After pausing its issuance of bonds for nine months, seemingly in response to public scrutiny and market perceptions, Korea Electric Power Corporation (hereinafter “KEPCO”), the South Korean state-owned utility, resumed issuing KRW-denominated bonds in June 2024. Facing ongoing financial challenges, including a debt-to-equity ratio exceeding 514% and the upcoming maturity of a majority of its bonds, the company started to address these issues by expanding its bond issuance with USD-denominated bonds in February 2025. Notably, for the first time in over a decade, KEPCO chose to issue conventional, non-labeled bonds, raising critical questions in terms of its commitment to transitioning to green practices.

According to the latest officially reported data (2024 3Q), the total amount of KEPCO bonds issued is USD 60.41 billion (KRW 71.91 trillion), of which USD 6.19 billion (KRW 7.36 trillion)i account for global ones. However, by investing in, certifying, and underwriting the company’s bonds, KEPCO bondholders, second-party opinion providers, and underwriters are enabling KEPCO to hold onto its fossil fuel-dependent business model, which heavily relies on coal. They are not only allowing KEPCO to continue its overseas coal business but are also failing to encourage the utility to implement a credible transition strategy aligned with the 2015 Paris Agreement towards carbon neutrality. In addition, those companies are endorsing KEPCO’s unreliable sustainable finance framework, which has been subject to criticism for lacking the rigor, specificity, and transparency necessary to ensure that proceeds flow to sustainable practices and projects.

Key actors in facilitating KEPCO’s continuation of these practices on a global scale are the underwriters of the company’s bonds, including Citigroup, Bank of America, JPMorgan Chase, HSBC, Mizuho, Standard Chartered, UBS, Crédit Agricole Corporate and Investment Bank, and Korea Development Bank. Significantly, the five major global investors as of February 2025 in KEPCO’s global bonds are TIAA-CREF, Vanguard Group Inc., MetLife Inc., Blackrock Inc., and Janus Henderson Group PLC. By certifying the electricity utility’s sustainable finance framework without proper assessment, Sustainalytics builds another perception of credibility as the second-party opinion provider.

Whether underwriting, certifying, or subscribing to KEPCO bonds, global actors—key participants in the South Korean bond market—should exercise heightened scrutiny when engaging with South Korean issuers characterized by high greenhouse gas emission profiles, such as KEPCO. Failure to exercise due diligence raises serious concerns about legitimizing KEPCO’s potential greenwashing practices and hindering its transition to a sustainable future.