When a South Korean electric utility issued green bonds last year while investing in new coal-fired power plants in Southeast Asia, the mixed environmental messages fueled investor skepticism about sustainability debt that’s only been growing since.

Korean issuers have shot up the rankings for green note sales this year with US$10.5 billion in deals, the most in Asia after China, according to data compiled by Bloomberg, but the sellers include many companies in emission-intensive industries.

Nonprofit firm Anthropocene Fixed Income Institute calculates that more than half of all green bonds from Korea come from “potentially controversial sectors” such as autos, chemicals, power producers and oil and gas, according to founder Ulf Erlandsson.

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