SEOUL, May 28 (Korea Bizwire) — South Korea’s state pension fund said Friday it will stop funding new coal power projects at home and abroad to join the global transition from fossil fuels and pursue a responsible investment strategy.
The National Pension Service (NPS)’s fund management committee approved the plan to limit investment in companies with mainstay focus on businesses tied to coal power.
The committee said it will adopt negative screening, a guideline that excludes investments that fall short of environmental, social and governance (ESG) principles.
As the first step, the committee said it will stay away from new coal power projects and prepare detailed investment guidelines to limit its exposure to carbon-intensive companies.
“The NPS declares the coal-free investment policy to prepare for the toughening global environmental regulations and to combat climate change, and proactively establish the investment strategy to hedge risks,” the NPS’s fund management committee said in a statement.
The pension fund currently invests in the state-run Korea Electric Power Corp. (KEPCO), POSCO, Doosan Heavy Industries and other companies that are in coal business.
The NPS is one of the world’s leading pension funds, with more than 770 trillion won (US$690 billion) in assets under its management.