The Bank of Korea announced Tuesday it has invested a portion of its foreign currency assets in the Bank for International Settlements (BIS) Climate-aligned Corporate Bond Fund, which launched on May 26.
The fund invests in high-grade corporate bonds while assigning greater weight to companies demonstrating strong climate performance, including low-carbon transition efforts. It was established following consultations with an advisory group comprising 14 central banks from major economies, including the BOK. The BIS asset management division oversees the fund's operations.
Since announcing its ESG investment framework for foreign currency assets in 2021, the BOK has steadily expanded related investments. As of end-2024, the central bank's ESG-related assets totaled $20.38 billion, roughly quadruple the $5.45 billion recorded at end-2020.
The portfolio comprises $8.82 billion in directly invested bonds, $1.71 billion in externally managed bonds, and $9.85 billion in externally managed equities.
"Following our 2022 investment in the BIS Asian Green Bond Fund, we have now joined this climate-aligned corporate bond fund," a BOK official said. "As a member of the advisory group involved in designing the fund, we will take a leading role in responsible investment."
The official added, "We will enhance our international standing by participating in global climate response efforts while strengthening cooperation with the BIS and foreign central banks."
The BOK continues to conduct research on climate change impacts on financial and real economies and to develop policy alternatives.