Hyundai Heavy Industries (HHI) Group, amidst its active pursuit of ESG management, became the first company in the Korean shipbuilding industry to obtain the highest credit rating required to be an issuer of green bonds.
HHI, the Group's shipbuilding arm, announced that it received a "Green 1" rating from NICE Investors Service Co., an affiliate of Korea's largest credit rating group National Information & Credit Evaluation (NICE), for its planned issuance of green bonds.
Green bonds
The "Green 1" rating assigned to HHI is attributed to its contribution to improving the environment
With this result, HHI plans to issue green bonds worth KRW 150 billion in total. Green bonds are a type of ESG bonds used to fund environmentally friendly projects, and NICE Investors Service performs a comprehensive assessment based on multiple factors to rate a green bond, including nature of the environmental project to be financed with such bonds, appropriateness of the project selection, management of proceeds, and disclosure on the use of proceeds.
The "Green 1" rating recently assigned to HHI is attributed to its continued contribution to improving the environment by building eco-friendly ships and thereby reducing the use of hazardous materials, and HHI plans to use the proceeds to build eco-friendly ships and develop related technologies.
Building eco-friendly ships
"Our commitment to building eco-friendly ships and investing in related technologies has led to NICE's highest rating," said an official of HHI. "Going forward, we will keep placing ESG at the core of our management strategy to help make a better environment for everyone."
Recently, HHI Group appointed Ka Sam-Hyun, president and CEO of Korea Shipbuilding & Offshore Engineering (KSOE), as the Group's Chief Sustainability Officer (CSO) and formed ESG Working Group Committee, in a bid to implement ESG management across all subsidiaries and affiliates of the Group.
ESG performance
HHI Group is also working on the development of a reporting process of the ESG performance to the BoD of each entity under the umbrella of the Group. Hyundai Oilbank, the Group's refining unit, also successfully issued green bonds worth KRW 400 billion after receiving from NICE and Deloitte Korea their respective green bond attestation.
The Group's focus on ESG efforts is evident in many ways. In May 2021, HHI became the first Korean shipbuilder to sign a green loan agreement with Korea Development Bank (KDB), which is worth KRW 480 billion, while HHI Holdings obtained a green loan of KRW 300 billion to incorporate environmentally friendly features into the design and construction of the Group's Global R&D Centre, being built in Pangyo, Gyeonggi-do.