[KH Finance Forum] NPS looks to exercise institutional power in Korea's ESG push

[KH Finance Forum] NPS looks to exercise institutional power in Korea’s ESG push
National Pension Service Chairman and Chief Executive Officer Kim Yong-jin delivers a keynote speech during The Korea Herald Finance and Investment Forum held in Seoul, Tuesday. (Park Hyun-koo/The Korea Herald)The National Pension Service, the world’s third-largest pension fund based in South Korea, has stressed its unwavering stance toward the adoption of environmental, social and governance factors across its investment universe.

Kim Yong-jin, chairman and chief executive officer of the NPS, pledged to motivate its investee companies and external partners, to which NPS deploys capital, to adapt to NPS’ responsible investing strategies.

The move will allow companies to get ahead of the game and predict changes, rather than being caught off guard by restrictions posed at the institutional investor’s request, said the official who leads the pension fund that oversees over 900 trillion won ($762 billion) of assets.

“The NPS’ act of responsible investing is not designed to widen investee companies’ uncertainties,” Kim said at The Korea Herald Finance and Investment Forum held in Seoul, Tuesday.

“Instead, it is meant to preemptively suggest our direction (toward ESG integration) and help us interact with investee companies transparently, so that the concept of ESG investing takes root in Korean society.”

Kim, a career bureaucrat who embarked on his role as NPS CEO in August 2020, is now behind the institutional power of the fund — holding a stake worth 184.3 trillion won across some 1,130 domestic listed firms, or 6.7 percent of Korea’s total market capitalization, as of June.

Its shareholder engagement with investee companies in Korea has largely revolved around governance factors, often giving the NPS clout in shareholders’ proxy fights.

With the ESG push in place, the NPS is likely to engage with companies’ environmental and social issues as well, Kim said in his keynote speech at the event.

Kim’s remarks come as the public pension scheme’s decadeslong push to exercise responsible investing strategies — aimed at taking both financial and nonfinancial performance into account in portfolio assessment — is beginning to take shape in the wake of the COVID-19 pandemic.

NPS took the first step as a responsible investor in 2006 and became a member of the United Nations Principles for Responsible Investment in 2009. Fast forward to more than a decade later, NPS is now a member of the International Corporate Governance Network, the Asian Corporate Governance Association and the Asian Investor Group on Climate Change.

At this juncture, especially when the pandemic shows no signs of surrendering, the NPS is looking to up the ante as its ESG assessment is increasingly integrated in the NPS’ investing mechanism.

“The coronavirus pandemic is accelerating the need for responsible investing,” Kim said.

“Pandemic-fueled changes in business environment is testing the sustainability of corporations. Global companies will have no choice but to focus on ESG as a key to survival to overcome uncertainties in the future.”

Starting this year, NPS will dial down exposure to companies with ESG ratings of “D” or below than portfolio benchmarks in active stock investment management strategy.

The same mechanism will apply to NPS’ passive stock investing, as well as domestic bond investing by the end of this year.

In the future, overseas investment of stocks and bonds will also be subject to its ESG assessment and oversight, while NPS seeks to ramp up ESG engagement with boards of foreign firms to influence their management.

The institutional investor’s ESG push will not be limited to its investee companies, as the NPS is looking to urge all of its external managers at home and abroad to submit responsible investing reports.

“It is crucial to substantiate ESG factors for capital allocation through discretionary investment management strategies,” Kim said.

“NPS is coming up with plans to take ESG factors into account when selecting and assessing external managers for stock and bond investment at home and abroad.”

Since Kim took the top post, the NPS has declared its exit from coal investing and sought to strengthen responsible investing. Kim also published a book titled, “ESG’s New Path with the National Pension Service.”

By Son Ji-hyoung (consnow@heraldcorp.com)

Internet Explorer Channel Network
News Related

OTHER NEWS

Stocks making the biggest moves in the premarket: Pinterest, PayPal, Tesla and more

Take a look at some of the biggest movers in the premarket: Pinterest (PINS) – Pinterest shares tumbled 13.2% in premarket trading after PayPal (PYPL) said it was not pursuing ... Read more »

Huseierne: Norwegian homeowners need to prepare for rising housing-related costs

More expensive electricity is only the beginning of rising housing costs in the future, according to the organization Huseierne. The organization is now asking homeowners to prepare for tighter economic ... Read more »

Beyond Meat plummets 60% since a January peak. Why this stock is ‘misunderstood'

Beyond Meat has taken another dive after warning on third-quarter sales. The alternative meat company fell 12% to close out last week after blaming the Covid-19 delta variant and a ... Read more »

Wells Fargo has a new virtual assistant in the works and it's named Fargo

A Wells Fargo logo is seen at the SIBOS banking and financial conference in Toronto Chris Helgren | Reuters Wells Fargo is developing a virtual assistant to help it convert ... Read more »

HSBC eyes interest rate boost as quarterly profits jump

HSBC has said it expects to benefit from central bank interest rates rising earlier than expected as it announced a third-quarter boost to its profit. © HSBC is the biggest ... Read more »

Millions could see Budget wage rises as Sunak poised to axe public sector pay freeze

Teachers, police officers and civil servants are poised to see salary hikes in Wednesday’s Budget after a cruel freeze on public sector pay. Chancellor Rishi Sunak has hinted he will ... Read more »

Investors cash in on pandemic pet boom

George Parrett had wanted a dog for years but the timing never seemed right. While the 33-year-old commuted from Tunbridge Wells to London for a job in public relations, his ... Read more »

IMM Private Equity inks deal to buy stake in Hanssem for W1.45tr

A headquarters building of Hanssem in Seoul. (Hanssem)IMM Private Equity said Monday it has signed a binding term to become the largest shareholder of South Korean kitchen and interior furniture ... Read more »

Budget 2021: The NINE taxes Rishi could inflict on YOU

The Autumn Budget 2021 will be delivered on Wednesday, October 27, and given the huge financial and human cost of the Covid pandemic sweeping changes are expected across many areas ... Read more »

As Britons adopt fintech what will become of those left behind?

© Provided by This Is Money MailOnline logo Britons are increasingly using online banking, money apps and contactless cards, a comprehensive survey shows. Fintech use and adoption has risen in ... Read more »

Nivesh ties up with distributors to expand presence in India's Tier-II & III cities

Nivesh, a digital-first platform, on Monday announced that it has witnessed 100% growth in investments from tier-II and tier-III cities and has tied up with individual distributors in more than ... Read more »

There's a chance China might finally put taxes on property

Vehicles drive by unfinished residential buildings from the Evergrande Oasis, a housing complex developed by Evergrande Group, in Luoyang, China September 16, 2021.Carlos Garcia Rawlins | Reuters BEIJING — China ... Read more »

Rishi Sunak's top 7 Budget tax targets - which one will hurt YOU most?

Victoria Scholar, head of investment at wealth platform Interactive International, said Sunak has to balance the books after spending more than £108 billion over the last 12 months, lifting total ... Read more »

S. Korea ranks 4th in ‘relative poverty' among 38 OECD members

Pedestrians cross a street near Gwanghwamun Square in Seoul on Oct. 20. (Yonhap)South Korea ranked No. 4 among 38 global economies in terms of the percentage of its population living ... Read more »

(2nd LD) Citibank Korea to close retail banking 'in phases'

(ATTN: ADDS more info at bottom) SEOUL, Oct. 25 (Yonhap) — Citibank Korea Inc., the Korean unit of U.S. banking giant Citigroup, said Monday it will close its retail banking ... Read more »

HSBC is set to report third-quarter earnings today. Here's what to expect

HSBC building in the Canary Wharf district of London, U.K.Leon Neal | AFP | Getty Images HSBC is scheduled to release its financial report card for the third quarter at ... Read more »

(LEAD) Citibank Korea to close retail banking 'in phases'

(ATTN: UPDATES throughout with Citibank Korea’s official announcement) SEOUL, Oct. 25 (Yonhap) — Citibank Korea Inc., the Korean unit of U.S. banking giant Citigroup, said Monday that it will close ... Read more »

Citibank Korea to close retail banking 'in phases'

SEOUL, Oct. 25 (Yonhap) — Citibank Korea Inc., the Korean unit of U.S. banking giant Citigroup, said Monday that it will close its retail banking services “in phases” in line ... Read more »

Rishi Sunak to hand NHS £6bn to tackle waiting lists and boost tech

A £5.9bn billion package aimed at tackling NHS waiting lists in England will form part of chancellor Rishi Sunak’s autumn Budget, the Treasury has said. © PA Chancellor Rishi Sunak ... Read more »

Triple lock scrap: Retirees £208 worse off - plot launched to overturn devastating drop

The Liberal Democrats are this week launching a bid to ensure pensioners are not crippled by financial difficulties next year. The cost of living crisis currently engulfing the UK is ... Read more »

People living in poverty ‘hit harder by gas and electricity bills', new data shows

Poorer households have been found to pay as much as 50 per cent more on their energy bills than those with more money, according to data analysed by the Labour ... Read more »

Dow futures fall 100 points after the blue-chip average notches third winning week in a row

Traders work on the floor of the New York Stock Exchange (NYSE) on October 15, 2021 in New York City.Spencer Platt | Getty Images Stock futures edged lower in overnight ... Read more »

'Buckle your seatbelts' because earnings will start to disappoint, long-term bull Art Hogan warns

Earnings season may turn an ugly corner. Long-term bull Art Hogan warns a storm of disappointing corporate guidance and missed revenue targets is ahead. “Buckle your seatbelts,” the National Securities' ... Read more »

What the first bitcoin futures exchange-traded fund means for the cryptocurrency industry

The value of Bitcoin (BTC) has exceeded the threshold of 66,895 dollars for the first time in his history. Chesnot | Getty Images This week marked a milestone for cryptocurrency ... Read more »

Rishi Sunak shares the 'big difference' between a National Insurance and Income Tax hike

Earlier this year, the Government announced that National Insurance payments for workers and employers would be temporarily increased by 1.25 percent, prior to a new 1.25 percent Health and Social ... Read more »

Lending caps on NBFCs may offer big opportunities to small players

New lending caps on NBFCs against funding initial share sales may throw up big opportunities for small players in last-mile financing. Many smaller NBFCs are likely to enter the estimated ... Read more »

Interest rates may be rising soon. Will your finances stand the strain?

The era of rock-bottom interest rates could soon be at an end. Expectations are growing that the Bank of England could raise rates as early as next month to tackle ... Read more »

[ESG Talk] Overseeing ESG risks in supply chain: procurement with a purpose

Bae, Kim & Lee expert adviser Lee Yeon-woo (Bae, Kim & Lee)In 2022, an area that is likely to strain companies’ transition toward a resilient, sustainable economy is the ESG ... Read more »

[Market Eye] Record-breaking year expected for banking groups; financial stocks, maybe

A citizen passes by a row of automated teller machines in central Seoul on Oct. 4. (Yonhap)Bank stocks in South Korea have long been regarded as an unappealing option for ... Read more »

Bumpy road lies ahead of top bidder to take over SsangYong Motor

Sports utility vehicle All-New Rexton’s special brand “Master” (SsangYong Motor)A new shareholder group led by South Korea’s electric bus manufacturer Edison Motors has unveiled its capital procurement plan for its ... Read more »

S. Korea alarmed by surging fuel prices, inflationary pressure

A gas station in Seoul shows a gasoline price of 1,843 won ($1.56) per liter on Sunday. The average nationwide gasoline price gained 45.2 won to 1,732.4 won in the ... Read more »

Inheritance Tax: Britons 'most hated tax' hits families as HMRC receipts rise by £700m

HMRC released data recently which showed £3.1billion was paid by families through Inheritance Tax (IHT) between April and September, an increase of £700million on the same period in 2020. Unfortunately, ... Read more »

Bitcoin is the new GOLD - $100,000 crypto is haven from inflation and stock market crash

The latest Bitcoin resurgence has seen its value has double since it slumped to around $30,000 just three months ago, in mid-July. Many investors will be kicking themselves for missing ... Read more »

S. Korea's seaport cargo up 8.1% in Q3 amid global rebound

This file photo shows ships carrying containers docked at a port in South Korea’s southeastern city of Busan. (Yonhap)Cargo processed at South Korean seaports advanced 8.1 percent in the third ... Read more »

‘I shaved 9 years off my mortgage': Simple way finance expert took his family to loan free

© THE HUMBLE PENNY/GETTY Ken Okoroafor of The Humble Penny Ken Okoroafor is a financial expert who managed to become financially free by just 34. During the pandemic, he was ... Read more »

Self Assessment guidance issued as deadline nears & a 'lumpy tax burden' hits freelancers

Self Assessment paper returns must be completed by October 31, while online returns must be done by January 31, 2022. Despite there still being time to act, new research from ... Read more »

Razorpay launches tokenisation solution in partnership with Mastercard, RuPay and Visa

Fintech firm Razorpay on Friday announced a new a tokenisation solution for businesses that will allow their end-customers to have the convenience of saved card transactions with added security and ... Read more »

Chancellor unveils multi-billion pound spending pledges ahead of budget

The chancellor has announced a series of spending pledges ahead of the autumn budget this week, which include £5bn for health research and innovation and £3bn for education. © Imagebridge ... Read more »

Labour calls for VAT cut on energy bills ‘to see people through the winter'

Labour is calling for a VAT cut on domestic energy bills to help tackle a looming cost of living crisis. © Eddie Mulholland Rachel Reeves said a VAT cut would ... Read more »

Scrap hated EU VAT on energy bills and save Brits £1.6billion, says Labour

© Getty Woman worried about bills and smart meter The demand by shadow Chancellor Rachel Reeves would be worth £1.6billion according to HMRC figures. It comes amid growing concerns of ... Read more »
On free-english-test.com you will find lots of free English exam practice materials to help you improve your English skills: grammar, listening, reading, writing, ielts, toeic