Bank of Korea Plans to Incorporate ESG Factors in Foreign Reserves

Posted on 10/06/2021

The Bank of Korea plans to slowly infuse ESG management into the foreign currency assets of the central bank. This integration on ESG factors for foreign exchange reserves must be within the scope that meets the requirements for safety, liquidity, and profitability of foreign currency assets. The Bank of Korea will first work with its external fund managers on ESG who manage foreign reserves. The second step would broadly expand ESG factors to all foreign currency assets within the next 2 to 3 years, according to the central bank. Companies with high carbon emissions or companies with low ESG rankings would eventually be excluded in the central bank’s investment universe.

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