KIC Discusses ESG Investment Strategy Utilizing AI

The sovereign wealth fund Korea Investment Corporation (KIC) held a forum to discuss ESG (Environmental, Social, and Governance) investment strategies utilizing artificial intelligence (AI). On the 6th, KIC announced, "We hosted 'KIC ESG Day' at our headquarters in Jung-gu, Seoul, inviting domestic and international investment experts."

About 70 participants attended the event, including public sector investment officials from the Bank of Korea, pension funds, and mutual aid associations, as well as private investment experts. Concrete practical strategies for applying AI to ESG investments were shared, with presentations and Q&A sessions on topics such as ‘AI-based corporate evaluation and investment data generation,’ ‘Application of AI technology to responsible investment portfolios,’ and ‘Development and application of ESG models.’

In his opening remarks, KIC President Park Il-young said, “Responsible investment has advanced both qualitatively and quantitatively as the importance of non-financial ESG factors has grown,” adding, “Collecting and utilizing ESG information through AI will be the key to reducing uncertainty across investments.”

Lee Young-jin, CEO of S&P Global Sustainalytics, who gave a presentation, explained, “AI can overcome chronic challenges encountered in responsible investment practices, such as lack of disclosure data and information asymmetry,” and noted, “It already plays a significant role in various areas including supply chain issue monitoring, sustainability disclosures, and climate and biodiversity risk analysis.”

Andy Moniz, Executive Managing Director and Head of Responsible Investment at Arcadian Asset Management, stated, “Using AI, we can efficiently identify ESG risks across more than 40,000 investment securities worldwide.”

Sylvia Chen, Head of South Asia ESG at Amundi Asset Management, introduced Malena, an AI-based analytical tool developed jointly with the International Finance Corporation (IFC), and predicted, “Natural Language Processing (NLP) technology will be especially useful for investments in emerging markets where ESG-related information is scarce.”

KIC is currently undertaking various AI-driven initiatives in responsible investment, including climate analysis using big data and shareholder activism prediction through natural language processing. Through these efforts, KIC aims to enhance its expertise in responsible investment as well as improve investment returns.