List

Climate risk analysis

To ensure price and financial stability, the Bank of Korea assesses and studies the impact of climate risks on the economy and financial system.

The Bank of Korea conducts research, including climate change stress test, to identify and address potential threats to the economy and financial system. It evaluates transition risks through stress test models, analyzes impacts from global climate policies and physical risks, and proposes policy solutions to tackle these challenges.

전환리스크로 인해 국내은행의 BIS비율은 2050년 경까지 2.6~5.8%p 하락할 전망 / 2℃ 시나리오 (BIS비율) 20 16.5, 30 15.9, 40 15.3, 50 13.9, (하락분) 20 0, 30 -0.7, 40 -1.3, 50 -2.6 / 1.5℃ 시나리오 (BIS비율) 20 16.5, 30 15.4, 40 14, 50 10.9, (하락분) / 주 : 1) 규제기준은 10.5% (d-sib 11.5%)

1. Research on transition risks

The Bank of Korea is using stress test to examine how transition risks from domestic and international environmental regulations and the shift to a low-carbon economy affect the economy and financial system. While moving to a low-carbon economy mitigates physical climate damage, it adversely impacts high-carbon industries by decreasing asset values. In Korea, the manufacturing sector's high greenhouse gas emissions and the financial sector's substantial exposure to these industries could pose a risk to the financial system due to falling asset values.

연간 강수량이 1m 증가하면 지역내 총생산의 장기 성장률이 -2.54% 하락하는 것으로 분석 /행정구역별 연 총강수량 변화의 일인당 지역내총생산 장기성장률 한계효과 서울 -2.54%, 경기 -2.01%, 인천 -3.43, 강원 -1.67%, 충남 -3.06%, 대전 -4.03%, 충북 -1.30%, 전북 -1.00%, 전북 -2.54%, 광주 -3.75%, 경북 -2.54%, 대구 -3.11%, 경남 -2.54%, 울산 -1.13%, 부산 -2.54%, 제주 -2.54% / 주 : 연 총강수량 한 단위(1m) 증가에 대한 행정구역별 한계효과를 나타냄.

2. Study of Physical Risks

This study examines how physical climate risks affect the real economy, industry output, and financial stability. Using NGFS climate scenarios and Kalkuhl and Wenz (2020) damage functions, we empirically analyzed the extent of climate-related damage. Assessing the probability and impact of climate risks is essential for developing climate solutions and encouraging emission reductions.

해외 기후변화로 인해 국내 주요산업의 부가가치 가 큰 폭 하락하는 것으로 분석 / 국내 주요 산업의 수출액 변화 자동차(-11.6~ -23.9%, 2023~2100년 누적기준, 이하 동일), 정유(-9.7~-19.1%), 철강(-7.2~ -15.6%) / 주 : 1) 기준시나리오 대비 변화(2023~2100년 누전 기준). 기준시나리오는 우리 경제가 기후리스크 충격 없이 기준 추세대로 성장하는 시나리오. 2) 음영은 하위 5%와 95% 변화폭 사이의 구간을 나타내며, 동그란 점은 부가가치 변화 기댓값으로 교역 대국의 GDP 변화 기댓값에 상응하는 수치를 의미.

3. Impact of Overseas Physical Risks on Korea

This study assesses how overseas climate change risks affect the Korean economy. Global climate impacts, like warming, can harm the global economy and affect Korea through trade. Climate-induced disruptions in energy, agriculture, and marine products may raise import prices, while reduced income of trading partners could lower demand for Korean exports.

국가별 화석연료 발전 비중 현황 / 한국(2021년기준)은 64%로 일본(73%)및 미국(60%) 보다 다소 낮거나 비슷한 반면 독일(47%), 영국(44%), 프랑스(9%)등에 비해서는 상당히 높은 편이다. 특히 한국의 재생에너지 비중이 7%로 주요국 (미국 21%, 일본 21%, 영국 42%, 독일 42%, 프랑스23%)에 비해 현저히 낮은 수준에 있다

4. Domestic and International Trends in Climate Change Responses

This section reviews domestic and international climate change regulations and policies, including GHG emissions comparisons, responses to the EU's Carbon Border Adjustment Mechanism (CBAM) in export industries, and trends in Korea's carbon market.

Supporting the Green Transition

We are exploring policy tools to reduce the transition burden on SMEs and ways to develop a market for green finance.

The financial sector, including green finance, is essential for companies to secure long-term investment for the green transition. Achieving carbon neutrality is a long-term project expected to deliver economic benefits exceeding costs by around 2040. Strengthening incentives for an environmentally friendly financial system is crucial for promoting green finance. Major economies, like the U.S. with its Inflation Reduction Act (IRA) and the European Green Deal, are heavily investing in green industries to transition to a low-carbon economy. Korea must also secure stable capital and foster strategic partnerships between government, industry, and the financial sector to support technological innovation and the green transition. The Bank of Korea is collaborating with the government and financial institutions to develop effective policies for green finance and is researching monetary policy tools for this purpose. Additionally, the Bank is expanding ESG investment in response to growing public demand for responsible investment.

Policy Recommendation to Promote Green Finance

The Bank of Korea proposes research based policy to promote green finance. It shares expertise and discusses effective policies with various climate-related bodies, including the Presidential Commission on Carbon Neutrality and Green Growth, and financial authorities, focusing on supporting green finance for climate-vulnerable SMEs.

Exploring the Potential Use of Monetary Policy Instruments

The Bank of Korea continues to explore monetary policy tools suited to Korea’s conditions, drawing from climate change responses of major central banks.

한국은행 외화자산의 ESG관련 투자 현황2021 ~ 2023년 (억달러) '20 채권44 주식11 합계55, '21 채권72 주식18 합계90, '22 채권81 주식65 합계146, '23 채권88 주식109 합계196

The Expansion of ESG Management for Foreign-exchange Reserves

The Bank of Korea aims to enhance public responsibility in asset management by increasing ESG investments in foreign exchange reserves and preserving asset values over the mid to long term. The Bank continuously purchases ESG-related bonds, applies negative screening to all foreign currency assets, and is considering adopting an ESG integration strategy for the entire asset management process.

Global cooperation

Climate change is crucial for humanity’s survival and can only be addressed through collective cooperation.

The Bank of Korea works with international organizations, governments, and private entities to address global climate change. Its activities include sharing climate response experiences and developing policies tailored to domestic conditions.

The Bank of Korea's cooperation on climate change response at home and abroad

[국내협력] 2050탄소중립 녹색성장위원회 대통령 직속의 탄소중립 정책 컨트롤 타워, 2050년 탄소중립 이행 로드맵 설정, 2050년 온실가스 감축목표(NDC) 설정 / 환경부 배출권거래제 운영, 목표관리제 운영, 녹색분류체계 마련, 녹색채권 가이드라인 마련(금융위 공동), 환경정보 공시체계 마련(금융위 공동) / 금융위·금감원 금융회사 대상 기후리스크 관리·감독계획 마련, 정책금융기관 녹색금융 확대 방안 논의 [국제 협력] / G20 지속가능금융 활성화 논의 / NGFS 기후 시나리오 설계 및 스트레스 테스트, 기후대응 통화정책 방안 논의, 중앙은행 넷제로 방안 논의 / BIS·BCBS 기후 건전성 규제 체계 마련, 기후데이터 확충 / FSB 기후데이터 확충 [국내협력, 국제협력] 한국은행 기후리스크의 경제적 영향 분석(기후 스트레스 테스트), 기후 대응 통화정책 검토, 국제기구 워킹그룹(5개) 참여, 현안·이슈분석, 외부공동연구

Participation in Domestic and International Consultative Bodies

The Bank of Korea collaborates with international organizations and governments to forge a unified response to climate change. Globally, the Bank participates in various working groups at international organizations, such as the NGFS and the G20, contributing to the development of global climate change response policies. Domestically, it works with entities such as the 2050 Carbon Neutrality and Green Growth Commission and the Financial Supervisory Service to study the impact of climate change on the financial system and to explore ways to promote green finance.

Conferences and Seminars

The Bank of Korea hosts climate change conferences to raise awareness and facilitate policy discussions with stakeholders. In 2023, it co-hosted the "International Green Finance Conference" with the 2050 Carbon Neutrality and Green Growth Commission, uniting academia, governments, and private sector representatives to explore green finance strategies.

Bank of Korea, in collaboration with the Financial Supervisory Service, hosted the “Climate Finance Conference” in 2025 to assess the impact of climate risks on the Korean economy and financial system and to share the current status of climate risk management in the financial sector.

International Green Finance Conference

Climate Finance Conference

A Sustainable BOK

The Bank of Korea aims to reduce its carbon footprint.

To contribute to achieving the national greenhouse gas reduction targets (NDCs), the Bank of Korea is gradually reducing its greenhouse gas emissions. Furthermore, it plans to establish a system to measure and manage indirectly generated greenhouse gas emissions (Scope 3) across the entire value chain involved in its operations. By proactively reducing emissions where possible, the Bank aims to create a sustainable work environment. Additionally, to enhance accountability and transparency in responding to climate change, the Bank intends to strategically increase the publication of climate-related reports and is considering the publication of a report detailing its climate response activities in the long-term.

Efforts to Reduce Greenhouse Gas Emissions

In April 2022, Bank of Korea was designated by the Ministry of Climate, Energy and Environment as a target institution for the public sector greenhouse gas target management scheme. The Bank then measured its Scope 1 and 2 emissions from all buildings and vehicles. It aims to cut these emissions by 37% by 2030 compared with the baseline year. To achieve this, the Bank is conserving energy through lighting control and temperature management, and is switching to zero-emission vehicles and expanding renewable energy use.

Further Efforts for a Sustainable Future

The Bank of Korea is taking additional steps to cut its indirect greenhouse gas emissions (Scope 3) from its operational value chain. Measures include:
   - Implementation of Weekly Car-free Day
   - Promoting Reusable items
   - Going Paperless
In the long term, the Bank is developing a system to measure and manage greenhouse gas emissions throughout its entire value chain.

Enhancing Accountability and Transparency

To enhance accountability and transparency in its climate response and support the transition to a carbon-neutral economy, the Bank of Korea plans to increase the publication of climate-related reports. It is also considering a comprehensive report on its climate response activities, including its vision, strategy, current status, and long-term plans.

Climate Change and Bank of Korea