NongHyup Bank

RATING

SECTOR

Financial Services

WEBSITE

CONTACT

NACF Headquarters bldg
Saemunan-ro 16
Chung-gu, Seoul

Tel: +82-2-1661-3000
Fax: +82-2- 2080-6130

STOCK EXCHANGE

LISTING

The bank does not disclose this information.

EMPLOYEES

59,900

CHIEF SUSTAINABILITY OFFICER

No CSO or equivalent mentioned or found.

AWARDS

CONTENT SOURCE

FURTHER READING

Report created by Sonria Willis

NongHyup Bank

SECTIONS :  Sustainability •  Targets  Evaluation •  Key Points  •  Overview

 

Company Activity

NongHyup Bank was founded in 2012 as a wholly owned subsidiary of NongHyup Financial Group, which, in turn, is wholly owned by the National Agricultural Cooperative Federationin South Korea. 

NongHyup Bank offers agricultural policy loans, as its main policy role, to farmers and agri-food companies usually at concessionary interest rates set below market level with the government support. NongHyup Bank’s financial services include personal financing, corporate financing, card service, foreign exchange service, and other financial services.

Although NongHyup does have some information about its Corporate Responsibility Reporting progress on its website, an annual report with information about the bank’s ESG and sustainability practices was not found but its parent company, the South Korean National Agricultural Cooperative Federation published an annual report with some notable information on its sustainability and ESG practices. 

The South Korean National Agricultural Cooperative Federation was established in 1961 “to enhance the social and economic status of its membership and to promote a balanced development of the national economy.” Its role is divided into three areas: marketing and supply, banking and insurance, and extension services.

Company Sustainability Activity

The NongHyup bank does not have an ESG or Sustainability report; however it does mention corporate social responsibility practices in the parent company’s annual report (The South Korean National Agricultural Cooperative Federation). 

The corporation states that it places high importance on fulfilling social responsibilities across a range of areas, including developing future leaders, improving rural welfare, supporting multicultural families and promoting rural culture — stating that the ultimate aim of its CSR efforts is to not only to improve the standards of living for farmers but also contribute to the balanced development of the Korean economy.

The NongHyup Bank has developed the Green, Social, and Sustainability Bond Framework under which it is issuing green bonds, social bonds, and/or sustainability bonds (“GSS Bonds”) and uses the proceeds to refinance or finance, in whole or in part, existing or new eligible projects that provide clear environmental and social benefits.

 

Highlights

  • Helped 5,427 elementary schools and community child welfare centers receive book donations.
  • 65,000 people participated in the bank’s financial literacy program.
  • Total of 21,596 rural seniors received medical services.

Targets

The bank does not disclose this information.

Progress

The bank does not disclose this information.

Certificates

UN Sustainable Development Goals

UN SDGs Compliance

SDG 1: No Poverty

  • Introduced several schemes with the goal to alleviate poverty in rural areas.
  • 65,000 people participated in the bank’s financial literacy program.

SDG 3: Good Health and Well-Being

  • Total of 21,596 rural seniors received medical services.

SDG 4: Quality Education

  • Helped 5,427 elementary schools and community child welfare centers receive book donations.

SDG 8: Decent Work and Economic Growth

  • Developed the Green, Social, and Sustainability Bond Framework.

SDG 10: Reduced Inequalities

  • Committed to reduce inequalities between rural and urban areas through it financial literacy courses.

Evaluation

The NongHyup Bank does not hold any major ESG certificate; although it does hold a certificate in green finance Climate Bond Certified. The company has also received a couple of awards in green finance such as the Green Bond Awards 2018 and the Global Capital SRI Awards. The bank is not mentioned in any major sustainability or CSR listing.

While the bank has not recorded any targets or progress for improving sustainability within its internal operations, the UN Environment Programme Finance has mentioned in its article that the bank is seeking to actively practice eco-friendly management and increase the use of renewable energy.

While points are taken off for barely mentioning environmental sustainability and not having a sustainability officer or director, the bank does mention its efforts to improve inequalities by supporting and introducing educational and medical schemes for underprivileged rural areas in South Korea.

More important and alarmingly, the bank has been investing approximately $16.8Bn in the coal industry.

This report gives the bank a rating of D.

Analyst Outlook: Positive

External sources have confirmed that the bank is seeking to improve sustainability and ESG practices; notably by practicing eco-friendly management and expanding investment in sustainable companies. 

However, because no explicit target or progress is mentioned and considering its minimal SDG compliance, it would be unreasonable to state a positive outlook.

Key Points

UN Environment Programme Finance initiative article states:

  • The bank will further expand investment in eco-friendly companies and industries, and strengthen support for the socially disadvantaged.
  • They will actively practice eco-friendly management by converting business vehicles to eco-friendly mobility such as electric and hybrid vehicles, and plan to increase the use of renewable energy through participation in the RE100 campaign.
  • In 2021, they will launch new ESG-related products to implement sustainable management that grows together with their customers.
  • Developed an “NH Green Growth Index,” designed to measure each company’s ESG achievement levels to release ESG specialized loans.
  • Accused of having $16.8Bn in coal exposure.
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