August 31, 2020 Read More →

Investors pressure Samsung over potential investment in Vietnam coal-fired power project

Bloomberg:

Activist climate investors warned Samsung C&T Corp. over its potential involvement in a new coal power plant in Southeast Asia amid mounting global pressure to halt use of the dirtiest fossil fuel.

Investment arms of Legal & General Group Plc, the U.K.’s biggest manager of corporate pension schemes, Norway’s KLP Kapitalforvaltning AS and Helsinki-based Nordea Bank Abp, have urged the South Korean company not to participate in the construction of the controversial plant in Vietnam, which it’s currently considering.

The project “poses significant reputational and climate related risks,” said Meryam Omi, the head of sustainable investing at Legal & General Investment Management Ltd. “We have asked the company to commit to no involvement in construction of new coal plants and will continue to engage with them on this matter.”

While the shareholders own just a tiny fraction of the de facto holding company of the Samsung empire, such public pressure is an increasingly common tactic by funds to put fossil fuel-engaged companies under the spotlight amid the global push against climate change.

The funds are focused on Samsung’s potential role in constructing the Vung Ang 2 project, which may come after state-run utility Korea Electric Power Corp. finalizes an impending investment in the venture.

The scrutiny comes as global investors are increasingly voicing concerns over the risks associated with South Korea’s overseas coal financing. BlackRock Inc., the world’s top asset manager, has urged Korea Electric to provide clear strategic rationale for its investment in several coal projects, including Vung Ang 2. Domestic pressure is also growing after the country unveiled a $35 billion plan to boost low-carbon power sources and foster green industries.

[Heesu Lee]

More: Samsung C&T targeted by activists over Vietnam coal project

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