Korean firms join anti-fossil fuel bandwagon
On Tuesday, DB Insurance became the first private financial company to foreswear some fossil fuel-related investment, joining such public pension funds as the Korean Teachers’ Credit Union and the Public Officials Benefit Association.
But the bandwagon is still small and less ambitious than in places like Europe. The Korean companies will only opt out of financing construction of coal power plants in and outside of Korea in the future.
Some wealth funds such as Norway’s sovereign wealth fund have gone much further, pledging to sell stock in companies that mine more than 20 million tons of coal annually or generate more than 10 gigawatts of power from coal.
Still, Korean institutions haven’t considered environmental or social factors for investment in the past, said Lee Jong-oh, director of the Korea Sustainability Investing Forum, a non-profit organization advocating ethical investment.
“Given that Korea has few companies involved in sustainable investment, their participation is meaningful and sets a good example for other institutional investors,” Lee said.
At a press event in Yeouido, western Seoul, Lee said that 1,145 institutional investors worldwide have joined the campaign to avoid coal and fossil fuel-related investment, which is called the Fossil Free Campaign.
The Korea Teachers’ Pension and Government Employees Pension Service announced their decisions to join the campaign last year.
With DB Insurance, the assets managed by participants total 111.5 trillion won ($93.9 billion).
In foreswearing fossil fuel project financing, the three companies hope to shift their investments to renewable energy.
“The exit from coal is the most basic and the most practical and powerful way for a financier to help tackle fine dust and climate change,” according to a declaration read at the press event.
“Also, it is the best way to provide financial services to our customers, policyholders and pensioners in a sustainable manner. We cooperate with other public and private financial institutions in order to prepare the ground for the phasing out of coal finance and increased investment in renewable energy,” it said.
As the only private company, DB Insurance received a great deal of attention.
Chung Kyung-soo, vice president of the company, said that it holds 610 billion won worth of investment that has already been spent or earmarked for the building of coal power plants.
“The investment that we already made will be spent as planned, but in the future, we will avoid the area,” Chung said.
Kim Jeong-nam, President & CEO of DB Insurance, also emphasized the company’s commitment to environmentally-friendly investment.
At the end of the Tuesday event, the Korea Sustainability Investing Forum released a roster of target institutions that it will encourage to foreswear fossil fuel investment.
The 15 institutions include the Export-Import Bank of Korea, Korea Trade Insurance Corporation, Korea Development Bank, National Pension Service, NH Nonghyup, Shinhan Bank, KB Kookmin Bank, Woori Bank, Samsung Life Insurance and Samsung Fire & Marine Insurance.
BY PARK EUN-JEE [firstname.lastname@example.org]