Global pension giant APG urges Samsung, SK, LG to take bolder action against climate change
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Dutch pension company sends letters to 10 major Korean companies
By Anna J. Park
APG Asset Management, Europe's largest pension investor, has started pressuring Korean conglomerates to respond more proactively to climate change.
Operating about 850 trillion won ($709 billion) worth of assets and investing for over 4.7 million Dutch pension participants, APG sent letters recently to 10 Korean companies ― all affiliates of major Korean conglomerates ― urging them to make greater efforts to cut carbon emissions. APG sent the letters to CEOs and chairs of 10 Korean companies ― Samsung Electronics, SK hynix, SK Inc., LG Chem, LG Display, Lotte Chemical, Hyundai Steel, POSCO Chemical, LG Uplus and SK Telecom.
APG has around 3 trillion won invested in these 10 Korean companies.
In its letter to Samsung Electronics, APG stated that the firm's carbon emissions-to-revenue ratio stood at 8.7 percent as of 2020, which is a much higher level compared to its global IT tech peers. Apple's emissions-to-revenue ratio is around 0.3 percent. If Samsung Electronics fails to reduce its current level of carbon emissions, its valuation will be at risk of decreasing due to an increase in emissions costs, it said.
Regarding SK hynix, APG pointed out that the firm's emissions-to-revenue ratio is about three times higher than Samsung Electronics'.
As for SK Inc., the Dutch pension investor said, “Despite its plan to achieve net zero by 2050, the company has no specific timeline or plans.” APG asked the firm to share more detailed plans with investors.
Companies like LG Chem, POSCO Chemical and Lotte Chemical were also urged to participate in the green initiative, given that their carbon emissions compared to their revenues are at a higher level than other global chemical companies.
As it is rare for overseas pension investors to disclose detailed information on their invested companies, the move is seen as APG's strong drive to pressure the companies that fail to make meaningful changes in their carbon reduction policies.
An APG official said that considering the 10 companies' status within global supply chains, as well as Korea's economic size, they haven't responded fully and quickly to climate change risks.
APG also plans to closely cooperate with other institutional shareholders of the 10 companies to maximize shareholder engagement, sending warning messages that corporate activities should not be pursued in a way that harms the environment and humanity.