Focusing on ESG finance and the energy industry… To become a partner for companies’ overseas expansion

“In the age of artificial intelligence (AI), the focus of sustainable finance is shifting from traditional carbon emissions reduction to energy efficiency in areas such as AI, data centers and electric vehicles. As global financial trends are changing rapidly, we aim to support Korean companies in their global expansion by providing long-term financing and risk management solutions.”

Helen Jung, country manager of ING Korea, made the remarks in an interview with Maeil Business Newspaper on May 22. Her point was that while sustainable finance had previously focused on the “reduction” of carbon emissions and renewable energy, it is now shifting toward the “efficiency” of energy use.

Jung, who was appointed as country manager of ING Korea in July last year, has focused heavily on sustainable finance during her first year in the role. Sustainable finance refers to applying the values traditionally represented by ESG — environmental, social and governance principles — to finance. In the past, particularly in the environmental field, the key focus was on reducing carbon emissions.

However, the situation has changed as the surge in electricity demand driven by the spread of AI has become a key issue. Investment in data centers is increasing with the expansion of generative AI and cloud services, while companies’ energy consumption is rising rapidly. As a result, it has become difficult to achieve sustainable management and sustainable finance, led by environmental goals, through carbon emissions reduction alone.

“Energy demand is growing explosively, while traditional carbon-related projects are no longer progressing at the same pace as before,” Jung said. “Rather, investment has become far more active in areas such as renewable energy, nuclear power, small modular reactors (SMRs) and energy-efficient data centers. Sustainable finance is also evolving in line with these changes in the industrial landscape.”

Ultimately, the key to sustainable management now lies in identifying these emerging industries and actively investing in them. Financial institutions, in turn, have taken on a new role: facilitating the flow of capital needed to support that transition.

On this, Helen mentioned, “We will actively support Korean companies operating in key future industries as they expand globally by providing long-term financing and risk management solutions.”

She also emphasized that sustainable finance should not remain at the level of simply offering preferential interest rates for ESG-related sectors, as it has in the past. Jung said, “Interest rate benefits are, of course, important, but for actual projects to move forward, a wide range of long-term financial solutions is needed. It is important to provide long-term capital through syndication, bond issuance, project financing and infrastructure finance.” Her point was that the role of global banks is bound to grow, as large-scale projects such as data centers and overseas factories require long-term funding over periods of 10, 15 or even 20 years.

Jung emphasized that ING has already been playing this role in supporting Korean companies’ overseas expansion. “Over the past five years, we have carried out a significant amount of financing related to electric vehicles, battery plants and the battery value chain,” she said. “As ING has a strong network in Eastern Europe, we have supported Korean companies with long-term borrowing when they expanded into countries such as Hungary and Poland.” She added, “Even after the factories are established, we continue to provide separate support for local working capital, trade finance and liquidity management.”

Social finance, in addition to environmental finance, is also an area of growth. “ING acts as a framework coordinator when credit card companies issue social asset-backed securities, or when public enterprises and financial institutions issue bonds related to supporting vulnerable groups and small and medium-sized enterprises,” Jung said. This involves conducting due diligence on whether the use of proceeds meets social criteria, obtaining opinions from external institutions and supporting the process all the way to bond issuance. She explained, “Our advisory role in structuring the framework is closely linked to our role in arranging bond issuance. We also coordinate blue bond issuances for projects related to the marine environment.”

Rising volatility in financial markets is another area ING is closely watching. “As exchange rate volatility has increased and raw material prices have risen, Korean companies’ demand for hedging has grown,” Jung said. “Providing risk management solutions that help reduce volatility in interest rates, exchange rates and raw material prices is also an important role.” Her point was that while a weaker KRW can benefit exporters, it can also increase cost burdens for companies that import raw materials, making risk management even more important.

Jung said Korean companies are more competitive than ever. “Korean companies are demonstrating strong competitiveness overseas across a growing number of sectors, including shipbuilding, semiconductors, defense and nuclear power,” she said. “When Korean companies invest overseas or expand their global businesses, ING can support them by leveraging its network.”

Jung cited her Korean background as a strength. “I fully understand that Korean companies have already grown into global leaders and are highly agile in adapting to change,” she said. “Drawing on my long experience in Korea’s financial and industrial sectors, I aim to create synergies by applying the solutions of a global bank to Korean companies.”

“When you work at a foreign bank, you naturally become a patriot,” she added. “From the headquarters’ perspective, Korea is one of many markets, so you need to explain why the bank should invest more in Korea.” “The role of a country head is to represent the Korean market and the competitiveness of Korean companies to headquarters,” Jung said. “Although ING is a foreign bank, one of my goals going forward is to contribute to the growth of Korean companies.”

Originally published in the Maeil Business Newspaper: Opens in a new tab"ESG 금융, 에너지 산업에 초점 … 기업 해외진출 동반자 될것" - 매일경제