Three South Korean financial institutions ‒ DB Insurance, Korean Teachers’ Credit Union and Public Officials Benefit Association ‒ said Tuesday they have decided to stop coal project financing in order to support global efforts to tackle climate change.
The move by the [financial institutions], who have a combined $73 billion assets under management (AUM), comes after two local public pension funds ‒ Korea’s Teachers’ Pension and Government Employees Pension Service, with $22 billion AUM ‒ made a similar announcement last year.
“The exit from coal projects is a basic move, yet the most practical and powerful way for a financial institution (FI) to support measures to tackle fine-dust pollution and climate change,” the firms said in a joint declaration during a ceremony in Seoul. “It is also the most sustainable way to provide financial services to our customers, policyholders and pensioners. We will cooperate with other public and private FIs to lay the ground for phasing out coal project financing and increase investments in renewable energy.”
DB Insurance, with $31 billion AUM, became the first private [financial institution] in Korea to join the environmental movement.
Korea has been facing growing calls from the international community, including the World Wide Fund for Nature and Greenpeace, to stop financing coal projects, which are considered the main culprit for fine-dust pollution that causes around 800,000 deaths per year. The nation is the second-largest investor in the global coal financing market.
Over the last decade, around $9.2 billion of Korea’s public funds have been invested in the construction of coal power plants in seven countries, according to Greenpeace. Among them, Export-Import Bank of Korea and Korea Development Bank financed $5.2 billion and $270 million, respectively. [Shin Ji-hye]