South Korea’s National Pension Service, the world’s third-largest retirement fund, faces criticism over potentially weaker-than-expected plans to curb investments in coal.
The fund, which manages assets worth about $700 billion, is reviewing options including a proposal that would limit holdings of companies that generate more than half their revenue from coal mining and power generation. That’s a far more lenient threshold than global peers and one that would have only minimal impact on its portfolio.
“The negative consequences of the NPS failing to make climate-conscious investments will be enormous,” said Kim Sung-ju, an opposition party lawmaker and a former chairman of NPS. “Given its clout, the fund’s reluctance to actively respond to climate change can severely undermine the world’s net-zero efforts.”
The fund is continuing to work on plans for its coal-based investments after pledging to divest from the dirtiest fossil fuel more than a year ago. A local unit of Deloitte LLP in April completed a study which recommended the NPS should consider policies which would prohibit investments in companies that win either more than 30%, or more than 50% of their revenue from coal, according to a report seen by Bloomberg News.