Ministry of Finance and Economy

On December 10, 2025, the Ministry of Economy and Finance (MOEF) released the first-ever Public Institutions ESG Guidelines at the 11th Ownership Steering Committee meeting, with a view to enabling public institutions to play a leading role in promoting the adoption of ESG management practices.   [Background and Progress]   Amid the global expansion of ESG institutionalization and the growing emphasis on the social responsibility of public institutions, the need for systematic ESG management among public institutions has become increasingly evident. While many public institutions recognize the importance of ESG management*, they face challenges in introducing ESG practices due to limited experience and institutional capacity.   * A total of 288 public institutions (84.0%) indicated the need for ESG guidelines. (MOEF, May 2025)   In addition, although a wide range of ESG standards exists both domestically and internationally, there has been no ESG standard specifically designed to public institutions with a strong public-service mandate. Moreover, ESG-related information disclosed via the All Public Information In-One (ALIO) system has been presented mainly in the form of quantitative indicators, making it difficult for the general public to fully understand.   Accordingly, with the aim of developing ESG guidelines tailored to public institutions, a working-level task force comprising ESG experts from public institutions, research institutes, and academia was launched in March 2025, and in-depth discussions have since been underway. During the process, a broad review was conducted of domestic and international ESG standards and related research findings, and diverse input from field practitioners was also incorporated to enhance applicability for public institutions. In particular, public institutions with operational responsibility for each key indicator participated directly in the indicator development process, with efforts made to ensure a balanced reflection of institutional conditions and circumstances.   [Key Features]   The Public Institutions ESG Guidelines (hereafter “the Guidelines”) set out sub-indicators across the environmental (E), social (S), and governance (G) pillars that reflect the social roles and responsibilities of public institutions. Notably, the social (S) pillar includes indicators directly related to people’s daily lives, such as safety management, support for work-life balance, and performance in mutually beneficial procurement, thereby highlighting the unique functions of public institutions, unlike other ESG frameworks.   The Guidelines were designed primarily around indicators commonly applicable to all public institutions, while also presenting more advanced indicators, such as those related to climate risk and biodiversity, as voluntary disclosure indicators. Furthermore, by incorporating not only quantitative metrics for each indicator but also each institution’s level of achievement against its targets, its efforts and performance in pursuing those targets, and its future plans, the Guidelines are expected to make a significant contribution to enhancing public understanding of ESG management by public institutions.   Making full use of existing ALIO disclosures and statutory disclosure materials, the Guidelines are structured to serve as a practical manual for the preparation of ESG management reports by public institutions. They classify each indicator into mandatory and voluntary categories in consideration of differences in institutional capacity, and also provide illustrative examples of reporting.   [Key Points]   The Public Institutions ESG Guidelines comprise a total of 37 key indicators and 80 sub-indicators across the three ESG pillars to support public institutions in pursuing sustainable management that takes environmental, social, and governance considerations into account.      Structure of the Public Institutions ESG Guidelines   Category Key Content Overview ▶ Covers the establishment and disclosure of ESG goals, including the formulation of objectives and strategies, stakeholder engagement, and materiality assessment. Environmental (E) ▶ Achieves a balance between environmental protection and social and economic needs   - Comprises a total of 13 indicators and 16 sub-indicators related to environmental factors such as greenhouse gas emissions, energy, and waste Social (S) ▶ Strengthens institutional social responsibility in areas such as safety, labor, human rights, and shared growth   - Comprises a total of 14 indicators and 38 sub-indicators for social responsibility, including labor, human rights protection, diversity, and social contribution Governance (G) ▶ Establishes a transparent governance structure through enhanced management transparency and ethical operations   - Comprises a total of 10 indicators and 26 sub-indicators covering board composition and activities, gender diversity, and internal audit functions across public institutions * Components by indicator: Rationale for selection, definition, basis for preparation / relevant laws and regulations, applicable institutions, key disclosure items, and examples of disclosure   [Future Plans]   As a first step toward supporting the facilitation of ESG management in public institutions, the Public Institutions ESG Guidelines will be followed by continued policy support to ensure the early establishment and wider adoption of ESG management systems across public institutions.   First, the Guidelines will be continuously revised and refined based on updates to international standards as well as feedback from experts and public institutions. In addition, drawing on the Guidelines, the Government plans to expand and systematize ESG disclosure items and strengthen linkages with ESG-related evaluation criteria in the management performance assessment framework.   Along with it, the Government intends to analyze ESG management information and publish a compilation of best practices, thereby facilitating the dissemination and sharing of management performance outcomes. Please refer to the attached files. 

On February 5, the Government successfully issued USD 3 billion Foreign Exchange Equalization Fund Bonds (USD FX Fund Bonds).   The bonds were issued in a dual tranche, with USD 1 billion maturing in three years and USD 2 billion maturing in five years.   Maturity                   Amount Issuance Rate1) Coupon Rate2) 3Y USD 1 billion 3Y U.S. Treasury yield + 9bp = 3.683% 3.625% 5Y USD 2 billion 5Y U.S. Treasury yield +12bp = 3.915% 3.875%  1) Issuance rate: the benchmark rate for the same currency and maturity plus spread. 2) Coupon rate: the interest rate actually paid to bondholders (for USD bonds, typically set in increments of 0.125%).   This issuance carries the following implications:   First, the issuance of three-year FX Fund Bonds at a single-digit spread of +9 basis points over U.S. Treasuries clearly demonstrates that Korean government bonds are regarded as top-tier assets in global financial markets, reflecting the country’s strong external credit standing, and that Korea faces no difficulty in raising foreign currency funding in international markets.   In particular, a spread of around 10 basis points over U.S. Treasuries – widely regarded as the world’s premier safe-haven asset – is lower than or comparable to that of the highest-rated international organizations and advanced-economy sovereigns, indicating that the so-called “Korea discount” in the market for Korean credits (foreign-currency bonds issued by Korean institutions) is being steadily eliminated.   In addition, the five-year tranche set a new record low spread for the second time, following the previous issuance in October last year, once again confirming that global investors’ appetite for and assessment of Korea’s economy and policy direction are improving at a rapid pace.   Second, amid heightened external uncertainties stemming from rising geopolitical tensions and escalating tariff issues, the government proactively and substantially strengthened its FX reserves, which serve as a key external safety buffer by helping stabilize the FX market. The size of the current issuance (USD 3 billion) represents the largest single foreign-currency bond issuance since 2009 (USD 3 billion). Furthermore, the government has secured in advance the funds needed to redeem FX Fund Bonds maturing in September this year (JPY 33 billion, issued in 2023) and in October (EUR 700 million, issued in 2021).   Third, despite challenging issuance conditions in a volatile global financial market environment, the bonds were issued at an opportune time with careful preparatory work.   Anticipating a potential increase in market uncertainty, the government began preparations for the current FX Fund Bonds issuance in late last year to ensure the ability to issue flexibly in response to market conditions. In particular, through group calls and one-on-one virtual meetings with global investors, the government actively highlighted Korea’s strengthened economic fundamentals, including its traditional manufacturing competitiveness in semiconductors, automobiles, shipbuilding, and defense, as well as enhanced soft power such as K-culture, growing AI capabilities, revitalization of the capital market including the KOSPI, and Korea’s inclusion in the World Government Bond Index (WGBI).   Building on these efforts, issuance was swiftly executed during a window of reduced market volatility in recent days, amid developments such as the agreement on the U.S. budget and the prospect of U.S.-Iran negotiations, thereby attracting strong investor interest.   Fourth, following the issuance of USD FX Fund Bonds in 2024 and EUR- and USD FX Fund Bonds in 2025, the government once again successfully issued the bonds under the SSA format[1], further cementing advanced sovereign issuance practices in the global bond market and reinforcing Korea’s status as a high-quality issuer.   Last but not least, the issuance helped create an environment in which Korean corporations and financial institutions can secure foreign currency more favorably in global markets. Domestic institutions seeking to raise foreign currency for overseas investment purposes are expected to access it on more advantageous terms, using the record-low spreads of this FX Fund Bond issuance as a benchmark. [1] Sovereigns, Supranationals & Agencies (SSA) collectively refers to central banks, sovereign wealth funds, international organizations, and policy financial institutions, which are generally regarded as high-quality investors in the global bond market. Please refer to the attached files. 

On February 4, Deputy Prime Minister and Minister of Economy and Finance Koo Yun Cheol chaired the Ministerial Meeting on Economic Affairs and Growth Strategy Task Force at the Government Complex-Seoul to discuss the “Plan to Promote the National Agricultural AI Transformation (AX) Platform,” the “Measures to Foster the AI Industry through Public Procurement,” and the “KS Certification System Reform Measures.”     Key messages from DPM Koo’s remarks are as follows:   The world is currently entering an era defined by a rapidly accelerating “AI revolution.”   The new continent of AI is not a realm reserved for a select few explorers. It will become the foundation on which we all will live in the years ahead. All citizens must be able to take part in exploring this new frontier.   To this end, the government will make all-out efforts to support Korean companies in securing leadership in high-tech industries such as semiconductors and AI.   [Plan to Promote the National Agricultural AX Platform]   As part of these efforts, an AX platform will be established in the agricultural sector to address structural challenges facing Korean agriculture, such as the climate crisis and labor shortages.   To that end, the government and the private sector will jointly invest more than KRW 290 billion to launch an agricultural corporation within this year.   AI-based solutions for the agricultural and livestock sectors will be developed and provided to farmers, enabling the automatic management of optimal growing conditions and the diagnosis of pests and diseases. These measures will allow farmers of all backgrounds, including elderly and new farmers, to manage smart farms in a professional manner.   Furthermore, next-generation smart greenhouses and livestock facilities will be built and exported to help Korean smart farm models gain a first-mover advantage in global markets.   [Measures to Foster the AI Industry through Public Procurement]   Public procurement of AI products will be significantly expanded to create a stable demand base that supports the sustainable growth of innovative companies.   The government will ease entry requirements for AI products in the public procurement market and provide preferential treatment, such as additional evaluation points, during bidding and contracting processes.   An “AI-dedicated track” will be newly introduced in the evaluation of innovative products to facilitate the swift and seamless adoption of AI products in the public sector.   The government will comprehensively introduce AI into public procurement administration. Through this initiative, product analysis and evaluation, public construction cost estimation, and adjustments to strategic stockpiles will be upgraded to systems aligned with the AI era.   [KS Certification System Reform Measures]   Last but not least, the KS Certification System will be reformed for the first time in 60 years to actively support the commercialization of high-tech products such as AI and robotics.   Through diversified evaluation methods, developers and designers of high-tech technologies, in addition to manufacturers, will now be eligible for KS certification.   The government will strengthen inspections and enforcement from the customs clearance stage to prevent illegal products that misuse KS certification from being imported or distributed.   Please refer to the attached files.