ING Korea’s Sustainable Solutions Group: “Sustainable finance is not a cost, but a strategic investment”

As global ESG regulations become more stringent, transition strategies for Korean companies have emerged as a critical challenge. The EU’s Carbon Border Adjustment Mechanism (CBAM), the US SEC’s climate disclosure requirements, and the global RE100 initiatives are having a direct impact on Korea’s export-driven industries. On this point, Louise Kim emphasised, “Sustainable finance is now a prerequisite for future competitiveness. It is no longer just a cost, but a strategic investment necessary to secure access to global markets.”

Louise Kim currently leads the Sustainable Solutions Group (SSG) at ING Korea and is part of the wider Asia-Pacific (APAC) sustainability team based in Singapore. She provides ESG financing structuring and advisory services to Korean corporations and financial institutions, supporting their transition towards greener and more sustainable business models.

She explained, “ING Korea’s Sustainable Solutions Group is responsible for tailoring global headquarters’ strategies to suit the Korean market and industries. Through a range of financial solutions—including green loans, sustainability-linked loans (SLLs), trade finance, and derivatives—we help Korean companies transition towards a low-carbon future.”

She also highlighted that ING was the first financial institution in the world to introduce the Sustainability-Linked Loan (SLL) in 2017. Unlike traditional loans that solely support renewable energy projects, SLLs are an innovative structure in which financial terms vary based on a company’s ESG performance. Its key feature is that companies can benefit from lower interest rates as they meet their ESG targets.

By serving as a sustainable finance hub for the APAC region, ING is strengthening close collaboration with countries focused on carbon-intensive industries such as steel, shipbuilding, and batteries—including Korea. Louise Kim noted that urgent priorities include Korea’s steel industry’s response to the EU’s CBAM, the transition to eco-friendly ships and port infrastructure in the shipbuilding and shipping sectors, and improving the sustainability of the battery supply chain.

In practice, ING recently acted as joint coordinator for a green loan worth KRW 1 trillion for Digital Edge’s data centre and supported Shinhan Card’s social bond issuance, demonstrating its financial innovation. Additionally, ING has entered into a strategic partnership with BNK Financial Group to advance regionally based decarbonisation projects, including offshore wind power initiatives in the Busan, Ulsan, and Gyeongnam areas.

Louise Kim pointed out that despite the rapid growth of the ESG finance ecosystem in Korea, many challenges remain. She observed that the high cost and limited accessibility of renewable energy make achieving RE100 targets difficult, and that mandatory ESG disclosure requirements have been postponed until after 2026, resulting in misalignment with global standards.

In particular, small and medium-sized enterprises face the greatest risks in responding to CBAM due to insufficient systems for collecting and verifying emissions data. To address these issues, ING is introducing an ESG trade finance model that supports supply chain decarbonisation. Through global partnerships—such as with CarbonChain—they track emissions data across supply chains and link customised KPIs to financial structures.

ING’s flagship climate strategy, known as the 'Terra approach', plays a central role in these efforts. The Terra approach is a financial decision-making framework designed to guide high‑carbon industries—such as power generation, steel, cement, and shipping—towards achieving net zero by 2050. Through this approach, ING collaborates with its steel and shipbuilding clients in Korea to provide tailored decarbonisation financing and jointly develop transition roadmaps.

Over the next three to five years, ING plans to focus on green data centres, renewable energy, smart logistics and ports, and low‑carbon shipping and aviation industries in Korea and across Asia. Louise Kim stated, “As energy costs and carbon footprints become key competitive factors, the global competitiveness of Korean manufacturing hinges on access to clean energy. ESG is not merely about compliance but a matter of securing long‑term competitiveness.” She added, “ING combines global experience with local expertise to help Korean companies find new opportunities amid the climate crisis and evolving regulations.”

What are the functions of the Sustainable Solutions Group within ING?

“The Sustainable Solutions Group (SSG) evolved from the previous division known as Sustainable Finance. Previously, the Singapore regional office oversaw the Asian markets, including Korea, but as the importance of the Korean market grew, ING established a dedicated sustainable finance team within its Wholesale Banking division in 2022. This team supports clients in transitioning to sustainable business models. Through a variety of financial structures—such as green loans, sustainability‑linked loans (SLLs), trade finance, and derivatives—it helps enable a low‑carbon future. The team plays a crucial role in integrating sustainability into ING’s core financial services and global strategy.”

Why does ING view the Korean market as strategically important?

“Korea’s industrial structure overlaps with sectors where ING has strengths, such as shipping and energy. Additionally, Korea is a strategically important market because it allows us to combine our global network with local expertise and apply the know‑how accumulated in Europe to the Asian market. In Korea, we have offered sustainable finance solutions that align with global standards, such as the Green Loan Principles. Recent examples include providing financial support for eco‑friendly vessels (LNG and dual‑fuel engine ships) and participating as a joint green loan coordinator for Digital Edge’s data centre project.”

ING introduced the world’s first SLL in 2017. How do SLLs differ from traditional green loan?

“Traditional green loans provide funding only for specific eco‑friendly projects, whereas SLLs are innovative in that they are directly linked to a company’s overall ESG performance. The SLL structure allows borrowers to receive lower interest rates as they achieve agreed ESG targets. Since then, SLLs have become the global standard in financial markets, and ING continues to maintain its leading position in this area. Recently, ING has also been innovating by linking ESG performance to financial terms in derivatives and trade finance.”

How does ING’s Terra approach work?

“The Terra approach is ING’s loan portfolio decarbonisation strategy, which began in 2018. Its goal is to lead high‑carbon industries—such as oil and gas, steel, cement, aluminium, and shipping—towards net zero by 2050. Rather than simply providing financing, ING publishes annual transition scorecards by industry, collaborates with clients to design transition roadmaps, and reflects these in financial terms. Since 2023, ING has introduced the Client Transition Plan (CTP) scoring system, engaging in transition strategy discussions with around 2,000 key clients worldwide, including in Korea. In Korea, ING works with steel, shipbuilding, and shipping companies to offer tailored financial structures and support industry-specific decarbonisation.”

How did Korean companies respond?

“Industries considered a priority, such as steel and shipbuilding, have been surprisingly open. Their ESG disclosure levels are not significantly behind global standards. However, there is a cultural tendency not to actively publicise their performance externally, and the biggest challenges lie in data collection and data quality management.”

What is ING’s assessment of the level of ESG capabilities of Korean companies?

“Large corporations are rapidly enhancing their ESG capabilities. For example, Samsung Electronics reported a 93.4% renewable energy transition rate in its DX Division in 2024. LG Group also reduced its Scope 1 and 2 emissions in line with its reduction target. However, small and medium-sized enterprises (SMEs) face challenges in responding to the EU’s Carbon Border Adjustment Mechanism (CBAM) due to inadequate systems for collecting and verifying emissions data. As this issue directly impacts export competitiveness, urgent action is required.”

How would you assess Korea’s sustainable finance market?

“It is growing rapidly, but there is still a long way to go. Access to renewable energy remains limited, and the mandatory ESG disclosure requirements have been delayed until after 2026. Achieving RE100 targets is also a challenge. However, policy changes—such as the government’s expansion of RE100 industrial complexes and reforms to power purchase agreements (PPAs)—are expected to increase financial demand. ING is prepared to actively support this transition through financing and advisory services.”

How do you assess the Korean ESG market and its challenges?

“The market has grown rapidly in a short period since 2020, with strong competitiveness centred around large corporations. However, urgent issues such as complex regulatory frameworks, low carbon pricing, and uncertainties in ESG disclosure timelines must be addressed. It is important to recognise that ESG is not just a regulatory requirement but a key to future competitiveness. In an export-driven economy, failing to keep pace with global standards could result in restricted market access. Given Korea’s solid technological capabilities and industrial base, I believe the transition presents both challenges and opportunities.”

What is ING Korea’s strategic direction for the next three to five years?

“ING is evolving beyond the role of a financial product provider to become a strategic partner, co-designing solutions alongside its clients. The immediate priority is to support carbon-intensive industries—such as steel, shipbuilding, and batteries—in meeting global regulatory requirements. Looking ahead, ING aims to expand its financing efforts into emerging sectors, including green data centres, offshore wind, hydrogen, smart ports, and cleantech supply chains. Ultimately, the objective is to help Korean companies retain access to global markets while enhancing their long-term competitiveness through sustainable finance.”

Originally published on Hankyung ESG: Opens in a new tabhttps://www.hankyung.com/article/202508250186i