Shinhan, Woori banks spearhead ESG, climate finance initiatives in U.K.

Woori Bank, left, and Shinhan Bank.

The local branches of South Korea’s Shinhan Bank and Woori Bank are strategically positioning themselves to become significant players in the financial landscape in the U.K.

The lenders are presented unprecedented opportunities to expand their presence in London, a global financial hub, after the U.K.’s departure from the European Union and Covid-19 in 2020.

“In an era where environmental, social, and governance (ESG) finance, including climate finance, has taken center stage, Korea is emerging as a robust partner for financial capital in developed regions like the U.K. and Europe,” said Woo Sang-hyun, head of Shinhan Bank’s London branch.

Woo explained that in the context of eco-friendly investments in third countries, particularly in developing and underdeveloped regions, investors from developed countries, grappling with their historical contributions to climate change, are increasingly favoring advanced Asian countries such as Korea and Japan as partners for climate finance.

Korea’s relatively brief history of capitalism, which has resulted in lower carbon emissions, has become a unique strength in climate finance, according to Woo.

Shinhan Bank London Branch is rapidly establishing itself as a major player in ESG finance. The bank showcased its ESG financial accomplishments at the Korea-UK Investment Forum held in London on September 13.

Shinhan Financial Group Co. is collaborating with Acumen Fund, Inc., a non-profit investment fund with a mission to alleviate poverty, to raise a $200 million fund dedicated to implementing solar power projects in 16 African countries near the Sahara region.

Shinhan Bank has committed a $20 million investment to this fund, which will receive a $50 million subordinated investment from the Green Climate Fund (GCF) and a $20 million contribution from charity foundations.

Shinhan Financial is also considering providing financial support for a Green Guarantee Company (GGC) project funded by the U.K. government.

This initiative involves the government and the GCF jointly hedging against climate change-related risks for companies in developing nations. The necessary funds are then supplied by global financial institutions, including Shinhan Financial, through loan bonds.

The London branch of Woori Bank, in the meantime, is also expanding its presence in the region with a strong focus on investment banking (IB) transactions.

Its key asset lies in the extensive network it has cultivated over the 45 years since its establishment in 1978.

“Our shift has been towards maximizing fee income by increasingly engaging in primary deals, involving investments from the outset of executing IB transactions, rather than primarily relying on secondary methods, which involved investing in existing loan assets,” said Jeon Soo-il, head of Woori Bank London.

Shinhan and Woori banks in London are also extending their financial reach to Europe, the Middle East, and Africa (EMEA).

“We are closely monitoring the African region as a potential future financial resource,” said Shinhan Financial Group Chairman Jin Ok-dong.

To spearhead the expansion, Shinhan Bank has appointed Woo as the head of the EMEA region, overseeing branch offices in many nations and cities, including London, Germany, and the Emirate of Dubai.

Woori Bank has also directed its London branch to revitalize its investments in EMEA.

“We are committed to expanding our deal-sourcing activities in EMEA,” Jeon said.