While the world races to meet climate targets, South Korea’s sole utility company is doubling down on fossil fuels—and global banks are quietly helping it do so. Despite warnings from civil society and rising climate risks, major financial institutions continue underwriting and investing in Korea Electric Power Corporation (KEPCO)’s bonds, effectively enabling a strategy that undermines both climate goals and financial stability.
On March 20, 2025, over 25 organizations signed letters addressed to the underwriters and five major investors of KEPCO’s global bonds. Highlighting the company’s lacking transition strategy and its backstep on green investments, the message was clear: Stop financing KEPCO’s continued reliance on fossil fuels. These letters urged financial institutions to refrain from underwriting and investing in new KEPCO bonds or those of its power generation subsidiaries and to publicly commit to ceasing financial support to companies expanding fossil fuel production and related infrastructure.
Yet, despite this call to action, only two institutions, Standard Chartered and UBS, acknowledged the letter. The silence from all investors and the remaining 6 underwriters raises serious concerns about their own sustainability commitments to responsible investment and global climate goals.
Struggling KEPCO holding back South Korea’s Energy Transition
KEPCO is South Korea’s sole electricity supplier and the major generator in the country. With such a position, its decisions can directly shape the nation’s energy landscape and impact Korea’s ability to achieve carbon neutrality by 2050, a commitment made under the Paris Agreement. However, KEPCO remains heavily reliant on fossil fuels, especially coal—producing just 2.1% of its energy from renewables while continuing to invest in overseas coal projects. This dependence not only undermines global climate commitments but also exposes KEPCO to volatile fossil fuel markets, worsening its financial struggles.
Over the past few years, KEPCO has faced mounting financial losses partly due to soaring fuel costs and their declining profitability. Rather than using financial struggles as a catalyst for clean energy transition and independence from global fuel price fluctuation, KEPCO has chosen a different path, doubling down on fossil fuels and relying on bond issuance to stay afloat. The company continues to leverage its proceeds to sustain its outdated business model—and global underwriters and investors play an increasingly crucial role in enabling this business model by continuing to facilitate KEPCO’s bond issuance.
By facilitating KEPCO’s bond issuances, global investment banks are not just supporting the utility’s fossil fuel dependence; they are also exposing themselves to financial, reputational and legal risks.
Greenwashing Claims and the Shift Away from ‘Sustainable’ Bonds
KEPCO’s financial strategy has already raised concerns over greenwashing and was criticized last year for issuing “green” and “sustainability” bonds while continuing to expand its fossil fuel portfolio. As a response, civil society groups called out KEPCO and its financial backers, highlighting the contradiction between its bond marketing and its actual investment decisions. A joint letter was sent to the company’s key underwriters and investors, demanding greater accountability. However, the global investment banks largely remained silent.
Rather than addressing these concerns through meaningful change, KEPCO has shifted toward conventional bond issuance, avoiding the criticism tied to sustainability-labeled bonds. Thus, by not issuing sustainability-labeled bonds, it has effectively removed the need to dedicate proceeds of such bonds only to green investments. This shift raises critical questions: Is this a sign of reluctance to commit to green investments? And how will stakeholders, including lead dealers and investors, guide KEPCO toward climate responsibility?
The financial institutions backing KEPCO have a responsibility to ensure that their capital is not facilitating further fossil fuel expansion. Yet their continued support suggests indifference to both financial and climate risk.
The Latest Joint Letter—and Another Round of Silence
Now, just one year later, a new joint letter has been sent. This time, a Network of 26 organizations have signed on, yet the outcome remains largely unchanged.
Image 1: Network of organizations that signed on the joint letter
Out of 13 banks, only Standard Chartered and UBS responded. However, both avoided commenting directly on KEPCO, instead pointing to their general sustainability frameworks and internal policies. The lack of engagement from the remaining underwriters and investors suggests that they are either unwilling to acknowledge the issue or are choosing to ignore it. Their continued silence calls into question their commitment to environmental and social responsibility.
As KEPCO continues down a path that contradicts global climate goals, its financial backers are not just risking undermining their own sustainability commitments, they are actively contributing to the problem. They have a responsibility to act and push for a genuine transition, so the question remains: How long will these financial institutions continue to turn a blind eye?
The following institutions failed to respond: JP Morgan Chase, HSBC, Mizuho Financial Group, Bank of America, Citigroup, Crédit Agricole CIB, TIAA-CREF, The Vanguard Group, MetLife Inc., BlackRock Inc. and Janus Henderson
The following institutions responded but did not commit to the requests: Standard Chartered and UBS