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| Environmental activists hold a rally in front of the National Pension Service headquarters in Jeonju, North Jeolla Province, to urge the state pension fund to stop its coal-related investments in this April 2021 file photo. Yonhap |
By Park Jae-hyuk
The National Pension Service (NPS) and state-run financial institutions were found to have remained passive about efforts to prevent climate change throughout last year, compared to private-sector financial companies, according to a domestic nonprofit organization's study released Tuesday.
Solutions for Our Climate's (SFOC) analysis of the 100 largest financial institutions in Korea found that none of the nation's 14 public financial firms promised to achieve net-zero emissions in their asset portfolios by 2050, nor devised any specific plans for reducing carbon emissions.
"The NPS managing over 900 trillion won ($750 billion) has a significant impact on the global financial market, but it only declared its coal exit in May 2021, without establishing any specific plans," SFOC researcher Han Soo-youn said. "Considering the overwhelming size of the public pension fund it manages, its strategies are expected to have a significant impact on the domestic financial market, so it needs to take forward-looking measures."
SFOC also criticized state-run lenders for only deciding not to invest in new coal power plant projects, without making divestments from existing coal-related companies in which they have already invested.
"The Export-Import Bank of Korea and the Korea Trade Insurance Corp., both of which have led financing for coal power plant projects overseas, are expected not to make additional investments, in line with the government's declaration of halting overseas coal financing," Han said. "However, they should set the standards regarding their investments in overall coal-related industries. The Korea Development Bank investing in the domestic market should also set its own coal exit standards."
The Korea Credit Guarantee Fund, the Korea Scientists & Engineers Mutual-aid Association, the Korean Federation of Community Credit Cooperatives and the Korea Technology Finance Corporation have not even made any declaration for their coal exits, according to SFOC.
In contrast to public institutions, private financial companies were found to have made various efforts to follow the global standards.
Standard Chartered Bank Korea, Samsung Fire & Marine Insurance and Mirae Asset Securities were mentioned as the three institutions that established criteria to exclude coal industries from their investments.
"Mirae Asset Securities established advanced carbon neutrality strategies, as it expressed its intention to consider setting standards regarding its investments in projects related to oil and natural gas," Han said. "Samsung Fire was the only non-life insurer that decided not to invest in companies having more than 30 percent of revenue from coal-fired generation and mining."
Subsidiaries of Shinhan and KB financial groups were recognized for presenting specific plans to reduce investments in carbon-emission heavy businesses from their asset portfolios.
By the end of 2030, Shinhan plans to reduce such investments from its asset portfolio by 38.6 percent, compared to the 2019 figure. KB seeks to reduce its investments in environmentally damaging businesses in its asset portfolio by 33.3 percent during the same period.
SFOC, however, emphasized that all of the 100 largest financial institutions in Korea are lagging behind in taking effective measures to fight climate change compared to their overseas peers, such as France's AXA, the Netherlands' APG and the U.K.'s National Employment Savings Trust.
