Transition-finance strategy seminar hosted by the office of Rep. Hyun Jung Kim and the Korea Sustainability Investing Forum (PCAF-KOREA)

From Corporate Lending to Capital Markets: “Transition Finance
 Emerges as a Core Agenda for the Financial Sector”

-  Seminar examines the concrete role of finance in the transition of high-carbon industries such as steel, chemicals and automobiles

-  Finance sector’s climate response must move beyond measurement to an implementation stage reflected in actual lending and investment strategy

“Transition finance” is set to emerge as a core agenda across corporate lending, investment and capital markets, industry experts said. Beyond measuring and disclosing financed emissions, the capacity to translate the low-carbon transition of high-carbon industries into actual financial products and investment strategies is becoming increasingly important.

The office of Rep. Hyun Jung Kim and the Korea Sustainability Investing Forum (PCAF-KOREA) co-hosted the seminar “Beyond Financed Emissions: Moving to Transition Finance in Practice” on the morning of July 7 in the First Small Conference Room of the National Assembly Members’ Office Building.

The seminar was held to discuss how to put transition finance into practice, building on the groundwork for measuring and disclosing financed emissions established through PCAF (the Partnership for Carbon Accounting Financials). PCAF is a global initiative that helps financial institutions measure and disclose the greenhouse gas emissions associated with their loans and investments in a consistent way. More than 760 financial institutions across over 85 countries currently take part, including 23 institutions in Korea, and PCAF participants worldwide manage some US$100 trillion in assets.

Measuring financed emissions is the starting point for understanding a financial institution’s climate risk and the emissions profile of its portfolio. As this is coupled with the build-out of policy and information infrastructure—the government’s expansion of climate finance, Korea’s transition-finance guidelines, and a climate-finance web portal—the foundation for putting transition finance into practice in Korea is also widening. The seminar focused on how to give concrete shape to the role of finance in supporting real emissions cuts and the low-carbon transition of high-carbon industries such as steel, chemicals, cement, power generation and automobiles.

[Photo] The seminar “Beyond Financed Emissions: Moving to Transition Finance in Practice”

In his opening remarks, Chun Seung Yang, Executive Director of the Korea Sustainability Investing Forum, reflected on both the significance of measuring financed emissions and the challenges that lie beyond it. “What isn’t measured cannot be managed, and what isn’t managed cannot be reduced,” he said. “PCAF marked an important milestone by providing a common language for understanding the flow of capital and the carbon emissions that come with it.” He added, “We must now move beyond measuring financed emissions to a stage where we mobilize the real economy to deliver the low-carbon transition.”

Rep. Hyun Jung Kim of the Democratic Party of Korea, a member of the National Assembly’s National Policy Committee, used his congratulatory remarks to stress the role of finance in supporting the transition of high-carbon industries. “For core manufacturers in steel, chemicals, automobiles and other sectors to transition into low-carbon, environmentally sound businesses, large-scale capital investment and funding for technology development are essential,” he said. “For transition finance to expand on a stable footing, clear guidelines and a solid policy foundation must be in place.”

Kyung Nam Kim, Executive Managing Director of KB Financial Group, which chairs PCAF-KOREA, said in her congratulatory address that “the concept of ‘financed emissions,’ unfamiliar at the time of PCAF-KOREA’s launch, has now become standard language across the financial sector,” adding that the sector’s capacity to measure and disclose financed emissions has steadily strengthened. She also said, “Finance should not stop at funding companies that already emit little; it must act as a ‘bridge for the transition’—supplying capital at the right time and supporting systematic roadmaps so that carbon-intensive companies can transform into environmentally sound ones.”

Delivering the first presentation, Tiange Wei, Head of Asia-Pacific at PCAF, spoke on trends in the PCAF Standard and guidance, explaining that measuring financed emissions is the starting point for financial institutions’ net-zero journey. Only by understanding the emissions of their loan and investment portfolios, she noted, can institutions set reduction targets and connect them to strategy and financing decisions.

Wei emphasized that PCAF is strengthening alignment with major international sustainability-disclosure frameworks, including IFRS S1·S2, the ESRS and the GHG Protocol. This shows that measuring financed emissions is expanding beyond a management tool for individual institutions into a foundation that underpins international disclosure and the implementation of transition finance. She also noted that the PCAF Standard update released in December 2025 added measurement methodologies for areas that had been difficult to address under the existing framework, including securitizations and structured products, sub-sovereign debt, and undrawn loan commitments.

Ji Hyun Kim, Research Fellow at the Hana Institute of Finance, forecast in her presentation on domestic transition-finance implementation strategy that transition finance will emerge as a major agenda for the corporate and investment banking markets. She explained that transition finance is taking shape not as a simple expansion of funding, but as a way of assessing the transition potential of high-carbon industries and linking it to financial products and risk-management systems.

Kim noted that leading global banks are putting transition finance into practice through assessment models that reflect sector-specific transition pathways, evaluation of and engagement on clients’ transition plans, performance-linked loans and use-of-proceeds transition bonds, and post-financing monitoring systems. For domestic institutions, she pointed to transition finance for companies in high-carbon industries, supply-chain-linked finance that extends large corporates’ transition to their suppliers, and the arranging of transition-bond issuance for companies within the same corporate group.

In the third presentation, Young Jin Lee, Sustainability Director at S&P Global Sustainable 1, spoke on transition-finance risk management and implementation using S&P data. He shared how financial institutions can identify and manage transition risk through a data-driven approach.

The presentations were followed by a panel discussion moderated by Prof. Hyeong Na Oh of Kyung Hee University, with panelists including Song Yi Lee, Deputy Director at the Financial Services Commission; Dr. Si Hyung Lee of the Korea Chamber of Commerce and Industry; and Tae Han Kim, COO at the Korea Sustainability Investing Forum—joined by presenters Tiange Wei and Young Jin Lee. The panel discussed the institutional and practical challenges of reflecting financed-emissions results in actual financing decisions, as well as ways to spur transition finance in Korea’s financial sector.

The seminar drew some 70 participants from Korea and abroad, spanning the financial sector, policy institutions, industry and civil society.

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About KoSIF   The Korea Sustainability Investing Forum (KoSIF) is a non-profit organization that promotes responsible investment and sustainable finance in Korea. It serves as the host of PCAF-KOREA, the domestic coalition of the Partnership for Carbon Accounting Financials.

Inquiries: mileysong@kosif.org