In a letter to CEOs and chairs, APG is calling on large South Korean companies and major carbon emitters to step up their efforts to combat climate change. On behalf of its pension fund clients, APG urges ambitious climate and carbon reduction strategies and commitments.
The letter has been sent to ten large South Korean companies in which APG invests, including Samsung Electronics, Hyundai Steel and LG Chem, a large (petro)chemical company. Despite being large carbon emitters, none of these companies is in scope of Climate Action 100+. This investor-led initiative aims to ensure the world’s largest corporate greenhouse gas emitters take necessary action on climate change.
‘Demonstrate ambition and leadership’
“Climate change is the single biggest challenge the world is facing,” says Yoo-Kyung (YK) Park, Head of Responsible Investment & Governance Asia Pacific. “These companies are important to the Korean economy and the global supply chain. Transforming them into low carbon businesses is critical to the goal of climate crisis mitigation.”
APG calls on the selected companies to evaluate their existing climate change strategies and carbon reduction targets and make sure these are ‘sufficiently ambitious’. The companies are also urged to communicate on their challenges related to climate change and the energy transition with long-term investors and to take their suggestions into careful consideration. The letter states it is important for companies to demonstrate ‘consistent and decisive leadership’ in addressing climate change.
Focus on bulk users of fossil fuels
APG’s largest client ABP announced in October 2021 it will stop investing in fossil fuel producers. The civil service pension fund wants to focus its engagement efforts on bulk users of fossil fuels, such as utility companies and car manufacturers. APG’s engagement with these ten large Korean companies – none of which is a fossil fuel producer - fits in with this approach.