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Sovereign wealth funds

KIC joins One Planet Sovereign Wealth Fund to bolster climate change efforts

Nov 22, 2020 (Gmt+09:00)

In a move to bolster its climate change efforts, Korea Investment Corporation has joined a group of international sovereign wealth funds in their aim to lessen climate change-related investment risk.

The South Korean sovereign wealth fund pledged its commitment to the One Planet Sovereign Wealth Fund (OPSWF) during a virtual summit presided over by French President Emmanuel Macron on Nov. 22.

Going forward, the KIC will heavily weigh in factors that combat climate change alongside environmental, social and governance (ESG) standards in its investment decisions.

Sovereign wealth funds from France, Italy and Spain also announced their commitment to the group.

The third One Planet Sovereign Wealth Funds Summit was held virtually on Nov. 22.
The third One Planet Sovereign Wealth Funds Summit was held virtually on Nov. 22.

The international climate change initiative was founded in 2017 to support the goals of the Paris Agreement, which addresses the negative effects of climate change. The group's institutional investors hold a combined $30 trillion in assets under management.

The One Planet Sovereign Wealth Fund is in charge of creating and distributing a framework that helps global institutional investors and asset management companies make investment decisions that minimize the side effects of climate change.

Also during the summit, the KIC became the first Korean institutional investor to publicly advocate the Task Force on Climate-related Financial Disclosures (TCFD). The TCFD was established in 2015 at the request of G20 finance ministers and central bank governors to increase reporting of climate-related financial data from global financial institutions.

KIC Chief Executive Choi Hee-nam said: “Recently there has been a rise in abnormal climate change across the globe which has made climate change-related financial information one of the most important indicators in the investment decision-making process.”

He added, “By joining the OPSWF and declaring our support for the TCFD, we plan to take action by identifying investment risks related to climate change, and actively exercise our leadership to promote sustainable growth in the financial market.”

​​​​​​​By Seon-pyo Hong

Danbee Lee edited this article.

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