Bank of Korea urged to support decarbonisation efforts as oil crisis rocks the country

20 April 2026 - The Bank of Korea (BOK) should take more action to align its policies with addressing the climate and ecological crisis, according to a new briefing from think tanks Positive Money (UK) and the Institute for Green Transformation (Korea). 

The briefing comes as South Korea rushed to secure 273 million barrels of crude oil last week from Kazakhstan, Oman and Saudi Arabia, after its economy was rocked by the closure of the Strait of Hormuz, which 70% of its energy supply is imported through. This dependence caused the Organisation for Economic Co-operation and Development (OECD) to downgrade South Korea’s growth forecast by 0.4% at the end of March.

Although the Korean government responded with the short-term measure of increasing coal use to fill the gap in energy supply, it also announced plans to raise renewable energy’s share of the country’s electricity generation to a minimum of 20% by 2030, up from 11.4% in 2025. But Positive Money and IGT are calling for the central bank to play a more active role in facilitating this shift, too.

Whilst acknowledging the steps that the BOK has taken so far, such as setting up a Climate Change Response Task Force, the Office for Sustainable Growth, and publishing a climate change strategy, their briefing argues that most of the BOK’s environmental work has focused on research and analysis, rather than concrete policies to shift financial flows away from high-carbon sectors and towards clean ones.

The authors call on the BOK to consider the impact of the financial sector on the climate and environment, rather than just the other way around, by adopting a perspective known as “double materiality”. They also urge the BOK to recognise the flaws of claims to “market neutrality”, arguing that this privileges sectors that already hold the most power in the economy, which are often high-carbon.

Specific policy asks include explicitly incorporating green bonds as a category in its collateral framework, which is the mechanism by which it decides which assets to accept as collateral against loans to financial institutions, and the leveraging of an existing loan programme - the Financial Intermediated Lending Support Facility (FILSF) - to actively support small and medium-sized enterprises (SMEs) to decarbonise. 

This work follows Positive Money’s 2025 East and Southeast Asia Green Central Banking Scorecard, in which South Korea’s central bank ranked eighth out of the 13 countries in the ASEAN+3 for its environmental policies, despite greater economic power than most, with South Korea also placing 13th in Positive Money’s 2024 ranking of G20 central banks and financial regulators on the same criteria. 

Joe Herbert, Senior Researcher at Positive Money and co-author of the briefing, said: 

“The Bank of Korea has taken initial steps to bring environmental considerations into its thinking, but it’s time to move from research to action.

“The BOK needs to respond to the climate and ecological crisis because the fallout from it threatens the central bank’s core mandate of maintaining price and financial stability; the current geopolitical context simply amplifies this need by highlighting Korea’s current vulnerability to the price volatility of global fossil fuel markets.

“There have been positive signs from the Korean government and the Bank of Korea - what’s important now is to implement concrete policies that actively shift financial flows away from high-carbon sectors and towards clean ones.”

Notes:

• The briefing can be read in full here: https://www.datocms-assets.com/132494/1776344188-a-bolder-environmental-strategy-for-the-bank-of-korea.pdf

• South Korea Secures Extra Oil, Naphtha For Non-Hormuz Delivery (Financial Post via Bloomberg, 15 April 2026): https://financialpost.com/pmn/business-pmn/south-korea-secures-extra-oil-naphtha-for-non-hormuz-delivery 

• OECD downgrades S. Korea's 2026 growth outlook to 1.7 pct amid Middle East tensions (The Korea Herald, 26 March 2026): https://www.koreaherald.com/article/10703720 

• South Korea sets 20% renewable power goal for 2030 (Energy Monitor, 7 April 2026): https://www.energymonitor.ai/news/south-korea-renewable-power-goal/ 

• Positive Money’s 2025 East and Southeast Asia Green Central Banking Scorecard can be found here: https://positivemoney.org/uk-global/publications/east-southeast-asia-green-central-banking-scorecard/  

• Positive Money’s 2024 G20 Green Central Banking Scorecard can be found here: https://positivemoney.org/uk-eu-global/publications/green-central-banking-scorecard-2024/ 

ENDS