POSCO E&C announced on April 6 that it has signed an ESG derivative contract to reduce greenhouse gases for the first time in Korea.
POSCO E&C recently signed an ESG derivative agreement with SC First Bank to add the goal of ESG activities to the “forward exchange” transaction for the Warsaw incinerator PJT as a condition for incentives.
In general, a domestic company enters into a forward exchange contract promising in advance to trade a certain amount of foreign exchange at a certain rate on a certain day in the future to minimize the risk of exchange rate fluctuations in foreign businesses.
POSCO E&C added to the existing futures exchange agreement that incentives will be provided if it achieves greenhouse gas reduction and G-seed certification goals, which are part of ESG activities.
POSCO E&C issued ESG-style foreign currency private equity bonds for the first time in Korea last year, and for the first time in Korea, it will spread ESG activities to the derivatives sector.
ESG-linked derivatives are the first in Korea, but they are also the first in Standard Chartered Group, the parent company of SC First Bank.
POSCO E&C and SC First Bank signed an "ESG Financial Business Agreement" at SC First Bank's headquarters on April 5 with POSCO E&C CEO Han Sung-hee and SC First Bank CEO Park Jong-bok attending.
According to the agreement, in addition to reporting the signing of ESG derivatives contracts, the two companies will work together strategically on policies and measures to establish ESG financial ecosystems such as trade finance and Green Loan in the future.
"We are proud to lead ESG activities by signing ESG derivatives contracts for the first time in Korea as well as the construction industry," a POSCO E&C official said. "We will do our best to take the lead in preemptive ESG management activities."
