Korea Investment Corporation Engages in International Discussions on Climate Change Response

[Asia Economy Reporter Minji Lee] The Korea Investment Corporation (KIC), a sovereign wealth fund, has decided to actively participate in international discussions on climate change and take the lead in discovering investment opportunities suitable for the Green New Deal era.

According to KIC on the 22nd, on the previous day (local time 16:00 on the 20th), KIC joined the One Planet Sovereign Wealth Fund (OPSWF) during the annual general meeting held via video conference chaired by President Emmanuel Macron. Alongside major institutional investors from nine countries including France, Italy, Spain, and India, KIC became a member of OPSWF, a sovereign wealth fund consortium focused on climate change response.

OPSWF is a consortium of sovereign wealth funds established in December 2017 with the purpose of supporting the goals stipulated in the Paris Climate Agreement and linking them to the financial industry. The event was attended by 33 CEOs including French President Macron, Michael Bloomberg, former New York Mayor and chair of the Task Force on Climate-related Financial Disclosures (TCFD), Mark Carney, former Governor of the Bank of England, as well as global sovereign wealth funds, asset managers, and private equity firms.

OPSWF develops frameworks related to climate change response and encourages member institutions, investee companies, and delegated asset managers to adopt them. The main goal of the consortium is to enable institutional investors to respond to financial risks caused by climate change through compliance with the framework developed in 2018. Including the newly joined institutions, the total fund size of investors participating in OPSWF is expected to exceed 30 trillion USD (approximately 33,000 trillion KRW).

With this OPSWF membership, KIC plans to participate more actively in discussions related to climate change and expects an increase in investment returns through future best practice responses. On this day, President Heenam Choi stated, “As abnormal climate events have increased worldwide recently, climate-related financial information has become the most important indicator in investment decision-making processes. This OPSWF membership and TCFD support declaration signify that KIC is proactively responding to investment risks related to climate change and will actively demonstrate leadership for the sustainable growth of financial markets in the future.” KIC is the first domestic public institutional investor to declare such support.

Previously, KIC established stewardship principles in 2018 and has been leading domestic institutional investors since early this year by building and operating ESG Integration that considers ESG factors across all investment asset classes and processes. Next year, KIC plans to introduce a more comprehensive climate change management system and strive to expand sustainable investments.