investing \7.4115 trillion, which was three times greater than that of Nonghyup Life Insurance (\2.691 trillion), putting it in second place. Samsung Life's investment in the coal-fired power generation was very high compared to other amount but also the amount of the total assets under insurance companies, not only in terms of absolute management.

Trends in the Life Insurance Sector’s Coal Financing by Year (in KRW 100 millions) Life Insurance Total Korean Financial Institutions Total 75,825

51,933 40,593 39,859 35,647 20,283 28,576 14,253 23,487 24,265 17,877 14,415 12,134 9,709 5,221 6,486 6,009 5,066 4,128 3,065 711 - 512 1,247 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

28 Samsung Life % of Total Coal Finance Company vs. Sector Total Major Projects Financed Insurance (in KRW 100 millions) (in KRW 100 millions)

Project Financing Power Plant Finance Method 7.41 Trillion KRW 9,319 56,093 Size Goseong Green 3,534 PF Corporate Bond Coal Finance Size Bukpyung 2,100 PF 64,796 95,390 12.5% Seoul Combined Thermal/ 2,316 Corporate Bond Shinseocheon Assets Under Management Underwriting (As of June 2020) - Taean 2,121 Corporate Bond Samcheok Green 2,004 Corporate Bond 291.3309 Trillion KRW

Nonghyup Life % of Total Coal Finance Company vs. Sector Total Major Projects Financed Insurance (in KRW 100 millions) (in KRW 100 millions)

Project Financing Power Plant Finance Method 2.69 Trillion KRW 14,052 56,093 Size Goseong Green 1,900 PF Corporate Bond Coal Finance Size Bukpyung 1,300 PF 12,858 95,390 4.5% GS Pocheon CHP 252 PF Assets Under Management Underwriting (As of June 2020) - Undisclosed

Kyobo Life % of Total Coal Finance Company vs. Sector Total Major Projects Financed Insurance (in KRW 100 millions) (in KRW 100 millions)

Project Financing Power Plant Finance Method 1.54 Trillion KRW 5,419 56,093 Size Goseong Green 2,280 PF Corporate Bond Coal Finance Size Bukpyung 800 PF 10,016 95,390 2.6% Saemangeum Cogeneration 662 PF Assets Under Management Underwriting Yeosu Cogeneration 654 PF (As of June 2020) - 258 PF 112.395 Trillion KRW

% of Total Coal Finance Company vs. Sector Total Major Projects Financed Hanwha Life (in KRW 100 millions) (in KRW 100 millions) Insurance

Project Financing Power Plant Finance Method 1.16 Trillion KRW 11,683 56,093 Size Goseong Green 3,421 PF Corporate Bond Coal Finance Size Bukpyung 700 PF 95,390 2% GS Pocheon CHP 546 PF Assets Under Management Underwriting Pospower Samcheok 190 PF (As of June 2020) - 125.7798 Trillion KRW

29 % of Total Coal Finance Company vs. Sector Total Major Projects Financed Shinhanlife (in KRW 100 millions) (in KRW 100 millions)

Project Financing Power Plant Finance Method 814 Billion KRW 1,886 56,093 Size Goseong Green 1,131 PF Coal Finance Size Corporate Bond Yeosu Cogeneration 467 PF 6,254 95,390 1.4% Millmerran 134 PF Assets Under Management Underwriting (As of June 2020) Bukpyung 100 PF - Pospower Samcheok 54 PF 34.947 Trillion KRW

Heungkuk Life % of Total Coal Finance Company vs. Sector Total Major Projects Financed Insurance (in KRW 100 millions) (in KRW 100 millions)

Project Financing Power Plant Finance Method 456.7 Billion KRW 4,567 56,093 Size Goseong Green 1,767 PF Coal Finance Size Corporate Bond Bukpyung 997 PF 95,390 0.8% Saemangeum Cogeneration 520 PF Assets Under Management Underwriting (As of June 2020) Pospower Samcheok 382 PF - GS Pocheon CHP 362 PF 30.379 Trillion KRW

Mirae Asset % of Total Coal Finance Company vs. Sector Total Major Projects Financed Life Insurance (in KRW 100 millions) (in KRW 100 millions)

Project Financing Power Plant Finance Method 438.4 Billion KRW 3,238 56,093 Size Goseong Green 1,520 PF Coal Finance Size Corporate Bond Pospower Samcheok 36 PF 0.7% 1,146 95,390 Assets Under Management Underwriting (As of June 2020) - 37.9838 Trillion KRW

KDB Life % of Total Coal Finance Company vs. Sector Total Major Projects Financed Insurance (in KRW 100 millions) (in KRW 100 millions)

Project Financing Power Plant Finance Method 312.1 Billion KRW 3,121 56,093 Size Bukpyung 1,580 PF Coal Finance Size Corporate Bond Saemangeum Cogeneration 796 PF 95,390 0.5% GS Pocheon CHP 252 PF Assets Under Management Underwriting (As of June 2020) Goseong Green 200 PF - Yeosu Cogeneration 179 PF 19.7499 Trillion KRW

30 Detailed Analysis of Coal Finance by Financial Institution Private Financial Institutions - General(Non-life) Insurance

Non-life insurance companies have provided a total of \18.7 trillion for coal-fired power generation over the past 12 years. Approximately two-thirds of the financing was the amount of coverage, which guaranteed the amounts for damages caused by cases or accidents, and the amount invested for asset management income was approximately \5.2 trillion, less than 30% at best. The difference was significant from the life insurance companies, which invested \16 trillion for asset management income.

Korean non-life insurance companies primarily classify the types of insurance into long-term insurance such Total Amount and Proportion by Financing Method in General Insurance Sector 18.7 as auto, personal injury, or pension, and general Trillion KRW (in KRW 100 millions) insurance such as fire and marine insurance. The Project Financing insurance provided by Korean private insurance Total Coal Finance companies to the power plants belongs to the general 21,023 159,988 by General Insurance insurance which guarantees against accidents taking Corporate Bond Sector place during the operation of power plants, and is different from the public export credit agency such 30,930 253,215 as the Korea Trade Insurance Corporation, which Underwriting Top 3 Coal Financiers provides guarantees for financing required for the power plant construction. 135,258 181,938 •Samsung Fire & Marine Insurance The total insurance fee income which the Korean non-life insurance companies have earned over the •KB Insurance past 12 years is \41.5 billion, which is a source of Coal Finance by Geographic Destination income that can hardly be ignored for Korean non- •Hyundai Marine & life insurance companies suffering from deficits or maintaining very low-level earnings through their Fire Insurance erea insurance business in recent years. This is especially 1.3% true for the general insurance products, whose total revenue in sales is small, unlike automobile insurance (for reference, the insurance companies' profits are divided into the insurance operating income based on the fee income and the investment operating income oetic through the asset management. Recently, many non- 98.7% life insurance companies have had deficits from their insurance business).

As with life insurance, in non-life insurance, Samsung Fire & Marine Insurance, a Samsung subsidiary, has generation, followed by KB Insurance and Hyundai had the largest financing related to coal-fired power Marine & Fire Insurance.

Annual Trends of Coal Financing in General Insurance Sector (in KRW 100 millions) General Insurance Total Korean Financial Institutions Total 75,825

51,933 50,346 40,593 39,859 35,647 28,576 14,253 23,487 24,265 24,420 17,877 22,365 12,134 12,872 9,222 10,876 5,066 7,739 5,367 7,762 2,140 3,937 3,810

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

31 Samsung Fire & % of Total Coal Finance Company vs. Sector Total Major Projects Financed Marine Insurance (in KRW 100 millions) (in KRW 100 millions)

Project Financing Power Plant Finance Method 7.70 Trillion KRW 5,321 21,023 Size Goseong Green 13,545 Underwriting Corporate Bond Coal Finance Size Anin Power Station 12,444 Underwriting 11,844 30,930 13% Pospower Samcheok 8,907 Underwriting Assets Under Management Underwriting KOEN 5,328 Underwriting (As of June 2020) 59,908 135,258 KOMIPO 4,256 Underwriting 86.1599 Trillion KRW

% of Total Coal Finance Company vs. Sector Total Major Projects Financed KB Insurance (in KRW 100 millions) (in KRW 100 millions)

Project Financing Power Plant Finance Method 7.41 Trillion KRW 5,392 21,023 Size Anin Power Station 13,449 PF, Underwriting Corporate Bond Coal Finance Size Samcheok Green 7,448 Underwriting 5,194 30,930 9.2% GS Pocheon CHP 5,979 PF, Underwriting Assets Under Management Underwriting Goseong Green 5,158 PF, Underwriting (As of June 2020) 44,136 135,258 Taean 4,765 Underwriting 36.4072 Trillion KRW

Hyundai Marine % of Total Coal Finance Company vs. Sector Total Major Projects Financed & Fire Insurance (in KRW 100 millions) (in KRW 100 millions)

Project Financing Power Plant Finance Method 3.70 Trillion KRW 3,217 21,023 Size Pospower Samcheok 5,562 PF, Underwriting Corporate Bond Coal Finance Size Goseong Green 3,763 PF, Underwriting 6,635 30,930 6.2% Anin Power Station 2,490 PF, Underwriting Assets Under Management Underwriting KOMIPO 1,049 Underwriting (As of June 2020) 27,154 135,258 Yeosu Cogeneration 448 PF 47.4857 Trillion KRW

Kdb Life % of Total Coal Finance Company vs. Sector Total Major Projects Financed Insurance (in KRW 100 millions) (in KRW 100 millions)

Project Financing Power Plant Finance Method 665.6 Billion KRW 206 21,023 Size Gunjang Energy 2,140 Underwriting Coal Finance Size Corporate Bond KOEN 1,010 Corporate Bond 4,310 30,930 1.1% KOMIPO 1,000 Corporate Bond Assets Under Management Underwriting (As of June 2020) KEPCO 700 Corporate Bond 2,140 135,258 KOWEPO 600 Corporate Bond 19.3465 Trillion KRW

32 Seoul Guarantee % of Total Coal Finance Company vs. Sector Total Major Projects Financed Insurance (in KRW 100 millions) (in KRW 100 millions)

Project Financing Power Plant Finance Method 412 Billion KRW - 21,023 Size Jawaharpur Super 880 Underwriting Coal Finance Size Corporate Bond Obra Thermal 864 Underwriting 2,200 30,930 0.7% Hadong 100 PF Assets Under Management Underwriting (As of June 2020) 100 PF 1,920 135,258 Other domestic projects 87 Underwriting 8.4576 Trillion KRW

% of Total Coal Finance Company vs. Sector Total Major Projects Financed DB Insurance (in KRW 100 millions) (in KRW 100 millions)

Project Financing Power Plant Finance Method 276.5 Billion KRW 2,765 21,023 Size Bukpyung 978 PF Coal Finance Size Corporate Bond Anin Power Station 900 PF - 30,930 0.5% Goseong Green 760 PF Assets Under Management Underwriting (As of June 2020) Pospower Samcheok 127 PF - 135,258 38.4066 Trillion KRW

% of Total Coal Finance Company vs. Sector Total Major Projects Financed Lotte Insurance (in KRW 100 millions) (in KRW 100 millions)

Project Financing Power Plant Finance Method 215.6 Billion KRW 2,165 21,023 Size Goseong Green 950 PF Coal Finance Size Corporate Bond Bukpyung 791 PF - 30,930 0.4% Pospower Samcheok 36 PF Assets Under Management Underwriting (As of June 2020) - 135,258 14.5962 Trillion KRW

Heungkuk Fire & % of Total Coal Finance Company vs. Sector Total Major Projects Financed Marine Insurance (in KRW 100 millions) (in KRW 100 millions)

Project Financing Power Plant Finance Method 192.9 Billion KRW 1,929 21,023 Size Goseong Green 1,640 PF Coal Finance Size Corporate Bond Bukpyung 289 PF 0.3% - 30,930 Assets Under Management Underwriting (As of June 2020) Undisclosed - 135,258

33 Detailed Analysis of Coal Finance by Financial Institution Private Financial Institutions - Securities

Securities companies have invested approximately \1.3 trillion in coal-fired power generation over the past 12 years. During the survey, nine securities companies, including Hi Investment & Securities, KB Securities, and IBK Securities, claimed that they were financing the coal-fired power generation, and the remaining 30 securities companies have responded to the survey that they have not made any investments.1

Regionally, financing by securities companies was focused on domestic projects as with other private Total Amount and Proportion by Financing Method in 1.27 financial institutions. In terms of the period, there was Securities Sector Trillion KRW (in KRW 100 millions) no investment made in the thermal power generation Project Financing until 2014, yet it began to increase consistently from Total Coal Finance 2015 and reached a peak in 2018. 3,556 159,988 by Securities Sector Corporate Bond Among the three companies that responded that they are financing for the projects or companies related to 9,175 253,215 Top 3 Coal Financiers coal-fired power generation, Hi Investment & Securities Underwriting affiliated with DGB Financial Group made the largest •Hi Investment & investment. Hi Investment & Securities invested a total - 181,938 of \850 billion in the corporate bonds of the KEPCO Securities and its subsidiaries (KOMIPO, KOSPO, and KOWEPO). •KB Securities The second was KB Securities providing a total of Coal Finance by Geographic Destination •IBK Securities \433.8 billion, including \300 billion loaned in PFs to Anin Thermal Power, for coal-fired power oetic generation. 100%

Asset Management Companies1 Asset management companies pool funds from customers such as banks and securities companies, and manage the assets primarily through fund management and equity investments. This is because they pursue fast and high returns. However, since financing for coal-fired power plant construction is mainly carried out in PF loans or by acquiring bonds of the coal-related companies, asset management Management and Heungkuk Asset Management companies rarely provide financing for coal-fired power responded that they have had a history of providing generation projects. A total of 22 asset management coal financing. Both firms financed KRW 24 billion and companies have responded to the request for data, KRW 170 billion each in PF loans, and both were made and among them, Shinhan B&P Paribas Asset for domestic coal-fired power plants.

Annual Trends in Coal Financing in Securities Sector (in KRW 100 millions) Securities Sector Total 75,870 Asset Management Total Korean Financial Institutions Total

52,036

40,593 40,259 35,647 5,900 14,253 23,487 24,365 17,877 28,618 1. From within the asset 12,134 2,281 2,475 management sector, there 1,700 are only two firms that have 5,066- 900 800 responded that they have 53 87 100 100 had a history of providing coal financing. Hence, they are 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 included in the securities sector.

34 Hi Investment & % of Total Coal Finance Company vs. Sector Total Major Projects Financed Securities (in KRW 100 millions) (in KRW 100 millions)

Project Financing Power Plant Finance Size Method Billion KRW 850 - 3,556 KEPCO 5,500 Corporate Bond Coal Finance Size Corporate Bond KOMIPO 1,000 Corporate Bond KOSPO 900 Corporate Bond 1.4% 8,500 9,175 Assets Under Management KOWEPO 700 Corporate Bond Underwriting (As of June 2020) KDHC 200 Corporate Bond - 240 Billion KRW

% of Total Coal Finance Company vs. Sector Total Major Projects Financed KB Securities (in KRW 100 millions) (in KRW 100 millions)

Project Financing Power Plant Finance Size Method Billion KRW 433.8 3,556 3,556 Anin 3,000 PF Coal Finance Size Corporate Bond 0.6% 275 9,175 Assets Under Management Underwriting (As of June 2020) - 56.5369 Trillion KRW

% of Total Coal Finance Company vs. Sector Total Major Projects Financed IBK Securities (in KRW 100 millions) (in KRW 100 millions)

Project Financing Power Plant Finance Size Method Billion KRW 40 3,556 KOWEPO 400 Corporate Bond Coal Finance Size Corporate Bond 0.1% 400 9,175 Assets Under Management Underwriting (As of June 2020) Undisclosed -

Heungkuk Asset % of Total Coal Finance Company vs. Sector Total Major Projects Financed Management (in KRW 100 millions) (in KRW 100 millions)

Project Financing Power Plant Finance Size Method Billion KRW 170 1,700 1,940 Gimcheon & Jeonbuk 1,700 PF Coal Finance Size Corporate Bond 0.3% - Assets Under Management Underwriting (As of June 2020) - 206.6 Trillion KRW

35 Detailed Analysis of Coal Finance by Financial Institution Analysis of Private Financial Institutions by Group

The management system of Korean companies tends to be top-down where strategy established by a parent company is shared by all subsidiaries. Since visions and philosophy are aligned throughout each group, it is difficult for a subsidiary company to commit to coal exit if such a decision is in conflict with the parent or any other subsidiary company. On this page, financial institutions are divided into groups and their coal finance size analyzed.

Top 2 Groups Dominate the Size of Coal Financing Examining by period, Samsung, KB Financial Group, The top two groups of coal financing, Samsung and Hyundai Marine & Fire Insurance have not provided Group, and KB Financial Group, account for an coal financing according to a specific pattern, yet have overwhelmingly high share of the total financial primarily provided financing together at the same time. institutions' coal financing. Coal financing from both However, Nonghyup Financial Group and Hanwha have institutions accounts for approximately one-third of all consistently increased their amount of coal financing. financial institutions' coal financing, and coal financing by top 5 groups account for half of the entire coal finance by Korean FIs. In particular, it may be difficult Top 5 Groups in Coal Financing Number of institutions / Coal Finance Figure (in KRW 100 millions) to recognize that Samsung is providing financing for coal-fired power generation because of its strong Project Finance Corporate Bond Underwriting perception as a manufacturing company. However, Samsung (2 / 15,118.7) Samsung has surpassed the financial group and offered the most funds. The amount has exceeded 14,639 76,640 59,908 \15 trillion, or 25% of all financial institutions' coal KB Financial (2 / 6,301.4) financing over the last 12 years. Furthermore, it is more than double the amount compared to 13,409 5,469 44,136 approximately \6 trillion of coal financing by KB Financial Group, a major financial group. KB Financial Hyundai Marine & Fire Insurance Insurance (1 / 3,700.6) Group has provided the largest amount of funds 3,217 6,635 27,154 among the financial groups for the coal financing, but has announced that it will take the lead in eco- Nonghyup Financial (5 / 3,549.8) friendly management by declaring coal exit financing as the first financial group in Korea. As such, it is 16,485 19,013 - time for Samsung, Hyundai Marine & Fire Insurance, Nonghyup, and Hanwha to move in a single direction Hanwha ( 2 / 1,833.9) with the coal exit policy. 11,889 4,310 2,140

Annual Trends of Top 5 Coal Financing Groups by the Size of Coal Finance (in KRW 100 millions)

Samsung KB Financial Hyundai Marine & Fire Insurance Nonghyup Financial Hanwha 30,000

25,000

20,000

15,000

10,000

5,000

0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

36 Samsung operates a few financial companies Samsung Group such as Samsung Fire & Marine Insurance, % of Total Coal Finance Proportion by Subsidiaries Samsung Life Insurance, and Samsung Securities as well as manufacturing companies like . Within the group, Samsung Samsung Fire & Marine 25% Samsung Life Insurance, Samsung Active Samsung Insurance 15.1187 Asset Management, Samsung Securities, Life 51% Trillion KRW Insurance and Samsung Fire & Marine Insurance have 49% responded to this survey. Samsung Active Asset Coal Finance Size Management and Samsung Securities have responded that they have no history of providing coal finance. Samsung as a group was the largest Assets Under Management (As of June 2020) coal financier with a total of \15 trillion. As a non- life insurer, Samsung Fire & Marine Insurance Top 5 Projects (in KRW 100 millions) 377.4908 Trillion KRW1 provided \5.9 trillion in underwriting, comprising Power Size Method Companies 77% of its coal finance. In contrast, Samsung Plant (in KRW millions) Life Insurance has provided financing in PF loans and through corporate bond acquisitions. Goseong 18,979 PF, Samsung Life Insurance, High Underwriting Samsung Fire & Marine Insurance Furthermore, Samsung Life received fees of approximately \600 million through financial Gangneung 14,744 PF, Samsung Life Insurance, Anin Underwriting Samsung Fire & Marine Insurance arrangements. Recently, Samsung has revealed that Samsung C&T will participate in Vietnam's Samcheok 8,907 PF, Samsung Life Insurance, Vung Ang Unit 2 coal-fired power plant project Underwriting Samsung Fire & Marine Insurance as a contractor. It is expected that Samsung will Bukpyung 3,499 PF Samsung Life Insurance, face criticism at home and abroad for its anti- Samsung Fire & Marine Insurance environmental management as a global company Gunjang 3,392 Underwriting Samsung Fire & Marine Insurance by participating in not only financing but also Energy directly in construction.

KB Financial Group is a leading financial group in KB Financial Korea, operating a total of 13 subsidiaries, and % of Total Coal Finance Proportion by Subsidiaries Group KB Kookmin Bank, KB Life, KB Insurance, and Kookmin Bank 5% KB Securities have responded to the request for KB Financial KB this data. It was found that KB Financial Group 11% Securities 6% has provided the largest amount of financing KB Life 6.3521 in all financial groups by providing financing of Insurance Trillion KRW approximately \6.3 trillion for coal-fired power 2% generation over the last 12 years. KB Group's Coal Finance Size KB Insurance financing methods for coal were primarily 87% insurance underwriting and PF loans, and the amount was 4.4 trillion and KRW 1.3 trillion Assets Under Management \ (As of June 2020) each. This is because KB Financial Group's coal financing was mostly originated by KB Top 5 Projects (in KRW 100 millions) 516.907 Trillion KRW Insurance. The proportion of KB Insurance's coal financing within the Group is 86%, amounting Power Size Method Companies Plant (in KRW millions) to \5.4 trillion. The coal-fired power plants on which KB Financial Group has focused include Anin Power 14,753 PF, Underwriting KB Life Insurance, KB Station Insurance, Kookmin Bank Gangneung Anin Thermal Power Plant, Goseong High Thermal Power Plant, and Samcheok Green Goseong 7,666 PF, Underwriting KB Life Insurance, KB Green Insurance, Kookmin Bank Power. In particular, the Gangneung Anin Thermal Power Plant was provided with over \1.4 trillion in Samcheok 7,448 PF, Corporate Bond KB Insurance financing. On September 25, 2020, KB Financial Green Underwriting 1. The amount of the assets under Group declared that it will completely cease GS 5,979 PF, Underwriting KB Insurance management is the sum of the participating in the financing and acquisition of Pocheon assets under management CHP of the institutions which have new coal-related projects moving forward. Until responded to the request for data now, KB Financial Group has provided the largest Taean 4,765 Underwriting KB Insurance within the group, not the overall assets under management of the coal financing, but with this commitment, it has group. (However, this is all based become a leading financial group managing coal on the data submitted by the institution.) risk.

37 Hyundai Marine & Fire Insurance is a group Hyundai Marine & Fire operating based on the financial industry as % of Total Coal Finance Proportion by Subsidiaries Insurance Group seven of its subsidiaries(9 in total), including Hyundai Hicar Accident and Hyundai Invest HMFI Asset Management, are financial companies. Group However, since only Hyundai Marine & Fire 6% 3.7006 Insurance has responded, each subsidiary’s Trillion KRW coal financing status cannot be analyzed. Hyundai Marine & Fire Insurance has provided Coal Finance Size financing of approximately\ 3.7 trillion over HMFI 100% the past 12 years, providing the fourth largest financing among all private financial institutions Assets Under Management (As of June 2020) and the third largest among non-life insurance companies. As with general non-life insurers, Top 5 Projects (in KRW 100 millions) 47.4857 Trillion KRW Hyundai Fire & Marine Insurance has provided financing through the insurance underwriting of Power Plant Size Method Companies (in KRW millions) \2.7 trillion, or approximately 73% of the total cumulative financing, while approximately\ 660 Pospower Samcheok 5,644 PF, Underwriting HMFI billion and \320 billion were provided through the Goseong Green 3,763 PF, Underwriting HMFI acquisition of corporate bonds and in PF loans. Anin Power Station 2,490 PF, Underwriting HMFI Hyundai Fire & Marine Insurance has responded Yeosu Cogeneration 448 PF HMFI that it has had no history of financing for overseas coal fired power generation projects, and as for Gimcheon 429 PF HMFI the domestic projects financed in large amounts, approximately \560 billion and \370 billion were for Samcheok Thermal Power Plant and Goseong High provided in PF loans and through the insurance Thermal Power Plant each.

Nonghyup Financial Group is a financial Nonghyup % of Total Coal Finance Proportion by Subsidiaries group consisted of 9 subsidiaries including Nonghyup Property & Financial Group NH Nonghyup Bank, NH Nonghyup Life, NH NACF Casualty Insurance Nonghyup Property & Casualty Insurance , and 3% 3% NH Investment & Securities. Of the Nonghyup Nonghyup NH Investment & Financial Group, NH Investment & Securities, NH Financial Securities 6% NACF 0% 1.8339 Nonghyup Bank, National Agricultural Cooperative 19% Trillion KRW Federation(NACF), NH Nonghyup Property & Casualty Insurance and NH Nonghyup Life have Coal Finance Size responded to the request for data. However, NH Nonghyup Life Investment & Securities responded that while it 76% has not been providing coal financing over the Assets Under Management (As of June 2020) past 12 years, it did take fees of approximately \1.6 billion by making financial arrangements for Top 5 Projects (in KRW 100 millions) 450.8774 Trillion KRW the Goseong Green Power project. Nonghyup Group has provided coal financing only through Power Size Method Companies Plant (in KRW millions) PF loans and corporate bond acquisitions, and the amount of financing by NH Nonghyup Life Goseong 2,660 PF Nonhyup Bank, Nonhyup Life Green from within the Group was tremendously larger. The size of coal financing by NH Nonghyup Life is Bukpyung 1,300 PF Nonhyup Life \1.4 trillion of PFs and \1.2 trillion of corporate Anin Power 1,000 PF Nonhyup Bank, Nonhyup Life, bonds, accounting for 4.5% of the coal financing Station NongHyup Property & Casualty by all financial institutions. NH Nonghyup Insurance, NACF Bank's financing was \670 billion, which was GS Pocheon 625 PF Nonhyup Bank, Nonhyup Life mostly made through the acquisition of general CHP corporate bonds for the operation of the coal Pospower 154 PF Nonhyup Bank, NongHyup Property & related companies rather than the power plant Samcheok Casualty Insurance, NACF construction project. Nonghyup Financial Group has not provided financing for overseas coal fired the Goseong High Thermal Power and Bukpyung Thermal power generation projects over the past 12 years, Power for approximately \260 billion and \130 billion each. and the most financing was made in PF loans to

38 Hanwha is a group that operates not only Hanwha Group manufacturers of explosives and chemicals % of Total Coal Finance Proportion by Subsidiaries such as Hanwha and , but also financial companies such as Hanwha Insurance Hanwha and Hanwha Life Insurance. Within the group, Group 3% Hanwha Hanwha Investment & Securities, Hanwha General 1.8339 General Insurance, Hanwha Life Insurance, and Insurance Hanwha Trillion KRW 36% Life Hanwha Asset Management have responded to Insurance the request for data, while Hanwha Investment Coal Finance Size 64% & Securities and Hanwha Asset Management responded that they have not provided financing for coal-fired power generation over the past Assets Under Management (As of June 2020) 12 years. Hanwha has provided a total of \1.8 trillion in financing, making it the second- Top 5 Projects (in KRW 100 millions) 145.1263 Trillion KRW largest after Samsung among general group companies. As for Hanwha Life Insurance, a Power Plant Size Method Companies (in KRW millions) total of \1.1 trillion was provided over the past 12 years, yet all were financed in PF loans. Goseong Green 3,421 PF Hanwha Life Insurance However, approximately 32% (\214 billion) of Gunjang Energy 2,140 Under- Hanwha General Insurance the total financing amounting to \665.6 billion writing were financed through coverage, and most of Bukpyung 700 PF Hanwha Life Insurance the rest acquired corporate bonds. Hanwha has GS Pocheon CHP 546 PF Hanwha Life Insurance responded that it has not provided financing for Pospower 217 PF Hanwha Life Insurance, overseas coal-fired power generation projects, Samcheok Hanwha General Insurance and the major domestic projects for which financing was provided were Goseong High Thermal Power and Gunjang Energy for \340 billion and \210 billion each in PF loans and institutions have responded that they have had no history through the insurance underwriting. Both of taking fees through financial arrangements.

Kyobo operates 8 financial companies including Kyobo Life Kyobo Securities and 4 non-financial companies % of Total Coal Finance Proportion by Subsidiaries Group including Kyobo Bookstore for a total of 12 subsidiaries. However, only Kyobo Life has Kyobo responded to the request for data on the status 3% of coal financing. It is not easy to establish 1.5435 connection with coal financing since Kyobo Trillion KRW is not strongly perceived to be a financial institution. However, its amount of financing has Coal Finance Size been substantial. As with other life insurance Kyobo Life 100% companies, Kyobo Life has not made insurance underwriting for the coal fired power plant related Assets Under Management (As of June 2020) products, and has financed a total of \1.5 trillion in PF loans for asset management and through Top 5 Projects (in KRW 100 millions) 112.395 Trillion KRW the acquisition of corporate bonds, making it the third largest among the life companies. Kyobo Power Plant Size Method Companies (in KRW millions) Life Insurance has provided approximately \1 trillion through the acquisition of corporate Goseong Green 2,280 PF Kyobo Life Insurance bonds, out of \1.5 trillion of coal financing, Bukpyung 800 PF Kyobo Life Insurance primarily through the acquisition of corporate Saemangeum Cogeneration 662 PF Kyobo Life Insurance bonds. Furthermore, Kyobo Life has taken fees Yeosu Cogeneration 654 PF Kyobo Life Insurance for financial arrangements for approximately \100 million through the financial arrangements Gimcheon 258 PF Kyobo Life Insurance of the Yeosu Industrial Complex Cogeneration Project, and is the only life insurance company to conduct financial arrangements together with projects were the Goseong High Thermal Power Plant and Samsung Life Insurance. Kyobo Life's major the Bukpyung Thermal Power, which were financed in PF investments in the coal fired power generation loans for \300 billion.

39 Shinhan Financial Group operates a total Shinhan of 17 subsidiaries. Among these, Shinhan % of Total Coal Finance Proportion by Subsidiaries Financial Group Shinhan BNP Paribas Investment Corp., Shinhan Bank, Shinhan Life Asset Management Insurance, and Shinhan BNP Paribas Asset Shinhan 2% Financial Management have responded to the request Group for data, and Shinhan Investment Corp. replied 2% Shinhan Bank 1.247 that it has had no history of financing for coal- 30% Shinhan Trillion KRW fired power generation over the past 12 years. Life Shinhan Financial Group has been publicizing Insurance Coal Finance Size 68% that it is leading environmentally responsible management in the domestic financial industry by signing as the first among the financial Assets Under Management (As of June 2020) groups to support the TCFD recommendation and devising the climate change response Top 5 Projects (in KRW 100 millions) 413.4197 Trillion KRW principles. However, it has provided a total of Power Plant Size Method Companies \1.02 trillion, and its financing has been the (in KRW millions) second largest after KB Financial Group among the major financial companies. Shinhan Life Goseong Green 3,221 PF Shinhan Life Insurance, Shinhan Bank Insurance has a relatively larger proportion of PF loans compared to other life companies, and Gunjang Energy 800 PF Shinhan Bank Shinhan Life is the only life insurance company Yeosu Cogeneration 467 PF Shinhan Life Insurance to extend PF loans to overseas coal fired Saemangeum 354 PF Shinhan Bank power plants (the Australian Millmerran Coal Cogeneration Fired Power Plant Project), which amounted to Cogeneration plant in 314 PF Shinhan Bank approximately \13 billion. As with other banks, Australia(anonymous) Shinhan Bank has provided financing only in PF loans, and has taken fees of approximately \4.7 billion by making financial arrangements for the Goseong High Thermal Power Plant project.

DGB Financial Group operates a total of 8 DGB Financial financial companies. DGB Financial Group was % of Total Coal Finance Proportion by Subsidiaries Group founded on Bank, a regional bank, and while the size of Daegu Bank's assets and roles DGB Financial DGB Life within the Group are large, it has not responded Group 0.2% 851.8 Billion KRW to the request for data. (Among regional banks, 1% BNK Kyeongnam Bank, Kwangju Bank, and Coal Finance Size Busan Bank have responded to the request

for data.) Only DGB Life and Hi Investment Hi Investment & Securities & Securities of DGB Financial Group have 99.8% Assets Under Management responded to the request for data. DGB (As of June 2020) Financial Group's total coal financing of\ 851.8 240 Billion KRW billion was accumulated and provided by Hi Investment & Securities with \850 billion, Top 5 Projects (in KRW 100 millions) and almost all financing was provided by Hi Investment & Securities, all of which acquired Power Plant Size Method Companies (in KRW millions) corporate bonds of the coal related companies. However, they have responded that it was not Pospower 18 PF DGB Life Samcheok possible to verify as to whether the bonds were issued for the purposes of the coal fired power KEPCO 5,500 Corporate Bond Hi Investment & Securities plant construction or the general operation of KOMIPO 1000 Corporate Bond Hi Investment & Securities the coal related companies since the purposes KOSPO 900 Corporate Bond Hi Investment & Securities of issuance were not specified. KOWEPO 700 Corporate Bond Hi Investment & Securities

40 Taekwang Group is a group of companies that Taekwang operates across various industries such as % of Total Coal Finance Proportion by Subsidiaries Group manufacturing, and it manufactures textiles and , financial, and media. There are Heungkuk a total of 6 financial subsidiaries, among which Taekwang Asset 1.4% Management 819.6 Billion KRW Heungkuk Life Insurance, Heungkuk Fire & 20.7% Marine Insurance, Heungkuk Securities, and Heungkuk Heungkuk Life Coal Finance Size Heungkuk Asset Management have responded Fire & Marine Insurance to the request for data, and Heungkuk Securities Insurance 55.7% has responded that they have had no history 23.5% Assets Under Management of financing for coal-fired power generation (As of June 2020) over the past 12 years. The Taekwang Group 30.2445 Trillion KRW has provided approximately \820 billion in cumulative financing, and approximately 60% Top 5 Projects (in KRW 100 millions) were made by Heungkuk Life Insurance. Unlike Heungkuk Life Insurance and Heungkuk Asset Power Plant Size Method Companies (in KRW millions) Management, as well as other non-life insurance companies that mainly provide financing through Goseong 3,407 PF Heungkuk Life Insurance, Heungkuk Green Fire & Marine Insurance the insurance underwriting, all of Heungkuk Fire & Marine Insurance provided financing only in PF Gimcheon / 1,792 PF Heungkuk Asset Management , Jeongbuk Heungkuk Life Insurance loans. Heungkuk Life has loaned approximately \450 billion, Heungkuk Fire & Marine Insurance Bukpyung 1,286 PF Heungkuk Life Insurance, Heungkuk \190 billion, and Heungkuk Asset Management Fire & Marine Insurance has loaned \170 billion. In particular, Heungkuk Saemangeum 520 PF Heungkuk Life Insurance Asset Management's \170 billion is approximately Cogeneration 7 times greater than Shinhan B&P Viva Asset Pospower 382 PF Heungkuk Life Insurance Management's \24 billion. Compared to 20 asset Samcheok management companies excluding Heungkuk Asset Management and Shinhan BNP Paribas financing, it seems it has provided an overwhelmingly larger Asset Management, which recently have res- amount of coal financing among the asset management ponded that they have not had a history of coal companies.

Mirae Asset Financial Group is a financial Mirae Asset group that operates 12 subsidiaries focusing % of Total Coal Finance Proportion by Subsidiaries Financial Group on the financial industry. Among these, Mirae Asset , Mirae Asset Life, Mirae Asset Mirae Asset Asset Management, and Multi Asset Asset Financial Group 438.4 Billion KRW Management have responded to the request for 0.7% data, while Mirae Asset Daewoo, Mirae Asset Coal Finance Size Asset Management, and Multi Asset Asset Management have responded that they have had no history of providing coal financing. However, Mirae Asset Life 100% Assets Under Management Mirae Asset Daewoo has responded that there (As of June 2020) is a plan to provide financing for the coal fired 37.9838 Trillion KRW power plants for \240 billion by 2H 2024 for contractual reasons. Mirae Asset Life Insurance Top 5 Projects (in KRW 100 millions) has provided financing in PF loans and through the acquisition of corporate bonds. As for PFs, Power Plant Size Method Companies (in KRW millions) the financing began in 2018 and the loans have amounted to \155.6 billion, while \114.6 billion Gosung Green Power 1,520 PF Mirae Asset Life of corporate bonds were acquired. Mirae Asset Pospower Samcheok 36 PF Mirae Asset Life Life Insurance is going against the current trend, as the amount of its financing has been rising since financing began in 2018, despite growing concerns over the risks of coal financing. Major projects financed by Mirae Asset Life Insurance in PF loans for the coal fired power plants are Goseong High and Samcheok. 41 Coal Finance Phase-out Plan of Financial Institutions

This study has investigated the financing amount related to coal by financial institutions, the plan to cease coal financing in the future, the plan to withdraw the existing investments, and the financing plan for new coal fired power plants. According to survey results, less than a fifth of the respondents were planning to declare the financial suspension for coal. In particular, none of the public financial institutions are planning any additional declaration of suspension except for the four institutions, which previously declared cessation of coal financing.

Public Financial Institutions Have No New Plan for Coal Exit In this study, 162 institutions (73 public and 89 private) Financial Institutions Planning to Declare Suspension of New Coal Investments (number of institutions/total surveyed) 1,602 have responded. Among these, only 19 institutions Trillion KRW (11%) have responded that they have already declared Public Financial Institutions the suspension of coal financing or they are planning to Private Financial Institutions Total Assets of Financial do so. Of 73 respondents, no public financial institutions Institutions Planning to were making additional plans, excluding 4 institutions Declare Suspension of which have already declared their suspension of coal Coal Financing investments (Government Employees Pension System, Public Officials Benefit Association, Teachers' Pension, and the Korean Teachers’ Credit Union). In the case of 4/72 15/89 private financial institutions, excluding the 6 institutions •Shinhan Life which have already made their declarations, 9 institutions have replied that they have plans to declare Plan to Withdraw Existing moving forward (a total of 15 institutions, or 17%). Coal Investments Analyzing the 19 institutions that have responded that they have a plan to declarae by the time of declaration, Declaration of Suspension in Coal Financing & 10 institutions have already made declaration and 3 Declaration Planning Institutions responded that they would make declaration within a Classification Timing Name of Institution year. Furthermore, 4 institutions responded that they Public Declaration GEPS would make declaration within 1 to 3 years. 2 institutions Financial completed POBA1 replied that they would do so in 5 years or more. The Institutions total amount of the assets under management of TP the 19 institutions was \1,602 trillion. In the case of KCTU KB Financial Group, all 13 subsidiaries of the Group announced their suspension of coal financing, yet only Private Declaration DB Insurance Financial completed 4 companies included in the survey were reflected in KB Insurance Institutions this study. KB Life Insurance KB Securities Shinhan Life Insurance Reveals Plans to Withdraw Existing Coal Investments KB Kookmin Bank Of the responding institutions, Shinhan Life Insurance Korea Investment & Securities2 was the only one that revealed its plan to withdraw Within Samsung Life Insurance the existing coal investments. Shinhan Life Insurance a year Shinhan Life Insurance proposed a withdrawal roadmap, claiming that approximately \170 billion of coal-fired power Hanwha Life Insurance generation related PFs remain, and that it plans to Within Kyongnam Bank 1 - 3 years recover all of them within 2 years. Nonhyup Bank

1. The Public Officials Benefit Major Public Financial Institutions Have No Plans to Cease NongHyup Property & Casualty Association has not responded, Insurance but its intention to commit to coal Coal Financing or Refused to Respond exit was confirmed. Many of the major public financial institutions, such as NH Investment & Securities 2. Korea Investment & Securities responded that it will not invest the Korea Export-Import Bank of Korea, Korea Trade After ABL Life Insurance in the construction projects Insurance Corporation, IBK Industrial Bank of Korea, 5 years for the new coal-fired power Heungkuk Fire & Marine Insurance plants in the future, and so was and the National Pension Service, were evasive by included among the institutions responding that they did not have plans to suspend generation, have responded in a similar manner at the which declared the suspension of coal financing. However, it new coal financing or withdraw any, or consultation National Assembly's Inspection of Government Offices was not included in the page of with relevant agencies is required. These institutions, for several years, so it is questionable as to whether a the “Current Status of Coal Exit Financial Institutions in Korea.” which have provided trillions of won for coal-fired power serious review of coal financing is in progress.

42 Many Avoided Responding to Questions Involving Plans Coal Fired Power Generation Projects Under Review or to Make New Investments in Coal Fired Power Generation Planning Three institutions have responded that they have coal Project Institution Investment Size fired power generation projects under review or plan, (in KRW 100 millions) and all of the target projects were identified as the Gangneung Anin Kyeongnam Bank 400 Gangneung Anin Thermal Power Plant. However, Thermal Power Plant a significant number of the institutions have not DB Life 1,000 responded to the questions or omitted report. For DGB Life 400 example, it was confirmed in a media report that Hana Bank has decided to extend USD 11.280 billion of loans for the construction of Indonesia’s Jawa Units 9 & 10, yet Hana Bank omitted this in the survey.

Whether Major Public Financial Institutions Plan to Cease or Withdraw Coal Investments1, 2 (in KRW 100 millions) nstitution Plans to Declare Suspension Coal Divestment Coal Finance on New Coal Finance Plans Size NPS Declined to respond Declined to respond 99,955 KEXIM Declined to respond Declined to respond 48,585 K-Sure Declined to respond Declined to respond 46,680 Korea Post Ｘ Ｘ 11,578 KDB Declined to respond Declined to respond 5,740 KFCC Ｘ Ｘ 5,356 IBK Declined to respond Declined to respond 1,208 TP ◯ -3 1,000 KTCU ◯ -3 700 GEPS ◯ -3 500 KIC(Korea Investment Corporation) Declined to respond Declined to respond Declined to respond

Whether Major Private Financial Institutions Plan to Cease or Withdraw Coal Investments1, 2 (in KRW 100 millions) Sector Institution Plans to Declare Suspension Coal Divestment Coal Finance on New Coal Finance Plans Size Banks Kookmin Bank ◯ Ｘ 3,333 Shinhan Bank In consideration Declined to respond 3,667 Hana Bank In consideration Declined to respond 2,465

1. Mark “O” for the institutions Woori Bank Declined to respond Declined to respond 2,241 which have made declarations. 2. Mark “Declined to respond” for all Nonhyup Bank ◯ Ｘ 6,769 of the follow cases: • No reply to the survey. Life Insurers Samsung Life Insurance ◯ Ｘ 74,115 • No response to the question. Hanwha Life Insurance ◯ Ｘ 11,683 • If no response is made to the question, and a reply has been Kyobo Life Insurance Ｘ Ｘ 15,435 made with separate comments (however, if the comments are Mirae Asset Life Ｘ Ｘ 4,384 “Under Review,” do not mark as “Declined to respond,” yet mark Shinhan Life Insurance ◯ ◯ 8,140 as “Under Review.”) 3. Since the institutions’ coal Non-life Samsung Fire & Marine Insurance Ｘ Ｘ 77,073 financing was made via the Insurers acquisition of corporate bonds Hyundai Marine & Fire Insurance Declined to respond Declined to respond 37,006 or equity interest of the coal related companies, there were DB Insurance ◯ Declined to respond 2,765 no investment details for the coal fired power plant or cogeneration KB Insurance ◯ Ｘ 54,723 plant construction project at all. Accordingly, it did not correspond Hanwha General Insurance Ｘ Ｘ 6,656 to the question asking for their plans to withdraw existing Securities KB Securities ◯ Declined to respond 3,831 investments in the construction Companies 3 projects for coal fired power Mirae Asset Daewoo Ｘ - 0 plants or cogeneration power Korea Investment & Securities ◯ -3 0 plants.

43 Conclusion

Coal financing is an anti-moral, anti-environmental investment. It is also a financially risky investment since it is highly likely to become a stranded asset due to the climate crisis. For this reason, public and private financial institutions around the globe are declaring coal exit financing. In Korea, too, the financial institutions declaring coal exit have emerged, yet they are remote from coal exit financing. Rather, they are called “climate villains” as Korea is the world's third largest coal financing country.

Devising of the Coal Exit Roadmap it is difficult to construct additional coal fired power plants Coal financing or coal exit financing in a country is largely in Korea other than the seven currently undergoing dependent on the government's climate change policies construction, the private financial institutions’ coal and the accompanying energy policies. The IPCC, an financing will likely decline. inter-governmental consultation body on climate change, recommends that the current coal fired power generation However, there is still demand for the overseas coal power must be reduced by 80% or greater by 2030 in order to plant constructions in developing countries, primarily in limit the global temperature rises to 1.5℃ or less, and the Southeast Asia. In this respect, coal financing is expected net zero carbon emissions must also be achieved by 2050. to be led by the public financial institutions focusing on Twenty three countries, including the UK and France, have the overseas. In this process, there is a possibility that the already legislated or made policies for the zero net carbon KEPCO and public financial institutions will involve private emissions by 2050. Based on which, many countries have financial institutions with “Team Korea” as their pretext. In already finalized or are devising their roadmaps for exiting fact, Hana Bank has participated in financing Indonesia’s the coal fired power generation by 2030. Jawa Units 9 & 10 and Vietnam’s Vung Ang 2 projects. Under such a business structure, there is a possibility of However, the recent actions of the Korean government are the privatization of profits and the socialization of losses. going against this global trend. Despite domestic and foreign In light of this, it is necessary to make policies to ban the criticisms, and despite the lack of economic feasibility, financing of the overseas coal power plants by public decisions were made to invest in the coal fired power plants financial institutions. Futhermore, it is necessary to include for Indonesia's Jawa Units 9 & 10 and Vietnam's Vung Ang a phased in withdrawal plan for the financing for which Unit 2. In Korea, 7 new coal fired power plants are undergoing agreement has already been executed or is underway. construction. This is in complete contradiction to the current Currently, four legislative bills have been proposed at the government's Green New Deal policy. The authenticity and National Assembly to ban the overseas coal power plant credibility of the Green New Deal are damaged domestically projects and their financing. The passing of these laws and globally. If the government sends out such contradictory should fundamentally block the overseas coal power policy signals, the Green New Deal will very likely fail. In projects and their financing. particular, if U.S. Presidential Candidate Joe Biden of the Democratic Party is elected after making commitments to Building a Green Financial System climate change including achieving zero greenhouse gas On top of the government's efforts to devise a strong coal emissions due to power generation by 2035, early shutdown exit roadmap and legislate prohibition of the overseas coal of the coal fired power plants would be inevitable. financing, policies to move the financial system towards climate finance, green finance, and even sustainable Consequently, considering various domestic and foreign finance ought to be constructed. Currently, international conditions, the government's recent decision to participate organizations are sending out warnings that the climate in the construction of overseas coal fired power plants and crisis might trigger a serious financial crisis and are provide public finance would be a serious misjudgment. requiring response. “Green Swan,” created by the Bank for The government ought to withdraw such decision even International Settlements (BIS), is a term embodying this, now. Furthermore, a “coal exit roadmap” must be devised, and the Task Force on Climate-related Financial Disclosures announced, and implemented as soon as possible in a (TCFD) and the Green Financial Network (NGFS) are manner to achieve 1.5℃ or below, which is the order of international initiatives intended to prevent such financial the climate science. Germany, which is Europe's largest crisis. The Korean government, particularly the Financial coal fired energy dependent country, has legislated a plan Services Commission and the Financial Supervisory to shut down all coal fired power plants by 2038. Service, which are financial regulators, must declare support for the TCFD and join the NGFS to induce coal A Law Banning Overseas Coal Financing is Required exit financing. The NGFS is synonymous with the financial The cumulative size of coal financing of Korea (2009 to regulators actively considering climate risks in assessing June 2020) is larger by the private financial institutions the soundness of financial institutions and building a green than by the public financial institutions. For the private financial system to ensure capital flows into the green coal financing, one for domestic coal fired power plants industries. In this process, green taxonomy is essential. is even more absolute than for overseas. However, since Under such a system, coal financing will lose its position.

44 Special Page

I. Analysis Of Coal Asset Exposure By Financial Institutions 46

II. Analysis Of Coal Asset Exposure By Financial Institutions 47

III. Local Governments' Anti-Coal Finance Policy In Custody Bank Selection Process 49 Ⅰ. Analysis Of Coal Asset Exposure By Financial Institutions

Recently, concerns have grown that financial institutions will become insolvent due to climate change, and the need for the financial institutions to manage and supervise climate change risks is rising. Accordingly, efforts are made at the level of domestic and foreign financial authorities or individual financial institutions in identifying the size of funds (exposures) invested in the industries of high risk due to climate change. This report is the first which has analyzed the exposures of the entire financial sector to coal-related industries (mining and coal-fired power generation).

In Korea, the Bank of Korea analyzed the size of As a result of the analysis, the total exposure of Korean loans, equities, and corporate bonds for the mining financial institutions to coal-fired power generation and 67 and industries for banks in 2018. At related companies was approximately \67.1 trillion, of the level of individual financial institutions, Shinhan which \41 trillion was carried by the public financial Trillion KRW Financial Group and KB Financial Group have analyzed institutions and \26 trillion by the private financial exposures to the fossil fuel and high carbon emission institutions. The analysis indicates that the size of the Size of Korean industries. However, no analysis of the entire financial public financial institutions turned out to be relatively Financial Institutions’ Exposure to sector has ever been attempted. larger due to the KEPCO’s interest (approximately \17 Coal-Fired Power trillion) held by the Korea Development Bank for the Generation Analytical Methodology purposes of securing management rights. However, This report has analyzed the assets invested in the even when they are excluded, it is still very high. By domestic and foreign mining and coal-fired power industry type of the private financial institution, life generation projects and companies by Korean financial insurance was the highest with approximately \14 institutions and calculated the size of their exposure. trillion, followed by non-life insurance (approximately \8.6 trillion) and banking (approximately \2.7 trillion). • Target financial institutions: all public financial institu- tions, private financial institutions (banks, life insurance When analyzing the private sector by group of companies, non-life insurance companies, securities companies, Samsung’s was overwhelmingly high with companies, and asset management companies) approximately \8.7 trillion. KB Finance came second • Scope of targets: domestic and foreign assets highest with approximately \3.6 trillion, and NongHyup invested by Korean financial institutions Financial Group the third highest with approximately • Target asset classes: Loans (project financing and \2.7 trillion. general corporate loans), corporate bonds, insurance (amount of coverage) and equities based on the By asset class, corporate bonds accounted for the most balance as of June 2020 with \24 trillion, followed by equities (\18.4 trillion), • Target industries: Coal-fired power plants, and mining loans (\16.7 trillion), and insurance (\8.3 trillion). and coal-fired power generation industries

Top 10 Institutions of Exposure to the Coal-Fired Power Generation (in KRW 100 millions) Rank Institution Exposure % By Asset Class Size of AUM Loans Corporate Bond Underwriting Securities 1 KDB 18,312.2 7% 1,313.8 773 0 16,921.1 2 NPS 10,894.1 1% 0 98,239 0 1,070.2 3 Samsung Life Insurance 7,010.8 2% 905.2 61,056 0 - 4 KEXIM 5,028.1 5% 5,028.1 0 0 - 5 K-Sure1 4,668 113% 0 0 46,680 - 6 KB Insurance 3,097.0 9% 330.8 4,895 22,767 - 1. The size of the exposure 7 Hyundai Marine & Fire Insurance 2,299.7 5% 467.7 6,635 11,685 - combines the total underwriting provided by the Korea Trade 8 Kyobo Life Insurance 1,964.2 2% 952.4 10,016 0 10.2 Insurance Corporation, and the proportion to total assets is 9 Samsung Fire & Marine Insurance 1,709.2 2% 524.8 11,844 0 - calculated by dividing it by the size of the fund. 10 Nonhyup Life2 1,696.1 2% 389.6 12,858 0 20.7 2. As the asset size was not reported, the figures of the management disclosure of NH NongHyup Life Insurance for 2Q2020 were used (excluding liability reserves).

46 Ⅱ. Renewable Energy Investment Status And Plan Of Financial Institutions

Renewable energy plays such an absolute role in responding to climate change. This is why many countries around the globe are ceasing coal-fired power generation and, instead, are increasing investments in renewable energy power generation. According to the IEA, 80% of the total power generation must be replaced by renewable energy by 2040 to achieve the 1.5C target. Last year, when comparing the investments made in coal-fired power generation and renewable energy, they were $50 billion and $2 trillion respectively, with the latter being approximately four times that of the former.

Korean Financial Institutions Going Against Global Accumulated Size of Korean Financial Institutions' Investment Trend Financing, Renewable Energy vs. Coal (in KRW 100 millions) time The advancement of the financial industry is a 0.5 slogan that all financial institutions have consistently Renewable Energy Coal 373,839 The ratio of demanded. However, according to this survey, it was found that the activities of Korean financial 221,302 Investments in 180,649 institutions are going against the trend of advanced Renewable Energy 101,744 to Coal-Fired Power global financial companies. It was also found that Generation by Korean Korean financial institutions have invested more in Financial Institutions coal-fired power generation than in renewable energy. Pic Priate The total accumulated investments in renewable energy is approximately \28 trillion, which is Top 5 Institutions of Renewable Energy Investments, approximately \30 trillion or more of difference from Public Financial Institutions (in KRW 100 millions) time \60 trillion, which is the accumulated investment 4 Rank Institution Investment Size in coal. This is the opposite to the global trend of The ratio of Renewable energy investment. Since 2010, the global renewable 1 KEXIM 4,182 Energy Investments energy investment has exceeded the amount of coal- 2 KDB 3,801.4 to Global Coal Fired fired power generation investments by 300% and 3 K-Sure 1,511.9 Power Generation has also increased consistently each year. In 2020, the difference has expanded to 400%. Because 4 IBK 200.9 even China, which invests most in coal-fired power 5 KFCC 190.5 generation, has three times the amount of investment in renewable energy, this result demonstrates that Top 5 Institutions of Renewable Energy Investments, the Korean financial sector's perception of climate Private Financial Institutions (in KRW 100 millions) change lags far behind the global level. Rank Institution Investment Size 1 Kyobo Life Insurance 3,448.8 The Export-Import Bank of Korea and the Korea Development Bank Rank 1st and 2nd for Renewable 2 Hanwha Life Insurance 1,970.5 Energy Investment Yet Lack Policy Consistency 3 Samsung Life Insurance 1,343.3 The accumulated investments in renewable energy made by the public financial institutions is approximately\ 10 4 Nonhyup Life 933.2 trillion, which is \8 trillion of difference from the private 5 KB Insurance 803.3 financial institutions which invested\ 18 trillion over the same period. Among public financial institutions, the big difference against other institutions, ranking 1st largest investments in renewable energy were made with accumulated renewable energy investments of by the Export-Import Bank of Korea, for \4.1 trillion. approximately \3.4 trillion. Kyobo Life's investments However, the Export-Import Bank of Korea has invested in renewable energy were approximately twice that approximately \4.8 trillion in the coal-fired power plants of the coal financing \( 1.5 trillion). Following which, and has recently decided to provide \810 billion of Hanwha Life and Samsung Life ranked 2nd and 3rd financing for the coal-fired power plant constructions with approximately \2 trillion and \1.3 trillion each. of Indonesia's Jawa Units 9 & 10, indicating a lack of The accumulated renewable energy investments consistency in policy. The Korea Development Bank, made by each institution were 1.69 times and 0.18 which ranked second, has also recently decided to times relative to coal financing. invest in coal-fired power generation, and the amount of renewable energy investments by the Korea Trade Samsung Life Has Lowest Ratio of Renewable Energy Insurance Corporation, ranked third, was approximately Investments to Coal Financing Among Major Insurers a third of the Corporation’s coal financing \( 4.6 trillion). Samsung Life invested \1.3 trillion in renewable energy and was counted as the 3rd largest renewable Investing Among Private Financial Institutions energy investing institution among private financial Among private financial institutions, Kyobo Life set a institutions. However, this size is less than even a

47 fifth of the amount of coal financing for\ 7.4 trillion. Renewable Energy Projects Undergoing Review Samsung Life ranked 3rd lowest for the ratio of The amount of investments in renewable energy projects 70 renewable energy investments to coal financing currently undergoing review or planning by financial among the major life insurance companies. Among institutions is \5.3 trillion in total, of which approximately Trillion KRW the non-life insurance companies, Samsung Fire 70% (\3.7 trillion) comes from investments in the dome- & Marine Insurance and Hyundai Marine & Fire stic renewable energy projects. In Korea, investments of Difference Between Insurance had the lowest ratios of renewable energy approximately \1.9 trillion in solar power projects and the Total Amount of Investments Required investments to coal financing at 0.08 and 0.10 each. \1.5 trillion in wind power projects were undergoing to Achieve 2030 Among the major commercial banks, Hana Bank was review. Renewable energy projects undergoing review or Renewable Energy the only institution that provided more coal financing planning overseas were located across various countries Target and Korean than renewable energy. including Japan, Chile, and the United States. Compared Financial Institutions' to Korea, as for the overseas projects undergoing review, Amount of Target Public Financial Institution Lack Plans to Invest in the investments in solar power projects were much larger Investments Renewable Energy than those for wind power. By facility capacity, most Despite policy initiatives such as the Green New Deal, projects of 100MW or less in Korea accounted for the most public financial institutions were found to have no most, while large-scaled projects ranging from 100MW investment plans for renewable energy. Only 3 of the to 800MW overseas were the most. 72 responding institutions (Korea Development Bank, IBK Industrial Bank of Korea, and Korea Overseas Financial Institutions Preparing Roadmap for Infrastructure & Urban Development Corporation) were Renewable Energy Investments the only public financial institutions that devised a roadmap (number of institutions/total surveyed) for renewable energy investments. To expand renewable Public Private energy and achieve a low carbon economy in line with national goals, a systematic and long-term investment plan for renewable energy by Korean public financial institutions is urgently needed. Private financial institutions have claimed that 22 institutions, which account for 4/73 22/89 approximately a quarter of the respondent institutions, have developed a renewable energy roadmap.

Financial Institutions' Renewable Energy Investment Comparison of Renewable Energy Investment Targets, Targets Significantly Insufficient to Achieve National Goals Government vs. Public vs. Private (in KRW 100 millions) The total target investments by 2030 for the 25 financial institutions which have devised renewable energy Government Target 920,000 roadmap amounted to approximately \22 trillion. New Public Institutions investments in renewable energy of approximately \3 Private Insitutions trillion are likely to be made by 2021, \18 trillion by 2025, and \22 trillion by 2030 are planned. This is less than a quarter of \92 trillion, which is the size of renewable energy investments to be made until 2030 as announced by the government in the 2030 Renewable Energy Plan, and is approximately \70 trillion or more of difference from the target investments proposed by the government. 84,000 16,239 16,239 In particular, such differences were far more pronounced 51,000 202,515 in the public sector. According to the government's plan, 163,515 7,226 of the \92 trillion target, the public sector needs to 22,915 finance \51 trillion and the private sector, \41 trillion. 2021 2025 2030 KEPCO and power generation subsidiaries will likely take over a significant portion of the public sector’s Size of Renewable Energy Project Investments investments. However, in reality, these public enterprises Undergoing Review 1 (in KRW 100 millions) also need loans or bond issuances to raise the funds 3,430 Solar Wind Others required for making investments. Hence, it is impossible 15,205 1. As for others, hydropower, to raise large scaled funds without active efforts of the biomass, fuel cells, and solar financial institutions, including public financial institutions. heat, among others, were The target investments for renewable energy to be made reported. As for overseas 5,621 projects, hydroelectric power by 2030 by public financial institutions aggregated in this 18,415 generation for Nepal and 2,950 Pakistan, among others, by the study amounted to approximately \1.6 trillion, which 6,989 Korea Overseas Infrastructure & was less than 3% of the target investment for the public Urban Development Corporation oetic Project erea Project captured the most. sector suggested by the government.

48 Ⅲ. Local Governments' Anti-Coal Finance Policy In Custody Bank Selection Process Leverage on Banks Coal Exit Announcements

Coal phase-out criteria as a bank selection instrument will likely become an effective policy to facilitate the coal exit of Korean financial institutions. This is because, on September 8th, 56 local governments and municipal and provincial offices of education nationwide declared they would use “coal exit financial institutions,” thereby creating an objective environment for banks to declare coal exit.

Definition of Coal Phase-Out Criteria The coal exit criteria is also in line with safety (stability). Local governments and offices of education Computer system’s security capability is an issue of designate financial institutions in the contractual form safety, and the internal and external creditworthiness for the operation and management of their funds. The and financial structure are also directly related to the designated financial institutions are called “safe, or stability. custody banks.” “Coal exit custody banks” means a financial institution designated by reflecting coal exit In the era of climate crisis, coal-fired power generation indicators such as whether the financial institution presents such a high risk of stranded assets due to (bank) has made coal exit annoucement, size of conversion risks such as energy conversion and coal-fired power generation investments, ratio of coal various regulatory policies. Naturally, coal financing is financing to total assets under management, whether also financially risky. International organizations such a gradual withdrawal plan is devised for the existing as the FSB, IMF and BIS are warning that the climate coal financing, and extent of performance, among crisis might trigger a serious financial crisis. others, among the evaluative items for the designation of coal exit financial institution for local governments “Green Swan” published by the BIS at the start of the and offices of education. year: Green Swan is a term embodying it in “Climate Changes and Financial Stability.” The TCFD, Task Force In the strictest sense, a coal exit custody bank on Climate-related Financial Disclosures, announced excludes banks that benefit from “coal financing” via the FSB to ensure evaluation of the financial as of the present point in time from the nomination institutions’ exposure to financial risks caused by process. However, if this criteria is applied, it is climate crisis at the meetings of financial ministers and practically unfeasible since there is no bank that meets presidents of central banks, and the NGFS, created this criteria, and it might trigger a rapid shock to the to build a system to achieve green finance, such financial institutions. Hence, coal exit criteria in bank as reflecting climate change related risks when the nomination process should be applied on preferential financial supervisory agency evaluates the soundness basis, and not on exclusive terms. of financial institutions, show that climate crisis is deeply related to the financial institutions’ financial The legitimacy of the Coal Exit Criteria in Bank Selection stability. This is synonymous with coal financing Process threatening the external and internal creditworthiness Banks of local governments and offices of education and financial stability of the financial institutions. are selected based on the three principles of safety (stability), profitability, and public interest. Major Log of Coal Exit Financial Institution Reflecting coal exit criteria in the bank nomination 2019.5 Korea Sustainability Investing Forum raises process is in line with the public interest. Coal-fired coal exit financial institution for the first time power generation has been responsible for an era as Greenpeace Secretary General Jennifer a source of energy for industrialization. Now, however, Morgan meets with Chungnam-do Governor Yang Seung-jo it is noted as the primary cause of the climate crisis and the fine dust which causes premature death. 2019.6 Chungcheongnam-do reflects coal exit criteria in bank selectin process for the first time in For this reason, the action of providing financing for Korea the coal-fired power plants is also under criticism 2020.1 Government announces social value for being an anti-environmental investment and considerations when selecting banks for local immoral investment. That is, the perception of it as an governments and the offices of education investment harming public interest has rooted. This 2020.3 Seoul Office of Education adopts coal exit is where the coal exit criteria gains its justification. In criteria in its bank selection process particular, because the coal exit financial institution is 2020.9 56 local governments and offices of education the institution that operates and manages the funds nationwide declares support for coal exit formed by the taxes of the people and local residents, criteria in bank selection process ("The 2020 International Conference on Coal this legitimacy may be said to be further strengthened. Exit" in Chungnam)

49 Adoption of Coal Exit Criteria as a Means to Realizing Table. Number and Size of Institutions Scheduled to be The proportion of Coal Social Value of Finance Designated as Coal Exit Financial Institutions by Year Exit Financial Institution The central government has also announced a policy Year 2020 2021 2022 to Local Governments’ to consider social values when nominating banks and Offices of for the local governments and offices of education. Number of Institutions 10 16 19 Education’s Coal Exist According to the “Public Sector's Implementation Size \ 25.9295 \ 71.493 \ 21.2979 Financial Institution trillion trillion trillion Nationwide Strategy for the Social Value Realization” announced (based on the amount) at the Innovative Growth Strategy Meeting on January 15th this year, the government is presenting a strategy announcement of the banks, which are key interested to strengthen the “Public Sector’s Social Value parties. Here, the “objective condition” is the change 33% Realization System” across the areas of organization, of the “market.” personnel, evaluation, and finance. As a plan for realizing social values of finance, the government The criteria sets the scene to coal financing market The proportion of Coal is presenting social values when selecting banks. vs. the annual budget bank nomination market, and Exit Financial Institution Responding to climate change and fine dust via coal serves as a strategy for creating market rules to to Local Governments’, exit belongs to social values in the “environmental” ensure that the profits gained from coal financing are Offices of Education’s, aspect. disadvantageous in the coal exit financial institutions Public Enterprises’, market. and Industrial The Inception of Coal Exit as a Bank Nomination Criteria Complexes’ & Investing and its Achievements The size of the annual budgets of local governments and Contributing The idea of integrating coal exit criteria in the bank nationwide (general accounting + public enterprises’ Institutions’ Coal Exist nomination process was first proposed by the KOSIF special accounting + other special accounting + Financial Institution in early May 2019 as a plan to induce the coal exit funds) exceeds \380 trillion in 2020. The size of the Nationwide announcements of financial institutions. Thereafter, at annual budget for municipal and provincial offices of (based on the amount) a meeting of Greenpeace Secretary General Jennifer education nationwide is over \75 trillion. However, if Morgan and Chungnam Governor Yang Seung- not only local governments and offices of education, jo, Chungcheongnam-do promised the “Coal Exit but also public enterprises, industrial complexes, and 30% Financial Institution Declaration” and began to speed investing and contributing institutions are included, up this process. As the Korea Sustainability Investing the size of the annual budget entrusted to banks will Forum, Korea Office of Greenpeace, Environmental be close to \500 trillion in 2020. Movement Alliance, and Climate Solutions jointly held a “Press Conference Urging Coal Exit Financial Currently (September 8, 2020), the size of annual Institution of Local Governments Nationwide” in June budget of the local governments and offices of 2019, this became more widely known. Consequently, education adopting coal exit criteria is close to in March 2020, 9 institutions formed an alliance and \148.8739 trillion. Metropolitan governments account demanded the Seoul Office of Education’s designation for \69.128 trillion, offices of education account of a coal exit financial institution, which the Seoul for \41.5924 trillion, and smaller unit governments Office of Education accepted thereby providing an account for \38.1535 trillion. Among these, 10 opportunity to expand it to the offices of education institutions, including the Seoul Metropolitan Office of nationwide. Environmental movement groups of Education and the Busan City Office of Education, are each region have engaged in activities with local planning to adopt the criteria this year, and the size of governments and offices of education to adopt the the annual budget is \25.9225 trillion. coal-related criteria. Chungcheongnam-do exercised leadership in inducing the declaration of coal exit In 2021, there are 16 institutions, accounting for financial institutions by 56 local governments and \71.493 trillion. Gyeonggi-do, Metropolitan offices of education at the “International Conference City, Chungcheongbuk-do, Gyeongnam Office on Coal Exit” held on September 8th in response of Education, City Office of Education, to a nationwide demand for coal exit financial Chungnam-do Office of Education, Chungbuk-do institutions. Coal exit financial institution has become Office of Education, Daejeon City Office of Education, an irreversible trend. City Office of Education, and other large scaled local governments and offices of education Purpose and Strategy of the Coal Exit Criteria whose size of coal exit financial institution is large are The criteria aims to end coal financing and respond included. to climate crisis by inducing coal exit announcements financial institutions. The fact that the number of local Such changes in the objective conditions are governments and offices of education which declared deepening the banks' concerns over the coal exit.

1. Refer to Annex IV for the detailed adoption of the criteria steeply rose to 56 means that Although they were not able to participate in the status of local governments’ and it is highly likely to operate as an objective condition declaration of coal exit financial institution this year, offices of education’s coal exit financial institution. for accelerating the decision making of the coal exit the local governments and offices of education

50 making their declaration next year are very likely to and funds). NH Nonghyup Bank is in charge of 560 do so, causing the banks’ coal exit to speed up. The of them. This is equivalent to a market share of impact of the coal exit financial institution is very real. 59.4%. Nonghyup runs 165 1-tier banks by general On September 25th, KB Financial Group declared accounting and 395 2-tier banks by by special coal exit for all subsidiaries, led by KB Kookmin Bank. accounts and funds. NH NongHyup Bank holds 1-tier banks for 10 metropolitan areas including Gyeonggi- Current Status of Local Governments’ and Offices do. Among commercial banks, Shinhan Bank is of Education’s Adoption of Coal Exit Criteria in Bank nominated for 62 banks (6.6%), Woori Bank for 58 Selection Process banks (6.2%), Hana Bank for 32 banks (3.4%), KB As the local governments’ and office of education's Kookmin Bank for 28 banks (3%), and the Industrial coal exit financial institutions, 12 banks are currently Bank of Korea for 4 banks (0.4%). designated. Included are 6 largest commercial banks (NH NongHyup Bank, Shinhan Bank, KB Kookmin Among regional banks, Daegu Bank is nominated Bank, Woori Bank, Hana Bank, and the IBK Industrial for 56 banks (5.9%), followed by Kwangju Bank, Bank of Korea) and 6 regional banks (Daegu Bank, Kyeongnam Bank, Busan Bank, Jeonbuk Bank, and Busan Bank, Gyeongnam Bank, Kwangju Bank, Jeju Bank. For local governments with local banks, Jeonbuk Bank, and Jeju Bank). most of them have local banks competing against NH NongHyup Bank. Among these, NH NongHyup Bank is the absolute powerhouse in the market. There are a total of 942 banks for local governments nationwide (general accounting, special accounting for public enterprises and special accounting with other special accounts,

Domestic Banks’ Nomination Status for Local Governments Annual Budget 1 (as of January 2020) Total Number of Custody Bank Total Market Market Share by Bank Coal Finance Size4 Name of Bank Nominations2 Share (in %) Nominations3 (count / %) (in KRW 100 millions) 1-Tier Bank 165 67.9 Nonhyup Bank 560 59.4 676.9 2-Tier Bank 395 56.5 1-Tier Bank 14 5.8 Shinhan Bank 62 6.6 366.7 2-Tier Bank 48 6.9 1-Tier Bank 18 7.4 Woori Bank 58 6.2 224.1 2-Tier Bank 40 5.7 1-Tier Bank 7 2.9 Hana Bank 32 3.4 246.5 2-Tier Bank 25 3.6 1-Tier Bank 3 1.2 Kookmin Bank 28 3 333.3 2-Tier Bank 25 3.6 Industrial Bank 1-Tier Bank 1 0.4 4 0.4 120.8 of Korea 2-Tier Bank 3 0.4 1-Tier Bank 11 4.5 Daegu Bank 56 5.9 Did not respond to the survey 2-Tier Bank 45 6.4 1-Tier Bank 6 2.5 Kwangju Bank 40 4.2 17.9 2-Tier Bank 34 4.9 1-Tier Bank 2 0.8 Kyongnam Bank 38 4 0 2-Tier Bank 36 5.2 1-Tier Bank 15 6.2 Busan Bank 36 3.8 78.6 1. Refer to Annex V for details 2-Tier Bank 21 3 such as the current status of local governments' nomination 1-Tier Bank 1 0.4 of banks Jeonbuk Bank 26 2.8 Did not respond to the survey 2. Criteria for each accounting 2-Tier Bank 25 3.6 classification 1-Tier Bank 0 0 3. Based on general accounting for Jeju Bank 2 0.2 Did not respond to the survey the 1-Tier Banks 2-Tier Bank 2 0.3 4. Accumulated figure from 2009 until the end of June 2020. * Based on KOSIF’s analysis based on the data provided by the Office of National Assemblyman Oh, Young-hwan

51 Methods to Reflect Coal-related Criteria in Bank voluntary items. Selection Process The indicators for the evaluation of coal exit banks may Evaluative Indicators and Scoring for the Criteria be newly installed as sub indicators for the detailed As for the evaluative indicators, it is possible to consider items equivalent to the following three items: △External whether coal exit has been made, year of declaration, and internal creditworthiness of financial institutions scale of investment in the coal fired power generation, and the stability of financial structure,△ contribution to proportion of investment in the coal fired power local community and the cooperative projects with local generation to the total assets under management, governments, and △other matters. whether a plan to withdraw the existing coal fired power investments on a phased in basis has been devised, First, from the perspective that coal financing is a risky timing of withdrawal, and the extent of performance, asset that is likely to become a stranded asset, it may be among others. As for scoring, allocating at least 3 approached from a risk perspective and newly installed points, and in particular, setting weights for the year of for the items of external and internal creditworthiness declaration may enable inducing the banks’ early coal of financial institutions and the stability of the financial exit. structure. This is because coal financing may affect asset quality. This plan reflects the global trend of the Scalability of the Coal Exit Criteria TCFD and NGFS, among others. However, this is a mid Reflecting the criteria in bank selection process is not to long-term task. This is because risk assessments limited to local governments and offices of education such as climate risks and coal risks must be predicated. only. It may also be used for the selection of coal exit financial institution (primary bank) for local public The second plan is one to reflect it in the “community institutions and investing and contributing institutions. contribution performance” among the items of Furthermore, it may be applied not only to the deposits “contribution to the local community and cooperative and insurance assets among the 68 funds of the central projects with local governments.” Chungcheongnam- government but also to the public institutions under do and Dangjin-shi newly installed “whether coal exit the central government agencies, as well as investing is made and coal financing investments are made” and contributing institutions. Moreover, colleges and “implementation performance result of eco-friendly and universities (particularly, national, provincial, and energy (renewable energy) conversion policy” under this municipal colleges and universities, among others), subitem, reflecting a total of 2 points with 1 point allotted religious institutions, various foundations, and for-profit for each. enterprises pursuing social values may also utilize it in response to the climate crisis. Last is the plan for the local governments and offices of education to newly install and score the “detailed Integrating coal exit criteria in the bank selection item for coal exit” on a separate basis for the item of process may induce investments in green industries “other matters.” Conventionally, local governments and and green companies by preventing private sector offices of education allocate 11 points allocated to these funds from flowing into coal-fired power generation voluntary items for the previously set detailed items, in a market-friendly manner and also devising an exit thereby increasing profits through the bank nomination strategy to which they belong for private-sector funds process or achieve the desired policy goals. However, that were already inflowed. This may be said to be a way to actively respond to the climate crisis, an even more of contributing to the implementation and facilitation of aggressive coal exit policy may be implemented by the Green New Deal, which is a key policy of the current establishing separate coal exit indicators for these administration.

Example of the New Installation of Coal Exit Indicators and Indicators for Local Governments and Municipal and Evaluative Items of Coal Exit Criteria for Chungcheongnam-do and Dangjin-shi Provincial Offices of Education Item Detailed Item Coal Exit Indicators Score

Contribution to local a. Contribution to local community (5 points) Whether coal exit announcement has been made 2 points community and • After comparing and evaluating the performance results of the financial Whether a plan to withdraw existing coal investments 1 points cooperation with institutions' independent activities for facilitating local economy, disaster relief, has been established local governments and social welfare of local community, assign points according to the ranking of Total points 3 points each financial institution (3 points) • After comparing and evaluating whether coal exit has been made and coal • Year of coal exit announcement financing investments were made by financial institution, assign points • Size of coal-fired power plant investments & proportion of coal- according to the ranking by financial institution (1 point). fired power generation investments to the total assets under • After comparing and evaluating the performance results of the eco-friendly management energy conversion policy by financial institution, assign points according to the • Timing of divestment of existing coal fired power generation ranking by financial institution (1 point). investments and extent of performance.

52 Appendix

I. Survey and Analytical Methodology 54

II. Coal Finance Status by Financial Institution 55

III. Project Details of Public Financial Institutions 60

IV. Status of Local Governments and Offices of Education Using Coal Phase-out 62 Criteria for Bank Selection Process

V. Status of Banks Selected by Local Governments 64 AppendixⅠ. Survey and Analytical Methodology

[ Overview of Survey ] [ Analysis and Ranking Method ]

▶ Surveying target: Conduct survey targeting all ▶ Data using comprehensive analysis and public and private financial institutions in Korea method - For the analysis of this report, among the ▶ Surveying method aggregated data, the amounts of the PF - Public financial institution: Send out a loans related to coal-fired power generation, questionnaire to the agency in charge of the corporate bonds, insurance underwriting public financial institutions through Wonyoung (coverage) and their sum provided from YangYi, Member of the National Assembly. 2009 until June 2020 are used as the basic - Private financial institutions: Office of National indicators. The office of Wonyoung YangYi requested the - As for corporate bonds, data were collected by Financial Services Commission to provide data. classifying them according to whether they can Then, the Financial Services Commission went be specified for use, yet due to the reliability of through the associations of private financial the reply data, the two amounts were combined institutions (Korea Federation of Banks, Korea and used for the analysis. Life Insurance Association, General Insurance - As for PF, the actually withdrawn amounts were Association of Korea, and the Financial used as the basic data, and the contract values Investment Association) and sent out the were used as needed. questionnaire to individual financial companies. - Time series analysis: Only the amounts which may specify the point of time were used for ▶ Survey details the analysis (except for some corporate bonds - Asset classes: Coal-fired power generation (general bonds for which purpose of use cannot related project financing (PF), general loans, be specified) and where the point of time is not corporate bonds (including general corporate disclosed). bonds)1, insurance, equities, coal exit plan, - Analysis by region: Only the amounts which and current status of investments in renewable may specify region are used for the analysis energy (except where the region is not disclosed). - Geographic destination: domestic and overseas

1. Corporate bonds are classified - Period: From 2009 until the end of June 2020 ▶ Data used and methods for ranking into the “corporate bonds whose - PF loans, corporate bonds, and insurance purpose of use may be verified (for example, general corporate ▶ Institutions responding to survey: a total of underwriting data were used for ranking in bonds issued by special purpose 162 financial institutions have responded the same manner as for the comprehensive companies founded for the 2, 3 construction and operation of - Public financial institutions : 73 analysis, whose sum was used for ranking. coal-fired power plants)” and - Private financial institutions: 89 - The above values less some corporate bonds the “corporate bonds whose purpose of use may not be • Banks: 8 (general corporate bonds for which purpose of specified.” For the former, the • Life insurance companies: 15 use cannot be specified) were used as auxiliary data by each year of acquisition were requested, and for the • Non-life insurance companies: 10 indicators as needed. In this case, rankings latter, those that were part of the • Securities companies: 33 and amounts were separately marked using balance as of end June of 2020 were requested. • Asset management companies: 22 parentheses. • Others: 1 (National Agricultural Cooperative - As for ranking by region, ranking is calculated 2. The financial institutions supervised by government Federation) based on the amounts which may specify ministries by law are all classified the region (except where the region is not as public financial institutions. However, NH NongHyup Bank Survey of data related to coal exit criteria in disclosed). (National Agricultural Cooperative ▶ Federation and affiliates under bank nomination process NongHyup Financial Group) are ▶ Data and method for the analysis of coal classified as a private financial - Data related to coal exit criteria in custody institution as an exception, bank nomination process featured in one of asset exposures because its area of business - The sum of domestic and overseas coal-fired is competitive against private the special chapters of this report is collected financial companies. independently from this survey. power generation projects, loans (PF and general corporate loans) for the companies 3. Only the cases in which the - Data is collected via the Ministry of the Interior relevant agencies have specified and Safety through the Office of National belonging to the mining and coal-fired power institutions of affiliation are generation industries, corporate bonds, and reflected in the calculation for Assemblyman Oh Young-Hwan. the number of responding insurance and equity assets based on the institutions. For example, all balance as of June 2020. mutual aid associations operating under the agency cannot specify the name of the institution, so it is excluded from the calculation of the number of responding institutions in cases where a reply has been made in the form of “Not Applicable.”

54 AppendixⅡ. Coal Finance Status by Financial Institution Public Financial Institutions1

1. Where a reply is made with omission of some data, only the missing items have been marked as “Declined to respond.” Listed in Korean alphabetical order. If institutions responded with a single “Not Applicable” to the entire questionnaire, past investment details are marked as “-,” and future plans have been marked as “Declined to respond.” Public financial institutions(funds) are displayed only if specified by each governmental ministries. (For instance, if a governmental ministry replied with a unilateral “Not Applicable” to all institutions(funds) under supervision, only those whose name is disclosed in the response have been included on this page) If a surveyee responded that it has plan to provide coal finance in the future, "X" is displayed automatically on its divestment plans. 2. Declaration of coal exit has been made. Institutions / Funds Supervising Ministry AUM 12 years Cumulative Remaining Balance Future Plans (in KRW (in KRW millions) (in KRW millions) millions) Project Corporate Under- PF Project Corporate Under- General Project Corporate Bonds Underwriting Finance Bonds writing Finance Bonds writing Corporate Finance Bonds Employment Insurance Fund Ministry of Employment and Labour ------Declined to respond Declined to respond

Public Fund Management Fund Ministry of Economy and Finance ------Declined to respond Declined to respond Employees Pension Service Fund Ministry of Personnel Management 8,747.3 0 0 0 0 0 0 0 50 8.2 ◯2 Declined to respond Korea Scientists and Engineers Ministry of Science and ICT 7,152.6 0 0 0 0 0 0 0 0 0 X Not applicable Mutual-Aid Association Science and Technology Promotion Fund Ministry of Science and ICT ------Declined to respond Declined to respond Korea National Maritime Museum Ministry of Oceans and Fisheries ------Declined to respond Declined to respond National Marine Biodiversity Institute Ministry of Oceans and Fisheries ------Declined to respond Declined to respond of Korea National Health Promotion Fund Ministry of Health and Welfare 183.1 0 0 0 0 0 0 0 0 0 Declined to respond Not applicable National Pension Fund Ministry of Health and Welfare 752,768.3 171.6 0 0 0 0 0 0 9,823.9 1,070.2 Declined to respond Declined to respond National Property Management Fund Ministry of Economy and Finance ------Declined to respond Declined to respond Military Welfare Fund Ministry of National Defence ------Declined to respond Declined to respond Military Pension Fund Ministry of National Defence ------Declined to respond Declined to respond Labor Welfare Promotion Fund Ministry of Employment and Labor ------Declined to respond Declined to respond Geum River Management Fund Ministry of Environment ------Declined to respond Declined to respond Nakdong River Management Fund Ministry of Environment ------Declined to respond Declined to respond Inter-Korean Cooperation Fund Ministry of Unification ------Declined to respond Declined to respond Agricultural Marketing & Price Ministry of Agriculture, Food and ------Declined to respond Declined to respond Stabilization Fund Rural Affairs Economic Development Cooperation Ministry of Economy and ------Declined to respond Declined to respond Fund Finance Korea Trade Insurance Corporation Ministry of Trade, Industry and 4,141.7 0 0 4,668 0 0 4,668 0 0 0 Declined to respond Declined to respond Energy Heritage Protection Fund Cultural Heritage Administration ------Declined to respond Declined to respond Radioactive Waste Management Ministry of Trade, Industry and 2,979.5 0 0 0 0 0 0 0 0 0 Declined to respond Not applicable Fund Energy Broadcasting & Communications Korea Communications ------Declined to respond Declined to respond Development Fund Commission Merit Reward Fund Ministry of Patriots and Veterans ------Declined to respond Declined to respond Affairs Busan Port Authority Ministry of Oceans and Fisheries ------Declined to respond Declined to respond Teachers Pension Ministry of Education 21,921.4 0 0 0 0 0 0 0 100 23.1 ◯2 X Judicial Service Promotion Fund Supreme Court of Korea ------Declined to respond Declined to respond Fund for advancement and Ministry of Trade, Industry and 73 0 0 0 0 0 0 0 0 0 Declined to respond Not applicable commercialization of technology Energy Industrial Worker's Accident Ministry of Employment and ------Declined to respond Declined to respond Compensation Insurance and Labor Prevention Fund Sub-Associations Supreme Court of Korea ------Declined to respond Declined to respond Sub-Associations Cultural Heritage Administration ------Declined to respond Declined to respond Korean Federation of Community Ministry of the Interior and 65,974.8 535.6 0 0 525.5 0 0 0 0 0 X X Credit Cooperatives (KFCC) Safety Asbestos Damage Relief Fund Ministry of Environment 39.1 0 0 0 0 0 0 0 0 0 Declined to respond Not applicable Fisheries Development Fund Ministry of Oceans and Fisheries 167.5 0 0 0 0 0 0 0 0 0 Declined to respond Not applicable Governmental Fund for Patriotic Ministry of Patriots and Veterans ------Declined to respond Declined to respond Martyrs & Independence Fighters Affairs Community Media Foundation Korea Communications Commission ------Declined to respond Declined to respond Gender Equality Fund Ministry of Gender Equality and Family ------Declined to respond Declined to respond Yeosu Port Authority Ministry of Oceans and Fisheries ------Declined to respond Declined to respond

55 Institutions / Funds Supervising Ministry AUM 12 years Cumulative Remaining Balance Future Plans (in KRW (in KRW millions) (in KRW millions) millions) Project Corporate Under- PF Project Corporate Under- General Project Corporate Bonds Underwriting Finance Bonds writing Finance Bonds writing Corporate Finance Bonds Yeongsan and Sumjin River Ministry of Environment ------Declined to respond Declined to respond Management Fund Korea Post Ministry of Science and ICT 138,055.5 47.8 0 0 28.6 0 0 28.6 1,110 80.7 X X Ulsan Port Authority Ministry of Oceans and Fisheries ------Declined to respond Declined to respond Atomic Energy Fund Ministry of Science and ICT ------Declined to respond Declined to respond Incheon Port Authority Ministry of Oceans and Fisheries ------Declined to respond Declined to respond Wage Claim Guarantee Fund Ministry of Employment and ------Declined to respond Declined to respond Labor The Fund of Employment Promotion and Ministry of Employment and ------Declined to respond Declined to respond Vocational Rehabilitation for the Disabled Labor Electric power industry basis fund Ministry of Trade, Industry and Energy 1,495.3 0 0 0 0 0 0 0 0 0 Declined to respond Not applicable IT Promotion Fund Ministry of Science and ICT ------Declined to respond Declined to respond Jeju Free International City Ministry of Land, Infrastructure ------Declined to respond Declined to respond Development Center and Transport National Housing & Urban Fund Ministry of Land, Infrastructure ------Declined to respond Declined to respond and Transport Korea Housing & Urban Guarantee Ministry of Land, Infrastructure ------Declined to respond Declined to respond Corporation and Transport Industrial Bank of Korea Financial Services Commission 318,377 120.8 0 0 23.6 0 0 139.2 0 0 Declined to respond Declined to respond Youth Fostering fund Ministry of Gender Equality ------Declined to respond Declined to respond and Family Livestock Development Fund Ministry of Agriculture, Food and ------Declined to respond Declined to respond Rural Affairs KORAIL Tourism Development Ministry of Land, Infrastructure ------Declined to respond Declined to respond and Transport KORAIL Tech Ministry of Land, Infrastructure ------Declined to respond Declined to respond and Transport Fund for management of Han River Ministry of Environment ------Declined to respond Declined to respond Korea Foundation for the Advance- Ministry of Education ------Declined to respond Declined to respond ment of Science and Creativity Korea Resources Corporation Ministry of Trade, Industry and Energy 8.1 0 0 0 0 0 0 8.1 0 0 Declined to respond Not applicable Korea Teachers' Credit Union (KTCU) Ministry of Education 41,354.9 0 0 0 0 0 0 0 70 0 ◯2 Declined to respond Korea Broadcast Advertising Corporation Korea Communications Commission ------Declined to respond Declined to respond KDB Financial Services Commission 257,373.7 496.7 0 0 381.9 0 0 931.9 77.3 16,921.1 Declined to respond Declined to respond Korea Fisheries Resources Agency Ministry of Oceans and Fisheries ------Declined to respond Declined to respond The Export-Import Bank of Korea Ministry of Economy and 104,926.1 4,858.5 0 0 2,417.9 0 0 2,610.2 0 0 X Declined to respond (KEXIM) Finance Korea Fisheries Infrastructure Public Agency Ministry of Oceans and Fisheries ------Declined to respond Declined to respond Korea Institute of Aids to Navigation Ministry of Oceans and Fisheries ------Declined to respond Declined to respond Korea Institute of Ocean Science & Technology Ministry of Oceans and Fisheries ------Declined to respond Declined to respond Korea Maritime Transportation Ministry of Oceans and Fisheries ------Declined to respond Declined to respond Safety Authority Korean Institute of Maritime and Ministry of Oceans and Fisheries ------Declined to respond Declined to respond Fisheries Technology Korea Hydrography and Research Association Ministry of Oceans and Fisheries ------Declined to respond Declined to respond Korea Ocean Business Corporation Ministry of Oceans and Fisheries ------Declined to respond Declined to respond Korea Overseas Infrastructure & Ministry of Land, Infrastructure 307.6 0 0 0 0 0 0 0 0 0 X Not applicable Urban Development Corporation and Transport Korea Institute of Marine Science & Ministry of Oceans and Fisheries ------Declined to respond Declined to respond Technology Promotion Korea Marine Environment Ministry of Oceans and Fisheries ------Declined to respond Declined to respond Management Corporation

56 AppendixⅡ. Coal Finance Status by Financial Institution Private Financial Institutions1

1. Where a reply is made with omission of some data, only the missing items hhavebeen marked as “Declined to respond.” Listed in Korean aalphabetical order. If institutions responded with a single “Not Applicable” to the entire questionnaire, past investment details are marked as “-,” and future plans have been marked as “Declined to respond.” 2. NAFC does not belong to Nonhyup Financial Group, yet for the sake of the report, it is regarded as the same group. 3. The companies marked the same figure for both project finance and general loans, although they constitute a distinct category. To prevent double count, figures provided in general loan have beenn eliminated. 4. The companies market the same figures for both project finance & general loans, corporate bonds (issued exclusively for construction of coal power plants) & general corporate bonds. To prevent double count, figures provided in general loans and general corporate bonds have been eliminated. 5. Declaration of coal exit has been made. Institutions / Funds Supervising Ministry AUM 12 years Cumulative Remaining Balance Future Plans (in KRW (in KRW millions) (in KRW millions) millions) Project Corporate Under- PF Project Corporate Under- General Project Corporate Bonds Underwriting Finance Bonds writing Finance Bonds writing Corporate Finance Bonds Supervising Kyongnam Bank BNK Financial Group 41,057.9 0 0 0 0 0 0 0 0 0 ◯ X Kwangju Bank JB Financial Group 26,109.7 17.9 0 0 0 0 0 0 0 0 Declined to respond Declined to respond KB Kookmin Bank KB Financial Group 413,929.6 333.3 0 0 333.3 0 0 0 0 0 (X) In consideration Declined to respond Nonghyup Bank Nonghyup Financial Group 326,105.4 136.1 0 0 125.5 0 0 0 540.8 0 ◯ X Nonghyup Agricultural Cooperative Nonghyup Financial Group 115,237 103.6 0 0 103.6 0 0 0 0 193.7 X X Federation2 Busan Bank BNK Financial Group 59,469.8 78.6 0 0 57.2 0 0 57.1 0 0 X X Shinhan Bank Shinhan Financial Group 378,463.1 366.7 0 0 278.5 0 0 0 0 0 (X) In consideration Declined to respond Woori Bank 349,498.9 224.1 0 0 198.5 0 0 94.6 0 0 X X Hana Bank 361,670 246.5 0 0 163.5 0 0 615.3 0 0 (X) In consideration Declined to respond

Life Insurers Kyobo Life Insurance Kyobo Group 112,039.5 541.9 0 0 496.5 0 0 456 1,001.6 10.2 X X Ninghyup Life Insurance Nonghyup Financial Group Declined to 1,405.2 0 0 389.6 0 0 0 1,285.8 20.7 X X respond Tong Yang Life Insurance Dajia Insurance Group 34,673.1 107.2 0 0 107.2 0 0 107.2 0 0 X X MetLife Insurance MetLife International 21,938 20 0 0 5.1 0 0 0 0 5.1 X X Holdings Mirae Asset Life Insurance Mirae Asset Group 37,983.8 323.8 0 0 155.6 0 0 0 114.6 0 X X Samsung Life Insurance Samsung Group 291,330.9 931.9 1,547.2 0 875.2 1,173.1 0 30 4,932.4 0 ◯ X Shinhan Life Insurance3 Shinhan Financial Group 34,947 188.6 0 0 172 0 0 - 625.4 40.4 ◯ ◯ ABL Life Insurance3 Dajia Insurance Group 20,352.7 22 0 0 11.1 0 0 11.1 0 0 ◯ Declined to respond Hanwha Life Insurance Hanwha Group 125,779.8 1168.3 0 0 477.1 0 0 477.1 0 0 ◯ X Hungkuk Life Insurance Taekwang Group 30,037.9 456.7 0 0 323.5 0 0 283.1 0 40.4 X X DB Life Insurance DB Group 11,686.1 0 10 0 0 10 0 0 10 0 X X DGB Life Insurance DGB Financial Group Declined to 1.8 0 0 1.8 0 0 8 0 0 X X respond IBK Insurance IBK Industrial Bank 8,893.9 17 12 0 17 11 0 0 0 0 Declined to respond Declined to respond KB Life Insurance KB Financial Group 10,033.4 112.8 0 0 47.3 0 0 43 0 0 ◯5 Declined to respond KDB Life Insurance The Korea Development 19,749.9 312.1 0 0 171.2 0 0 171.2 0 0 X X Bank

Non-life Insurers Lotte Insurance Lotte Group 14,596.2 215.6 0 0 150.5 0 0 165.8 0 0 X X Samsung Fire & Marine Insurance Samsung Group 86,159.9 532.1 0 5,990.8 524.8 0 0 0 1,184.4 0 X X Seoul Guarantee Insurance Seoul Guarantee Insurance 8,457.6 0 20 192 0 0 191.9 0 200 0 Declined to respond Declined to respond Korean Reinsurance Korean Reinsurance 12,429.8 0 0 0 0 0 0 0 0 0 X X Hanwha General Insurance4 Hanwha Group 19,346.5 20.6 431 214 2.7 371 0 2.7 371 0 X X Hyundai Marine & Fire Insurance Hyundai Marine & Fire 47,485.7 321.7 0 2,715.4 249.1 0 1,168.5 218.6 663.5 0 Declined to respond Declined to respond Insurance Heungkuk Fire & Marine Taekwang Group Declined to 192.9 0 0 164 0 0 164 0 0 ◯ X Insurance3 respond DB Insurance DB Group 38,406.6 276.5 0 0 144.7 0 0 0 0 0 ◯5 Declined to respond KB Insurance KB Financial Group 36,407.2 539.2 50 4,413.6 330.8 20.1 2,276.7 0 469.4 0 ◯5 X NH Nonghyup Property & Nonghyup Financial Group 9,535 3.6 0 0 3.6 0 0 0 74.7 0 ◯ X Casualty Insurance

57 Institutions / Funds Supervising Ministry AUM 12 years Cumulative Remaining Balance Future Plans (in KRW (in KRW millions) (in KRW millions) millions) Project Corporate Under- PF Project Corporate Under- General Project Corporate Bonds Underwriting Finance Bonds writing Finance Bonds writing Corporate Finance Bonds Securities Companies Kyobo Securities Kyobo Group ------Declined to respond Declined to respond Daishin Securities Daishin Financial Group ------Declined to respond Declined to respond Leading Investment & Securities ------Declined to respond Declined to respond MERITZ Securities Meritz Financial Group 265 0 0 0 0 0 0 265 0 0 X X Mirae Asset Daewoo Mirae Asset Group Declined to 0 0 0 0 0 0 0 0 0 X X respond Bookook Securities Hanil ------Declined to respond Declined to respond Samsung Securities Samsung Group ------Declined to respond Declined to respond SangSangIn Investment & SangSangIn Financial ------Declined to respond Declined to respond Securities Group Shinyoung Securities ------Declined to respond Declined to respond Shinhan Investment Shinhan Financial Group ------Declined to respond Declined to respond Yuanta Securities Korea Yuanta Financial Group ------Declined to respond Declined to respond Eugene Investment&Securities Eugene Group ------Declined to respond Declined to respond Yuhwa Securities ------Declined to respond Declined to respond eBEST Investment & Securities ------Declined to respond Declined to respond Kakaopay Securities ------Declined to respond Declined to respond CAPE Investment & Securities Cape ------Declined to respond Declined to respond KOREA Asset Investment Securities ------Declined to respond Declined to respond KIWOOM Securities Daou Technology ------Declined to respond Declined to respond Hana Financial Investment Hana Financial Group Declined to 0 0 0 0 0 0 0 0 101 Declined to respond Declined to respond respond Hi Investment & Securities DGB Financial Group 240 0 850 0 0 0 0 0 0 0 X X Korea Investment & Securities Korea Investment Holdings 147 0 0 0 0 0 0 147 0 0 ◯2 Declined to respond Hanyang Securities ------Declined to respond Declined to respond Hanwha Investment & Securities Hanwha Group ------Declined to respond Declined to respond Hyundai Motor Securities Hyundai MotorGroup Declined to 0 0 0 0 0 0 0 0 0 X X respond Heungkuk Securities Taekwang Group ------Declined to respond Declined to respond BNK Securities BNK Financial Group ------Declined to respond Declined to respond DB Financial Investment DB Group ------Declined to respond Declined to respond DS Investment&Securities ------Declined to respond Declined to respond IBK Securities IBK 5,508 0 40 0 0 0 0 0 0 0 Declined to respond Declined to respond KB Securities KB Financial Group 56,537 356 0 0 8 0 0 37 28 0 ◯2 Declined to respond KTB Investment KTB Group ------Declined to respond Declined to respond NH Investment & Securities Nonghyup Financial Group Declined to 0 0 0 0 0 0 0 0 0 ◯ X respond SK Securities SK Group ------Declined to respond Declined to respond

Asset Management Companies KYOBO AXA Investment Managers Kyobo Group ------Declined to respond Declined to respond Daishin Asset Management Daishin Financial Group ------Declined to respond Declined to respond MIDAS Asset Management ------Declined to respond Declined to respond Multi Asset Global Investments Mirae Asset Group ------Declined to respond Declined to respond Mirae Asset Global Investments Mirae Asset Group ------Declined to respond Declined to respond Baring Asset Management Korea MassMutual ------Declined to respond Declined to respond

58 Institutions / Funds Supervising Ministry AUM 12 years Cumulative Remaining Balance Future Plans (in KRW (in KRW millions) (in KRW millions) millions) Project Corporate Under- PF Project Corporate Under- General Project Corporate Bonds Underwriting Finance Bonds writing Finance Bonds writing Corporate Finance Bonds Samsung Asset Management Samsung Group ------Declined to respond Declined to respond Shinyoung Asset Management ------Declined to respond Declined to respond Shinhan BNP Paribas Asset Shinhan Financial Group 9.6 24 0 0 0 0 0 0 0 9.6 X X Management Woori Global Asset Management Woori Financial Group ------Declined to respond Declined to respond Woori Asset Management Woori Financial Group ------Declined to respond Declined to respond Truston Asset Management ------Declined to respond Declined to respond Hanwha Asset Management Hanwha Group ------Declined to respond Declined to respond Hyundai Investment Asset Hyundai Marine & Fire ------Declined to respond Declined to respond Management Insurance Heungkuk Asset Management Taekwang Group 206.6 170 0 0 120.5 0 0 0 0 0 X X BNK Asset Management BNK Financial Group ------Declined to respond Declined to respond DGB Asset Management DGB Financial Group ------Declined to respond Declined to respond Deutsche Asset & Wealth Group ------Declined to respond Declined to respond Management IBK Asset Management IBK ------Declined to respond Declined to respond Korea Infrastructure Asset KDB ------Declined to respond Declined to respond Management KTB Asset Management KTB Group ------Declined to respond Declined to respond NH-Amundi Asset Management Nonghyup Financial Group ------Declined to respond Declined to respond

59 AppendixⅢ. Project Details of Public Financial Institutions1

1. Only displays projects that have disclosed details including geographic data, name, financial figure. Order and country name listed in Korean alphabetical order. 2. Corporate bond acquisition sum 3. Nonghyup is included in this page due to its public characteristic. This includes subsidiaries of Nonghyup financial group and NACF. Geographic First Year Project Name Financing Plant Committed Total Sum Institution Destination of Coal (Coal Power Plant) Method Capacity Sum Executed Finance (MW) (in KRW millions) (in KRW millions) Korean Federation of Community Credit Cooperatives (KFCC) 2018 Anin PF 2,080 320 245.3 2018 Goseong Green PF 2,080 120 114 2019 Bukpyung PF 1,190 150 150 2019 Samcheok PF 2,100 290 26.3 Industrial Bank of Korea (IBK) South Korea 2013 Saemangeum Cogeneration Project Finance 303 27.5 26 IBK 2014 Bukpyung Project Finance 1,190 82.1 82.1 IBK 2016 KOWEPO Corporate Bond 2,100 - 202 IBK Securities 2016 KOWEPO Corporate Bond 2,100 - 202 IBK Securities 2016 Gimcheon Cogeneration Project Finance 59 10 10 IBK 2018 Goseong Green Project Finance 2,080 20 15.2 IBK Insurance 2019 Samcheok Project Finance 2,100 50 4.5 IBK, IBK Insurance Korea Post South Korea 2011 Yeosu Cogeneration PF 48 21.5 19.2 2017 Goseong Green PF 2,080 28.6 28.6 Korea Development Bank (KDB) Indonesia 2017 Tabalong Power Station PF 200 273.5 258.6 KDB - Banten Suralaya Power Station (Jawa 9 & 10) PF 2,000 480 - KDB South Korea 2011 Yeosu Cogeneration PF 48 82 73.3 KDB, KDB Life Insurance 2012 Gimcheon Cogeneration PF 59 48.5 45.5 KDB 2013 Saemangeum Cogeneration PF 303 112.5 96.1 KDB, KDB Life Insurance 2014 Bukpyung PF 1,190 243 243 KDB, KDB Life Insurance 2015 GS Pocheon CHP PF 169 63.8 62.1 KDB, KDB Life Insurance 2017 Goseong Green PF 2,080 20 20 KDB Life Insurance 2019 Samcheok PF 2,100 173.2 10.2 KDB, KDB Life Insurance The Export-Import Bank of Korea (KEXIM) Morocco 2013 Jorf Lasfar Power Station PF 700 376.5 377.9 Vietnam 2011 Mong Duong Power Station PF 1,200 689.2 645.6 2014 Mong Duong Power Station PF 1,000 574.7 525.4 2014 Thai Binh Power Center PF 1,200 657 554.3 2015 Vinh Tan Power Station PF 1,200 526.6 468.3 2018 Song Hau Thermal Power Plant PF 1,200 555.6 332.6 2019 Nghi Son Power Station PF 1,200 1,028.6 274.5 India 2008 Mundra Ultra Mega Power Plant PF 4,000 772.8 638.7 Indonesia 2010 Cirebon Power Station PF 660 271.1 268.5 2017 Cirebon Power Station PF 1,000 590.3 377.5 Yet to be Banten Suralaya Power Station (Jawa 9 & 10) PF 2,000 816 0 executed Chile 2007 Ventanas Power Station PF 270 46.5 59.1 2014 Cochrane Power Station PF 532 105.3 56 Philippines 2010 Cebu Power Plant PF 200 291.4 280.1

60 Geographic First Year Project Name Financing Plant Total Sum Destination of Coal (Coal Power Plant) Method Capacity Underwritten Finance (MW) Korea Trade Insurance Corporation (K-Sure) Vietnam 2010 Mong Duong Power Station Underwriting 1,120 805.2 2013 Vinh Tan Power Station Underwriting 1,200 546 2015 Song Hau Thermal Power Plant Underwriting 1,200 621.6 2016 Vinh Tan Power Station Underwriting 600 396 Indonesia 2016 Tabalong Power Station Underwriting 200 466.8 2019 Banten Suralaya Power Station (Jawa 9 & 10) Underwriting 2,000 840 Chile 2012 Cochrane Power Station Underwriting 472 298.8 Turkey 2012 Tufanbeyli Power Station Underwriting 450 693.6

Geographic First Year Project Name Financing Plant Committed Sum Total Sum Institution Destination of Coal (Coal Power Plant) Method Capacity (in KRW millions) Executed Finance (MW) (in KRW millions) Nonghyup Financial Group3 South Korea 2018 Anin PF 2,080 600 100 Nonghyup Bank, NACF, Nonghyup Life, NongHyup Property & Casualty Insurance 2018 Goseong Green PF 2,080 350 266 Nonghyup Bank, Nonghyup Life 2020 Bukpyung PF 1,200 130 130 Nonghyup Life 2019 Samcheok PF 2,100 140 Nonghyup Bank, NongHyup Property & Casualty Insurance, NACF 2016 Saemangeum Cogeneration PF 10 9.5 Nonghyup Bank 2016 GS Pocheon CHP PF 64.5 62.5 Nonghyup Bank, Nonghyup Life

61 AppendixⅣ. Status of Local Governments and Offices of Education Using Coal Phase- out Criteria for Bank Selection Process1

1. Source : KOSIF, Chungcheongnam-do (as of 2020 Sept 8th) Category Name Annual Budget Size Bank Renomination (as of 2020) Year Regional Local Gyeonggi-do 31.7377 Trillion KRW 2021 Governments Daegu 10.9207 Trillion KRW 2023 (RLG) Chungcheongnam-do 7.7836 Trillion KRW 2023 Daejeon 6.7828 Trillion KRW 2021 Chungcheongbuk-do 5.7409 Trillion KRW 2021 Ulsan 4.4019 Trillion KRW 2022 Sejong 1.7604 Trillion KRW 2022 Sub Total 7 Regional Local Governments 69.1280 Trillion KRW Offices of Education Seoul 10.847 Trillion KRW 2020 Gyeongsangnam-do 5.4850 Trillion KRW 2021 Busan 4.6059 Trillion KRW 2020 Incheon 4.2022 Trillion KRW 2021 Jeollanam-do 3.8734 Trillion KRW 2023 Chungcheongnam-do 3.6143 Trillion KRW 2021 Chungcheongbuk-do 2.7242 Trillion KRW 2021 Daejeon 2.2397 Trillion KRW 2021 2.2373 Trillion KRW 2023 Ulsan 1.7646 Trillion KRW 2021 Sejong 761.1 Billion KRW 2022 Sub Total 11 Local Offices of Education 41.5924 Trillion KRW

Basic Local Seoul Gangdong-gu 847.8 Billion KRW 2022 Governments Dobong-gu 680.9 Billion KRW 2022 (BLG) Busan Dongnae-gu 447 Billion KRW 2023 Incheon Michuhol-gu 753.9 Billion KRW 2022 Yeonsu-gu 624.1 Billion KRW 2022 Dajeon Seo-gu 857 Billion KRW 2021 Daedeok-gu 457 Billion KRW 2021 Gyeonggi-do -si 2.9906 Trillion KRW 2022 -si 2.9712 Trillion KRW 2021 -si 2.6278 Trillion KRW 2020 Hwaseongsi 2.6091 Trillion KRW 2020 Gwangju-si 1.1260 Trillion KRW 2020 -si 1.3548 Trillion KRW 2022 Pocheon-si 1.951 Trillion KRW 2023 -si 973.9 Billion KRW 2022 -si 944.7 Billion KRW 2020 -si 783.9 Billion KRW 2022 -si 680.7 Billion KRW 2022 -si 667.9 Billion KRW 2021 -si 497.8 Billion KRW 2022

62 Category Name Annual Budget Size Bank Renomination (as of 2020) Year Basic Local Governments Chungcheongbuk-do Boeun-gun 421.9 Billion KRW 2021 (BLG) Chungcheongnam-do -si 1.9827 Trillion KRW 2020 -si 1.1400 Trillion KRW 2023 -si 1.398 Trillion KRW 2020 Dangjin-si 1.350 Trillion KRW 2023 -si 890.5 Billion KRW 2023 -si 865.8 Billion KRW 2021 Buyeo-gun 791 Billion KRW 2022 -si 787.2 Billion KRW 2022 Hongseong-gun 715.3 Billion KRW 2022 Yesan-gun 649.9 Billion KRW 2020 Taean-gun 609.1 Billion KRW 2023 Seocheon-gun 538.3 Billion KRW 2022 Geumsan-gun 517.1 Billion KRW 2021 Cheongyang-gun 475.8 Billion KRW 2022 -si 255.9 Billion KRW 2020 Jeollanam-do -si 878.5 Billion KRW 2022 Gyeongsangnam-do Changnyeong-gun 568.5 Billion KRW 2023 Sub Total 38 Basic Local Governments 38.1535 Trillion KRW

Total 56 Institutions 148.8739 Trillion KRW

63 AppendixⅤ. Status of Banks Selected by Local Governments

1. Number by separate accounting 2. Status by 1-tier bank / 3. Cumulative figure from 2009 to 2020 June (bank nomination status as of 2020 Jan)

Bank Total Total Market Market Share by Tier Bank Nomination Status2 Coal Finance Nomination Share (in nomination count / %) Provided 3 Count1 (in %) (in KRW millions) Gyeonggi-do RLG +30 BLGs Gyeongsangbuk-do RLG +20 BLGs Gyeongsangnam-do RLG +17 BLGs 1-Tier 165 67.9 Jeollanam-do RLG +21 BLGs Jeollabuk-do RLG +13 BLGs Gangwon-do RLG +18 BLGs Nonghyup Chungcheongnam-do RLG + 15 BLGs 560 59.4 676.9 Bank Chungcheongbuk-do RLG +11 BLGs Sejong RLG Jeju RLG 2-Tier 395 56.5 5 Ulsan BLGs 2 Incheon BLGs 2 Busan BLGs 1 Daegu BLG

1-Tier 14 5.8 Seoul RLG + 5 BLGs Shinhan Bank 62 6.6 366.7 2-Tier 48 6.9 Incheon RLG +7 BLGs 1-Tier 18 7.4 Woori Bank 58 6.2 18 Seoul BLGs 224.1 2-Tier 40 5.7

1-Tier 7 2.9 Daejeon RLG +5 BLGs Hana Bank 32 3.4 246.5 2-Tier 25 3.6 1 Incheon BLG

1-Tier 3 1.2 2 Seoul BLGs Kookmin Bank 28 3 333.3 2-Tier 25 3.6 1 Gwangju BLG

Industrial Bank 1-Tier 1 0.4 4 0.4 1 Suwon BLG 120.8 of Korea 2-Tier 3 0.4

1-Tier 11 4.5 Has not responded Daegu Bank 56 5.9 Daegu RLG +10 BLGs 2-Tier 45 6.4 to the survey

1-Tier 6 2.5 Gwangju RLG +4 BLGs Gwangju Bank 40 4.2 17.9 2-Tier 34 4.9 1 Jeollanam-do BLG

Kyongnam 1-Tier 2 0.8 Ulsan RLG 38 4 None Bank 2-Tier 36 5.2 1-Tier 15 6.2 Busan Bank 36 3.8 Busan RLG + 14 BLGs 78.6 2-Tier 21 3

1-Tier 1 0.4 Has not responded Jeonbuk Bank 26 2.8 1 Jeollabuk-do BLG 2-Tier 25 3.6 to the survey

1-Tier 0 0 Has not responded Jeju Bank 2 0.2 No nomination 2-Tier 2 0.3 to the survey • 243 1-tier banks (general accounts) Total 942 100 • 699 2-tier banks (fund, public enterprise special accounts, other special accounts, etc)

* Analyzed by KOSIF based on data provided by the office of National Assembly member Oh, Young-hwan

64

Member of the National Assembly Wonyoung YangYi

Korea Sustainability Investing Forum Wonyoung YangYi Greenpeace East Asia (KoSIF) Member, National Assembly Republic of Korea f6, 257, Hangang-daero, Yongsan-gu, Karl. C. S. Yang Seoul, 04322, KOREA Vice-Chairman, Ph.D #502, 1, Uisadang-daero, Yeongdeungpo-gu, Tel: +82 (0)2 3144 1994 Seoul, 07233, KOREA www.greenpeace.org/korea Jong-O Lee Tel: +82 (0)2 784 8834 Director www.yangyi.kr [email protected] Taehan Kim Senior Researcher

Haeyoung Um Researcher

Seongeun Lee Researcher

Jeonghyun Kim Researcher kosif #707, Chunma B/D, 402 Hakdongno, Gangnam-gu, Seoul, 06088, Korea Tel: +82 (0)2 738 1142 www.kosif.org [email protected]