Shinhan Bank (2023)

Signing Date 09 Sep 2020
Region of Headquarters: Asia-Oceania
Current EPFI Reporting Year/Period: 2023
Institutional Reporting: Link to Report

 

Please read the important notes and disclaimer for further information on ‘EPFI Reporting’, compliance and publication on the EP website.

Further information on this EPFI may be obtained through the Institutional Reporting hyperlink.

Project Finance Advisory Services

Total number mandated in the reporting period: 0

Project Finance Transactions

Total number that reached Financial Close in the reporting period: 10

Equator Principles Category A1 B2 C3
Sector
Mining
Infrastructure
Oil & Gas 2 1
Power
Others 7
Region
Americas 2 1 3
Europe, Middle East & Africa 2
Asia Pacific 2
Country Designation
Designated Country 4 2 1 7
Non Designated Country
Both
Independent Review
Yes 2
No 1 7
Totals 2 1 7
1

Category A – Projects with potential significant adverse environmental and social risks and/or impacts that are diverse, irreversible or unprecedented.

2

Category B – Projects with potential limited adverse environmental and social risks and/or impacts that are few in number, generally site-specific, largely reversible and readily addressed through mitigation measures.

3

Category C – Projects with minimal or no adverse environmental and social risks and/or impacts.

4

Designated Countries are those countries deemed to have robust environmental and social governance, legislation systems and institutional capacity designed to protect their people and the natural environment.

Project-related Refinance & Project-related Acquisition For Project Finance

This information is required under EP4. EP4 applies for those transactions mandated after 1 October 2020 and that have reached Financial Close by the end of the period being reported.

Project Name Reporting For Project Finance (And Project-related Refinance & Project-related Acquisition Finance For Project Finance)

No. Project Name Sector Project Location(s) Year of Financial Close
1 Matterhorn Express Pipeline Infrastructure United States 2023
2 Port Arthur LNG Oil & Gas United States 2023
3 Botely Energy Others United Kingdom 2023
4 Project Server Infrastructure United Kingdom 2023
5 Project Titan Others United States 2023
6 Yongsan Residential Complex Development Others Korea, Rep. 2023
7 Bucheon Residential Complex Others Korea, Rep. 2023
8 Project Falcon Others United States 2023
9 Rio Grande LNG Oil & Gas United States 2023
10 Project Eagle Others United States 2023

Project-Related Corporate Loans

Total number that reached Financial Close in the reporting period: 4

Equator Principles Category A1 B2 C3
Sector
Mining
Infrastructure
Oil & Gas 2
Power
Others 2
Region
Americas
Europe, Middle East & Africa
Asia Pacific 4
Country Designation
Designated Country 4 4
Non Designated Country
Both
Independent Review
Yes 2
No 2
Totals 4
1

Category A – Projects with potential significant adverse environmental and social risks and/or impacts that are diverse, irreversible or unprecedented.

2

Category B – Projects with potential limited adverse environmental and social risks and/or impacts that are few in number, generally site-specific, largely reversible and readily addressed through mitigation measures.

3

Category C – Projects with minimal or no adverse environmental and social risks and/or impacts.

4

Designated Countries are those countries deemed to have robust environmental and social governance, legislation systems and institutional capacity designed to protect their people and the natural environment.

Project-related Refinance & Project-related Acquisition For Project-related Corporate Loans

This information is required under EP4. EP4 applies for those transactions mandated after 1 October 2020 and that have reached Financial Close by the end of the period being reported.

Project Name Reporting For Project-related Corporate Loans (And Project-related Refinance & Project-related Acquisition For Project-related Corporate Loans)

No. Project Name Sector Project Location(s) Year of Financial Close
1 Precursor Facility Others Korea, Rep. 2023

Number of projects that were not disclosed as per the disclosure conditions specified in Annex B of the Principles: 3

Under EP4, project name reporting is encouraged for Project-Related Corporate Loans that have reached Financial Close and required for Project Finance transactions that have reached Financial Close.

EP4 applies for those transactions mandated after 1 October 2020 and that have reached Financial Close by the end of the period being reported.

Implementation of the Equator Principles

Equipping bank employees with the knowledge and skills to navigate the Equator Principles was one of the major focus for Bank this year. The Bank found that it is crucial for ensuring responsible financing and mitigating environmental and social risks.

Beginning of 2023, Shinhan Bank planned a comprehensive training program tailored to corporate business department and loan division.The training delved into the 10 core principles, more specifically their objectives and outlining the specific requirements for each.

Employees had the chance to learn about environmental and social risk assessment with some case studies, learning to identify potential risks associated with projects and implementing effective mitigation strategies. Employees were given some time to digest the significance of environmental and social impact assessments (ESIAs).

Furthermore, the training provided some insights to equip employees to foster meaningful stakeholder engagement, emphasizing the importance of consulting with local communities and/or NGOs throughout the project cycle.

The training was performed several times to acomodate employees’ schedules and to cater diverse business divisions’ needs.
Equator Principles training aimed to educate employees from different divisions about the changing business landscape.

The respective roles of the Equator Principles Reviewers, business lines, and senior management in the transaction review process are as follows.

Designated ESG Planning Team members carry independent role by reviewing Equator Principles. The main role of these specialists are to assess environmental and social risks associated with deals presented by the business lines.

Business lines are responsible for leading the transaction and ensuring compliance with the Equator Principles. Some of the responsibilities include identifying potential Equator Principles applicability early in the transaction process, managing ESIA and ESMP development process, addressing any concerns raised by ESG Planning team during the review process and more. Some of the reviewed transactions will be presented to the Senior Management by business lines.

Senior management ultimately decides and approves the transaction after reviewing what was submitted by business line. Before making a decision, senior management carefully considers the recommendations of ESG Planning team.

Shinhan Bank has established a dedicated guide called the ‘Application Manual for the Equator Principles’. This manual outlines the specific procedures and processes for integrating the EPs into the Bank’s credit assessment and approval process for project finance and PRCL deals. This Application manual provides guidelines for all bank employees involved in project financing and/or corporate loans, ensuring everyone understands how the EPs are applied in practice. Since 2020, Shinhan Bank has incorporated the application of the EPs directly into its Credit Operation Procedures, which means that evaluating a project against the EPs is now a mandatory step within the standard loan approval process. The application of EP is aligned with Shinhan Financial Group’s broader Sustainability Policy Framework. By aligning the EPs with a broader framework, Shinhan Bank demonstrates a more comprehensive approach to sustainable finance. Moreover, this signifies a long-term commitment to responsible project financing practices.