APG lead signatory of pressing letter to Korean government
APG and 22 other large global investors encourage South’s Korea’s government to outline a clear and fully Paris-aligned decarbonization pathway and stop building new coal-fired power plants. Clear climate policies will help Korean companies to transition to net zero emissions by 2050 or sooner. APG is co-leading this investor initiative on behalf of its pension fund clients.
In a letter to South Korea’s Presidential Committee on Carbon Neutrality, the investors state that for many of the Korean companies they engage with, national policy on energy and climate change is critical to the achievement of their net zero ambition. The letter is supported by Climate Action 100+ and signed by investors with a combined €5.8 trillion in assets under management, including lead investors APG, BMO Global Asset Management, EOS at Federated Hermes and Sumitomo Mitsui Trust Asset Management.
Companies need clear climate policies
According to the signatories, South Korean companies need clear signals from policymakers to enable them to make a successful transition to net zero emissions, mitigate climate risk and protect long-term value. “This must include clear dates for phasing out coal in line with achieving the Paris objective of keeping global warming to 1.5°C,” the letter says.
The investors urge that the International Energy Agency’s recently developed Net Zero 2050 scenario be embedded in the transition pathways the Committee is developing. “It is critical these pathways are fully aligned with the Paris Agreement, reach net zero emissions by no later than 2050 and do not further embed coal in the Korean economy, delaying the inevitable and urgent transition that is required,” says Yoo-Kyung (YK) Park, Head of APAC Responsible Investment & Governance at APG.
No coal expansion
In August, APG sent a separate letter to the Korean government to express its concerns about private coal-fired power plants under construction there. APG also sold its stake in the Korea Electric Power Corp. (KEPCO) last year, citing the state-run company's construction of coal plants in Vietnam and Indonesia. “The expansion of coal-fired power in South Korea goes against efforts to combat climate change,” says YK, “It also puts assets at risk of becoming stranded and unprofitable due to low utilization and extra efforts necessary to offset carbon emissions.”
Climate Action 100+ is the world’s largest investor engagement initiative on climate change. It involves more than 615 investors, responsible for over €47 trillion in assets under management. The initiative aims to ensure that the world’s biggest corporate greenhouse gas (GHG) emitters take action on climate change.