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| Top 15 investors in the coal industry / Courtesy of Urgewald |
By Nam Hyun-woo
The National Pension Service (NPS) is the world's eleventh-largest institutional investor in the global coal industry, raising concerns over the prudence of investments amid a global financial market trend of supporting environmentally-friendly companies.
According to a joint report by environmental organizations including Germany's Urgewald, France's Reclaim Finance and U.S. Rainforest Action Network, the NPS invested $11.41 billion _ $7.8 billion in bonds and $3.61 billion in shares _ in global coal companies as of last month.
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| National Pension Service Investment Management's office in Jeonju, North Jeolla Province / Courtesy of National Pension Service |
Vanguard Group of the U.S. was the top investor with a total of $85.85 billion invested in the global coal industry, followed by BlackRock, Capital Group, State Street and the Government Pension Investment Fund of Japan.
Buoyed by the NPS' presence, Korea was the ninth-largest coal-investing country, financing a total of $16.81 billion. The U.S. was the top investor with $602.4 billion, followed by Japan, the U.K., Canada, India, Switzerland, Germany and China.
Among lenders in Korea, state-run KDB Financial Group ranked at No. 1, extending $2.21 billion in loans to coal companies. The Export-Import Bank of Korea, also a government-run lender, was No. 2 with $1.57 billion and Hana Financial Group followed with $318 million.
Including underwriting, NongHyup Financial Group was the No. 1 institution which loaned $132 million to coal companies and guaranteed $3.7 billion worth of debt.
The report named Korea Electric Power Corp., Doosan Heavy Industries & Construction, POSCO and LG International as companies deeply engaged in the coal business.
The heavy exposure of Korean financial institutions to the coal industry goes against President Moon Jae-in's drive to lower the country's dependence on fossil fuel and shift to renewable energy as the economic driver of the future.
"Coal businesses have already lost their competitiveness in the market, and a growing number of experts are now acknowledging the issue as a matter of financial prudence, rather than environmental commitment," said Youn Se-jong, a lawyer and a member of a Korean civic group called Solutions for Our Climate. "This report shows that the NPS accounts for the largest proportion of Korea's overall coal investments and this needs to change."
In January, the NPS said it is considering designating climate change as one of its priorities, suggesting that changes could be made in its fund operating philosophy.
"Among Korea's top five financial groups, KB, Shinhan, Woori and NongHyup have proclaimed that they will stop coal investments," Youn said. "This is the time for the NPS to come up with policies phasing out coal investments and be more active in tackling risks stemming from climate change."
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