This photo shows the corporate logo of Samsung Group at its office building in Seoul on June 26. (Yonhap)
Financial affiliates of South Korea’s largest conglomerate Samsung Group announced Thursday that they would halt investment projects linked to coal-power businesses as part of their efforts to run operations in an environmentally responsible manner.
Samsung’s insurance arms Samsung Life Insurance and Samsung Fire & Marine Insurance, among others, will stop investing in coal-fired power stations or lending money to operators of such power plants. They will also stop purchasing bonds issued by builders of coal power plants. The two companies have shunned investing in coal-based power generation since June, 2018.
Samsung Fire has also decided not to handle new insurance products for construction of coal power plants.
Brokerage Samsung Securities and asset manager Samsung Asset Management, on the other hand, plan to come up with investment guidelines regarding environment, society, and governance, or ESG. The guidelines are expected to include policies that put an end to investment in coal mining and coal power generation.
While distancing themselves from the conventional power generation, the Samsung affiliates will continue to make investment in environmentally friendly segments, including renewable energy and electric vehicles.
“In order to protect the environment and be more environmentally responsible, Samsung affiliates have decided to walk away from coal-related investment,” an official from one of Samsung’s financial units.
The ESG criteria is considered an important factor across the globe in recent years when evaluating corporate management.
The latest move to go green come after other non-financial affiliates of the conglomerate, including Samsung Electronics and Samsung C&T, announced that they would ramp up their efforts for ESG in line with a global trend for environmentally conscious management and investment.
The amount of ESG-related investment assets grew nearly 16 times over 15 years, from $6.5 trillion in 2006 to $103.4 trillion won this year, according to the UN Principles for Responsible Investment, an organization that promotes environmental and social responsibility among global investors.
The Korean government has proclaimed that it will go carbon neutral by 2050, vowing to nurture businesses in the renewable energy sector. The state-run National Pension Service, one of the largest pension fund operators, plans to increase the proportion of responsible investment assets to some 50 percent of the organization’s entire assets under management.
By Kim Young-won (email@example.com