이 기사는 2021년 05월 11일 08:00 thebell 에 표출된 기사입니다.

More issuers are obtaining certifications for their socially responsible investment (SRI) bonds from more than one external agency in a bid to enhance their transparency and credibility.

Growing number of companies obtain certifications from two external institutions when they issue won-denominated SRI bonds, industry sources said on Friday, including Hyundai Oilbank, Hyosung Heavy Industries, Hyundai Construction Equipment, Hanwha Corp, and SsangYong E&C.

SRI bonds only need to be certified by one external agency before issuing. The won-denominated SRI bonds have normally been certified by one agency since 2018.

Hyundai Oilbank’s issuance earlier this year was the first case where a domestic company obtained multiple certifications when issuing its won-denominated SRI bond.

Hyundai Oilbank, Hyosung Heavy Industries, Hyundai Construction Equipment, Hanwha Corp, and SsangYong C&E each have their own weaknesses in terms of ESG, with Hyundai Oilbank operating its refinery business, SsangYong C&E owning a cement manufacturer, and Hanwha Corp owning a defense affiliate.

Obtaining certifications for more than one institution may strengthen investors’ awareness of the issuers. “Investors tend to read reports relatively meticulously amid lingering concerns about greenwashing due to insufficient regulations on SRI bonds,” said an industry source.

Credit rating agencies are frequently hired by issuers. Hyundai Oilbank and Hyundai Construction Equipment have obtained certifications from NICE Investors Service and Deloitte Anjin, Hyosung Heavy Industries from NICE Investors Service and Korea Investors Service, Hanwha Corp from NICE Investors Service and Korea Ratings, and SsangYong C&E from Korea Investors Service and Korea Ratings for their SRI bonds.

Whereas accounting firms like Deloitte Anjin focus on verifying the management system of SRI bonds, credit rating agencies describe in their reports whether the funds raised by SRI bonds are put into appropriate projects, how they are managed, and what ESG management activities the issuer conducts.

Certification service providers are trying to cut the certification fee. The SRI bond certification fee was in the range of 30 million won ($26,900) to 40 million won, but it has declined rapidly to a range of above 15 million won. However, there has been a case where a issuer pays 10 million won to each agency as it tries to obtain multiple certifications.

Some market insiders are worried about the overly heated competition and deterioration in certification service quality.

“In order to make profits from the SRI bond certification service business, the fee must rise to 30 million won or more,” said an official at an agency. “It is difficult to maintain the quality of service in a situation where it is difficult to assure how long the market will continue its growth.” (Reporting by Ji-hye Lee)