Global investors are growing increasingly wary of POSCO Holding’s climate impact and carbon footprint. (Image courtesy of Kobiz Media)
SEOUL, Mar. 20 (Korea Bizwire) – POSCO Holdings, a major South Korean steelmaker listed on the KOSPI index, has seen a precipitous drop in foreign shareholdings over the past year, as global investors grow increasingly wary of the company’s climate impact and carbon footprint.
According to data from the Korea Exchange, foreign ownership of POSCO Holdings had plummeted to 27.9% as of March 15, down a staggering 22 percentage points from 49.79% a year earlier. The company’s foreign investor base, which typically hovered between 50-60%, first dipped below 50% in March 2022 and has continued its freefall since.
Among the top 10 stocks on South Korea’s main bourse by market capitalization, POSCO Holdings stands out as the only one to have experienced such a drastic foreign divestment of over 20 percentage points during this period.
A recent report from Solutions for Our Climate (SFOC), a non-profit addressing the climate crisis, sheds light on the exodus. It reveals that at least 15 European institutional investors excluded POSCO Holdings and its subsidiaries from their portfolios between 2022 and 2023 due to climate-related concerns.
One notable example is Denmark’s Danske Bank, which divested from POSCO Holdings and POSCO Future M in 2022, citing their involvement in fossil fuel activities with severe climate impacts. Danske also blacklisted POSCO and POSCO International over environmental destruction practices and human rights issues, while cutting ties with POSCO Steeleon over greenhouse gas emissions.
The latest high-profile divestment comes from the Dutch asset manager Robeco. With €181 billion in assets under management as of late 2022, Robeco added POSCO Holdings to its exclusion list this year for failing to meet climate criteria. Its rationale for excluding five other POSCO entities was their plans to expand coal-fired power generation.
“Divestment or exclusion is a last resort when a company’s values fail to align with those prioritized by investors, despite active shareholder engagement,” SFOC’s report states. It criticizes POSCO for declaring carbon neutrality by 2050 without providing “credible and achievable short-term targets or a roadmap.”
The non-profit has urged POSCO Holdings’ incoming CEO and board, set to be appointed at the March 21 shareholder meeting, to reevaluate the business model for the decarbonized economy and establish a detailed carbon neutrality plan.
“As climate issues manifest through frequent disasters, responsible investors are continuously tightening climate-related conditions,” said Chang Yu-ting, an SFOC researcher. “The global financial sector increasingly views climate not as a subset of ESG, but as a critical factor affecting financial stability and resilience.”
M. H. Lee (mhlee@koreabizwire.com)
